Government intervention, Costs and the issue of Suspension

The Digital Economy Bill continues to be debated as it battles to get through the House of Lords, on its journey to becoming one of the most significant pieces of legislation for the creative industries in recent times.

The barriers to the progression of its journey have been due to the extremely divisive issues of the costs of the planned processes, suspending users access to the internet and also the ability of the Government to intervene in the processes at a later date.

FAST continues its backing for this Bill and reaffirms its support for the Government to continue to take a strong hand on this matter to see it as law by the General Election. FAST wants the Government to ensure that when the Bill is passed, it will stand up to the rigours required of this fast moving industry in the long term and not merely pay lip service to a current issue. Legitimate products mean tax revenue for the Treasury.

 In short, Clause 17 must survive to also receive Royal Assent.

The House of Lords debate on the Digital Economy Bill commenced in the House of Lords early this month and several sessions have seen debate. This most essential piece of legislation is welcomed by FAST as presented and the organisation fully supports the efforts by government in this area.

It is regarded as of the upmost importance that this legislation is drafted in a way that will ensure that this serves not only the current requirements of the software community, but it must also have regard for the ever changing technological environment that the current problems grew up in.

Therefore FAST feels that integral to the overall success of the legislation is the willingness of the legislators to create a law that is fit for the purposes as technology evolves.

Therefore,  we fully support Clause 17 of the Digital Economy, not withstanding the latest compromise position to be moved in the Lords.

Please see our letter recently published in the Guardian.

http://www.guardian.co.uk/technology/2010/jan/16/digital-economy-bill-software-theft

FAST creates the FLAG Digital Group to focus on the digital legal issues for the software industry going forward.

FLAG is the Federation Against Software Theft’s Legal Advisory Group established shortly after FAST was founded in 1984, and consists of lawyers from many of the UK’s leading Intellectual Property practices. FLAG meets several times a year to receive presentations on pertinent topics and review legal developments affecting the software industry.

FAST General Counsel, Julian Heathcote Hobbins comments: “The specialist legal knowledge FLAG has on such digital issues will help manage complex issues to bring business benefits to firms at this time of economic instability.”

FLAG determines whether action is required to alert the Government and other agencies to the industry’s position making submissions to Government and the European Commission on law. In 2007 FLAG made a substantial contribution to Gower’s review on Intellectual Property.

“The Digital Group’s first task is to consider the new Digital Economy Bill and specifically if there are material issues with certain clauses” Julian concluded.

Law firms participating in the new group include Beachcrofts, DMH Stallard, Lovells, Palmer Briggs Legal and Wedlake Bell.

For those who missed it, the Queen has now confirmed that the Digital Economy Bill will be part of the legislative programme for the next parliamentary term. Although she did not mention IP specifically, the associated briefing from the Labour Party makes it clear that the Bill will include the following measures:

• Introducing proportionate measures to reduce the widespread problem of unlawful sharing of creative work online. These measures will place obligations on Internet Service Providers to work with rights holders and if necessary to take technical measures against persistent infringers.
• Protecting authors by extending public lending rights to non-print books such as audio books and e-books.
• Updating the UK’s 300 year old copyright framework through the regulation of collection societies (who collect revenue on behalf of authors) and to make provision for the granting of licenses for “orphan works” – creative works where the copyright holder is untraceable.

In terms of immediate next steps, the Department for Business, Innovation & Skills should provide more details on the Bill which we will circulate. The Speech will also be debated in the Commons which may raise some issues for us.

For further details on the bill please visit no.10 website http://www.number10.gov.uk/Page21348

We are pleased to announce that we have posted our latest response to the Digital Britain Report. We believe this to be an excellent opportunity to finally have some movement in an area that is arduous and complex both commercially and legally.

We now eagerly await the proposed legislation for the illicit p2p dilemma and the introduction of an increase in penalty fines for criminal IP offences.

On 14th July the Federation met with the Shadow IP Minister, Adam Afriyie. Adam Afriyie agreed to table two parliamentary questions on our behalf. The first will be a question on representative rights which will ask the Government for a date by which it will respond to the Civil Justice Council’s “Improving Access to Justice through Collective Actions” report, which contained recommendations made by the Civil Justice Council to the Lord Chancellor. The second will concern the Government’s response to the “Law on Damages” consultation, in which the Government said that it would give further consideration to the fact that it is currently possible to acquire licences for software applications after an infringement has been discovered without any penalty being imposed. The Government said that the imposition of a fine may be appropriate. Again, The Federation is seeking the date that the Government will respond on this.

On 1st July 2009, the Government published its long-overdue response to the Law On Damages Consultation. This consultation was closed on 27 July 2007, almost two years ago. A specific issue which was raised by the Federation in its response was that it is currently possible to acquire licences for software applications after an infringement has been discovered without any penalty being imposed. The Government recognises that the absence of such a penalty does not provide any incentive to acquire the licence prior to use. However, it does not believe that exemplary damages to counter the absence of any penalty is the answer. It states that the imposition of a fine may be a more appropriate course in these circumstances. No commitment to change this has been given by the Government, and fines are already a possible penalty where a company has been convicted of copyright offences. We are disappointed that after nearly two years, no material change is being proposed and the Government says that further consideration is needed.

On Friday, the Government announced the creation of a new Department for Business, Innovation and Skills whose key role will be to build Britain’s capabilities to compete in the global economy. The Department will be created by merging BERR and DIUS. We note that David Lammy MP has been confirmed as a Minister within the new Department for Business, Innovation and Skills. His role has not been announced yet, but we are hoping that he will keep his responsibilities of IP Minister having instigated a major review. However in the light of yesterday’s announcement that Sion Simon MP has joined DCMS as Minister for Creative Industries, with responsibility for Copyright and IP, this remains to be seen. Who is now in control of the copyright agenda? Watch this space for any developments!

Research carried out for the Strategic Advisory Board for Intellectual Property (“SABIP”) has found that seven million people in the UK are involved in “illegal downloads”. The report suggests that people on one file-sharing network had free access to £120 billion of material. SABIP’s view is that it may be hard to change attitudes towards downloading in the light of the ease with which it can be done, especially at no cost to the downloader. Internet Services Porviders (ISPs) continue to voice the view that it is not their job to police the internet.

We do not believe that it is a defensible position for ISPs to avoid all responsibility. Our view is that, under existing legislation (section 35, Data Protection Act 1998), personal data can be given to rights holders for the purpose of prospective legal proceedings. Citing agreements with customers, ISPs are resistant to using this exception to the data protection legislation. The current practice, which involves the rights holder seeking an order for pre-action disclosure under CPR 31.16 (a “Norwich Pharmacal order”) is a resource-heavy and expensive process. Consequently, this can lead to a chilling effect on legitimate actions to deal with illegal file-sharing. Is it time for the Government to act and compel the ISPs to take this simple step that they are able to do under existing law?