P2P Copyright Infringement Update

It’s been an interesting few months in Europe if you’re in the piracy “business”. The persistent efforts of content owners in lobbying against online piracy now seem to be bearing meaningful fruit. There is even talk of pirate sites approaching labels for licences before receiving cease and desist demands.

Although there were signs of a shift in outlook in court decisions in Belgium and Finland in the last couple of years, the real movement has happened in 2009. On the legislative side, piracy has moved up the political agenda, with a drive towards legislative change in several European countries (particularly France, Sweden and the UK). Although there are some national nuances, the general approach seems to be that local governments want to make ISPs more responsible for the transmission of unauthorised content on their networks. This year also brought with it the long-awaited first decision in the Pirate Bay case. Despite politics and the noise surrounding the Pirate Bay, it’s a solid decision for rightholders. Although the founders are appealing the decision, and despite some apparently misguided attempts to legitimise the Pirate Bay service, it looks like the labels and studios have got their way against one of the most prolific and troublesome pirates of all time.

Now, the UK Government has made a surprise announcement of tough new measures against unlawful file sharing. This announcement goes much further than had been proposed in the Digital Britain Report issued in June this year. The Report indicated that persistent offenders would be subjected to a notification scheme via warning letters from ISPs threatening legal action or technological restrictions imposed by Ofcom, the national regulator. Such restrictions were to be put in place by 2012, and included blocking of URLs or reducing bandwith to prevent illegal filesharing. However, soon after the publication of its implementation plan for the proposals in the Report, BIS, now led by Lord Mandelson, announced more stringent proposals that include the acceleration of technical measures, such as the disconnection of Internet access. These measures will be subject to ministerial authority, as opposed to falling under the ambit of Ofcom.

The new proposals by BIS are viewed by some as being heavy-handed and controversial, particularly in terms of user privacy. For example, ISPs may be forced to disclose personal data of infringing users for legal action or disconnection to be effected. Also, in severing online access, it is difficult to ascertain how the Government will be able to reprimand an abuser without any action affecting the rest of the Internet users in a household. Whilst undoubtedly appeasing the content industry, these measures have the potential to stir up unrest. There is also the thorny question of due legislative process – it has been reported that Lord Mandelson, never one to shy away from a nice meal on a yacht, was corralled into intervention in the Digital Britain process by the personal lobbying efforts of wealthy entertainment ‘moguls’. This newfound Government expediency towards anti-piracy measures may yet be derailed by resistance to the means, if not the method, of bringing about change.

Still, all this is potentially great news for content owners, who have been having a very hard time of it recently. I would be genuinely excited to see services like MixCloud, Spotify, Psonar, Hulu, MySpace and many others who have invested heavily in digital distribution get the chance to play on a truly level playing field.

For further reading, see our Client Alert on What You Need To Know About Digital Britain.

San Francisco Music Technology Summit shows positive trends in digital music industry

I attended the San Francisco Music Technology Summit a couple of weeks ago to talk on a panel about concluding licensing deals with rightsholders. I was pleased to look out from the stage to see a tough, cynical and badly dressed crowd – I knew then that I was speaking to the real digital music industry.

My overall impression of the event was that, despite the usual doom and gloom that we’ve gotten used to this year, it was a fabulously positive event. Some trends were clear:

  • There has been a huge growth in the number of services that leverage data to produce recommendations and other results that help drive consumption. The success of these businesses is measured in both an objective and a subjective way, but the overall message seemed to be that they are here to stay and will soon migrate to other areas of the Internet – books, films, television and beyond.
  • The legal backdrop for licensing music and content on the Internet is still fraught with difficulty. In the face of this, many new services are trying clever and interesting ways in an attempt to avoid licensing altogether. Almost all of them are doomed to failure – record labels won’t stand for it, and rightly so. However, it’s a shame that they feel compelled to go that route. Licensing music needs to be much easier and laws need to be clearer. And, as I was politely reminded in the bar at the end of the event, there are far too many lawyers in the music business.
  • The advertiser-funded content model is being scrutinised closely. In a declining ad market, companies that pursue this option have to do their sums carefully and adapt their service to take full advantage of every single monetisation opportunity to survive. Given that advertising has funded television services for many years, I’m hopeful that the best ad-funded sites can make it work. I am a huge fan of Last.FM, MySpace and Spotify, and want them all to flourish.

From the sunny climes of the West Coast to the rather less sunny weather in London, we are waiting for the release of the UK Government’s Digital Britain report next week. The report will set out what steps ISPs will have to take to assist rightsholders against piracy. The government has been making weaker and weaker promises to the content industries in the run-up to the release of the report. In light of recent legal developments in France, I wonder how far they will go?