Peer presentation London 12 Dec 2005

Peer-to-Peer The Legal Stuff You Must Know: 

Peer-to-Peer The Legal Stuff You Must Know 12 December 2005 Severin de Wit Simmons & Simmons

Internet: Legal Challenges: 

Internet: Legal Challenges Scams asking for Money Stealing of Bank Account details Identity theft Stock Market scam Auction Fraud Copyright infringements Spywear inside computer obtaining Information Copy Restriction Software (Sony)

P2P – The Good & The Bad: 

P2P – The Good & The Bad Rise in Peer to Peer (P2P) services, many legal applications BitTorrent use for update Linux O/S Knowledge Management, E-learning Gives also rise to Civil Liberties concerns (www.ipjustice.org) Caused a rise in piracy of copyrighted material, e.g. Napster and BitKeeper

P2P - The Good: 

P2P - The Good New P2P technologies allow consumers to discover new ways to Share content Create new media Efficiently distribute digital files P2P networks allow computers to directly share digital information without having to access a central server more fault-tolerant able to resist censorship from governments or corporations

P2P - The Bad: 

P2P - The Bad File Sharing deprives content providers (music film industry) from royalty/license income as reward for their investment Transmission of criminal material as pornography, information linked to terrorism, computer virus activities, etc.

Where is Debate About?: 

Where is Debate About? Today's debate in Legal Circles is about whether the traditional copyright mechanisms can be stretched to include the network, or whether we need to invent new intellectual property mechanisms and cultures P2P has intensified this debate

Peer-to-Peer: Copyright dominated area: 

Peer-to-Peer: Copyright dominated area Future peer-to-peer file-sharing entwined with copyright law Copyright owners targeted makers of file-sharing clients (Napster, Scour, Audiogalaxy, Aimster, Kazaa, Morpheus) but also companies that provide products that rely on or add value to public P2P networks, such as MP3Board.com, which provided a web-based search interface for the Gnutella network

Copyright Objects ‘Then’ (early 90s): 

Copyright Objects ‘Then’ (early 90s) Tangible things (books, journal issues, photos, vinyl LPs, audio-tapes, microfilm, video-tapes, cassettes, diskettes, CD-ROMs, games-cartridges) A person bought, rented, borrowed or visited a tangible thing, or gained admission to a location where it was reproduced, performed or played The person had no need for a copyright license Replication was expensive, required infrastructure Copies were accessible by one person at a time

Copyright Objects, the Digital Era – I: 

Copyright Objects, the Digital Era – I convenient and inexpensive creation desktop publishing packages, PC-based graphic design tools, animation, digital music generators digitization of existing materials scanners, OCR, digital cameras, digital audio-recording near-costless replication disk-to-disk copying, screen-grabbers, CD-burners as a consumer appliance, MP3

Copyright Objects in the Digital Era – II: 

Copyright Objects in the Digital Era – II very rapid transmission, unmeasurably low costs modem-to-modem transmission, CD-ROMs in the mail, emailed attachments, FTP-download, web-download inexpensive and widespread access PCs, PDAs, mobile phones, public kiosks, web-enabled TV in the workplace, the home, public kiosks, Internet cafes computer-based analysis of data data-matching, profiling, data-mining, pattern-recognition convenient manipulation of data-objects word-processors, sound and image processing tools

Copyright – Basics: 

Copyright – Basics Basic rights of copyright owner in any copyright system reproduction (copy) publication (made available to others) adaptation (e.g. translation) performance (actor, singer, etc) More recent: broadcast moral rights File sharing necessarily includes both “reproduction” and “publication”

International Copyright Treaties: 

International Copyright Treaties International Copyright Laws updated for digital age via WIPO Copyright Treat (WCT), WIPO Performances and Phonograms Treaty (WPPT) These “WIPO Internet Treaties” can be divided into three parts: incorporation of certain provisions of TRIPS Agreement not previously included (e.g. protection of computer programs and original databases as literary works under copyright law)  updates not specific to digital technologies (e.g., the generalised right of communication to the public) provisions that specifically address the impact of digital technologies such as the principles for liability of online service provider and digital right management system

Copyright – Actionable Rights: 

Copyright – Actionable Rights Infringements have been actionable under civil law Some actions have recently been criminalised Against Whom? End-users – practise in US, Europe follows Internet Service Providers (ISPs) Software makers (KaZaa, Grokster)

Fair Compensation or DRM?: 

Fair Compensation or DRM? EU Copyright Directive article 5(2) allows EU Member States to insert exemption for private copying in their national copyright acts under the condition that the right holders receive ‘fair compensation’ for home copying Fair compensation via Levy system or DRM-solution?

Levy vs. DRM: 

Levy vs. DRM Argument in Europe: levy and DRM cannot coexist DRM should be preferred, as it is more just, more direct, more precise, and more efficient Argument in the U.S: levy or other liability rule regime (e.g. compulsory licensing) should be preferred

“Time Shifting” exception: 

“Time Shifting” exception Existing laws allows public to record TV, radio programs for purpose of viewing at a more convenient time (“time-shifting”) Music industry: limit scope very narrowly. Were it to allow the recording of streams or downloads music, this would substitute for the retail sale Movie Industry: vital that any webcast, peer to peer, simulcast, interactive and near on demand services are not caught within the scope of the existing time-shifting exception Most EU courts followed that reasoning : P2P is not Time Shifting

E-Commerce Directive (2000) – ISP: 

E-Commerce Directive (2000) – ISP Art 2(a) ISP: Provider of an “information society service” defined as “any service normally provided for remuneration, at a distance, by means of electronic equipment for the processing (including digital compression) and storage of data, and at the individual request of a recipient of a service.” Much wider than traditional ISP sector Non-commercial? Search engines? Universities? Services provided not wholly at a distance, e.g., tele-employer? P2P intermediaries?

Liability ISP – “Mere Conduit”: 

Liability ISP – “Mere Conduit” E-Commerce EU Directive: art. 12: no liability for “mere conduit” service providers who provide the mere conduit of information for third parties via transmission in a communication network or the provision of access to a communication network, on condition that the provider does not initiate the transmission, does not select the receiver of the transmission, and does not select or modify the information contained in the transmission

Liability ISP – “Caching”: 

Liability ISP – “Caching” E-Commerce EU Directive: art. 13: not liable for the automatic, intermediate and temporary storage of information, performed for the sole purpose of making more efficient the onward transmission of information to other recipients of the service upon their request Certain conditions: the provider does not modify the information the provider removes the information or disables access to the information when he obtains knowledge that the information has been removed from the network

France – more extreme proposal : 

France – more extreme proposal French Parliament: “Copyright and Related Rights in the Information Society Bill” consequences, if adopted DADVSI bill prohibits the design, distribution and use of free software that would allow accessing protected work.

Latest P2P case law - US: 

Latest P2P case law - US US 7th Court of Appeal BMG Music vs. Gonzalez (Dec 9) copy downloaded, played, and retained on one’s hard drive for future use is a direct substitute for a purchased copy—and without the benefit of the license fee paid to the broadcaster. The premise of Betamax is that the broadcast was licensed for one transmission and thus one viewing. Betamax held that shifting the time of this single viewing is fair use. The files that Gonzalez obtained, by contrast, were posted in violation of copyright law; there was a copy downloaded, played, and retained on one’s hard drive for future use is a direct substitute for a purchased copy—and without the benefit of the license fee paid to the broadcaster. The premise of Betamax is that the broadcast was licensed for one transmission and thus one viewing. Betamax held that shifting the time of this single viewing is fair use. The files that Gonzalez obtained, by contrast, were posted in violation of copyright law; there was no license covering a single transmission or hearing—and, to repeat, Gonzalez kept the copies. Time-shifting by an authorized recipient this is not.

Slide22: 

For further information, contact Severin de Wit at severin.dewit@simmons-simmons.com Thank you