European Observatory on Infringements of Intellectual Property Rights, RAND etc.

I have previously written about a new sub-institution established by the European Commission in the field of intellectual property enforcement – European Observatory on Counterfeiting and Piracy. In February the name was altered to the European Observatory on Infringements of Intellectual Property Rights (EOIIPR, perhaps).

This second baptism coincided with its transfer to a new home in sunny Alicante, at the Office for the Harmonization of the Internal Market (OHIM), and organisation better known for its administration of EU Community Trademarks and Designs. At birth the EOIIPR was located within the Enforcement Unit at the Internal Market directorate without much in the way of staff or money. The move to OHIM changes this and they will now have 15-20 people on an annual budget of three and half million euros. A Regulation officialising the transfer was passed by the European Parliament in February.

That this transition unfolded without any great ruckus will have been a great relief to both Commission officials and private sector lobbyists for the Trademark and Copyright industries: public commotion over the ACTA treaty raised the worry that the re-establishment of the Observatory could be sunk as collateral damage in the shit-storm.

Function of the Observatory

Once installed the EOIIPR began a consultation with interested parties to devise its programme for the next year, which was presented at its Plenary meeting in Alicante two weeks ago. I find it notable that once again the only consumer or user group present was the European Consumers Organization (European Digital Rights did make a submission as part of the consultation in July). Otherwise this has been a conclave of bureaucrats and lobbyists.

In the short term the Observatory is tasked with sourcing of data regarding piracy, counterfeiting etc which can be used to demonstrate that the Intellectual Property Rights Enforcement Directive is insufficient as stands, and thus requires some form of successor. That the Commission has already decided that this is the case is evident from its review of that legislation.

Consequently the Observatory put out a tender, and duly commissioned RAND to devise a methodology which could generate a set of figures which could be presented as objective (in contrast to the research reports bought and paid for by vested interests).

RAND Report

I was initially cynical about RAND’s involvement. So imagine how refreshing it was to discover that industry ‘stakeholders’ were not satisfied with how the work was developing. Had the research outfit gone off reservation? Decide for yourself: here is a short presentation made in Alicante, and the full report is here. If you don’t have the stomach for it, here are a few things that I gleaned:

(i) Firstly, it contains no estimates as to the size of the market in counterfeits or the impact of  file sharing – referred to as unauthorised use of protected content (UUPC) – on the relevant industries or wider economy but is focused on building a methodology. As a result they address the lack of methodological and data transparency inherent in previous reports:

“Often the lack of clarity in fully describing the methods, assumptions and data underlying them constitutes a major barrier to an independent assessment of the statistical consistency of the results. This issue was also highlighted by earlier research efforts on the topic (e.g. OECD, 2008, p.78). In other cases, in the reports that produce the estimates reviewed above, more substantial issues remain poorly addressed from a scientific point of view” (P.17)

Later they extend their criticism to the limitations of the analytical frameworks more generally:

Overall, one of the main weaknesses of some of the existing estimates of the effects of counterfeiting and piracy on macro-economic variables such as GDP and employment is the assumption of a 100 percent substitution rate between counterfeit and genuine products – see for example the OECD (2008) critique of a 2005 IDC study. In addition, one aspect that seems to be systematically excluded from existing studies is consumer surplus. Consumer surplus refers to the welfare benefit of getting access to a substitute good at a lower price, while many studies consider the negative effects of counterfeiting and piracy on consumers (unemployment and health and safety risks) and on producers (lost revenues). Huygen et al. (2009) provide an example of a comprehensive treatment of the distribution of welfare effects and of their net balance (i.e., the balance between costs and benefits) in the case of file sharing (Huygen et al.,2009). From an economics point of view, any study that neglects consumer surplus in a welfare analysis is incomplete. (p.34)

(ii) Their own model (outlined in pages 41-65 of the full report) uses of sales forecast data generated internally by companies in affected sectors. Actual sales achieved are then deducted from the forecast numbers to identify the difference. Part of this discrepancy will be explicable retrospectively due to changed market conditions (e.g.  the arrival of new competitors, foreign exchange rate variations etc.) But one part will remain, an ‘unpredicted forecasting error’ some of which will derive from the substitution of product sales by counterfeit alternatives.

The result of this first process is then object of a second analysis to try to identify the amount attributable to counterfeiting for a specific product and national market. A series of factors are used in the regression: (i) rule of law (ii) corruption (iv) government effectiveness (iv) customs (v) tourism ; relevant metrics are obtained from international organisations such as the IMF/WB. These factors are presumed to have an effect in encouraging or deterring counterfeit trade.

(iii) Their assessment is  that the model is better suited to dealing with physical rather than digital goods, principally because of the difference in the utility and reliability of sales forecast data, but also because of the ease of supply and movement of digital goods.

(iv) Few firms were willing to cooperate with them to test drive the model, largely because of fears regarding control over commercially sensitive data. No digital media companies took part. Ultimately only one physical good manufacturer (unnamed) provided a full data set. The results obtained initially diverged strongly from the firms own research which had been conducted using mystery shoppers, whereby goods are purchased and then analysed for authenticity (apparently the gold standard in this field, but expensive to operate). Once the data was cleaned of severe outliers, it tracked the mystery shopping research more closely.

Consequences?

The Commission is now in a tricky position: they’ve paid RAND at least half a million for this and cannot simply sweep the results under the carpet. RAND have designed a model for use in real markets and products, rather than simply accepting that ‘piracy and counterfeiting’  are costing ‘Europe’ trillions of euros and hundreds of thousands of jobs. My guess is that it will now be minimised. What if any effect this will have on the IPRED review, due imminently, is uncertain.

On VPNs, Filesharing & Illusions

Over the last while I’ve been checking out cryptoparties. As a forum for the self-education of users regarding online risks it has potential as a useful format, although it will need to avoid the temptation to drift into security-flavoured machismo. As it happens I think that those who could most benefit from it are users who are either inexperienced, mildly technophobic, or both. But in order to serve that constituency the delivery needs to be pitched at a specific, actionable level. More on that another time, perhaps. For now I want to make a couple of comments about a frequent topic which arises in that milieu, namely filesharing and anonymity, and VPNs (Virtual Private Networks).

VPNs can help protect the security of your communications with the network, and allow you to circumvent geo-blocking (where access to a resource is limited to those in a specific country). So far, so good. But there is a misconception circulating that use of a VPN provides a fail-safe cloak for filesharing, an error which is cultivated by the VPN companies themselves trumpeting claims that they keep ‘no logs’. This is obviously false. Otherwise every kiddie-porn trafficker, carder, scammer and spammer would be good to go. Companies operating retail VPN services have an obvious need to prevent such uses of their networks. Otherwise they would be blacklisted by those they purchase services from upstream. Secondly they will have to deal with police investigations and court orders consequent to criminal prosecutions.

The delivery of subscriber data on Lulzsec participants to police in the UK last year by Hidemyass is a case in point. I doubt any other service would have behaved much differently, unless they’re so shady that such stuff pales in comparison with what they and their other customers are up to – and you might think twice about transacting with such people. There may also be a services out there which are currently following another policy and who have not yet been brought into line, but that’s a matter of time: the court cases will come.

When No Logs Means… Just a Little Logging
When VPN providers say they keep no logs, they mean that they are not watching your traffic, but they will certainly know when you *log on* and *log off* their service, because such information is useful for them in managing their own network, supplying consistent quality of service and identifying abusive users so as to eject them. In many jurisdictions they are required to keep logs by law, as is the case under EU Data Retention and US Anti-Terrorism legislation. That said, there are wrinkles as to how long the logs must be retained, and this is an evolving legal question (the situation in Germany for example is in flux). This log data connecting a user with an internet protocol address is the information required by copyright enforcement agents who will have collected the other information necessary by observing your activity on whatever protocol you use – they just need to identify you.

What VPNs can change is the jurisdiction to which your virtual identity will be subjected if observed by a potential complainant. Copyright law is territorial, not as is sometimes wrongly put ‘international’. There are international treaties, and in the EU a process towards harmonisation, but court cases will be held in national courts and decided under national law. There are countries where copyright enforcement is still not regarded as a priority, or where the media companies have not installed an efficient processing infrastructure. This may be useful if you live in a place  with an enforcement apparatus industry. Even in Europe some jurisdictions may only require the handover of subscriber data if the complaint is criminal in nature, as has been the case in Spain, and thus will not stretch to common garden copyright infringement cases. But overall the situation of a VPN and an ISP are similar; they are both middlemen, the former is just more nimble in terms of setting its virtual location. In some cases ISPs are also willing to test the demands of complainants in courts because they have more resources, and interests, to do so.

With a little digging one discovers plenty of testimonies online by users who have had had their VPN service discontinued because their provider has received complaints under the Digital Millenium Copyright Act in the US. In fact, if one bothers to actually read (!) the Terms of Service, P2P and torrenting of copyrighted material is often listed as grounds for disconnection. Nobody is going to take serious heat to protect your mass entertainment supply – it’s not exactly wikileaks territory.

Fool’s Gold
If you want to snarf the latest Hollywood blockbuster, there is no technical silver bullet to guarantee that will not get grief. It has always been the case that the best protection in such scenarios lies simply in the huge numbers of people doing it. The likelihood of getting caught is low, but some people will. Ultimately this will only end when the current copyright are repealed. Until then (!) the more obscure and bounded the place where you’re trading files, the less likely it is to come under the radar; the internet is a big place with plenty of poorly mapped territories – check it out!

What I find wretched is that VPNs are just the latest in a sequence of products shilled to P2P users. First it was companies giving out malware-infected p2p clients, and making millions. Then came the direct download sites, distorting filesharing into a form of  FTP with a client/server architecture, and hitting the till register as they sold premium accounts – more millions. Next it was the turn of those peddling all you can eat Usenet subscriptions. Now is the time of the VPN spivs, trading on people’s fears.

What all of these companies have in common is that they want to sell you something you can either have for free, or that can’t be bought. Total anonymity in combination with high performance is simply inherently contradictory. You won’t enjoy torrenting over Tor! Anonymity ‘for hire’ is good only as long as you are faced with adversaries without sufficient motivation or resources. To believe otherwise is to delude yourself. As expert cryptoanalyst Bruce Schneier wrote:

“If you think security can solve your problem, then you haven’t understood security, and you haven’t understood your problem.”

Word.

——

ps No comments marketing commercial services please.

Library Closure of Type .nu

Apparently now is a time of reckoning for the ‘one click’ hosting services which have come to dominate filesharing since around 2005. While attention has focussed on supersized Megaupload operator Kim Dotcom and his bizarre universe, other more discrete circuits have also been closed. Library.nu, an enormous collection ranging from bestsellers to truly arcane academic titles in all formats, yesterday announced its own epitaph .

Books have always been available online; when I first got access to Usenet in 1992, some of the first things I came across were Bruce Sterling’s ‘The Hacker Crackdown’ and Hakim Bey’s ‘Temprary Autonomus Zone’, cult titles amongst early internet users. Books were inputed laboriously via keyboard and posted as .txt, first on usenet, then the web and ftp. Scanners were still in short supply at that point, and OCR software underdeveloped, but as they dispersed and improved the number of works mushroomed. But the delivery method was inconvenient, requiring the reader to remain at their screen or print to dead tree. Other larger collections were assembled, such as textz.com, which eventually ended up in legal wrangles with rightsholders.

With the growth of file-sharing into a mass phenomenon in the middle of the last decade, dedicated book sites appeared, sometimes linked explicitly to complaints about access and cost. This was the case with the Danish vidensdeling.nu founded in August 2005 to provide a platform for students to share course books. Publishers immediately shut the site down. A similar site in the US, Textbook Torrents launched in 2007, was closed in the summer of 2008 after an article in the Chronicle for Higher Education led to threats of legal action against its creator.

Ebook Readers, Meet Direct Downloads
Prior to the release of mass market book readers, the mainstream publishing industry felt relatively unaffected, but they understood that as the devices made their way into users’ hands they would find themselves losing control in a replay of the music and film sectors. As torrent sites came under sustained pressure, and their users were targetted with legal action, many closed or became private clubs. Direct downloads filled the gap left in their wake: requiring no software installation they were simple to use, and due to their FTP structure their users were not connected to a network transparent to monitoring and potential identification. Whilst these sites limited the quantity non-paying users could access, the small size of books vis a vis movies made such sites playgrounds for book fans. As Amazon ramped up marketing and volume on the Kindle, and then tablets like the iPad took off in popularity, the bumpiness in the user experience of digital text diminshed, and the protective buffer around the publishers receded.

With this in mind the German Boersenverein developed a strategy in winter 2008 which was subsequently circulated to Publishers’ organisations internationally the following spring. Here they outlined an approach which combined political lobbying with stigmatization of unauthorised copying of books. Parallel to this they proposed to increase the availability of authorised ebooks, and to instigate a legal campaign against “systematically ‘suitable’ services”, one-clicks hosts in particular. In this manner the demand then flowing towards pirate sites could be intercepted and rerouted by an industry doing a better job at supply.

To this end a relationship was established with the Lausen legal practice in Munich. The first target was Rapidshare: in 2009 they campaigned to have the site blocked by German ISPs. Unsuccessful on this score, a group of national and international publishers initiated legal proceedings, represented by Lausen. In February 2010 an injunction was obtained from a court in Hamburg ordering the removal of 148 works from Rapidshare (many of them also text books) and further monitoring to ensure that the works did not reappear. As some titles continued to be available, the plaintiffs brought rapidshare back to court, where the latter were fined 150,000 euros in December of the same year for failure to comply with the terms of the injunction, and not having introduced adequate filtering mechanisms.

Curtains for Library.nu
In 2011 Lausen and the publishers turned their attention to library.nu, a site providing a central register of books available for download from a series of direct download sites and active since 2006. An article published in the Sunday Times in mid-December last reported that the operators of the site had been traced to Galway, Ireland, and that one of the addresses provided to the domain registrar was the headquarters of Anglo Irish Bank (the administrator obviously has some sense of humour as Anglo was the biggest crap-out of the property bubbble collapse).

Between Christmas and New Year the publishers successfully applied for a series of court orders at the Landesgericht in Munich. Apparently the orders to cease and desist were passed then to Ireland in the last week. The plaintiffs are claiming that library.nu was a massive commercial piracy operation making eight million pounds a year, an improbable figure given that virtually all of their income derived from advertising and donations. According to an article in torrentfreak premium membership was introduced for purchase only in November last, which didn’t leave them with much time to make hay.

Whilst the library.nu domain has not been seized, the operators have decided themselves to take it offline. According to a press release from the American Association of Publishers, the operators will now be pursued:

One positive outcome from this complicated process is that the platform operators themselves are now being held responsible as perpetrators for the copyright infringements on their sites and will therefore not merely be liable for the illegal conduct of their users. All four copyright chambers at the LG of Munich I who dealt with this issue and who promptly issued the 17 interim injunctions were in agreement on this matter.

Although how this is being dealt with jurisdictionally remains unclear.

A Blip or the End?
The tiny size of contemporary epubs makes them incredibly easy to store and distribute. As is the case with much online enforcement activity this is more about the show than the substance, intended to scare other operators and send a message to errant users. It is true that as long as these sites are structured in a centralized manner they will have a limited half-life. One would expect the recent closures to lead to a renewed interest in distributed and even quasi-anonymised systems, such as i2p.

Centralisation constitutes a honey-pot for profit-focussed pirates: without it there is no audience whose attention can be sold to advertisers, nor a fixed infrastructure on which a toll can be charged for access or better performance. It is a great irony that what began as a campaign against p2p has now had the unforeseen consequence of creating a market for a client-server system of unauthorised media distribution, thereby offering significant incentives for a particular type of entrepreneur. This client-server architecture is the very negation of the potential of the net, returning users to the role of passive customers.

On a final note, the case of library.nu is significant because the demand for the works offered there demonstrates that filesharing is not just about pop music, porn and cams of action movies, but also those forms and sources of knowledge whose acquisition are ritually celebrated within ‘enlightenment’ culture. Many of those whose works were offered derive income not from royalties, but from related activities such as teaching and research. Such people were themselves an important component library.nu’ user base. Some have other means to access the same materials, others, especially those in countries with weaker education infrastructures and more emaciated library budgets, do not. Outside of formal education, the millions of online autodidacts may be denied access to material, seriously impinging on their lives and possibilities. When one considers the cost of text books and more especially scholarly articles, that is no hyperbole, and applies not only to the global south but the post-industrial north as well, awash in its dreams of knowledge economies and human capital.

But maybe such a concern is sheer melodrama, given the likelihood of the same works becoming freely available elsewhere. Time will tell.

Ireland’s Post-SOPA Tsunami

I have made two corrections to this post in response to comments received after intial publication. They relate (a) to Micheal Martin’s comments in the Dail, a matter clarified in the accompanying footnote and (b) the fact that the Greens had already left the coalition government when allegations arose in February 2011 that new copyright enforcement measures were to be rushed through before the election. Happy to correct any further inaccuracies.

1. Is the Statutory Instrument and Irish SOPA?
The labelling of the copyright amendment as Ireland’s SOPA has been contested by some as inaccurate. There are differences, it is true. Most obviously SOPA is designed to target ‘foreign’ websites, whereas the Irish SI (Statutory Instrument) makes no distinction between foreign and domestic web sites.

Secondly the SI focuses on copyright questions whereas SOPA takes aim at a broader range of alleged ‘intellectual property’ infringements. Participants in the counterfeit medicine trade as well as suppliers of counterfeit materials to the military and federal agencies are made subject to increased punishments. In addition SOPA is more forensic, and paradoxically thus, transparent in the terms of the anticipated consequences: IP (internet protocol) blocking (probably jettisoned at this point), exclusion from search engine results, isolation from financing via advertising or payment systems.

But it is precisely as a result of the open-ended language of the Irish legislation that there is a justifiable fear that such means could be deployed at the discretion of an Irish judge. IRMA’s behaviour – from the negotiation of private enforcement agreements with Eircom to their current suit against the Irish state for the losses sustained as a result of unauthorised uses – indicates how ill-advised it is to make available such an unbounded instrument for their use – these people have just got a bad attitude.

Fianna Fail’s leader Micheal Martin said Sherlock was ‘perhaps not perfectly’ handling the ‘issue’^[1], which might appear unduly mild unless one recalls the allegations published in Siliconrepublic last February. Therein it was rumoured that the then Fianna Fail/Green coalition minority government intended to rush through copyright enforcement orders via Statutory Instrument just as they were about to be booted out by the electorate (this claim was later rejected by then minister Mary Hanafin).^[2]

Apart from the concerns about the substantive questions about legal consequences, there is a problem with method. When it takes a Freedom of Information request to discover that Enda Kenny held a private meeting last summer with the new head of the Motion Picture Association of America, former Democrat Senator Chris Dodd, then the suspicion that vested interests are intervening in a surreptitious manner to shape the law is fully justified. All the more so when it happens quietly in Castlebar ^[3].

A pattern emerges in the history of attempts to prevent users from sharing files, that of keeping the public at a safe distance from decision-making: private agreements between companies in the digital media market, closed-door audiences for lobbyists with political leaders, secondary legislation requiring no official vote so as to give form to the policy conclusions.

2. The Fight Against ‘SOPA Ireland’
StopSopaIreland went live on the evening of January 23rd, providing information on the amendment, a petition to register opposition, and appealing to users to contact local politicians. Within a week the petition had garnered 75,000 signatures, 50,000 of them identified as coming from Irish internet protocol addresses.

On the night of January 25th, a series of government websites were targeted and shut down by means of a distributed denial of service attack; twitter account AnonOpsSweden identified it as a response to the copyright proposals. In response to a question by independent TD Catherine Murphy, a fifteen minute exchange took place in the Dail on January 26th, and Sherlock later announced that a longer debate was scheduled for the 31st. As the campaign picked up steam a call circulated for a demonstration in Dublin on January 28th.

Demonstration against SOPA/ACTA & the Copyright Amendment, Dublin, January 28, 2012.
Photo by Dara Robinson.

Another demonstration has now been called in Dublin for next saturday February 4th, a day which will see coordinated protests against ACTA worldwide.

In an echo of the SOPA campaign there is an interesting contrast between the mood in online and offline media, and the a perceivable shift in the sense of how influential they are respectively. Forums such as boards.ie, and online only news operations such as thejournal.ie and broadsheet.ie have been important platforms for criticism of the proposals, whereas an earlier generation’s not especially informed attitudes can still call the print press home.

3. Empty Disavowals
For the reasons explained in section 1, Sean Sherlock’s protestations that the amendment is nothing like SOPA are unconvincing. He and his department have issued a bizarre commentary to accompany their draft amendment, which nominally purports top demonstrate why it is not like SOPA. This statement opens with the patently untrue claim that

‘We all subscribe to the freedoms, the opportunities and the access to information that the Internet provides us with’

because online copyright enforcement by definition means a limitation on that freedom. And there could be a reasonable argument as to whether or not that is appropriate, just as there is, for example, in the area of child pornography.

So why dissimulate, why can he not just spit it out and say ‘we are going to limit the freedom to do what you want on the internet and place obstacles to the free exchange of data because we believe that copyright protection wins out’? The answer of course is that the politicians are fearful of how that will make them appear in the public eye. They have watched the anti-SOPA tsunami break land in Washington DC and don’t like the look of what it has left in its wake.

Of course were they to be clear about this they would have to provide a justification for their reasoning. As pointed out by ALTO the government has not carried out any Regulatory Impact Assessment to assess the results of the proposed change. Therefore any economic basis for the change can only come from figures provided by one or other of the industries implicated (and the figures bandied about seem to emanate exclusively from the music industry), or else from some other source which has not been made public.

Rather than acknowledging what is obvious to even the most cursory examination of the copyright debate, that there is a fundamental disagreement as to the legitimacy and necessity for copyright as currently constituted, the commentary continues with a massive bluff:

“Ireland is very proud of the fact that we have a modern suite of intellectual property laws that by their very nature balance a range of competing interests and rights in a manner that is seen, right across the globe, as reasonable and proportionate.”

But the SOPA saga demonstrates that this is untrue. So does the long fight against the HADOPI three strikes law in France. As do the massive demonstrations against ACTA in Poland last week. And so does the continued popularity of filesharing as a phenomena despite a massive and sustained attack on its participants through legal action and propaganda presented as ‘education.’ And what about the legions of lawyers and economists opposed to measures strengthening and extending copyright, some of whom are against it altogether? Don’t pretend there is a consensus of ‘reasonable people’, that’s a fiction. The ease with which these initiatives previously passed had more to do with how their content and consequences were concealed from the public, and the lack of enthusiasm on the part of industrial era media companies, themselves amongst the greatest beneficiaries of the copyright ratchet, to aerate these debates fairly,

4. Dail Debate, January 31st
Undoubtedly the full debate will shortly be available online, but the crux of it was simple enough. All of the opposition parties (FF, SF and independents) opposed the SI, albeit for different reasons, arguing that it was inappropriate subject matter for executive fiat and merited primary legislation with a full debate, or that it should be delayed and a special committee set up to investigate.

As a practical matter independent TDs Stephen Donnelly and Catherine Murphy also submitted an alternative SI in consultation with TJ McIntyre and Simon McGarr. It contains safeguards for data protection and other fundamental rihts; limits availability of injunctions to cases where damages would be inadequate; shifts the legal and technical costs of the injunction from intermediary to applicant (copyright owner), and requires that lawful data transactions be unimpeded by any order of the court. In addition the SI would be applicable time period for the instrument to two years, during which time they would expect there to be a debate over, and drafting of, primary legislation.

Objections ranged from the impact it would have on foreign direct investment, the costs which would be imposed on websites willing to contest injunctions, that it was an error to target intermediaries rather than ‘perpetrators’ of copyright infringements, and more general concerns about the impact on individual rights and freedoms. Interestingly all speakers referred to the huge amount of email they had been receiving on the subject from concerned individuals.

Sherlock was not having any of it. He parsed the alternative SI, insisting that these concerns were either unfounded or inherently integrated in European Court of Justice cases such as Sabam v Scarlet. These limits would as a constrain against any judgicial temptation to grant excessive injunctions, and require their decisions and remedies to abide by the principle of proportionality i.e. balancing the interests involved. This insistence on judicial discretion was perhaps the most outlandish aspect of his speech. Whilst asserting that the SI did not mark any change in government policy, he went on to say that given the unpredictable nature of future scenarios, they would prefer to deal with them on a case by case basis. What he means then is that there is a new policy: judges will invent the policy on the basis of how they ‘feel’ about the matter whenever the cases should arise. Justice Charlton himself outlined the danger in this approach in the very EMI/UPC decision which sparked all this.

As regards any future primary legislation, Sherlock expressed a preference for the affected parties ‘getting together’ and listeners got a good dollop of the stakeholder palaver. Of course parties like IRMA/EMI/MPAA won’t be quite as motivated, having got a measure in the bag and satisfied themselves they can get what they want.

And In Conclusion?
Light comedy, amidst general cluelessness, was injected when FG TD Jerry Buttimer spoke of the online activists as ‘keyboard warriors, some bordering on anarchism’. But only a moment later we were brought back to reality with a bang: asked whether he planned to sign the SI or consider alternatives, Sherlock announced that he’d dealt with all concerns, would not change the wording and would be signing it into effect. He did not say when exactly.

To be continued?

¹ This section originally read: “Leader of the opposition, Micheal Martin grotesquely described Sean Sherlock’s handling of the process as ‘perfect'”. This report was contradicted in comments by Paul Sammon, (see below), based on the official record. Whether my mistake derived voices in my head or the result of poor audio is unclear. I can always hope an eventual review of the audio will vindicate me, but in the meantime gracious concession seems fitting 😉

According to the official record Micheal Martin’s comment was:

“The Minister of State, Deputy Seán Sherlock, is handling the issue of on-line copyright, although perhaps not perfectly at this stage. So far the handling of it is giving rise, correctly or otherwise, to a damaging perception of how this country views Internet freedom.”

Back to post

² The first version of this post was corrected after a reminder from commenter Paulie Doohan that in the Green Party had in fact left the government, leaving FF on their own by the end of January 2011. Green TD Eamonn Ryan (formerly Minister for Communications, Energy and Natural Resources), blew the whistle on attempts to sneak copyright enforcement measures through the back door. Back to post

³ ‘Kenny met US online piracy campaigner’, Colin Coyle and Mark Tighe , The Sunday Times, 28th January 2012 (behind paywall). Back to post

Germany: Auctioning an Opportunity to Shake Down Filesharers …

Over the last two weeks I have been catching up on developments in the copyright enforcement area with a view to writing another boring post about it. But an absurd and scandalous story from Germany requires an entry all to itself.

Abmahnkanzlei: Shock Troops of the Enforcement Machinery?
In Germany there exists a form of legal practice known as as an “Abmahnkanzlei“, which would literally be a legal practice which makes orders to cease, desist and compensate (Abmahnung). These have been employed by copyright owners as agents to pursue filesharers. The procedure is familiar: internet protocol addresses are collected through online monitoring; rightsholders or their agents seek a court order directing the identification of the subscriber names behind the IP address. At this point the abmahnkanzlei sends a letter to the subscriber demanding compensation and a written commitment to stop the infringing activity. The sum demanded varies according to the copyright owner involved. Apparently porn producers insist on more money than the music companies, which figures, given the potential to implicitly blackmail subscribers by revealing their identities and alleged sexual proclivities in court.

The online news portal Heise has now reported that in the last days one of the large abmahnkanzlei, Urmann + Collegen in Regensburg, has announced that it is auctioning off the right to pursue 70,000 subscribers who have already been mailed two demands and have refused to pay up. Within their system a first demand was for a sum of 650 euros. If no settlement was forthcoming, a second letter was sent demanding 1286 euros. These 70,000 letters thus have a notional value of 90 million euros. Presumably whatever amount is coerced through this sum is to be split between the issuers of the ‘warnings’ and the owners of the copyright.

An additional, and perverse, twist to this process is that there are firms specialising in contesting these claims, who offer to handle pending and future cases for a fee which ranges between 500 and 650 euros – and thousands of people have signed up. The whole setup has become a racket whose only beneficiaries apparently are lawyers.

In a hearing hosted by the European Commission last June, the Association of the German Internet Industry, ECO, reported that German Courts are now directing the release of up to 5000 subscriber identities in one hearing. They also said, and I will try and verify these figures, that ISPs are being required to identify 300,000 people per month. Obviously these are huge numbers, and one wonders why this is not a bigger issue in public discussion.

Whither Privacy?
One also wonders where the German Data Protection Authorities are in all this; in 2010 the Swiss Supreme Court ordered a company, Logistep, which does network monitoring for copyright owners with a view to instigating enforcement proceedings, was ordered to cease (see also analysis from a Swiss legal practice and Ars Technica). The case was taken by the Swiss Federal Data Protection agency. Switzerland of course is not in the EU, and the law is different, but there have been cases refusing to release subscriber information in other EU jurisdictions such as Austria and Spain.

In any case, the gigantic scale of this campaign perhaps provides another element of the explanation for the sharp increase in support for the Pirate Party. Despite it not having been a widely discussed topic during the election campaign, there are undoubtedly a lot of people who are furious about all this.

Jean Bergevin Lands EU IP Enforcement Unit

After the controversy surrounding the appointment of Maria Martin Prat as head of the Copyright Unit at DG Markt, there has been less attention to another personnel change. Alvydas Stancikas, former head of Unit D3 on Enforcement, has headed off for other pastures to be replaced by Jean Bergevin. Tillman Lueder, incidentally, has been moved to the financial services directorate as head of unit for Asset Management. What a rum place the Commission is; staff who spend time years getting to grips with technical fields then get summarily redeployed in a totally different area – very logical!

Bergevin is an economist by background and was one of the main designers of the ECommerce Directive, and most recently head of unit E2, focused on services and including areas such as gambling and gaming.

His appointment suggests two things to me. Firstly it is perhaps welcome to have someone with the tools to think, if inclined, about intellectual property in a wider economic context as opposed to treating it as a good in itself (a problem especially with the lawyers). Secondly, as someone with significant experience in the design and management of directives, and specifically the ECommerce directive, his arrival may mean that they are going to get serious about IPRED 2, not least as it will have a an interface with the provisions limiting liability for ‘Information Society Service Providers’ set out in the aforementioned directive. You can read his take on intermediary liability here.

On June 7th in Brussels there will be a public hearing on “Directive 2004/48/EC on the enforcement of intellectual property rights: Challenges posed by the digital environment”, where there is scheduled to be a presentation by Unit D3, so we will soon get an idea of the flavour which Bergevin will bring to the debate.

His former unit also handled the 2010 consultation on the E-Commerce Directive which was criticised for its resistance to incorporating the views of NGO and user groups around the broader questions at stake in filtering and monitoring of online services.

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 (subsequently renamed the European Observatory on Infringements of Intellectual Property Rights (EOIIPR) and transferred to the OHIM). 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.

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.

Inside the European Observatory on Counterfeiting and Piracy

Two spheres of activity have dominated the attention of the EOCP since its inception: the rather insipid sounding ‘stakeholder dialogue on illegal uploading and downloading’ and a subgroup working on a review of the implementation of IPRED1 and proposals for the future. Where the first attempts to broker agreements between corporate players on opposing sides of the policy battle, the second is dedicated to the generation of new legislative substance. In addition there is work being done on public awareness initiatives around the ‘problem’ of counterfeiting and piracy.

Preparing the Ground for IPRED2: Legal Subgroup; Whois?
This has a relatively small membership made up of Commission employees such as Alvydas Stančikas together with representatives from national anti-counterfeiting groups (France, Italy, Sweden, Belgium, Netherlands), their European counterparts (SNB REACT), the International Federation of the Photographic Industry, Motion Picture Association, Business Software Alliance and lawyers representing collecting societies such as BASCAP and major software producers. There are no participants from consumer or civil liberties groups, or indeed from any other NGO. Nominally the European Consumer Organization – BEUC – should have a member present as well, but this has not come to be, for reasons unclear.

IP Enforcers Tool Up in Europe

The European Commission will soon launch a second intellectual property enforcement directive (IPRED2), which this time will contain those crimninal provisions removed during the passage of IPRED1 in 2004 due to doubts as to their legal basis. With the passage of the Lisbon treaty and recent ECJ legal decisions this uncertainty has been reduced. In the following posts I want to sketch out other changes at an institutional level and provide an update on the mustering of the forces behind the new directive.

The first of these is the creation in 2008 of a unit dedicated to IP Enforcement inside of DG Internal Market. Created under the direction of Alvydas Stančikas, this unit creates a section of the bureaucracy now wedded unconditionally to the ideology of expansionist IP laws. Functionaries, alas, are usually substantially indifferent to the content of their roles, preferring to see their task as to bring suggested initiatives to fruition (thereby accruing institutional prestige with the career advancement that accompanies it) rather than challenging the assumptions behind them.

For more than a decade the Copyright unit, long headed by Tilman Lueder, has been the epicenter for Commission action. Whilst attached to the shibboleths which insist that increased protection is necessary to protect innovation, it at least located enforcement in a wider context of copyright objectives. Removal of enforcement questions from any broader discussion of the ecology of innovation and creativity transitions the apparatus to a structural capture by content industry incumbents.

European Observatory on Counterfeiting and Piracy
The first task of the new Unit has been to oversee the establishment of an ‘Observatory‘ to gather data about alleged IP infringements. Like so many other foul initiatives in the copyright sphere of late, it emanated from Sarkozy’s France. More specifically it was proposed during the period of the French Presidency in 2008. Given that he had made copyright protectionism a battle-cry in the previous year’s election, this came as no surprise. This campaign opened with a Communication by the European Commission on 16 July, mooting the need for better information collection and sharing. The following September the ECPO’S creation was mandated by a Council Resolution.

Sarkozy’s demands were realised on April 2nd 2009 saw the establishment of the ECPO’S launch by Charlie McCreevy, former irish finance minister, then Commissioner for the Internal Market. In September 2009 the Commission set out its aims in another Communication.

Methods
For some time those responsible for IP policy at a European level have bemoaned the unsolicited attention of external observers who criticise their policies on the basis of users’ interests or alternative visions of the innovation process. This was especially the case in the successful defeat of the EU Commission’s campaign for software patents. Part of their response has been to increase their activity in areas of soft law (communications, resolutions), try and effect change through closed-door dialogues between interested ‘stakeholders‘ (a lot more on this in my next post), and to either encourage or actively implement the mobilisation of administrative resources to attain their ends. The result is an immiseration of public discussion and a further dilution of democracy. The EOCP is a perfect example of several of these tendencies.

McCreevy’s speech at the launch spelled out the new approach:

“The mere existence of new laws, although important, cannot be expected to combat a worldwide infringement problem. So once again I stress the point that we must turn our attention towards supportive programs that can help bring to bear strong administrative commitments and resources, in conjunction with the flexibility and
resourcefulness of the private sector.”

Participation is limited to those invited by the Commission and industry involvement is obviously preferred: since the foundation of the ECPO there has been almost no involvement of consumer or civil liberties organizations (the BEUC did attend one meeting).

Tasks
Criticism of Commission’s reliance upon industry produced statistics with regard to infringement, which unsurprisingly exaggerate the scale of losses, means that the basic task is to produce defensible figures. The methodology and collection of the data collation will be determined by a private contractor who is to work closely with industry representatives (like the IFPI and the MPAA).

Secondly the EOCP functions as a forum for the a series of work-groups: legal reform (in preparation of IPRED2); on online copyright infringement (focusing heavily on the legal responsibility of ISPs as well as IPRED2); public awareness.

In general the plan is that the EOCP will be a clearing-house for exchange of ‘best practices’ derived both from the various jurisdictions and a transmission-belt for private-sector enforcement initiatives. And doesn’t it all sound somewhat familiar? Well it should, much of it is in the Anti-Counterfeiting Trade Agreement (ACTA) – even though it hasn’t been passed yet, the EU is behaving as if it’s already there!

These meetings are staffed by functionaries from the Knowledge Economy and IP Enforcement Units inside DG Internal Market. In order to access additional resources the Observatory will now be under the official auspices of the Office for the Harmonization of the Internal Market in Alicante, who are otherwise concerned with Trademarks and Designs.

With the departure of McCreevy in early 2010, the position of commissioner for internal market passed to Michel Barnier, a right-wing member of Sarkozy’s UMP; his cabinet can be expected to provide enthusiastic encouragement for all enforcement related efforts.

Why Should We Care?
The real target of all these efforts are ordinary computer users. The cloud of professed concern about organized crime and the hazards of fake medicines is really an alibi for a campaign around individual use and circulation of cultural works. The EOCP is about preparing the ground for a subsequent legislative campaign threatening massive damages and the obligation to employ censorware against intermediaries such as ISPs, and nonjudicial punishments against users (a la Hadopi) or worse, jail (but this more as a threat than a reality).

In addition to the crudely repressive aspect of this, what grates is the boneheaded commitment to monopoly rights as a means to promote some notional ‘knowledge economy’.

– The Commission has screwed up in the past on this and it knows it: their own report on the Database Directive demonstrates that.

– The software community in Europe showed them they were wrong about software patents as well, but had to defeat the Commission in Parliament due to their impermeability to rational argument.

– And today, how many innovative services will never be born in Europe because of the protectionist approach to copyright law? Google could launch googlebooks precisely because they had a broad fair-use defense to rely upon, that gave them a counterweight to the publishers’ threats and enabled a negotiation. Such a scenario was unthinkable in Europe and it’s the EU’s loss as an economy.

Will anyone inside the EU Commission will take the risk to launch processes which correct these failures?
—————-

My next posts will deal with what is going on within the EOCP’s subgroups and the content of IPRED2.

Romani Decree: Agcom and IP Enforcement in Italy

In the second week of December a wikileaked US diplomatic cable from February 2010 revealed the US ambassador’s scepticism at the motivations behind the Romani Law (Decreto Romani), nominally the Italian implementation of EU Directive 2007/65 on Audiovisual Media Services.

The cable described at some length how the law’s provisions could be exploited to the benefit of the Berlusconi’s media empire. Amongst other matters, the decree promised greater action on copyright, an area in which the Italian government had hitherto been somewhat disinterested. In fact the design of the Romani Law was driven largely by the need to restrict the commercial activities of Sky, the only effective private sector competitor to Mediaset.

From this perspective the legislation is in historical continuity with its predecessor, the Gasparri law, whose purpose was to ensure an undisturbed transition of media power in the shift from the analogue to digital framework. Yesterday’s incumbents – Berlusconi and RAI – would also be tomorrow’s. The Gasparri law was ultimately the target of a complaint procedure by the European Commission begun in 2006.

Just a couple of days after the leak, on December 17th, the Italian communications authority, Agcom (Autorità per le garanzie nelle comunicazioni), under the powers assigned to it by the Romani Law, announced new measures to be used against sites hosting materials that infringe copyright.

What is Agcom?
Agcom was established by the Maccanico law in 1997 as an agency somewhat independent of the government; of its eight members four are selected by the Parliament and the other four by the Senate. The authority is charged with overseeing infrastructure and competition in the communications sector, and even-handedness in broadcasting. Currently it is under pressure from Minister Paolo Romani to punish a program, Anno Zero, presented by Berlusconi critic Michele Santoro, on the grounds of broadcasting “claims of a gratuitous character, derogatory and seriously damaging to the dignity and decorum of eminent political personalities” on several occasions in January, ie allegations against Berlusconi in relation to soliciting child prostitutes aka the Ruby case…

Marketing Enforcement Strategies
Subsequent to Agcom’s announcement of the new measures, the ‘anti-piracy’ organization FAPAV (Federazione Anti-Pirateria Audiovisiva) held an event in Rome in mid-January to present the Italian aspects of a study commissioned on the detrimental effect of copyright infringement on employment in Europe, produced by Tera Consultants under commission by BASCAP and the International Chamber of Commerce.

As usual improbably large figures were thrown around (billions of euros and 22,000 jobs lost!) with no reference made to the provision of the underlying ‘raw data’ by the IFPI (music industry lobby) and FIMI (their Italian satellite) and a marketing company, IPSOS. No discussion of methodology either, perhaps advisedly so, as the Social Sciences Research Council (who are conducting similar investigations) had publicly criticised it when the report was initially published in March 2010. Not that any of the journalists reporting the event seemed to care: as usual they reproduced faithfully what they were told ^[1].

FAPAV had invited Nicolas Saydoux, head of French trade group and antipiracy lobby ALPA, to entertain the audience with a fairytale: how a strategy combining 3 strikes legislation and an increased range of legal products on the market had succeeded in reducing piracy levels by 85% – in less than six months!

New Measures
Obviously FAPAV would like to see similar measures taken against users in Italy but for now they will have to make do with Agcom’S proposals, namely a system whereby copyright owners can complain to sites hosting their materials or linking to other sites which do, and request the material’s removal. Where no action is taken within 48 hours, the complaint is passed to Agcom, who, after examination of the offending material, will demand its removal. In the absence of compliance fines can be imposed.

To deal with sites based outside of Italy, it is proposed having checked that infringing content was available, Agcom could order providers to ban the IP or DNS so as to prevent access. Such an approach is already in use against foreign gambling sites, and notoriously also in place against the Pirate Bay – not that this has stopped many Italians from circumventing these controls on access to TPB.

What is really interesting about all this is that Agcom’s powers would not require any judicial order. There is no judge involved. Attentive readers will be struck by the similarity to the first version of Hadopi in France. Undoubtedly the positive feelings of FAPAV towards this scheme are driven by the same rationale that was behind Hadopi 1: accelerate the process of shutting down the alleged infringer by recourse to administrative rather than judicial mechanisms. Or to put it more simply, eliminate due process.

Transparency? Nah…
Amazingly for such a controversial system it is not being created by parliament, but rather through an administrative order on the part of Agcom, under the terms set out by the Romani decree. The proposed order was released in December and is subject to two months ‘public consultation’ prior to being enacted. A campaign has been started by an alliance of organizations including the consumer groups, lawyers, and business. In recent days they have launched a site to coordinate opposition to the measures.

Postscriptum
In a separate decision Agcom has also decided that sites with a turnover of more than 100,000 euros per year based on user-generated content will be subjected to the same legislative requirements as TV stations – restrictions on the provision of content to minors, obligations to individuals defamed etc – and are to be treated as having responsibility for the content on their sites.

Most heavily impacted by this is youtube. In 2008 Mediaset initiated a case against youtube/google, demanding 500 million euros in damages of 500 million euros for copyright infringement of Mediaset programs on their video platforms. This resulted in two decisions against Google, in December 2009 and February 2010, regarding liability for hosting parts of the Italian version of Big Brother (Grande Fratello), a franchise owned in Italy by R.T.I.

Agcom’s decision regarding liability for user-generated content may be of significance in determining the eventual outcome, but this will also hinge on clarification of the more general liability of intermediaries in Italian law, currently a source of great confusion.

(1) http://www.repubblica.it/spettacoli-e-cultura/2011/01/26/news/bel_paese_pirati-11661722/index.html Back to post ¹