18.00-onwards. Social event (because geeks have social lives too) UK premiere of Kembrew Mcleod’s “Copyright Criminals” Ethanol and a chance to engage in social interaction with other members of the Homo Sapiens Sapiens species available at [...]]]> And here it is, this year’s GikII programme in its full glory:

(Via El Mundo) A judge in Barcelona has just delivered an astounding sentence with regards to sites that link to P2P content. The case was brought by SGAE (Sociedad General de Autores y [...]]]> [Note: I know the title is not legally accurate, I hope my fellow lawyers will cut me some slack for reporting purposes ]

(Via El Mundo) A judge in Barcelona has just delivered an astounding sentence with regards to sites that link to P2P content. The case was brought by SGAE (Sociedad General de Autores y Editores), the main Spanish collecting society, against Mr Jesus Guerra-Calderón, an individual who administers a site called elrincondejesus.com. SGAE claimed that Mr Guerra has been reproducing and communicating to the public works owned by their associates. The respondent argued that his website does not store any content, is not for profit, and that it simply provides links that can only be accessed using eMule, a P2P application, and therefore is not liable for direct or secondary copyright infringement. The judge agreed with the respondent, and dismissed the claim. Was the judge correct?

Elrincondejesus.com is a bit of an oddity, it is an very old-fashioned website filled with flashing icons, scrolling text and clashing colours. It does have a bit of a quaint 90′s feel to it. It is accurate to say that the site itself does not host any content. However, it is filled with links and images that clearly indicate that if you click on them, you might be taken to a page where the content can be found. The links however, are not direct links to the content, they are  eDonkey links; instead of having the form http:// they are ed2k://. This means that a normal browser cannot open them, and you need to download a P2P application that can open the file, such as eMule. This is a terribly inefficient way of running a website, it makes the service painfully slow, and it also relies entirely on Mr Guerra’s own input, as none of the content is generated dynamically.

One can tell a lot about a person by looking at their website, and elrincondejesus.com is like an open page. The site seems to be entirely a labour of love, there is no obvious manner in which Mr Guerra is making any money from the service he provides, and the technologies used are like a snapshot of the file sharing scene circa 2004. In other words, I cannot see why anyone would use this service, when it would be easier to find content through faster dynamic torrent portals such as Isohunt and the PirateBay. Perhaps the value lies in the fact that Mr Guerra is pointing directly to Spanish language content, so it might offer a niche service to people who have not kept up with newer services, and also who want links to Spanish content in an accessible manner.

Having said that, is the service infringing copyright? The case is centred on one simple legal question. Does providing a link to content constitute making the work available to the public? As mentioned, the judge did not think so, his reasoning claims that linking is not the same as distributing, disseminating and making the work publicly available. Mr Guerra is just creating an index of links, which is not in itself an infringing practice. In his view, linking is an integral part of the Internet. He says:

“The defendant’s conduct is to create an index that supports and guides users to access networks using P2P file sharing system, menus, posters or covers for movies or musical works. But there is no provision in the protection system covered by Intellectual Property Law, and adapted to Community Law, that prohibits sites which encourage, permit or guide users to search for works which will then be traded through P2P networks. Broadly speaking, the linking system is the very basis of the Internet, and a multitude of pages and search engines (like Google) can technically do what precisely what is currently under dispute, namely, to link to so-called P2P networks.”

This is a remarkable paragraph. Because the same result can be achieved through other means, the judge has ruled that this specific website is not engaged in copyright infringement. Moreover, the judge took into consideration that elrincondejesus.com is not a commercial endeavour. As if the above was not enough, the judge then went on to make a legal assessment of P2P networks in general. Magistrate Raúl García-Orejudo makes an interesting argument about the legality of P2P systems:

“P2P networks are mere conduits in the transmission of data between individual users of the Internet, and as such they do not infringe any right protected by Intellectual Property Law. Some P2P networks act as storage, which contain files that are not protected. There are also works which are no longer protected because the term of protection has run out; and there are works whose protection is not allocated to SGAE. Therefore, it has become necessary to clearly delimit which works are protected, and what conducts can infringe Intellectual Property Law, which was not done in this occasion.”

The judge also bemoans the fact that it is very difficult to clearly identify P2P users and the files they are sharing, even if they are infringing. Judge García-Orejudo admits that some conducts in P2P networks can be infringing, but seems to imply that current legislation does not fit quite well with the technologies. He says:

“Undoubtedly, previously undistributed works can be made available to the public through P2P networks, even potentially, as they might not be downloaded by other users. This behaviour can often be directed to a plurality of people. However, again, the legal type does not fit exactly and in every circumstance the usual behaviour of the users in such networks, given that, on one hand, in most cases users have the intent of downloading a file not knowing if part of the file they just downloaded is being shared at the same time by one user or a plurality of users from their hard drive. It is perfectly possible that the file exchange is taking place with only one person, or with a limited number of people.”

Here the judge is skating on thin ice. I understand that Civil Law judges are less capable of interpreting the letter of the law than common law judges, but even if one takes a very narrow reading of the law, I cannot help but feel that Mr García-Orejudo may be wrong in his interpretation. He seems to imply that knowledge of the exchange is a requirement for infringement, which is the completely wrong reading of the EU Copyright Directive. This suspicion is confirmed when I read the next part of the reasoning:

“Concluding, one must not forget that this is a mere exchange of files between individuals, without commercial gain, directly or indirectly (as it is difficult to establish a necessary causal relationship between downloading and not purchasing a work) through a medium such as the Internet, which is distinct from other obsolete technologies ( such as exchange or copy of tapes), in the fact that it has become massive and global, as is the distribution by the same medium of publicity, access and authorised communication of works by their authors or managers with the corresponding monetary rewards and cultural diffusion”.

Now, that is a long sentence. I am hoping that my translation managed to convey the wrongness of the argument. The judge seems to be saying that just because the Internet allows for the legal dissemination of information, then P2P is not so bad. This is so wrong-headed that I do not know where to begin.

This is an important and interesting ruling. I tend to agree with the linking part of the reasoning, but I completely disagree with the argument presented by the judge with regards to P2P networks. The judge uses some paper-thin arguments here to imply that P2P networks are not illegal, that they are here to stay anyway so what is the problem, and that almost nothing taking place in those networks can be enforced. I would be surprised if SGAE does not appeal the ruling.

Having said that, it seems clear that judges around the world are increasingly having to grapple with complex technical issues. The Australian judge in Roadshow v iiNet got the technology right. I’m afraid that Mr García-Orejudo did not even try.

Update: Good analyses in Spanish from Miquel Peguera and Iurismatica. We seem to agree that the ruling should have ended with the discussion about links, and that talking about private copying is a red herring.

Sabam v Tiscali has been a long-running case in Belgian courts with regards [...]]]> Just on the coattails of Roadshow Films v iiNet, we are about to get another landmark ruling on ISP liability. If there was any doubt that we are witnessing a legal struggle between intermediaries and content owners, we can lay those doubts to rest.

Sabam v Tiscali has been a long-running case in Belgian courts with regards to ISP filtering (see TJ McIntyre’s report on the 2007 ruling here). The case was brought by the Belgian Society of Authors, Composers, and Publishers (Sabam) against ISP Tiscali (which later changed its name to Scarlet). Sabam wanted Tiscali to install filtering software in its network which would allegedly curb illicit filesharing in P2P networks. The first ruling in the District Court of Brussels agreed with the claimants based entirely on expert reports about the feasibility of deploying filtering systems. The expert argued that there were at least thirteen systems capable of effectively filtering P2P transmissions, seven of which could be deployed in Tiscali’s servers. Tiscali’s response was that these solutions were partial and ineffective at best, as P2P clients are increasingly becoming more difficult to filter because of encryption technology. The ruling states:

“[...] it must be noted that the issue of future potential encryption cannot today be an obstacle to injunctive measures since this one is currently and technically possible and capable of producing a result, as it is in the case before this court; that the internet sector is constantly evolving; that in crafting injunctive relief, the judge cannot consider speculations about potential future technical developments, especially if these might also be subject to parallel adaptations concerning blocking and filtering measures [...]

This is an interesting paragraph for various reasons, one is a particular hobby-horse of mine. How does the law respond to changing technological challenges? In this specific case, the Belgian court has decided to ignore future considerations in order to issue an injunction based on existing technologies. Reasonable approach, but I believe the court were misguided by the experts, as nowadays most Bittorrent clients have encryption capabilities.

Unsurprisingly, the decision was appealed, and the Brussels Court of Appeals has referred two questions to the European Court of Justice. According to the IPKat, these questions are:

“1. Do Directives 2001/29 [copyright in the information society] and 2004/48 [the IP enforcement directive], read in conjunction with Directives 95/46 [on the processing of personal data], 2000/31 [the e-commerce directive] and 2002/58 [on privacy and electronic communications] and interpreted with regard to Articles 8 and 10 of the European Convention on Human Rights, allow Member States to authorize a national court, seized in a procedure on the merits and on solely on the basis of the legal provision which holds that “They [the national court] can equally impose a prohibitory injunction on intermediaries whose services are relied upon by a third party to infringe copyright or a neighbouring right”, to order an ISP to put into place, vis-a-vis all of its customers, in abstracto and as a preventive measure, at the expense of the ISP and without limitation in time, a system filtering all electronic communications, both incoming and outcoming, passing through its service, in particular by means of peer to peer software, with the aim to identify the circulation on its network of electronic files containing a musical, cinematographic or audiovisual work to which the claimant alleges to enjoy rights and to then block the transfer thereof, either at the request or at the time it is sent?

2. If question 1 is answered in the positive, do these directives require that the national court, seized to rule over a request for injunctive relief against an intermediary on whose services a third party relies to infringe a copyright, applies the principle of proportionality when it is asked to rule over the efficacy and the dissuasive effect of the requested measure?”

Unfortunately, I have not been able to uncover any more detail (and I do not speak French), but what I have seen so far seems extremely interesting. Those two questions lie at the heart of ISP liability and indemnity in Europe, and any ECJ ruling on them could prove vital for the future of intermediaries.

As was mentioned last week, we have been expecting an important ruling with regards to internet service provider (ISP) liability from Australia.  Behold Roadshow Films Pty Ltd v iiNet Limited [2010] FCA 24.  This is a case of tremendous importance [...]]]>

What did you say Skippy? ISPs are not liable for the infringement committed by their customers?

As was mentioned last week, we have been expecting an important ruling with regards to internet service provider (ISP) liability from Australia.  Behold Roadshow Films Pty Ltd v iiNet Limited [2010] FCA 24.  This is a case of tremendous importance because it is one of the first skirmishes in the brewing struggle between content owners and intermediaries (I use the term intermediaries on purpose, as the wider dispute encompasses companies such as Google).

iiNet is an Australian internet provider, which was sued by Australian film producer Roadshow Films, part of the Village Roadshow conglomerate.  However, the real power behind the suit was the weight provided by several Hollywood studios, including Warner, Columbia, 20th Century, and Sony Pictures.  The question at the heart of the proceedings was whether an ISP is to be held liable for the copyright infringement committed by its customers.  Call me cynical, but it seems like the film studios chose Australia as the first place to test this theory because Australian copyright law holds secondary infringement as direct infringement.  In other words, anyone making available copyright works will be held similarly liable, whether they do so directly or indirectly.

This is a lengthy and complex ruling, but it is remarkable that it has fallen upon a judge that seems to get the importance of the ruling in the wider context, and also who got the technical complexities involved.  Cowdroy J has managed to wade through the technical issues with exceptional clarity, and has produced a ruling that should become an instant classic.  The judge accurately identifies that the case hinges on two simple questions.  Have the iiNet customers infringed copyright directly?  The answer is yes.  Has iiNet authorised the copyright infringement of its users by failing to take steps to stop it from happening? Here the answer is no. The reasoning behind the negative answer is set out clearly:

“12. Firstly, in the law of authorisation, there is a distinction to be drawn between the provision of the ‘means’ of infringement compared to the provision of a precondition to infringement occurring. The decisions in Moorhouse, Jain, Metro, Cooper and Kazaa are each examples of cases in which the authorisers provided the ‘means’ of infringement. But, unlike those decisions, I find that the mere provision of access to the internet is not the ‘means’ of infringement. There does not appear to be any way to infringe the applicants’ copyright from the mere use of the internet. Rather, the ‘means’ by which the applicants’ copyright is infringed is an iiNet user’s use of the constituent parts of the BitTorrent system. iiNet has no control over the BitTorrent system and is not responsible for the operation of the BitTorrent system.
13. Secondly, I find that a scheme for notification, suspension and termination of customer accounts is not, in this instance, a relevant power to prevent copyright infringement pursuant to s 101(1A) [...]
14. Thirdly, I find that iiNet simply cannot be seen as sanctioning, approving or countenancing copyright infringement. The requisite element of favouring infringement on the evidence simply does not exist. The evidence establishes that iiNet has done no more than to provide an internet service to its users. This can be clearly contrasted with the respondents in the Cooper and Kazaa proceedings, in which the respondents intended copyright infringements to occur, and in circumstances where the website and software respectively were deliberately structured to achieve this result.
15. Consequently, I find that the applicants’ Amended Application before me must fail.”

This conclusion is both astute and well informed, as it takes into account the very clear distinction between an internet service provider, and the producer of software designed specifically to authorise copyright infringement, such as Kazaa.  Cowdroy J goes in detail through some of the most relevant aspects of the technology, namely the intricacies of Bittorrent transactions, and also whether the identification of customers is reliable.  To me one of the most important parts of the ruling is that we get a very clear legal explanation of the Bittorrent protocol:

“70. To use the rather colourful imagery that internet piracy conjures up in a highly imperfect analogy, the file being shared in the swarm is the treasure, the BitTorrent client is the ship, the .torrent file is the treasure map, The Pirate Bay provides treasure maps free of charge and the tracker is the wise old man that needs to be consulted to understand the treasure map.
71. Whilst such an analogy grossly oversimplifies the situation it will suffice for present purposes. It demonstrates that all of the constituent parts of the BitTorrent protocol must work together before a person can access the file sought. In this judgment the Court will refer to all the constituent parts together as the ‘BitTorrent system’.
72. Such analogy also demonstrates that a number of deliberate steps are required to be taken by a person to bring about the means to infringe the applicants’ copyright. The person must download a BitTorrent client like Vuze, seek out .torrent files related to copyright material from websites, and download those .torrent files and open them in their BitTorrent client. Thereafter, the person must maintain connection to the internet for as long as is necessary to download all the pieces. The length of this downloading process will depend on the size of the file, the number of peers in the swarm and the speed of those peers’ internet connections.”

The other remarkable part of the ruling is that we get a very detailed insight into the technology involved in the detection of repeat infringers.  The applicants use a Bittorrent client called DtecNet, which singles out infringing torrents identified by the content owners, and starts downloading from the participant sharers in the swarm.  The agent downloads a full copy of the file to establish that this is indeed an infringing copy, and then identifies IP addresses in the iiNet network.  The agent would then download one piece of the full file from a specific IP address, and would continue to download a piece every 24 hours from the same address.  This technical operation was able to establish that there were indeed iiNet customers sharing infringing files repeatedly, but here is where one of the most interesting findings takes place.  Cowdroy J accurately points out that the infringement is much less widespread than previously beieved, and particularly, seemed to express doubt as to the efficiency of matching IP addresses with specific customers.  Another interesting technical issue that came to bear on the liability issue was the fact that the applicants were trying to paint a picture that a large portion of an infringer’s broadband use would be dedicated to illegal filesharing, while the evidence was to the contrary.

Turning to the legal aspects, one of the most important questions in the ruling is whether each time a user connects to the internet it should be considered as a fresh count of making the work available to the public, or whether the first action, namely downloading the .torrent file and seeding it, would be one single count.  Cowdroy J opines:

“310. [..] The Court finds that it is the wrong approach to focus on each individual piece of the file transmitted within the swarm as an individual example of an ‘electronic transmission’. The BitTorrent system does not exist outside of the aggregate effect of those transmissions, since a person seeks the whole of the file, not a piece of it. In short, BitTorrent is not the individual transmissions, it is the swarm. It is absurd to suggest that since the applicants’ evidence only demonstrates that one piece of a file has been downloaded by the DtecNet Agent from each iiNet user (in some cases more than one, but not many more), the applicants cannot prove that there have been ‘electronic transmissions’ by iiNet users of the applicants’ films. But it is equally absurd to suggest that each and every piece taken by the DtecNet Agent from an iiNet user constitutes an individual ‘electronic transmission’ infringement.
311. The correct approach is to view the swarm as an entity in itself. The ‘electronic transmission’ act occurs between the iiNet user/peer and the swarm, not between each individual peer. One-on-one communications between peers is the technical process by which the data is transferred, but that does not mean that such level of detail is necessarily what the communication right in s 86(c) focuses upon. While the DtecNet evidence cannot prove directly that an iiNet user has ‘electronically transmitted’ a film to the swarm (it can only show that the data has been ‘electronically transmitted’ to the DtecNet Agent acting as a peer in the swarm) the evidence is sufficient to draw an inference that in most cases iiNet users have done so. “

There are many other legal aspect treated, most of them are specific to Australian copyright law.  The most relevant from an international perspective, and one that has been highlighted elsewhere, is that the ruling seems to seriously attack the viability of three-strikes approaches to copyright infringement.  Firstly, there is a lengthy discussion about the legal reliability of evidence obtained by agents acting on behalf of the copyright owners, when by definition those agents are licensed by the owner to undertake actions that would otherwise be infringing, namely, collect copies from the internet.  Secondly, there is the troublesome issue of how such evidence should be suspect in the first place.   Cowdroy J says:

“631. [...] the Court finds that it would not be appropriate to construe the safe harbour provisions such that there is an expectation on the [ISP] to terminate its subscribers at the request of a person who does not swear to the truth of his statement, and is an employee of an organisation whose precise legal status vis-à-vis the relevant copyright owners and exclusive licensees is not at all clear. Allegations of copyright infringement are serious charges which are potentially defamatory. Further, AFACT (the Australian copyright enforcement agency) enjoys no status as an authority invested with power to issue legally enforceable directions.”

This paragraph should be printed out and handed out to the Lords currently discussing the Digital Economy Bill (wink, wink, ORG).  We cannot possibly build a system of punishment that relies entirely on suspect accusations without any legal recourse.  The very principles of fairness and due process of law are at stake here.

What a refreshing ruling from Down Under.  Unfortunately, another copyright case from the land where women glow and men plunder has overshadow this more important development.

I just smiled and gave me a vegamite sandwich.

It was supposed to be the British equivalent of high-profile cases such as PirateBay and the Jamie Thomas trial.  It was supposed to act as a clear deterrent to a new generation of file-sharers against widespread copyright infringement.  Instead, Alan Ellis, the founder of torrent tracking site OiNK [...]]]>

"I'm not criminally liable for secondary infringement, officer!"

It was supposed to be the British equivalent of high-profile cases such as PirateBay and the Jamie Thomas trial.  It was supposed to act as a clear deterrent to a new generation of file-sharers against widespread copyright infringement.  Instead, Alan Ellis, the founder of torrent tracking site OiNK has been acquitted of the charges of conspiracy to defraud.  How did this case turn from sure thing to nightmare for the music industry?

OiNK was not your typical torrent tracker site. Websites such as PirateBay, Isohunt, and TorrentReactor are free to use and available to the wider public.  OiNK was a free-of-charge closed service, available only by invitation from an existing member, which could be obtained by paying $5 USD.  The site also operated through donations, which amounted to a staggering $300,000 USD.  OiNK’s statistics are impressive, it boasted 200,000 registered users, and it facilitated the exchange of 21 million files. I am going to go out on a limb here and claim that most of those files were infringing copies.

So, it is clear that OiNK was in the wrong, and the fate of Mr Alan Ellis was sealed, right? Not really.  The problem seems to have been that prosecutors chose to charge Mr Ellis with conspiracy to defraud, instead of anything related to copyright infringement.  This meant that they had to prove Mr Ellis was trying to defraud his customers, when it was clear that he was offering a service, and his clientèle knew fully well what they were getting into.  No fraud then.

Why didn’t the prosecution try for copyright infringement offences?  For example, s107 CDPA establishes criminal offences for various copyright infringement acts made “in the course of business”.  As Mr Ellis was clearly profiting handsomely from his services, it could be argued strongly that he was infringing copyright for commercial gain.  Or can it?  The main problem with torrent sites is precisely that no infringing copies are kept on the servers, and that the trackers act simply as facilitators.  Using a real-world analogy, torrent sites are more akin to bar lounges where illicit goods change hands.  Nonetheless, s107 also covers secondary infringement offences, such as communicating infringing copies to the public, which one might think is precisely what a torrent site does.  However, the wording of UK copyright law is problematic in this respect, as it seems entirely drafted with physical copyright infringement in mind.  For example, s108 CDPA says:

“108.-(1) The court before which proceedings are brought against a person for an offence section 107 may, if satisfied that at the time of his arrest or charge-
(a) he had in his possession, custody or control in the course of a business an infringing copy of a copyright work, or
(b) he had in his possession, custody or control an article specifically designed or adapted for making copies of a particular copyright work, knowing or having reason to believe that it had been or was to be used to make infringing copies,
order that the infringing copy or article be delivered up to the copyright owner or to such other person as the court may direct.”

This clearly assumes that criminal commercial infringement will take place through some physical medium, and seems to preclude facilitating online acts.  It seems then that prosecutors were not sure to obtain a conviction through copyright infringement.  OUT-Law makes a good point that the best way to proceed was to pursue OiNK for authorising copyright infringement, which is a civil offence for secondary infringement (see s24(2) CDPA).

Good news for OiNK may be bad news for the rest of us, as I am afraid that the music industry may use this verdict to push for stronger copyright protection in the upcoming Digital Economy Bill.  It is clear that some torrent sites operate at the very fringes of acceptable behaviour.  As some independent musicians have pointed out in an interesting Guardian blog article, torrent sites may be guilty of not doing enough to curb infringement.  If legislators are presented with an idea of a virtual Wild West where everything goes, we may be in for a rough awakening when the Bill eventually gets through Parliament.

The case deals with email contractual negotiations that [...]]]> (Via Jordan Hatcher) What are the rules with regards to contract formation through email? When exactly is a contract concluded if the negotiators have not disclosed the terms and conditions clearly? The case of Baillie Estates Ltd v Du Pont (UK) Ltd helps to elucidate some of these questions.

The case deals with email contractual negotiations that are nowadays common in various industries. The case involves Edinburgh printing company Baillie Estates, and the English representative of US multinational Du Pont. The contract involved the purchase of a large printing press. While the sales process involved visit by Du Pont sales agent to Baillie’s facilities, the negotiation process was mostly conducted through email. According to the facts of the case, Du Pont sent an email to Baillie with details relevant to the conclusion of the contract, including price, date of delivery, payment dates, interest rates, and extras to be included in the transaction. Baillie responded with a short email reading “Go ahead”, and Du Pont replied with a terse and vague and terse response “It’s on the way”, with no reference as to what was on the way. At this point, Baillie’s representatives thought that the contract had been concluded. However, Du Pont then sent the standard terms and conditions as an email attachment the day after, which included a jurisdiction and choice of law clause, but also specific provisions about credit checks that may hinder the conclusion of the contract.

The parties were in disagreement as to when there was a contract. Baillie argued that the contract had been concluded with the communication that “It’s on the way”, while Du Pont argues that the early exchange was only an invitation to treat, and that the contract would have been concluded after Baillie had agreed to the standard terms and conditions. In the Court of Session decision, Lord Hodge opined that the email with contractual details was indeed an offer, and that the subsequent communication, while informal, had the acceptance effect. Therefore, a contract was concluded before Du Pont had sent an email with its standard terms and conditions.

A very interesting aside is that Du Pont’s communications contained a disclaimer stating that no email communication should be considered contractual unless clearly stated. Lord Hodge says:

“For completeness, I record that Du Pont did not advance the argument set out in their defences that their emails contained a standard disclaimer that the email did not constitute a contractual offer or acceptance unless it was designated that an e-contract was intended. Such an argument would have been inconsistent with Mr Cormack’s approach and would have been met by the response that it was the attached proposal rather than the email which was the offer document.”

Very interesting ruling indeed! It seems like this serves to further erode the enforceability of email disclaimers. Brodies has drafted a list of lessons to be learnt from this case:

“Contracts may be formed by email earlier than you might expect.

When negotiating a contract by email, tell the other side about your standard terms as early as possible.

Consider rewording standard “no contract” email footers to cover attachments.

If you do not want to be bound until the contact is signed, then say so expressly in your communications (both written and verbal). In England, the phrase “subject to contract” is often used. In Scotland, while it may help to use this phrase, it does not have the legal meaning that it has in England. It is better to spell out the position in each communication e.g. by making clear that nothing in the communication constitutes a legal offer that is open for acceptance to create a legally binding contract.”

Sound advice indeed.