FEDERAL COURT UPHOLDS RIGHTS TO COPY DATABASES

A Court dismissed a case brought by Telstra subsidiary Sensis, against a competitor local listing company from using information derived from Telstra’s white and yellow pages.  The Federal Court Judge in Telstra Telephone Directories Pty Ltd v Phone Directories Company Pty Ltd [2010] FCA 44, ruled that information contained in Telstra’s databases isn’t protected by copyright law. The ruling means that factual databases like phone directories, TV event schedules, real estate listings in databases such as realestate.com, and sporting fixtures and databases may be at risk of being duplicated.  The case  gives greater certainty to database vendors in Australia following the Ice TV case (IceTV Pty Limited v Nine Network Australia Pty Limited [2009] HCA 14) which  held that it a question of fact and degree as to whether authors who gather, collect and organise material into a database have invested a “sufficient effort of a literary nature” to be considered an author under Australian copyright law. The decision brings Australian law on compilations of factual databases more in line with US law….read more here

EUROPEAN COURT OF JUSTICE TO RULE ON LIABILITY OF ISPS FOR INFRINGING PEER TO PEER FILE SHARING -  SABAM v Scarlet (Tiscali).

In the case of SABAM v Scarlet (Tiscali), the Brussels Court of Appeal has referred two questions to the European Court of Justice relating to the liability of ISPs for preventing illegal file sharing by users downloading music files.

In 2004 the Internet Service Provider Scarlet was required to install technological measures to render it impossible for infringing material to be exchanged using peer to peer technologies.  Expert evidence was tendered in subsequent litigation identifying 11 solutions that could be appliedto block or filter the file-sharing.

This case is unprecedented in Europe being the first occasion upon which a Court has ordered an ISP to institute  a system of technical filtering to monitor users’ activity in order to detect attempts to exchange infringing files  to prevent such transfers taking place.   The case is unique in that it requires ISPs to take a proactive rather than a reactive  approach to monitoring their users’ activities.

The Belgian Internet Service Provider renamed from Tiscali to  Scarlet, now owned by Belgacom, appealed the ruling, contending that it was not feasible to do so using a filter, and such software, known as Audible Magic, was not able to block such infringing content.  Scarlet had earlier been  given six months to comply with the order to use the patented filtering technology and proprietary song database by the Court to prevent the continuation of the copying. The ISP was also ordered to pay 2500 pounds per day whilst the infringing activity by users continued to occur. Their appeal was successful in 2008 and the earlier decision overturned.

Audible Magic’s Patented Content Based Audio Identification technology works by taking a fingerprint of each song,  extracting a fingerprint to analyse a copy of the shape of a sound.  Audible Magic’s patented CBID technology is based on more than 7 years of scientific, mathematical, and engineering research.  They have built the largest song fingerprint database in the world to identify infringing copyrighted works.

The case involved the consideration of  several technical and legal issues aired before the Brussels Court of Appeal last October.  After hearing the case over November and December,  the Brussels Court of Appeal referred the following questions to the European Court of Justice for their determination:

1. Can an ISP be expected to institute measures to prevent infringement taking place?

2.  If the answer to one is yes, what exactly are the scope of their  responsibilities?

In arriving at a finding on the first question,  the European Court of Justice will be required to consider the effect of  the European Copyright Directive, Privacy and Enforcement Directive in addition to Articles 8 and 10 of the European Convention of Human Rights.  At stake are also issues of privacy,  secrecy of communications and freedom of expression.

The second question raises the extent to which the technical and financial burden to avoid copyright infringement should lie upon an ISP.  It puts ISPs in a difficult position as if they are mandated to prevent infringing peer to peer file sharing prior to it taking place, this raises questions of possible censorship.  ISPs are required to play Judge and Jury in taking action against end users, and in doing so are taking on a law enforcement role.

This effectively puts ISPs in a double bind where they are required to block all traffic which may be legitimate which would also be likely to impact on the cost of internet access.  There is a significant cost involved in implementing the Audible Magic fingerprinting system, being estimated as approximately 6 pounds annually per user.  This adds up to a significant cost burden before the cost of redesigning the network are considered to facilitate such filtering technologies.

The matter is not likely to be heard by the  ECJ until 2011, and it is possible that no decision would be made until either late 2011 or early 2012.

The decision has implications not just for SABAM (Belgian Society of Authors, Composers and Publishers) and intellectual property owners, but also for ISPs and privacy advocates.

A similar matter came before the High Court in Ireland, when Irish ISP Eircom agreed to a three strikes French style enforcement after being sued by Sony, Universal, EMI and Warner. The music companies demanded it take similar action to prevent users from illegally engaging in the downloading and sharing of infringing music files.

If the action brought by SABAM is successful it will set a precedent requiring ISPs to implement technical measures to monitor and filter their subscribers’  use of peer to peer technologies.

In the Irish litigation the relevant litigation was s 40 of the Copyright and Related Rights Act 2000 which suggests that the owner of facilities made available to the public could be held liable where  notified by the owner of the copyright in a work that those facilities were being used to infringe copyright in that work and the person failed to remove the infringing material as soon as practicable after.

Under these circumstances the person providing the facilities could be held liable for authorising the infringing activity.  This language seems to be directed to ISPs who are acting as web content hosts.  However it is predicted that the Plaintiff in the SABAM litigation will argue that the legislation must be read in light of the Directive 2001/29 on Copyright in the Information Society & Directive and 2004/41 on the Enforcement of Intellectual Property Rights to encompass  situations where the ISP is doing nothing more than merely providing internet access to users.

Whilst action had previously been taken against end users for copyright infringement the action against the Irish ISP was the first time an ISP had been targeted for authorisation of infringement.  Actions brought against end users proved to have little deterrent effect on the infringing activity, and the music industry focused it’s efforts on intermediaries such as ISPs to compel them to police their users’ activities.

This strategy has been part of a broader international strategy to force ISPs to adopt measures to disconnect users believed to be engaged in infringing activities, and block access by subscribers to certain websites believed to be either involved in hosting or linking to illegal content.

Litigation has not yet taken place involving action being taken against ISPs. As stated above action in the UK has consisted of  persuading ISPs to adopt a three strikes policy involving them disconnecting users’ accounts after three complaints with the prospect of litigation occurring if this approach is not taken.

In Denmark ISPs have been compelled to take steps by reacting to infringements so that continuing access is preventing to infringing sites.

Whilst no particular solution was suggested in the Irish litigation by the Court to ensure Eircom adhered to it’s obligations, it was suggested that the Audible Magic fingerprinting software be used to detect infringing activity.

The argument which SABAM is predicted to use is that the  obligations under  the legislation should be read in light of the Copyright and Enforcement Directives. This would raise a conflict between the Directives and the Electronic Commerce Directive 2000/31 which has the effect of prohibiting the imposition of an obligation on providers to monitor information they transmit and store.

The monitoring of subscribers’ uses of facilities raises the question of the compatability of this requirement with the right to privacy under international law.

The question is what level of awareness the court will prescribe is necessary to impose liability on an ISP remains to be seen.  Will it be enough for a mere allegation of copyright infringement to be made to  found liability?   S40 of the Copyright and Related Rights Act 2000 seems to require more than a vague assertion that users are engaged in infringing activities and seems to suggest that users be identified in addition to infringing works.

If the Plaintiffs are successful before the ECJ this will be likely to pave the way for other copyright holders such as the movie industry, book owners and photographers may be able to demand that such filtering systems be implemented to prevent copyright infringement of their works occurring.

However by the time the decision is handed down by the ECJ it is forseeable that peer-to-peer programs using encrypted transfers able to defeat such software will already be commonplace.