Extension internet copyright exemption

15 May 2006

Lorna Brazell

February 2006

The consultation launched in July 2005 by the Department of Trade and Industry (“DTi”) in the United Kingdom on the liability of ‘information society services providers’ (“ISSPs”) received some 35 responses, several of them weighty. The questions of whether the activities of hyperlinking to infringing material, providing location tool services or content aggregation ought to be exempted from copyright infringement by statute are evidently still live issues within the affected industries.

The responses break down into two predictable categories. Those from the content providers argue that no extension of any exemption is required and in some cases, such as British Music Rights, that the existing exemptions should rather be restricted. The users, on the other hand, such as information service providers, libraries and universities argue that any degree of uncertainty over the legal correctness of hyperlinking is bad for the knowledge economy and economic development generally. These two sets of interests have no common ground, and indeed are not always arguing over the same kinds of internet use. It is highly improbable that any of the content providers object to the kinds of linking and aggregation services being provided by the members of the Libraries and Archives Copyright Alliance; rather, their concerns relate to individual websites and the commercial intermediaries which enable copyright piracy of current, commercially valuable internet content.

Arguably, neither restriction nor extension has yet been demonstrated to be necessary. A common theme of the responses from both camps is the lack of case law to date clarifying the courts’ approach to the existing exemptions, and it is true that there is no guidance to date. However, this suggests that either these activities are not causing the right holders any material problems in the UK,[1] or the parties to any disputes have found the law sufficiently clear not to incur legal costs in unnecessary argument. It also underlines the fact that introducing further legislation will not entirely solve the problem in a common law jurisdiction: until the courts have ruled upon the scope and effect of any provision, uncertainty as to its proper interpretation will inevitably persist.

At one level, the dispute is over which side should bear the administrative costs of ensuring compliance with copyright. While traditionally the costs of policing copyright have, largely without demur, been borne by the copyright owners who benefit from it, the anonymity and global nature of the internet may, now that its infrastructure and operators are well established and economically powerful, justify apportioning those costs – at least insofar as necessary to make the originators of infringements identifiable. The existing exemptions enable ISPs not to need to know their customers since, whatever those customers do, the worst the ISP has to fear is an obligation to take down any content which is objected to, while continuing to profit commercially from supporting the customers’ activities. At the same time, the copyright holder may be unable to enforce their rights against the originator of the infringement since they are unable to identify them. This is completely inconsistent with the EU’s approach in other areas, such as the provision of legal or other professional services, where the service provider is obliged upon pain of serious criminal liability not to provide services until rigorous identity checks have been carried out, to ensure no money laundering is involved.

The origin of this inconsistency is the policy behind the Ecommerce Directive, which was to ensure the emergence of ISPs and the growth of internet services by shielding the nascent infrastructure providers from potential liability due to third party-instigated infringements. The expectation that this protection is the birthright of such operators is now engrained, although their relative economic status is transformed.[2] The response from Reed Elsevier, for instance, argues that “it is self evident that it is impossible to structure the business to vet every piece of data received on [the scale of uploading 1.6 million searchable documents per day]”. Reuters takes a similar line. This may be true while the aggregator takes it as a given that they are entitled to expect to operate on such a scale, since that is what their customers want and are prepared to pay for; but it is equally arguable that the aggregator should only be entitled to profit from holding a database which it can pre-vet, or should be prepared to accept liability when its huge scale of operation leads it into inadvertent infringement. The contrast with liability for copying, or authorising copying, through physical means is striking: if a university library may be liable for letting students photocopy excessive extracts from books on machines it provides, why should not a large, commercial organisation bear at least some liability for facilitating the world wide distribution of infringing copies for profit? There is no absolute right to run a large business for profit on the back of exoneration from infringement of other parties’ rights.

The enactment of a requirement that ISPs not only take down infringing material but also identify and retain records as to who their customers are is one possible balance which would enable ISPs to continue to grow without liability while improving the feasibility of direct enforcement for rights holders. Of course, there is a risk that the response to imposing such an obligation would be for infringers to operate through legitimate offshore entities whose identities could be verified without their users becoming known – or for internet service provision to move out of the UK. As a matter of policy, however, it is far from clear that intermediation of infringement “without tears” should be condoned. Rather, the UK should be concerned to ensure that the growth of e-commerce throughout the EU is based on a sound balance between the competing interests – which a number of responses opined has already been achieved by the existing legislation, and which in a broader context is already under review by a working group headed by [ ] the former editor of the Financial Times, not required to report until late 2006.

As one response[3] pointed out, there is no certainty at this stage whether the courts would hold hyperlinkers liable for copyright infringement in the first place. Nor is there any reason to suppose search engines’ acts fall within existing copyright restrictions. The natural anxiety of legitimate, publicly funded bodies such as universities and libraries that their public-interest activities should carry no risk at all is not a persuasive reason for providing generalised exemptions from a liability which may not exist and which is equally if not more likely to fall upon other service providers – who may well be profiting commercially from the potentially infringing activities, and whose justification for exemption is on an entirely different foundation. The assenting argument of commercial users that, as the Internet Service Providers’ Association put it, “it is unlikely that the Internet would be the widely used and useful tool it is today if these links and in particular the results of search engines were not freely available and unimpeded by concerns about liability”, in fact undermines the case it seeks to make – since it is self-evident that the Internet has evolved as it has despite any current anxieties about residual liabilities such as those under consideration, and that these anxieties have not yet been proved to be well-founded.

British Music Rights also indicated that its members would want to be able to make an intermediary liable for such activities where the ultimate infringer was for instance a website based in Russia or another country where enforcement is simply not practicable – in effect attempting through the UK’s courts to enforce rights which local law in those countries either does not confer or chooses not to enforce. As a matter of policy, this would require considerable care. But until it has been established that the law as it stands imposes any liability upon such intermediaries even when located in the UK, further legislation would be pre-emptive and premature.

The situation in other Member States does appear to vary considerably, through both the implementations of the original Directive into national law and the subsequent court interpretations of those laws. Some responses, such as that of Thus (the owner of Demon Internet) reflect the reality that ISPs operate in a genuinely global environment where disparate decisions in different countries create an impossible regulatory situation. However, that cannot be cured by, and is therefore no basis for, unilaterally amending the law in the UK – indeed, as the Digital Content Forum points out the only likely result of further action by the UK will be to increase the overall variation across the EU. If any action can improve the level of legal certainty, it needs to be done at the EU level.

The DTI are still in inter-departmental discussions as to what form the UK Government response to this consultation should take. A final response is not expected now until around February 2006.

Published in World Intellectual Property Report, February 2006

[1]Where ‘material’ means ‘individually sufficiently damaging to justify the legal costs of pursuit through the courts’.
[2] Respondents include not only traditional publishers who have moved online, but also some of the giants of the internet - eBay, Yahoo and others which only came into existence with the rise of the World Wide Web.
[3]From British Music Rights