Revolving Door Between Commission and Copyright Industry?

Unconfirmed reports claim that Maria Martin-Prat is to succeed Tilman Lueder as head of Directorate unit D1 at the European Commission, responsible for copyright policy. Martin-Prat took a sabbatical between 2000 and 2004 to work for the International Federation of the Phonographic Industry. As yet there has been no official confirmation, but the news is being relayed by french webzine PCinpact, Pirate Party MEP Christian Engstrom and consumer organization KEI (which includes a precis on the positions expressed by her whilst working for the IFPI such as her aggressive opposition to private copy rules). Being a high level appointment, i presume the decision was in the hands of Commissioner Michel Barnier.

People are understandably outraged at the appointment. While there is no question as regards her suitability to work for the Commission in general, it is grotesque that she should be put in charge of a policy unit in an area where she was previously a paid lobbyist. She is currently head of Directorate Unit E1, concerned with the Services Directive.

Whilst web commentary presents her as ringmaster for the new Enforcement Directive (IPRED2), I’m not so sure. As I wrote in February, there is now a unit dedicated specifically to Enforcement, headed by Alvydas Stancikas. His unit ran the legal sub-committee formed to report on the first IPRED and suggest modifications. Head of Directorate Margot Fröhlinger has also been prominent in the enforcement field.

Tilman Lueder was a pretty entertaining guy, rather wry, who also expressed some scepticism about the direction of copyright policy in recent years, pointing out the impossibility, for example, of the Google Books initiative in the EU due to the lack of a general fair use defense. Apparently he’s off to China.

EU Contracts RAND for Piracy & Counterfeiting Study

Much of the EU’s output is not the work of officials but rather of thousands of firms contracted per project. Tender reference MARKT/2010/03/D requested proposals for:

A study to assess the scope, scale and impact of counterfeiting and piracy in the internal market, through a defined methodology for collecting, analysing and comparing data.

This study will be the flagship publication of the European Observatory on Counterfeiting and Piracy. The tender process concluded in December and the winner was announced in January: the RAND Corporation (UK), and they will be paid half a million euros for their labours.

RAND has a certain fame as the birthplace of much of modern game theory under John Nash, and the doctrine of nuclear deterrence through mutually assured destruction (MAD). Launched an part of the cold-war security apparatus, RAND is now a massive organization heavily focussed on statistics and modeling for the devleopment of policy recommendations, often in ‘public safety’ fields.

Their selection warrants unease because although they would not be regarded as IP specialists, they do have form: in 2009, their US organization produced a lengthy report ‘Film Piracy, Organized Crime, and Terrorism’. This study was financed by the Motion Picture Association, and much of the documentation compiled was assembled by a consultant on ‘organized crime’ employed by the MPA. RAND did at least disclose the relationship with a vested interest.

Analysis of the IP Enforcement Directive Report

My intent initially was to publish this in January, but as the preceding posts make clear, there was considerable digging to be done to get a better picture of the context. In what follows, I begin with some comments with regard to shaky basis for the enforcement project, and then move on to a more detailed review of the Commission’s report.

1. The most noteworthy element of the Commission’s Report on the IP Enforcement Directive is what is absent. The Directive itself mandated the review, under Article 18, titled ‘Assessment’:

Three years after the date laid down in Article 20(1), each Member State shall submit to the Commission a report on the
implementation of this Directive.

On the basis of those reports, the Commission shall draw up a report on the application of this Directive, including an assessment of the effectiveness of the measures taken, as well as an evaluation of its impact on innovation and the development of the information society (my emphasis).

Those interested in reading about ‘impact on innovation and the development of the information society’ will be disappointed, as such a section does not exist. Late transposition by several member states is offered as explanation for its absence. Yet this tardiness was no obstacle to a commentary on the efficacy of the Directive’s enforcement measures. A strange anomaly, but easily explained:

“… in the context of the European Observatory on Counterfeiting and Piracy, DG Internal Market and Services works with experts from the private sector to assess the application of the Directive and to complete the information received from the Member States.”
Commission Staff Working Document, p.5 (hereinafter CSWD)

So we’re in good hands. Elsewhere the Report relies on work commissioned by copyright industry players in support of its assertions, such as that produced by Tera consultants, whose methodology was questioned by the Social Sciences Research Network (SSRN).

Confusion and Dismay Strike EU Enforcement Overlords

The rather boring series of posts recently was triggered by the announcement last December of a consultation on the review of the Intellectual Property Enforcement Directive (IPRED 1) passed in 2004. Closing date for submissions is next week, March 31st. Before continuing with an analysis of the review and a summary of my concerns, two recent incidents are worth noting.

1. Michel Barnier’s Letter to Françoise Castex & Stavros Lambrinidis
In response to a written question from two MEPs about the ‘stakeholders dialogue on illegal uploading and downloading’, reported here, Commissioner Barnier of Internal Market responded with a letter on March 7th. Therein he states:

“In conformity with the Commission’s “Better Regulation” initiative, a public consultation has been launched on the Report of the IP Enforcement Directive, adopted by the Commission at the end of 2010. Participants in the stakeholders dialogue do not benefit from a preferential position during this consultation.”
(my trans.)

Regular meetings took place between the private sector and Commission officials for the preceding year and a half; the ‘stakeholders dialogue’ was held almost monthly. In addition there was also the of ‘legal sub-committee‘, representing the same sector of rightsholders (but with less interference from those pesky Telcos and ISPs). The contents of the Report mirror the subjects discussed at those meetings. so much is in fact acknowledged in Annex 2 of the Commission Staff Working document relating to the methodology of the review:

“Apart from the information contained in these reports, the Commission did not receive a substantial amount of additional information fromthe Member States’ authorities, neither during the implementation period, nor after the transposition of the Directive into the national law. As a result, and because of the reasons mentioned above, the information received had to be complemented from other sources, in particular through consultation with rightholders, and in particular through the consultation of legal experts from the private sector who meet regularly in the legal subgroup that has been formed in the context of the European Observatory on Counterfeiting and Piracy.”

So is it the case that the chance to continuously inject opinion and information during a documents assembly does not constitute ‘a preferential position’? Or was it just a matter of judicious reference only to the stakeholders dialogue, with the hope that the legal sub-committee (see details) might be forgotten?

He also claimed that Data Protection officials were present at any meetings where the identification of users by means of their IP address was discussed, and while I don’t know it for a fact, I would be interested in hearing if that was the case in February, April and July 2010 when these matters were discussed in the stakeholders dialogue. Reports I have read of these meetings are strangely omit to make any mention of their presence.

2. Fröhlinger Calls Halt

Better still, the very next day, Margot Fröhlinger, titular head of the stakeholders dialogue wrote to announce that it was over! Her apportionment of the responsibility of the blame is rather vague, as she bemoans how:

“An exchange of ideas on possible joint actions to promote access to legal offers and on user awareness could have brought new insights on how to assist consumers to legally enjoy premium content.”

Schade. Apparently some stakeholders are…

…less willing to continue with the dialogue. These stakeholders perceive the format of the stakeholder’s Dialogue, as well as its timing, as not appropriate and as not useful.

Which is just plain unsporting of them if you ask me. Presumably the stakeholders referred to are the ISPs and Telcos, although that’s a bit of deductive work on my part: consumers and users groups never participated, therefore they couldn’t leave; the content industry doesn’t pass up a chance to hang with their chums in the Commission.

Interestingly her letter also announces the intention to ‘reach out to the general public, through additional hearings, in order to take account of the public interest, to the maximum extent possible.’ Does that mean the consultation will be extended beyond March 31st?

Other views/responses: read Iptegrity’s take on events. Likewise PCimpact published a response (in French) from Jerome Zimmerman of La Quadrature du Net.

… and it Felt Like a Kiss? EU IP Expansionism Abroad

Due to its role in the advancement of of entertainment and pharmaceutical interests within the GATT-TRIPS negotiations of the 1980s, the United States is typically assigned the role of bully in the international intellectual property sphere (for an excellent account see Drahos and Braithwaite’s “Information Feudalism”). Viewed in combination with its bilateral trade agreements, foisting stringent IP rules on smaller, poorer nations, this is somewhat understandable. But such a reading obscures the role of the European Union. Since the 1980s, key business organizations within the EU such as UNICE have functioned as a key vector for the same policy messages. In more recent times these ideas have been fully integrated into numerous aspects of institutional activity at an EU level. In what follows I will outline some developments at the level of trade policy since 2002.

The new phase was confirmed in a 2004 communication from the Commission Communication “Strategy for the enforcement of intellectual property rights in third countries“ (hereinafter Strategy), which listed eight elements considered essential to the campaign. Several of these recall practices long established in the US. The thrust of the strategy was confirmed in a major policy document issued by DG Trade in autumn 2006, “Global Europe: Competing in the World”, regarded as signalling the relaunch of a bilateral approach to trade negotiation, and marking the dimming of the multilateral phase which in the IPR sphere produced both TRIPS and the two treaties (WCT and WPPT) at WIPO in 1996.

Pursuing the New Approach
1. Watch Lists
The first task defined in the Strategy is the identification of ‘priority countries’, analogous to the s.301 report produced annually since the 1980s by USTR, deemed the source of egregious infringements of European rightsholders.

Closed Door Policy Shaping at the EOCP

in July 2009, three months after the McCreevy’s announcement of the European Observatory on Counterfeiting and Piracy (EOCP), a ‘stakeholder dialogue on illegal up and downloading’ was launched under its auspices and the direction of Margot Fröhlinger, Director for Knowledge-based Economy at DG Internal Market.

The goal was to achieve an accommodation between content owners and the infrastructural intermediaries. From the beginning the Commission have indicated that should the parties fail to come to voluntary agreements, the EC will amend one of its directives and impose a solution: E-commerce Directive (2000/31), the Infosoc Directive ( 2001/29) or the Enforcement Directive (2004/48).

Users and Consumers Missing from the Equation
Representatives of media companies, trade associations, collecting societies and ISPs have been involved in the monthly meetings. European Consumer group BEUC refused to participate, and, whether for wont of an invitation or lack of interest, no organization representing consumer or user interests was involved.

Il Badalone; Brunnelleschi and an Early Patent

Normal service on boring enforcement related matters will resume later today, in the meantilme a little history. The initial draft stated the Badalone patent was the world’s first, this turns out to be incorrect, in a variety of ways! On a purely formal level, the first patent was granted to Francisco Petri in 1416 for the fulling of wool and was awarded in Venice.
*****
Having been in Florence for the last months, I discovered that it was the site of what was apparently the world’s first patents: a boat design created in 1421 by the builder of the Duomo’s famous cuploa, Filippo Brunelleschi, and christened “Il Badalone”. We don’t have the detail of the design, but thee is an image by Taccola in his book De Ingenis.

Il Badalone from Taccola's De ingenis

Ireland: Three Strikes and Fair Use

Last week a chill ran through the irish blogosphere: former Green party minister Eamonn Ryan suggested that the outgoing Fianna Fail administration might introduce three strikes/’graduated response’ against file-sharing just as they were being kicked unceremoniously out of power. How would they do that? A statutory instrument, a diabolical device enabling the introduction by the executive of secondary legislation, based on a prior legislative act (in this case the Copyright Act as amended), without having to debate or pass it in the Dail (Parliament). Back-door legislation, in other words. This threat was quickly disavowed by the relevant minister, Mary Hanafin (who lost her seat anyway in the subsequent election). Alas this may not end the matter: the new senior government partner Fine Gael, are suspected to be favorable to a three strikes style solution.

Recent History of Online Copyright Shenanigans in Ireland…
The record companies first went on the offensive in 2005. That year the Irish Recorded Music Association (representing EMI, Warner et al.) sought and obtained a high court order to identify 17 individuals observed allegedly sharing copyrighted works (via their internet protocol addresses). Two further batches of identifications were granted in 2006 and 2007 against an additional 72 people, opening the way to civil infringement prosecution. According to IRMA defendants agreed to pay the plaintiffs around 2,500 euros each to settle out of court.

In March 2008 IRMA initiated action against the former telecoms monopoly Eircom, the largest supplier of broadband in Ireland, presumably based on a theory of contributory liability. The year before a Belgian collecting society had won a decision obliging an ISP to install filtering software in order to prevent copyright infringement. That case, Sabam v Scarlet was later referred to the European Court of Justice and a decision on the issue is expected this autumn.

Rather than confront this pressure in court, Eircom agreed to enter into a voluntary agreement with the music companies, whereby the ISP would take action against users identified by the plaintiff companies as having infringed their works. IRMA committed themselves to negotiating similar agreements with other ISPs so that Eircom would not be put at a competitive disadvantage due to their collaboration. That summer IRMA also sought a court order obliging Eircom to cut off access to the Pirate Bay, an application which was not opposed by the provider, and duly granted that September.

Concerns over the Data Protection aspects of the Eircom/IRMA agreement, the settlement was referred back to the High Court in April 2010, when it was given the green light by Judge Charleton. In the meantime other ISPs were proving to be less accommodating to IRMA’S demands, especially UPC, owner of a cable networks and formerly know as NTL. They refused either to block access ot the Pirate Bay or to make a private agreement against their users interests with IRMA. Predictably this ended up in court last October. The result was resounding victory for UPC. Justice Charleton acknowledged that there was nothing in Irish law requiring the ISPs to police their users in this way. ISPs are obviously ‘mere conduits’ for data operations, do not have any role in executing infringing activity, and are consequently protected from liability under the safe harbours for service providers under article 12 of the EU ECommerce Directive. He also conceded that there was no legal basis for grant of a blocking order as regards the Pirate Bay, and underlined that his previous decision to the contrary resulted from the fact that Eircom had not opposed the previous order nor seen fit to make any argument against it.

There is also an interesting business background to this series of events: Eircom have been haemorrhaging customers at a rapid pace, according to some estimates 1000 users per month. In the meantime UPC increased their number of phone subscribers by 60% last year. How many of those customers were attracted by the stance taken by UPC on users’ rights? Impossible to say, but it cannot have been irrelevant.

Meanwhile Eircom are having serious difficulty managing their debt levels and have warned that they may breach their covenants. Sad to say, but it’s hard not to feel some glee at their predicament; the highest line rental charge in Europe, negligible investment in the infrastructure, pathetic service and to cap it all, an unwillingness to defend their own customers legal interests in court against an industry that they were getting into bed with.

Given the recent scare, it is good to hear that there is now a ‘free culture’ group also in Ireland, launched on the initiative of Kevin Flanagan who I met at the last international meeting of EXGAE/LaEx in Barcelona in late October. They add some more attentive eyes to the trojan efforts of the people at Digital Rights Ireland, sentinels of digital civil liberties in Ireland…

.. and finishing on a Bizarrely Positive Note…
Fine Gael for Fair Use?

This whole palaver roused my curiosity about current goings on in matters copyright in Ireland. And it was with some astonishment that I discovered that Fine Gael (the victorious party in last week’s election) have at least one decent policy: it seems that they are proposing a pan-European fair use defense. Surprised as I was at first, there is a logic to it, given that Google employ over 2000 people in Dublin and the technology sector (largely composed of US multinationals) remains one of the few parts of the economy to continue performing.

Now there has been endless blather as regards the ‘knowledge economy’ in Ireland over the years, so serious scepticism is warranted (the persistence of substandard connectivity is a monument to broken promises of shiny futures past), but on copyright flexibility at least they seem to be tiliting the right way. I read that DRI organised a day school on these themes at Google recently, it seems that some of that work may have delivered a yield. Fair play.