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.

Hello, good evening and welcome

Despite longstanding resistance, I’ve finally been persuaded to release my humble thoughts on technology and law out on the blogosphere. Given that my whole career so far has been dedicated to the application of outdated law to digital innovation, I’m using this first blog entry to give my (probably outdated) views on the developments we have experienced in cyberspace in the past few years.

I’m convinced that many years from now, historians will look back at the late 1990s and 2000s as a period akin to the Industrial Revolution that happened in Britain, and then the world in the late 18th century. Remarkable developments in telecommunications, computing, software and engineering have enabled the huge and unstoppable growth of the Internet, from its early days as a rudimentary communications tool to the incredible phenomenon that it is today. These developments affect our everyday lives in innumerable ways. Our standard of living has increased dramatically. We can learn, interact and transact more quickly than ever. Our business methods and processes are more efficient than we could have believed possible 20 years ago. And we are still only near the beginning.

In light of these incredible changes, those charged with creating the laws that govern our society have been faced with an impossible task. Our laws have developed at an incredible pace in recent years, particularly as they pertain to the Internet and changes brought about by technology. Laws relating to intellectual property, data, commerce, privacy and jurisdiction have had to be rewritten by legislators. Where the legislators have been unable to keep up, the rules of business have taken over, producing case law through litigation that has allowed companies to keep operating within the law in an ever-changing technological environment. Some of these cases have been decided in the past few years, while some still rumble on. I am hugely excited by the prospect of the ongoing Google v. Viacom case going to trial, not least because its result will influence the way that content is treated on the Internet around the world.

At Reed Smith, we have been fortunate to have been involved, and still be involved, with many of the companies that have led this technological revolution. Many of our clients today are some of the world’s leading protagonists of change – they include household digital brands, global technology corporations, entertainment conglomerates, and leading research and development houses. The client list is formidable, and one I am proud to be involved with. One of the most exciting things as a commercial lawyer in this area is seeing your clients grow from small beginnings to become market leaders. In 2007, we helped our client Last.FM become part of the global CBS Corporation, when the founders sold the business for $280 million. We were lucky enough to have worked with the Last.FM team since the early days. Last year, we worked with our client Bebo as it joined the AOL group, having been previously involved in many projects that helped build the business in the face of unstable and difficult laws that apply to social networks. Both companies remain Reed Smith clients. Working with start-ups and helping them grow is core to our business, which is part of the reason we have started this blog.

Despite the fact that the global economic climate is challenging, we are still seeing strong activity in the technology start-up sector. Laws are still changing, VCs and angels are still funding and, most of all, companies are still innovating and shifting the goalposts. We have started working with some amazing new businesses already this year, and we want to start working with many more. So I’m going to use this blog going forward to talk about some of the things that we see happening in the marketplace, in the hope that it’s as useful and insightful as a blog written by a lawyer can be. I would love it if you take the time to use the Comments button to comment, offer feedback, challenge, berate, mock, agree, disagree, flame, pwn, do whatever – in a world that’s now so connected and full of information, I would just be happy that you’re engaged with the blog.