Internet Service Liability and Intellectual Property Rights

Notice and Take down certainly appears to be the favoured model both on this side of the Atlantic and in the US with regard to instances of Internet based infringement of intellectual property rights. There have been many instances that have illustrated how grave a threat the Internet represents to frustrating the workings of IPR; music file sharing websites being a primary example. Given the nature of the Internet, combating this problem requires a trans-national approach. As well as providing an analysis of US legislation for comparative purposes, this section seeks to give you an overview of pending European legislative provisions aimed at resolving the ISPs position in relation to liability for infringing intellectual property rights.

• The US Approach - The Digital Millennium Copyright Act, 1998.

The US has lead the way in adopting a formulated approach to copyright enforcement and protection. Following much lobbying by the software and entertainment industries, two powerful pieces of legislation have been introduced in America aimed at efficiently dealing with the problem of digital piracy; the Digital Millennium Copyright Act of 1998, and the "No Electronic Theft" Act 1997. The cumulative effect of these Acts is that it is now a criminal offence to circumvent anti-piracy software, which is incorporated into commercial software, and copyright works provided in digital format. This is in accordance with Article 12 of the WIPO Treaty, 1996. Moreover, the manufacturing, sale or distribution of code-breaking devices that may be used to make illegal copies of software, is prohibited. A measure of balance is achieved in the legislation, as it is provided that Encryption codes may be broken or cracked when the purpose of doing so is for research or where such is necessary in order to access or achieve inter-operability of a computer system. It is also permissible where the purpose of doing so is to test a computer security system.

The Digital Millennium Act deals specifically with the issue of Internet Service Providers' liability vis-à-vis copyright. The general rule that an ISP will not be held to be liable for providing access or facilitating access to copyright infringing material is preserved by this Act. The Act stipulates a clearly defined notice and take down time table. When an ISP is notified in writing that copyright infringing material is available through its service, it must act expediently to remove or disable access to the offending material. The written notification must provide adequate information to support the claim of copyright infringement. The ISP is then obliged to notify the party, the subscriber that placed the offending material on the server, that the material will be removed from the server within ten working days of the notification having been served. The party alleging the infringement must then seek a Court Order to restrain the subscriber from engaging in the infringing activity by way of an injunction. This must be sought within a ten-day period of the notification. Failure to comply with this time limit, will oblige the ISP to replace or re-activate access to the material in question. This somewhat long winded procedure seeks to strike a balance between the right to Freedom of Expression and the proper enforcement of intellectual property rights.

A copy of the Digital Millennium Copyright Act, 1998 can be found at the following location: http://www.loc.gov/copyright/legislation/dmca.pdf

• The European Approach.

The European Approach to ISP liability and Intellectual Property Rights is primarily dealt with by two directives, which will ultimately become a part of the domestic law of each Member State of the European Union:

1) The Copyright and Related Rights in the Information Society as adopted on the 9 th April 2001.

2) The Electronic Commerce Directive, 2000/31/EC.

These two pieces of legislation have been greeted with a high degree of criticism. Many have commented that far from providing certainty with regard to ISP liability, the two directives seem to be at odds on the issue.

• The Copyright Directive

Article 5(1) of the Copyright Directive deals with the controversial topic of transient copying and provides for an exception from liability for copyright infringement, where the reproduction is transient or incidental in the following broad circumstances:

1. the transient copies are an integral and essential part of a technological process whose sole purpose is to enable a transmission in a network between third parties by an intermediary or a lawful use of a work or other subject-matter to be made; and
2. they have no independent economic significance.

The net effect of this is that ISP's and telecommunications operators will not be required to seek consent, or to pay for transient copies made across their networks as part of the transmission process. This position is in keeping with the logic that imposing liability for the creation of transient copies would make the Internet unworkable. However, there would seem to be a lack of clarity regarding the second part of the provision, it is in effect left to the domestic courts to determine whether such a copy has any "independent economic significance". While the basic premise of this is sound, it will be left to the various legislative bodies across the European Union to clarify this issue. The negative aspect to this is that the ISP operating across Europe may still end up facing a variety of degrees of liability across the EU.

• The Electronic Commerce Directive

The Electronic Commerce Directive provides for the liability of intermediaries in a more detailed manner than the Copyright Directive. It should be noted that this provision is not specific to intellectual property rights and associated liabilities but applies to general content liability. The Directive refers to intermediaries as "Information Society Services". An Information Society Service is broadly defined as:

"Any service normally provided for remuneration, at a distance, by electronic means and at the individual's request of a recipient of a service".

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