This week, in the US, the recording industry's injunction against Napster has been re-activated in a new form following an Order from the U.S. Court of Appeals for the Ninth Circuit. Having been given a temporary reprieve last year, pending the outcome of the appeal, Napster must now remove all unauthorised tracks from its service within just 72 hours. The time limit operates from the moment record labels present Napster with a list of the infringing material to be taken off. Interestingly, the record companies must not only list the titles of the infringing works and artists involved, but also the names of the relevant files as they appear on the Napster service. Although, they have some work to do, this decision is nonetheless music to the recording industry's ears.
Whilst the recording industry has relentlessly pursued the litigation in order to protect its assets, it seems to be widely accepted that the peer to peer distribution model utilised by Napster offers great opportunities to rights holders in theory at least. The huge number of individuals making use of the Napster service (currently around 60 million worldwide)indicates it potential. The market for any type of digital product that can be shared over the Internet, including books, film and software, clearly could be substantially broadened by use of such distribution, to the benefit of many rights holders. The issue is though whether it is possible to use and control this form of distribution without falling foul of the law.
From a UK perspective, the question is whether an organisation can operate a service which permits users to exchange copyright works, such as music, books and films, without breaking the law. Is it necessary license rights from the copyright owners involved.
Starting with the basics, in the UK various different types of work are entitled to copyright protection under section 1 of the Copyright, Designs and Patents Act 1988 (Athe CDPA@), including the following:
- Original literary, musical or artistic works; and
- Sound recordings, films, broadcasts or cable programmes.
A digital product is likely to contain a number of these works (for example, a musical work and a sound recording in the case of an mp3 music file) that will often be under different control or ownership. Therefore, a number of different parties may be interested to take action to stop unlawful distribution of a particular product.
Primary Acts of Copyright Infringement
The various primary acts restricted by copyright are set out in section 16 (1) of CDPA. These acts will amount to infringement where they are carried out without the consent of the copyright owner. They are torts of strict liability, in that knowledge that the act is infringing copyright is immaterial.
The relevant primary acts that are capable of being carried out on the Internet are:
- Reproduction; and
- Inclusion in a cable programme service.
For reasons, which are not examined here, other activities defined in s.16 of the CDPA do not accommodate the online world quite so well.
It is clear that the operator of an online peer to peer service would not generally be held to be liable itself for primary acts of infringements in the UK, as no copies of the copyright works involved are made on or transmitted via its servers, not even transient ones. However, the issue of whether any users of such a service are liable for such primary acts does require consideration, in order to determine whether there are acts of infringement that are being authorised. Copyright will be infringed where a person authorises primary acts without consent. Such a person could also be liable for procuring or inciting infringing acts.
The reproduction right is the most fundamental right of copyright owners, and is broadly defined in section 17 of the CDPA. It covers the reproduction of works in any material form, including storing them in any medium by electronic means. Furthermore, the making of copies that are transient or incidental to some other use of the work, amounts to a restricted act.
Under UK law, infringing copies are therefore clearly being made at several different points where there is peer to peer distribution. For example, a copy of a work is made on the computer or server where it is being stored. Each user downloading a work from the Internet via the service involved will then make a further copy of it. There may also be a number of intermediaries who make copies.
Inclusion in a Cable Programme Service
Inclusion of a work in a cable programme service, is a restricted act under section 20 of the CDPA. Although it is complex, this right fits the Internet environment in a number of respects.
A cable programme service is defined in section 7 (1) of the CDPA as a service which consists wholly or mainly in sending visual images, sounds or other information by means of a telecommunications system, otherwise than by wireless telegraphy. It must be either for reception either at two or more places (whether for simultaneous reception or at different times in response to requests by different users), or for presentation to members of the public. Where a user makes a copyright work available to other users in numerous places via the Internet, this clearly falls within the first option. The proposition that a web site can amount to a cable programme service was considered and accepted by the Scottish Courts in the case of Shetland Times v Wills.
Accordingly, it could be said that users who make copyright material available to other users of a peer to peer service are including it in a cable programme service.
Permitted Acts - Fair Dealing
In the UK there is no statutory exception that is directly equivalent to the concept of "fair dealing" or "non-commercial use" as raised, so far unsuccessfully, by Napster in its defence in the US litigation. The CDPA does provide for some limited acts which will not amount to copyright infringement. It is difficult to see how these could generally be relied upon in this context in the UK. However, there is clearly scope for some peer to peer services being brought within the exceptions. For example, section 30 states that fair dealing with a work for the purposes of criticism or review or reporting current events does not infringe copyright. Accordingly, a service involving the exchange of copyright materials specifically for this purpose could be found to be non-infringing.
Section 16(2) of the CDPA provides that copyright in a work is infringed by a person who authorises another to carry out an infringing act e.g. copying. At first glance this would appear to be very useful. However, as a number of UK Court decisions have shown, liability for authorisation has historically proved difficult to establish.
It has been held that an authorisation "can only come from someone having or purporting to have authority, and an act is not authorised by someone who merely enables or possibly assists or even encourages another to do that act, but does not purport to have any authority...".
Providing a person with the means to make infringing copies of or carry out other infringing acts on the Internet may therefore be held not to amount to authorisation, if previous cases are followed. If standard terms and conditions are included on a relevant service, purporting to require users to comply with copyright legislation as a condition of use, as in Napster's case, this would seem to make it all the more difficult for right holders.
The UK Courts may be persuaded however to re-examine this issue in the light of new technologies, and find reasons for distinguishing the old cases. In particular, we are now dealing with a situation where a potential defendant has the ability to control how their service is used and prevent infringing use, such as using monitoring and filtering software. Napster have acknowledged this to a certain extent in working with Bertelsmann to create a legitimate service.
For the future, operators of peer to peer web services will also have to take into account the implementation of the E-Commerce Directive (which incidentally limits the liability of service providers). The long awaited Copyright Directive approved by the European Parliament on 14 February 2001 will also provide directly enforceable rights for the online world, which could be used by copyright owners against these types of services.
Under our existing legal framework in the UK, the operators of peer to peer services that potentially facilitate acts of infringing copyright, may be able to distance themselves sufficiently from consumers to ensure that they do not fall foul of the law. However, there is a risk that the UK Courts will interpret current legislation in favour of copyright owners seeking to enforce their rights against such operations, and such risks can only increase once the E-Commerce and Copyright Directives are implemented.
Operators of peer to peer services should be advised therefore to obtain licences from copyright owners to protect their position if possible. Whether such licences will be made available is another matter. This will no doubt depend on the security measures offered by such a service to monitor and protect copyright works.
First published in E-Comerce Law and Policy in March 2001.