The Digital Economy Act 2010 ("Act") has come into force following the Digital Britain report and a Digital Economy Bill on the future of the digital and communication industries.
At a glancee, the Act includes the folowing main provisions:
Obligations on internet service providers aimed at reducing online infringement of copyright.
Power for the Secretary of State to block an internet location, that is being used in connection with copyright infringement.
New duties for Ofcom to report, every three years, on the UK’s communications infrastructure, internet domain name registration and how media content contributes to the public service objectives.
Power of intervention in relation to internet domain registries.
Extension of the range of video games that are subject to the classification requirement.
Increased penalties for copyright infringement.
Changes to the public lending right.
1. Online copyright infringement: notification system and technical sanctions
One of the key objectives of the Act is to reduce online infringement of copyright, by introducing new sections 124A to 124M in the Communications Act 2003.
a.Notification system: initial ISP obligations
In particular, the Act requires ISPs to: a) Notify their subscribers, if the internet protocol (IP) addresses associated with them are reported by copyright owners as being used to infringe copyright, based on infringement report (CIR) and b) to provide, on an anonymous basis, copyright infringement lists to copyright owners. ISPs will also have to adopt an industry code, to specify the number of CIRs threshold and the relevant enforcement procedures. A copyright owner could apply to the courts for an order to obtain the names and addresses of those subscribers on the list that have exceeded the threshold of 50 notifications.
The code must contain enforcement procedures that, Ofcom may employ, in the event of an ISP failure to comply with the code; it must also specify the rights of subscribers to challenge actions by ISPs and copyright owners, a framework for handling disputes and a methodology for estimating levels of unlawful file sharing, against which the impact of the initial obligations will be assessed.
Ofcom must prepare full progress reports every 12 months and interim reports every three months, about the infringement of copyright by subscribers to internet access services, once the code of practice has been in force for over 12 months. It is envisaged that these reports will help the Secretary of State to monitor trends in on line copyright infringement and to ascertain the effectiveness of the obligations on ISPs.
b.Technical sanctions
The Secretary of State has the power, under the Act, to make an order and impose an obligation on ISPs, to take a range of technical measures against those subscribers who have had more than a prescribed threshold number of copyright infringement reports made against them. Such technical measures include limiting internet connection speed and suspending the subscriber’s service. However, there can be no such order, before the initial obligations code of practice have been in force for at least 12 months.
c. Subscriber appeals
The Act also provides that, there must be adopted an appeals procedure for subscribers. The procedure will operate as follows:
Appeals will be to an independent body, set up for the purpose of hearing them and further appeals may be made to the first-tier tribunal, in relation to the imposition of technical sanctions;
Subscribers will be able to appeal on grounds that, the apparent infringement alleged by the copyright owner is not, in fact, an infringement and/or that, the infringement report does not relate to the subscriber’s IP address, at the relevant time and/or that, the copyright owner or the ISP failed to comply with the regulatory codes;
The burden of proof, in relation to infringement and the accuracy of the IP address will fall on the copyright owner and the ISP;
The subscriber will succeed in the appeal under the above grounds, if he/she can show that, he/she did not commit the allegedly infringing act and took reasonable steps to prevent others from infringing via his/her internet connection.
d. Penalties and sharing of costs
The Act sets out the penalties that may be imposed on an ISP for, among other things, the contravention of its obligations or obligations under the Act. The maximum penalty is £250,000, although the Secretary of State can increase this amount by order. The Secretary of State is to specify by order how costs are to be apportioned, between copyright owners, ISPs and, in case of subscriber appeals, the subscriber concerned.
The Secretary of State may, by issuing specific regulations, make provision about the granting by a court of a blocking injunction in respect of a location on the internet, which the court is satisfied has been, is being or is likely to be used for or in connection with, an activity that infringes copyright. Such regulations may be made if:
The use of the internet for activities that infringe copyright is having a serious adverse effect on businesses or consumers;
They are a proportionate way to address that effect;
The regulations would not prejudice national security or the prevention or detection of crime;
A court is satisfied that, a substantial amount of material has been, is being or is likely to be obtained from the location in infringement or copyright or has been, is being or is likely to be used to facilitate access to such an infringing location;
Prior notice of the injunction application is given to the ISP and the website operator;
Evidence is provided of any steps taken by the ISP or the website operator, to prevent infringement and evidence of measures taken by the copyright owner or licensee to give people access to the material;
The blocking of the location does not have a disproportionate effect on any person’s legitimate interests;
ISPs are not ordered to bear the costs of obtaining a blocking order.
An area of concern has been highlighted as the prospect that, cafes, libraries Universities and other places, that offer free WiFi connection, may fall within the definition of “internet service provider”. The type of service offered and the contractual relationship with users of the service will determine whether or not the provider is classified as a subscriber or as an ISP.
Although such providers should be able to appeal on the grounds set out in section 124K of the Communication Act, this will inevitably be time-consuming and costly. There is also the issue of drawing up the codes of practice and sharing the costs of the new measures to be determined. The government published a set of proposals for sharing of costs that would arise under the new legislation proposing that, notification costs should be shared between copyright owners and ISPs in the ratio 75:25.
However, it has been suggested that, the above measures may be powerless against a growing number of websites, that offer encrypted “cyber locker” facilities, allowing people to swap files without their contents being publicly visible and virtual private networks which can conceal a subscriber’s activities from ISP and proxy servers that could be used to hide the identity of file-sharers, by making it appear as though they are operating from a different location.
3. Ofcom’s duties
Ofcom must report to the Secretary of State on various infrastructure matters in the first year after the provision comes into force; then, at three years intervals, it must report on the types of network available, geographic and population coverage, network unavailability, the extent to which networks are shared, the standard of UK networks compared to those in other countries and on matters relating to internet domain names, such as their management and distribution, their misuse or the use of unfair practices by registries, end-users or registrars.
4. Power in relation to internet domain names
The Secretary of State has now the power to intervene in the operation of domain name registries where:
There has been misuse of domain names, registering intentionally misleading domain names and spamming or the use of unfair practices, such as cyber-squatting and pressure sales tactics, by registries, registrars and end-users of domain names or whether registries have failed adequately to deal with complaints, according to prescribed requirements;
The above failures have adversely affected or are likely to adversely affect: a) the reputation or availability of electronic communications services or networks in the UK; or b) the interests of UK consumers or members of the public.
The powers are only exercisable in relation to top and second-level domain name registries, where the domain is UK-related. In such situations, the Secretary of state must notify the registry, specifying the failure and a period within which the registry may make representations.
5. Video recordings
This section of the Act extends the statutory classification requirement to video games, that are only suitable for viewing by persons aged 12 years and above. It sets out the conditions that, must be satisfied for the game to be an exempted work, under the Video Recording Act 1984. The existing statutory exemptions for video games will continue to apply, such as those concerned with sport and music, but in addition, a video game will be exempted if, it satisfies one or more of the new conditions set out in the new section 2A. The first condition is that, the game does not contain anything listed in the section 2A(2), which is based on the criteria used by the PEGI.
6. Increase penalties for copyright infringement
Section 42 of the Act amends sections 107 of the CDPA, which deal with infringing articles and illicit recordings respectively, to increase the maximum fine, that may be imposed for these offences from the statutory maximum (£5,000 in England and Wales and £10,000 in Scotland) to £50,000.
7. Public lending right
Section 43 of the Act updates the Public Lending Right Act 1979 (1979 Act) to reflect the changing nature of book publishing and the increasing demand for the loan of books from public libraries in formats other than print. The main changes introduced by the section , are as follows:
Amended definition of “book” in the 1979 Act, to include audio and e-books, provided they consist mainly of written or spoken words or still pictures;
Amended definition of “lending”, “loan” and “borrowed” in the 1979 Act, with the aim of capturing almost all cases, in which a public library makes a book available to a member of the public, for use away from the library for a limited period of time;
It extends the definition of “author” in the 1979 Act, to include producers and narrators of audio-books;
It makes consequential amendments to the CDPA, to reflect the extended definitions of “book”, “author” and “lending” in the 1979 Act.
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