Informationoverlord

Thanks to an PLC update I came across an interesting defamation case between Islam Expo Ltd a company which organises the bi-annual IslamExpo, an Islamic exhibition and the publisher of the Spectator (and one it’s journalists) concerning an article published online at www.spectator.co.uk. The item stated that ” Demos sponsored and participated in a debate at IslamExpo and a seminar on ‘Political Islam’. That’s right: a left of centre think tank worked with a clerical fascist party to organise a conference about its racist, genocidal, theocratic political programme.”

Islam Expo complained that this was defamation and the court was asked to decide on “In their natural and ordinary meaning the words complained of meant and were understood to mean that the Claimant is a fascist party dedicated to genocide which organised IslamExpo, a conference with a racist and genocidal programme”.

Where it becomes interesting – for me, at least - is the Spectator argued that the statement was not defamatory when read in the proper context of the underlying hyperlinked documentation. In the online article “Demos”, “Harry’s Place points out” (mentioned earlier in the article) “Debate” and “Seminar” all linked to other material.

As the court points out “It is a principle of law most recently defined in Charleston v. Newsgroup Newspapers Limited [1985] 2 AC 65, 70-71, that in order to determine the meaning of words complained of it is necessary to take into account the context in which the words were used and the mode of publication. Thus a claimant cannot select an isolated passage in an article and complain of that alone if other parts of the article throw a different light on that passage.”

So the question becomes, in an online world, does the material found at the end of a hyperlink need to be taken into account when deciding on the issue of context in a defamation case? The Spectator argued they should, Islam Expo that they shouldn’t.

Justice Tugendhat decided he would take into account what was in the hyperlinks, but did so “without thereby intending to imply any ruling, one way or the other, as to whether that approach is right in law.” His decision did not actually help the Spectator, whose own lawyer conceded that without reference to the documents the subject of the hyperlinks, the words complained of are capable of being understood as ‘ambiguous.’

Justice Tugendhat concluded that it was clear the words complained of are capable of referring to Islam Expo, and that a hypothetical reader/person could do so. The case can now proceed to trial.

I think Justice Tugendhat was spot on with his conclusion. The question as to whether linked content should be included, or even considered, as part of the ‘context’ is a much more interesting one. I would probably argue that hyperlinks, in the context of online articles, act in the same way that footnotes and references would in a print publication. Although easier to access this ‘referred’ content online than in print, so more likely to be read, it is still for the individual to read or disregard their existence. So, for me, I can’t see how hyperlinked content can be regarded as context in situations such as this one.

The Ninth Circuit Court of Appeal has vacated Mattel’s hard-won injunction on behalf of its Barbie doll, finding the remedy imposed by the District Court too broad.

In 2008, Mattel won a lawsuit claiming MGA had infringed its copyright and breached a contract because the designer of Bratz dolls was still under contract to Mattel when he developed the Bratz concept for MGA Entertainment, the makers of the rival (and currently more popular) Bratz doll range. A jury awarded Mattel $100 million.

Mattel had argued that Carter Bryant had come up with the Bratz dolls concept when he was working for Mattel. He left Mattel in or around 2000 for MGA and shortly after his move, MGA had started marketing the Bratz doll. MGA had argued that the Bryant had created the concept during a period of time when he was not working for Mattel. However, this argument fell by way side during the original case and Mattel convinced a federal jury that the employee conceived the Bratz idea whilst in its employ.

In April 2009, a federal judge upheld the jury verdict and imposed a constructive trust over all trademarks including the terms “Bratz” and “Jade,” essentially transferring the Bratz trademark portfolio to Mattel.

The Ninth Circuit has now ruled the District court erred in making this decision. “It is not equitable to transfer this billion dollar brand— the value of which is overwhelmingly the result of MGA’s legitimate efforts—because it may have started with two mis-appropriated names. The district court’s imposition of a constructive trust forcing MGA to hand over its sweat equity was an abuse of discretion and must be vacated. ” The Court pointed out that evebn the jury seemed to grasp this point when it awarded Mattel only $10 million, or about 1% of $1 billion it sought, because it found only a small portion of the Bratz dolls infringing.

The Court also took issue with the District Courts decision prior to trial, to find that Bryant’s employment agreement assigned his ideas to Mattel, and so instructed the jury. The Ninth Circuit judges however concluded that whilst the agreement could be interpreted to cover ideas, and a Mattel executive claimed during her deposition that it was common knowledge in the design industry that terms like “invention” and “design” did include employee ideas, the text doesn’t compel that reading and other Mattel employee contracts actually specified that ideas were covered.

Bryant’s 1999 employment agreement, which provides: “I agree to communicate to the Company as promptly and fully as practicable all inventions (as defined below) conceived or reduced to practice by me (alone or jointly by others) at any time during my employment by the Company. I hereby assign to the Company . . . all my right, title and interest in such inventions, and all my right, title and interest in any patents, copyrights, patent applications or copyright applications based thereon.” (Emphasis added.) The contract specifies that “the term ‘inventions’ includes, but is not limited to, all discoveries, improvements, processes, developments, designs, know-how, data computer programs and formulae, whether patentable or unpatentable.”

The court also found that the phrase “at any time during my employment” is ambiguous stating that it could easily refer to the entire calendar period Bryant worked for Mattel, including nights and weekends – or just working hours. The District court erred in deciding there was no ambiguity. It also erred in affording broad protection against substantially similar works to the original sculpt of the dolls; and whilst it didn’t err in affording the doll sketches broad copyright protection against substantially similar works, it did err in failing to filter out all the unprotectable elements of Bryant’s sketches – “Mattel can’t claim a monopoly over fashion dolls with a bratty look or attitude, or dolls sporting trendy clothing—these are all unprotectable ideas… This error was significant. Although substantial simi-
larity was the appropriate standard, a finding of substantial similarity between two works can’t be based on similarities in unprotectable elements. ”

The Court concluded ” On remand, Mattel will have to convince a jury that the agreement assigned Bryant’s preliminary sketches and sculpt, either because the agreement assigns works made outside the scope of employment or because these works weren’t made outside of Bryant’s employment. And, in order to justify a copyright injunction, Mattel will have to show that the Bratz sculpts are virtually identical to Bryant’s preliminary sculpt, or that the Bratz dolls are substantially similar to Bryant’s sketches disregarding similarities in unprotectable ideas.”

“Because several of the errors we have identified appeared in the jury instructions, it’s likely that a significant portion—if not all—of the jury verdict and damage award should be vacated, and the entire case will need to be retried.”

This has always been an interesting case and it looks like we set for several more years of it. A reading of the judgment gives hope to both sides. The court doesn’t say that Mattel has lost the case, but more that the District Court ignored too many ambiguous aspects of the case, resulting in an overbroad finding against MGA.

Well it’s the funkalistic, / the blunt I twist it - Cypress Hill - ‘I wanna get High’

It’s not often that the right to go into a ‘coffee shop’ and spark up a joint comes before the courts, but at this very moment the judges at the European court of Justice are faced with just that question.

Advocate General (AG) Bot of the European Court of Justice has proposed the full court agree that the decision of the Dutch municipality of Maastricht to prohibit the admission to ‘coffee shops’ of anyone who is not a Dutch resident is legal. No, seriously, this is a real case.

Maastrict passed rules that reserved admission to the coffee shops to residents of the Netherlands only, and when one coffee shop owner, Mr Joseman got busted a couple of times for having non-residents in his shop – partaking of his wares – he was closed down –albeit temporarily. Mr Joseman decided to appeal against the decision and the Raad van State (Council of State, the Netherlands) decided to refer the question of whether European Union law precludes rules which prohibits admission to coffee shops of persons not resident in the Netherlands to the ECJ.

Mr Joseman argued that the ban on non-dutch customers was in conflict with the guarantee under the EU treaty on the free movement of services (Article 56 TFEU). The freedom prohibits restrictions on free circulation of services within Member States. Services are defined in the negative, “they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and persons.” (Art. 57 TFEU) Services include those activities of “a commercial character.”

However, aaccording the AG Bot drugs, including cannabis, are not goods like others and their sale does not benefit from the freedoms of movement guaranteed by European Union law, in as much as their sale is unlawful (though tolerated by the authorities in the Netherlands. Possession is, however, lawful). As such, he decided that the measure adopted by the municipality of Maastricht does not fall within the scope of the freedom to provide services – regardless of the fact that the coffee shop also sells coffee and cakes etc.

He also added that the Schengen Agreement between France, Germany, Belgium, Luxembourg and the Netherlands which aimed to eliminate border checks between the countries also did not preclude the measures, especially as EU law allows Member States to determine measures necessary for maintaining public order within their borders and drug tourism represents a genuine and sufficiently serious threat to public order in Maastricht, that the measure to exclude of non-residents from coffee shops is necessary to protect the residents of the municipality from trouble caused by that phenomenon.

This would be interesting if other dutch municipalities followed suit.

An Advocate General`s opinion is persuasive, but not binding on the ECJ, which will issue its judgment in due course.

There’s a stain on my notebook where your coffee cup was / And there’s ash in the pages - Squeeze ‘Coffee in Bed’

“So fuck the FCC / Fuck the FBI /Fuck the CIA / Livin in the motherfuckin USA” - Steve Earle – F the CC

The U.S. Court of Appeals for the 2nd Circuit in New York has ruled that the U.S. Federal Communications Commission’s (FCC) indecency policy is unconstitutionally vague and could create a chilling effect beyond “fleeting expletives” heard on broadcasts.

The case deals with an appeal by Fox (and several other broadcasters) against the FCC’s expansion of its rules – made in March 2004 - to deal with obscenity and indecency in Television (and the special addition of profanity as a separate category of proscribed speech under the law)

The same court, in 2005, ruled by 2-1 that that “the FCC’s new policy regarding “fleeting expletives” represents a significant departure from positions previously taken by the agency and relied on by the broadcast industry. We further find that the FCC has failed to articulate a reasoned basis for this change in policy. Accordingly, we hold that the FCC’s new policy regarding “fleeting expletives” is arbitrary and capricious under the Administrative Procedure Act. The petition for review is therefore granted, the order of the FCC is vacated, and the matter is remanded to the Commission for further proceedings consistent with this opinion”.

At that time the Court first pointed to the Supreme Court decision in Pacifica (1978) that the FCC could, consistent with the first amendment’s right to free speech, regulate indecent material, but emphasised the limited nature of the ruling saying it did not ’speak to cases involving the isolated use of a potentially offensive word in the course of a [radio] broadcast ‘

When the FCC reversed its initial decision not to sanction NBC for the broadcast of Bono saying “really fucking brilliant” at the 2003 Golden Globes the Commission it moved away from this position stating: “While prior Commission and staff have indicated that isolated or fleeting broadcasts of the “F-Word” such as that here are not indecent or would not be acted upon, consistent with our decision today we concluded that any such interpretation is no longer good law”

The 2nd Circuit argued ruled the FCC had failed to show why this was no longer good law and what had changed to warrant this new position on ’single’ fleeting expletives. The case was appealed to the Supreme Court who reversed this decision by a 5-4 margin stating that: “None of the Second Circuit’s grounds for finding the FCC’s action arbitrary and capricious is valid.
First, the FCC did not need empirical evidence proving that fleeting expletives constitute harmful “first blows” to children; it suffices to know that children mimic behaviour they observe. Second, the court of appeals’ finding that fidelity to the FCC’s “first blow” theory would require a categorical ban on all broadcasts of expletives is not responsive to the actual policy under review since the FCC has always evaluated the patent offensiveness of words and statements in relation to the context in which they were broadcast. The FCC’s decision to retain some discretion in less egregious cases does not invalidate its regulation of the broadcasts under review. Third, the FCC’s prediction that a per se exemption for fleeting expletives would lead to their increased use merits deference and makes entire sense.”

The Supreme Court however, refused to rule on the constitutionality of the rules, absent a ruling on that subject by the Second Circuit, so sent the case back to New York for examination of the constitutional issues. The 3 Judge panel has now done so an unanimously concluded “We now hold that the FCC’s policy violates the First Amendment because it is unconstitutionally vague, creating a chilling effect that goes far beyond the fleeting expletives at issue here”.

What is an unconstitutionally vague law/rule? According to US law something is impermissibly vague if it does not “give a person of ordinary intelligence a reasonable opportunity to know what is prohibited” In this case the broadcaster argued the FCC’s indecency test was not one that made clear what was prohibited. They pointed to the Supreme Court’s decision to cut down the Communications Decency Act in Reno v ACLU where the law was found unconstitutionally vague with its use of general undefined terms such as ‘indecent’ and ‘patently offensive’, must also apply here where the identically used terms are applied.

The Court found there was additional guidance that meant the Reno decision in and of itself didn’t mean they should find against the FCC. However it did find the indecency policy impermissibly vague, pointing out that according the FCC ‘Bullshit’ – as used in an episode of NYPD Blue is indecent because it is ‘vulgar, graphic and explicit’, but ‘dickhead’ was not indecent because it was ‘not sufficiently vulgar, explicit, or graphic.’ No explanation is provided as to why, for example multiple occurrences of variants of the word ‘Fuck’ are not indecent and profane in Saving Private Ryan, but were in musical documentary The Blues.

The Court summed its vagueness argument by pointing to the FCC’s own lawyer during oral arguments whose answer to a question on whether a discussion programme dealing with the dangers of pre-matital sex aimed at teenagers would be permitted under the FCC rules replied ‘I suspect it would’. It followed this observation by listing programmes that had not been broadcast or rebroadcast and scripts that had been changed in fear of failing foul of the FCC rules.

The court concluded: ” the absence of reliable guidance in the FCC’s standards chills a vast amount of protected speech dealing with some of the most important and universal themes in art and literature. Sex and the magnetic power of sexual attraction are surely among the most predominant themes in the study of humanity since the Trojan War. The digestive system and excretion are also important areas of human attention. By prohibiting all “patently offensive” references to sex, sexual organs, and excretion without giving adequate guidance as to what “patently offensive” means, the FCC effectively chills speech, because broadcasters have no way of knowing what the FCC will find offensive. To place any discussion of these vast topics at the broadcaster’s peril has the effect of promoting wide self-censorship of valuable material which should be completely protected under the First Amendment.”

The FCC can appeal the ruling to either the full court of the 2nd Circuit or take the case back to the Supreme Court. It could also just choose the rewrite its indecency rules, and then – in all likihood – end up starting this process again with new challenges to its constitutionality. I feel it is unlikely to do the latter until a decision is handed down in a loosely related case being played out in the 3rd Circuit court in Philadelphia over the infamous 2004 Super Bowl halftime show, in which CBS broadcast the ‘wardrobe malfunction’ which saw one of Janet Jackson’s breasts was exposed for about half a millisecond. An appeal to the full 2nd Circuit and/or Supreme Court seems more likely, although in both cases I think the broadcasters will succeed.

For the second World Cup running Dutch beer company Bavaria have succeeded in becoming the brand everyone is talking about at the tournament. It seems this time around the company gave out lots of free tight fitting orange dresses to female Dutch fans prior to the game with Denmark and also allegedly paid 36 very attractive women to wear the dresses and stand together during the match cheering on the Dutch team. Unbelievably the Cameramen (and yes they still pretty much all are still men) found these attractive women in the crowd and cut to them on several occasions.

I saw it with my own eyes and besides admiring the young ladies talents, didn’t think anything of it. Bunch of woman dressed in Orange - the colour the natonal team play in - at a Dutch football game? I expect to see that. If you were a serious Dutch beer fan you might have picked up on the beer angle, though even that’s doubtful, but anyone else?

FIFA however also saw something totally different. They obviously cast their mind back to the last World Cup in Germany when Bavaria had handed out lots of orange lederhosen to fans – resulting in one set of fans being forced to either miss the game or stand in their underwear after being told they could not enter the ground in the lederhosen. Also it appeared that the tickets the ladies were using – which were close to pitch side - had come from an allocation given to ITV pundit Robbie Earle for friends and family. Earle has been sacked by ITV over the issue.

FIFA would be taking their action on behalf of the official beer sponsor Budweiser, who are the only beer brand allowed to advertise within FIFA venues.

The question of Ambush Marketing has been a major IP issue over the last decade or so, and understandably so. Big sporting events such as the Olympics, and the World Cup get much valued sponsorship money from big brand owners to be associated with such events – these rights do not come cheaply, and it is hard to argue that these sponsors should not be given some level of protection for that financial outlay which is often key financing in allowing the events to actually take place. However the manner in which this is achieved is often seem as heavy handed or misplaced.

In South Africa, there has been legislation covering ambush marketing since before the 2003 cricket World Cup took place. I particular, the South African Trade Practices Act (as amended) prohibits ambush marketing by association, and article 15a of the South African Merchandise Marks Act (as Amended) stipulates that:

“For the period during which an event is protected, no person may use a trade mark in relation to such event in a manner which is calculated to achieve publicity for that trade mark and thereby to derive special promotional benefit from the event, without the prior authority of the organiser of such event.
…the use of a trade mark includes( a) any visual representation of the trade mark upon or in relation to goods or in relation to the rendering of services; (b) any audible reproduction of the trade mark in relation to goods or the rendering of services; or (c) the use of the trade mark in promotional activities, which in any way, directly or indirectly, is intended to be brought into association with or to allude to an event.”

However, for the most part it is left to the Advertising Standards Authority to regulate, through their Advertising Code and Sponsorship Code.

Section 3.7 of the Sponsorship code states:
“The attempt of an organisation, product or brand to create the impression of being an official sponsor of an event or activity by affiliating itself with that event or activity without having paid the sponsorship rights-fee or being a party to the sponsorship contract.”

Additionally under the Sponsorship rules and provisions in Section 10 which “apply to all categories of sponsorship, parties to sponsorship and sponsorship practices, without exception” is adds that “A product or logo that is not directly associated with the sponsor of the event, activity, team, individual or organisation may not be visibly used or displayed during the [sponsored] event.”

In the current case this is particularly interesting as Peer Swinkels, Marketing Director of Bavaria beer, denying his company had done anything wrong stated that “The Dutch people are a little crazy about orange and we wear it on public holidays and events like the World Cup. We put no branding on the dress and FIFA don’t have a monopoly over orange.” This contrasts to the position in Germany, where their logo was visible on the orange lederhosen.

Which brings us to the question of who has won. Whilst I am sure FIFA feels the need to be vigorous in being seen to defend its official sponsors, whether the arresting of some of the ladies involved does anything to enhance the brands you’re protecting is another question. Meanwhile, the people at Bavaria beer must be sat with huge smiles on their faces as FIFA’s actions have brought global press coverage to something that should frankly have just been ignored.  Add to that the question of did Bavaria actually break the law, which seems at best questionable and we get:

Final Result: It’s Germany all over again: Bavaria Beer 1 FIFA World Cup 0.

UPDATE:  According to euFootball.biz, two of the women have now been charged with breaching the Merchandise Marks Act and FIFA’s head of media Nicolas Maingot has said: “FIFA has filed charges against the organisers of the ambush marketing stunt.”

And the prize for giving the story yet more oxygen? Anyone talking about the ‘official’ beer of the tournament? Nope.

Bavaria Beer 2 FIFA World Cup 0

Last weekend many of my fellow Legal Library and Information friends (and legal publishers/vendors) took over Brighton for the annual BIALL conference. I couldn’t make it, but I believe a good time was had. But it did get me thinking.

Each year several awards are handed out including those for Law librarian of the Year (congratulations Jules Winterton, Associate Director and Librarian, Institute of Advanced Legal Studies for winning this one this year), Best Legal Information Service, Supplier of the Year Award, and Legal Journals Award.

The latter two are always interesting – won this year by Wildy & Sons Ltd and Common Market Law Review respectively, but for me the more interesting award would be for Worst Supplier of the Year Award, and/or Worst Legal Journals Award – or maybe a Legal Information ‘Villain’ award. Yes, we should recognise excellence but we should also as an association be turning the spotlight on those who consistently demonstrate poor customer service, excessively hike prices without justification and who – in the buzz word of our new government – are anything but ‘transparent’ in their subscription costs.

So, what say you BIALL. How about next year we have a new category for those who should be doing better.

In the meantime, your nominees for worst legal supplier/publisher of the year – feel free to be anonymous - are more than welcomed.

Photojournalist Daniel Morel was surprised when he saw photos he had taken in Haiti – showing the devastation after the earthquake - appearing in various publications credited to Associated Press (AFP) and Lisandro Suero. He sent cease and desist letters asking the AFP and other to stop using his photographs without his permission. AFP claimed they ceased publication of the images but stated Morel continued to make unreasonable demands that amount to an ‘antagonistic assertion of rights’. AFP responded by filing a declaratory judgment action asserting commercial defamation and seeking a declaration of non-infringement.

What happened?

According to Morel – a well know and award winning photographer, who amusingly previously worked for AFP for 14 years, up until 2004. - he had taken the photos and a friend advised him he coul get them ‘out there’ by uploading some of his photos and sharing them on Twitter using the TwitPic service. Suero, another ‘photographer’ copied the images to his own account and the licenced these to the AFP who in turn licenced them to Getty Images.

AFP – who don’t mention Suero at all in their declaratory judgment complaint - claim that it doesn’t matter if the photos are really Morels as it still had a right to use them as Twitter’s terms of service allow it to do so. It says this despite the fact that the photos were uploaded to Twitpic, which is actually a separate service, with its own terms of services – which state “By uploading your photos to Twitpic you give Twitpic permission to use or distribute your photos on Twitpic.com or affiliated sites All images uploaded are copyright © their respective owners.”- and it is also a separate company to Twitter [Indeed, nowhere in the complaint is Twitpic mentioned at all].

According the them Morel provided a nonexclusive licence to use his photographs when he posted them to the site. They also claim that by contacting AFP customers and asserting his copyright over the photos he has engaged in ‘unscrupulous business practices’.

AFP points out that Twitters terms stated that by posting photos to the service Morel was granting Twitter a ‘worldwide, non-exclusive, royalty-free licence, with the right to sub-licence others, to use, copy publish, display and distribute those photographs’

Indeed Twitters terms do say:
” By submitting, posting or displaying Content on or through the Services, you grant us a worldwide, non-exclusive, royalty-free license (with the right to sublicense) to use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute such Content in any and all media or distribution methods (now known or later developed).”

However, they also state: “You retain your rights to any Content you submit, post or display on or through the Services.” And they further clarify the above rights by adding ” This license is you authorizing us to make your Tweets available to the rest of the world and to let others do the same. But what’s yours is yours – you own your content.”

Now even if you accept the AFP’s position on the photos, the AFP did not licence the content from Twitter, and under their argument the non-exclusive, royalty-free license Morel was agreeing to was with Twitter, and therefore the rights to licence that content is theirs, and no-one elses. Nowhere in their terms does it grant other parties a exclusive, royalty-free license to re-use anything found on Twitter. They say:

“You agree that this license includes the right for Twitter to make such Content available to other companies, organizations or individuals who partner with Twitter for the syndication, broadcast, distribution or publication of such Content on other media and services, subject to our terms and conditions for such Content use. “

Very clear that the content is only shared with companies that partner with Twitter, which as they don’t mention it in their pleadings, one concludes that the AFP obviously aren’t such a partner.

Not just satisfied with that AFP also want a finding of defamation against Morel due to his continued assertions that AFP acted without a licence and infringed his copyrights, which AFP proclaim were false or made “with reckless disregard of whether they were false”

As one might expect Mr Morel sees things a bit differently.

He claims when he posted the first pics on Twitpic he states received several requested for rights to buy/publish the images from the world’s media – including from AFP, who at the same time were in contact with Mr Suero about ‘his’ pictures, which when they couldn’t immediately get hold of Morel went ahead and download the photos from Mr Suero’s account – even though they could not get hold of him either. As Morel attests they did not seem to do anything to verify the authenticity of the imagery or the accuracy of the source.

Shortly after the AFP try to contact Morel again and realising the photos are his, arrange to get the photo credits changed – although evidence provide by Morel show that several of his images were still being distributed and reprinted with either ATP/Getty and or Suero’s name attached two months after ATP had claimed to have done this.

Morel claims AFP knew the images were his, continued to use and licence them for use by others and indeed encourage that use for their own benefit. He is asking the court to send the case to trial to let a jury hear his copyright claims against AFP, Getty and others.

I can’t see this going any other way than AFP et al settling this case out of court. If it goes to trial they’ll get a royal spanking from a jury

Missed this last week. Copyright Tribunal has upheld web news monitoring service Meltware’s right to challenge the Newspaper Licensing Agency’s (NLA) Web Database Licence/Web End User Licence. Meltware is arguing that the costs of the licence as excessive and they would be paying around £10,000 to cover around 3.8% of their news sources, and that also that several terms in the licences are unreasonable – including supplying the NLA with a list of all its customers and notifying their customers that they in turn will need a NLA licence. The NLA had argued that the Tribunal should not hear the case as Meltware has no standing to bring the case as they have not signed up to the licences and that the Tribunal had no jurisdiction. The Tribunal dismissed both these arguments. Both sides can not start submitting evidence and a hearing will be held in February 2011. 

The report stage of the Digital Economy Bill at long last produced some real amendments to the Bill, but the biggest one has left some thinking the ‘improvements’ may in fact do more harm.

From the moment the bill was first published last year Clause 17, which gives the government “a power to amend the Copyright, Designs and Patents Act 1988 (CDPA) in future, to reflect fast-changing technology,” found opposition both within parliament - Lord Clement-Jones called it a Henry VIII clause - and with search and social media companiessuch as Google, eBay, Facebook and Yahoo who wrote to Peter Mandelson this week asking for clause 17 of the to be deleted from the draft law arguing the “clause is so wide that it could put at risk legitimate consumer use of current technology as well as future developments.”

The government who had already amended the clause once were set to amend it further this week but were trumped by Lord Clement-Jones who tabled his own amendment to replace the clause with one of his own.

The government’s proposed amendment would have made it clear that the scope of amendments to Part 1 of the CDPA is limited to Chapter 6 of Part 1 of the copyright Act, and clarified that the clause could only “be used only to make enforcement of rights easier or more efficient, not to define what constitutes copyright infringement”

Lord Clement-Jones’ clause introduced the power to shut down / block access to websites hosting infringing material by allowing “the High Court to grant an injunction requiring ISPs to block access to sites where there was a substantial proportion of infringing material that is either hosted by the particular site in question or accessed through the particular site. The injunction would be granted only where rights holders had first requested ISPs to block access to the site and when they had also requested the site operator to stop providing access to the infringing material, either by removing the material itself or removing the ability to access it.”

Lord Young responding for the government - and being in the interesting position (for a change) of making sense - pointed out the amendment was not a good idea for several reasons: (i) the provisions would need to be notified to the European Commission under the technical standards directive…subsections (6) and (7) of the proposed new clause would not count as notification in draft. Without the proper three-month notification, the provision would not be enforceable (ii) Blocking access to websites is an enormous step. It is worth noting that many and possibly most sites containing infringing material will also contain legitimate material. Finding a way of blocking infringing material without impacting disproportionately on legitimate uses is likely to be difficult, and (iii) sites that link to other sites that would be caught by this proposed clause but which do not have any control over or even knowledge of the content to which they link. That could lead to search engines being on the wrong end of a blocking order, something which will cause significant public disquiet.

Lord Erroll who supported an amendment that would have completely removed Clause 17 from the bill, as he would have prefered to see the next Parliament conduct a proper review or rewrite of the CDPA also saw a problem with Lord Clement-Jones’ amendment. ” We have to remember that the Bill does not just deal with streamed video, film and music. It also involves text-it can be applied to ordinary short text and brief things like that. What do search engines do? They search text and reproduce it in an aggregate form so that you can find what you are looking for. That means that, almost certainly, all search engines will be infringing from day one.”

Lord Clement Jones responded that he did not think this a problem. “I do not believe that this will involve thousands of sites. As soon as the ISPs notice that this legislation has gone through, they will alter their behaviour. We have seen what has happened in Sweden where there has been a steep fall in pirate sites, and I believe that it would be exactly the same under this legislation. [I] also cannot accept the Minister’s points about the EU technical directive in this case…If the Minister thinks that the wording of proposed new Section 97B is not precisely apposite for the purpose, it can always be changed at Third Reading to make sure that it is valid. We would welcome amendments to that effect.”

The clause was be put to the vote. It passed by 165 -140, and so is now in the bill.

UK ISP Talktalk reacted strongly to the new clause, calling the measure “draconian” and “futile”. Director of strategy and regulation, Andrew Heaney Heaney said “The amendment seems to require ISPs - and by implication their customers - to pay costs to rightsholders unless we bar a site prior to an injunction being granted against it. The amendment proposes that if a rightsholder’s application for an injunction against a website is ultimately successful, the ISP has to pay the rightsholder’s costs for making that application. This will inevitably encourage ISPs to bar access to a site immediately, in effect turning us into judges deciding which sites our customers can and cannot access.”

It certainly seems that the Lib-Dems have manged to get the bill looking ven more likr America’s DCMS than the government - a feat in itself. How long will sites be blocked? who will review the sites to see if they can be unblocked? It seems to me all this clause now does is as the earl of Erroll said in the debate, give the entertainment indutries yet another stick - this time through lawyers - “to threaten people with huge costs in court unless they roll over and give lots of money up front, so that people end up settling out of court.”

As on the day the bill was first published, Clause 17 must go.

The House of Lords have had their second day debating the Digital Economy Bill, and started talking about the issue that takes up most of the bill – Online infringement of copyright, which covers clauses 4-17 of the bill. The first amendments discussed would come before Clause 4.

Lord Razzall moved an amendment to insert a new clause on the obligations of copyright holders that that any ‘copyright holders seeking to take action against subscribers for online copyright infringement must use the process set out in sections 124A to 124E of the Communications Act 2003 except in cases of actual or likely extreme prejudice.’

This clause was mainly aimed at stemming tide of solicitors letters accusing people of illegal file-sharing and the treat of court action unless they pay up. Lord Howard, whilst agreeing that this was undesirable argued that the reduction in this practice should be a natural consequence of the successful implementation of this part of the bill, not a result of our having imposed a legislative block on rights holders “The difficulty of successfully suing someone through the judicial process for these copyright breaches is well established. The large number of people involved in file-sharing, the enormous number of files being shared and the low value of each individual copyright breach all point to our hope that the provisions lead to a significant reduction in illegal sharing without the courts being used.”

Lord Birt and Lord Triesman argued that the current bill is a proportionate response to the problem of illegal file sharing; Lord Whitty disagreed “it is not sensible to approach it by effectively alienating large chunks of the population when there is an alternative. The alternative may take longer, but it is clear that, both in the present system of going to the courts and in the potential of the system proposed in the Bill, proportionality will go out of the window.”

Lord Davies emphasised that the bill is not about criminalising people, and that “the behaviour we are tackling is civil infringement, not a criminal one.” He also said the “Peer-to-Peer file-sharing is already illegal “; a point picked up on by Earl Errol who stresses that the phrase used should be “peer-to-peer unlawful file-sharing.”

Lord Lucas – who declared that his main income from outside of the house is from the sale of copyright material – once again pointed the finger of blame at the copyright holders, in particular the film industry: “People love going to the cinema to see something like “Avatar”. It is an extraordinary experience on a big screen. However, why do the companies not sell DVDs and allow the downloading of copies of the film at the same time? It would not reduce their cinema take; it is nothing like the same experience. It just gives people who would never go to the cinema the chance to see the film. These companies created the piracy problem. They are continuing to create it. We must not, in this Bill, give them the illusion that they can stay where they are and that beating up on their customers is the solution to all their problems. ”

Amendment Withdrawn

Lord Clement-Jones then moved an amendment relating to compliance with fundamental rights, and a statement that the Secretary of State must demonstrate that any measures are proportionate and necessary and balance the rights of public and rights holders under ECHR before they are implemented.

His proposal was supported by Lord Lucas and Whitty, Baroness Miller and Earl Errol who stressed the importance of the bill being compliant with the wording of the new Framework Directive. The Government (Lord Davies) replied that “believe, of course, that the Bill is consistent with the EU framework provisions.” Lord Clement-Jones was not convinced: ” The Minister claimed that the Bill is compliant with EU law. He claimed that elements such as the fact that subscribers can be heard as a right of appeal make the Bill compliant. The reason for the amendment is that we do not believe that the Bill is compliant with those principles. There is a lack of specific statement about the burden of proof, the allocation of costs, and the quality of the evidence. There are many aspects that need to be explicit but are not stated. We need a set of guiding principles.”

Amendment Withdrawn

Clause 4: Obligation to notify subscribers of reported infringements

A group of amendments tabled to clarify the text of the bill including: making clear that the information provide to copyright holders/ISPs is of alleged breach of copyright not of infringement itself; the bar being set too low for the evidence needed by rights holders, in particular by making evidence needed simply the ‘appearance’ of copyright infringement; the removal of the term ‘unlawful peer-to-peer filesharing’ from the obligation to notify subscribers of copyright infringement clause making it about any copyright infringement; and the question of defences for internet subscribers who connection was used by others to download/upload copyrighted material.

Earl Errol stated the issue of ‘alleged’ breach was an example of where the text should be change to ensure compliance with EU law.

Lord Young responded that the text did not need changing as “Clause 4 already expressly recognises that the infringement described in a copyright infringement report is only “apparent”. Equally I think that the copyright infringement reports amount to more than mere allegation. New paragraph (b) requires the copyright infringement report to include, “a description of the apparent infringement” as well as evidence that shows the subscriber’s IP address and the time at which the evidence was gathered, so that there will be-I stress this-a clear and robust audit trail.”

Lord Young also told the Lord the government had provided ‘a draft outline of the initial obligations code’ , which according to Lord Clement-Jones includes statement that “The CIL will facilitate targeted civil action by copyright owners against the most serious alleged infringers”

Lord Whitty was concerned that the scope of the bill seemed to have been expanded beyond dealing will illegal p2p file-sharing and widened to potentially all forms of infringement and over all technologies. Lord Young replied that he could not see how restricting these provisions could do anything other than prevent the possible future beneficial use of the provision should the occasion arise. Lord Whitty remained concerned that having an open-ended extension to other forms of copyright violation – especially ones where rights holders already had the right of redress in the courts was “quite dangerous.”

Baroness Miller questions the effect the drafting of the bill will have on corporate and communal facilities such as Internet Cafes, communal wi-fi, university networks etc, concluding that as drafted it would be “extremely discouraging” to anyone wanting to provide such connection.

Lord Young “We recognise that libraries, other wi-fi operators and open-access providers such as universities serve an important function …We do not think that they are caught as individual service providers, which we think they are not, or as consumers However, the fact remains that they can take easy steps to prevent infringers using their connection. They can apply controls so that file-sharing sites are blocked at a subscriber level, particular protocols are blocked or that the amount of bandwidth available is limited to make file-sharing on such connections unrealistic.” In response to a follow up question of would action be taken against those who didn’t adopt these controls, he added the government had “no intention of penalising communal organisations unreasonably.”

Baroness Miller asked why a person should face having their internet access curtailed in anyway due to the actions of others and points to the fact that if a friend borrows your car and gets caught speeding it will be them, not you who is liable for the fine and penalty points. The bill as drafted however would still make the person providing the connection, the internet subscriber , solely liable.

Lord Davies responded that you had to start somewhere and that if someone received an initial letter they could then take measures to prevent further misuse of their connection if they had not been the alleged infringer themselves.

Lord Clement-Jones, Lord Lucas and Baroness Miller all asked Lord Davies and the government to set out what defences would be available to someone who receives these letters. If not in the bill would they be in the ICR code? Lord Davies avoids answering the question and merely says “. If it reached the stage that the subscriber had got past the early stage and the issue was of such seriousness that the copyright owner was concerned to take court action, all the normal defences under copyright legislation would apply and the defendant would be within the framework of law in the same way as for any other offence. The Bill does not change or challenge that.”

Earl Errol, supported by Baroness Miller, requested that the government commit to giving a legal definition of ‘allowed’ in ‘ a subscriber to an internet access service has allowed another person to use the service’ citing the debated on the Computer Misuse Act and a discussion over the word ‘likely’, which was subsequently dropped from that bill. “In common usage the word “allowed” would mean that I had given positive approval to an action. However, I am not sure that that is the legal definition. It may be that “failure to prevent” is the legal definition…I would like by the next stage of the Bill to have a proper legal definition of “allowed”.”

Baroness Miller added that “the fundamental issue is that the subscriber is still, in the way that this is drafted, in the box labelled “guilty” until proven innocent. The Ministers may shake their heads, but until they have defined “allowed” then the subscriber is in the box marked “guilty” because they are not able to prove that they are innocent without going through the whole rigmarole of what is allowed in the Bill.”

Amendments withdrawn/not moved/unallocated

Lord Razzall also tabled an amendment that sought to add that A “copyright infringement report” is a report ” includes a sworn statement by the person making the report that the information collected has been obtained in compliance with all relevant laws, including data protection and privacy laws, and by persons entitled to gather such information.” Lord Davies responded that this will be cover by the ICR code, and that it was not usual practice to put a requirement in legislation that it should be implemented in accordance with existing legislation.

Amendments withdrawn/not moved.

Meanwhile Lord Mandelson was penning an amendment to be tabled on the controversial ‘ Clause 17′, which gives the government power to amend the Copyright, Designs and Patents Act 1988.

Current clause in bill.

Lord Mandelson’s amended clause would read:

17 Power to amend copyright provisions

In Part 7 of the Copyright, Designs and Patents Act 1988 (miscellaneous and

general) after section 302 insert—
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“Prevention or reduction of online infringement of copyright

302A Power to amend Part 1 and this Part

(1) The Secretary of State may by order amend Part 1 or this Part for the
purpose of preventing any infringement of copyright by means of the internet if satisfied that—
(a) the infringement is having a serious adverse effect on businesses or consumers, and
(b) making the amendment is a proportionate way to address that effect.

(2) The following provisions apply to the power conferred by this section.

(3) Subsections (4) to (6) do not limit that power.

(4) The power may be exercised so as to make new provision or to amend
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or repeal provision (whenever made).

(5) The power may be exercised so as to—

(a) confer a power or right or impose a duty on any person;

(b) modify or remove a power, right or duty of any person;

(c) require a person to pay fees.
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(6) The power includes power to—

(a) make different provision for different cases;

(b) make transitional or saving provision;

(c) make any consequential amendment, repeal or revocation of

provision (whenever made) contained in or made under an Act.
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(7) The power does not include power to create or modify a criminal

offence.

(8) An order under this section must be made by statutory instrument.

“(9) The Secretary of State may not make an order under this section unless—
(a) the Secretary of State has consulted the persons the Secretary of State thinks likely to be affected by the order (or persons who represent such persons) and such other persons as the Secretary of State thinks fit;
(b) following that consultation, the Secretary of State has laid a draft order and explanatory document before Parliament in accordance with section 302B; and
(c) the order is made in accordance with section 302C.
302B Draft order and explanatory document laid before Parliament
(1) If, after the conclusion of the consultation required by section 302A(9), the Secretary of State considers it appropriate to proceed with the making of an order under section 302A, the Secretary of State must lay before Parliament—
(a) a draft of the order, together with
(b) an explanatory document.
(2) The explanatory document must—
(a) describe the infringement of copyright that the Secretary of State is satisfied is having a serious adverse effect on businesses or consumers;
(b) describe the effect;
(c) explain why the Secretary of State is satisfied that making the amendment is a proportionate way to address that effect;
(d) give details of the consultation undertaken under section 302A(9), any representations received as a result of the consultation, and the changes (if any) made as a result of such representations.
(3) Where a person making representations in response to consultation under section 302A(9) has requested the Secretary of State not to disclose them, the Secretary of State must not disclose them under subsection (2)(d) if or to the extent that to do so would (disregarding any connection with proceedings in Parliament) constitute a breach of confidence actionable by any person.
(4) If information in representations made by a person in response to consultation under section 302A(9) relates to another person, the Secretary of State need not disclose the information under subsection (2)(d) if or to the extent that—
(a) it appears to the Secretary of State that the disclosure of that information could adversely affect the interests of that other person; and
(b) the Secretary of State has been unable to obtain the consent of that other person to the disclosure.
(5) Subsections (3) and (4) do not affect any disclosure that is requested by, and made to, a committee of either House of Parliament charged with reporting on the draft order.
302C Super-affirmative procedure
(1) The Secretary of State must have regard to—
(a) any representations,
(b) any resolutions of either House of Parliament, and
(c) any recommendations of a committee of either House of Parliament charged with reporting on the draft order,
made during the 60-day period with regard to the draft order.
(2) If, after the expiry of the 60-day period, the Secretary of State wishes to make an order in the terms of the draft, the Secretary of State must lay before Parliament a statement—
(a) stating whether any representations were made under subsection (1)(a); and
(b) if any representations were so made, giving details of them.
(3) The Secretary of State may after the laying of such a statement make an order in the terms of the draft if it is approved by a resolution of each House of Parliament.
(4) However, a committee of either House charged with reporting on the draft order may, at any time after the laying of a statement under subsection (2) and before the draft order is approved by that House under subsection (3), recommend under this subsection that no further proceedings be taken in relation to the draft order.
(5) Where a recommendation is made by a committee of either House under subsection (4) in relation to a draft order, no proceedings may be taken in relation to the draft order in that House under subsection (3) unless the recommendation is, in the same Session, rejected by resolution of that House.
(6) If, after the expiry of the 60-day period, the Secretary of State wishes to make an order consisting of a version of the draft order with material changes, the Secretary of State must lay before Parliament—
(a) a revised draft order; and
(b) a statement giving details of any representations made under subsection (1)(a) and of the revisions proposed.
(7) The Secretary of State may after laying a revised draft order and statement under subsection (6) make an order in the terms of the revised draft if it is approved by a resolution of each House of Parliament.
(8) However, a committee of either House charged with reporting on the revised draft order may, at any time after the revised draft order is laid under subsection (6) and before it is approved by that House under subsection (7), recommend under this subsection that no further proceedings be taken in relation to the revised draft order.
(9) Where a recommendation is made by a committee of either House under subsection (8) in relation to a revised draft order, no proceedings may be taken in relation to the revised draft order in that House under subsection (7) unless the recommendation is, in the same Session, rejected by resolution of that House.
(10) Subsections (3) to (5) of section 302B apply in relation to the disclosure of representations under subsections (2)(b) and (6)(b) of this section as they apply in relation to the disclosure of representations under subsection (2)(d) of that section.
(11) For the purposes of subsections (3) and (7) an order is made in the terms of a draft order if it contains no material changes to the provisions of the draft order.
(12) In this section the “60-day period” means the period of 60 days beginning with the day on which the draft order was laid before Parliament under section 302B.
(13) In calculating the 60-day period no account is to be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than four days.”