Tuesday, 26 February 2008

Enforcing Law on the Internet.

The Internet remains the wild, wild, web not because of a lack of laws, but rather the difficulty surrounding enforcement. The Internet’s role is growing on a daily basis and has reached a point where it has become ubiquitous and an essential feature of daily life both from a personal perspective and due to its role in the international economy. The recently released “Creative Britain; new talents for the new economy”[1] framework paper has demonstrated a reversal of many of the positions formerly held by the British government. This new position is likely to require internet service providers to take action on illegal file sharing, as a consequence leaving intermediaries liable if they fail to take action.

If an ISP is to be held liable for authorisation as an intermediary, it must have knowledge, or otherwise deduce that infringements are proceeding.[2] Although, intermediaries commonly monitor their systems and have the means to suspect when infringements are occurring, Internet intermediaries also require the authority to prevent infringement if they are to be held liable for authorisation, a condition that entails an aspect of control.[3] The government’s proposal[4] requires monitoring from the destination ISP places the responsibility firmly on the local provider of Internet services. Though this may seem unfair to many, as source ISPs may be located in any location in the world and can easily move when facing restrictions, holding the destination ISP responsible for monitoring content would appear as the only feasible solution as it is infeasible for the destination ISP to provide services within the UK from other locations.

It is clear that a framework similar to that proposed by Mann and Belzley[5] or by Lichtman & Posner[6] is needed to effectively control infringements over the Internet and that such a solution is economically the most effective solution. The proposed strategy of the British government[7] is unlikely to be popular at first. Recommendations for a French style system of three strikes[8] would require additional monitoring from the ISP and also introduce a possibility of infringing the customer’s privacy rights[9]. The concurrence of privacy legislation and the need for additional controls will make the introduction of these initiatives interesting to say the least. The pirates are starting to replace the Cowboys changing the wild, wild, web to that of the proverbial high seas. The need for sensible legislation that will limit the increasing criminal activity while also considering the impacts on the law-abiding users of the internet is clear. The proposed strategy of the British government[10] offers great potentials, but will come down to the implementation as to whether these are successful. The Internet is entering its final stage of development, legislative control.

Anonymity and leaky international boundaries impede the prosecution of the primary malfeasors. Internet intermediaries, especially those that service end users are both easily identifiable and have many of their assets within the UK. The malfeasors require payment intermediaries to process their transactions. The “Creative Britain” strategy[11] has provided little in either incentive or regulation concerning these actors. Payment intermediaries have the technological competence to avert detrimental transactions at the lowest cost of any intermediary with the largest potential payback. Further, in many cases the largest effect on the Internet pirates is provided through economic means. As such, the legislation should be adapted to mandate internet intermediaries control illicit transactions and consequently protect the public interest. To do this effectively will require more than just a mandate that Internet intermediaries monitor illicit activity. It will be also necessary to regulate liability in order to protect Internet intermediaries from the actions that they are required to take in order to protect the Internet. The constant seesawing between policy positions that has occurred in respect of the Internet demonstrates that we have not achieved this yet.

The position of the British Government[12] with its recent moves to call Intermediaries to action in the formation of a voluntary body to stop Intellectual Property violations is a start to the reforms that are needed. The problem is well defined in this call for reform, however, the call for voluntary changes are unlikely to bring about the required changes. Intermediaries have the capability to stop many of the transgressions on the Internet now, but the previous lack of a clear direction and potential liability associated with action rather than inaction[13] remains insufficient to modify their behaviour. Even in the face of tortuous liability, the economic impact of inaction is unlikely to lead to change without a clear framework and the parallel legislation that will provide a defence for intermediaries who act to protect their clients and society.

[1] Department for Culture, Media and Sport, 22 Feb 2008
[2] Ibid, Gibbs J at 12-13; cf Jacobs J at 21-2. See also Microsoft Corporation v Marks (1995) 33 IPR 15.
[3] Ibid, University of New South Wales v Moorhouse, supra, per Gibbs J at 12; WEA International Inc v Hanimex Corp Limited (1987) 10 IPR 349 at 362; Australasian Performing Right Association v Jain (1990) 18 IPR 663. See also Lim YF, 199-201; S Loughnan, See also BF Fitzgerald, “Internet Service Provider Liability” in Fitzgerald, A., Fitzgerald, B., Cook, P. & Cifuentes, C. (Eds.), Going Digital: Legal Issues for Electronic Commerce, Multimedia and the Internet, Prospect (1998) 153.
[4] The “Creative Britain; new talents for the new economy” strategy was issued on the 22nd Feb 2008 and is available online.
[5] Mann, R. & Belzley, S (2005) “The Promise of the Internet Intermediary Liability” 47 William and Mary Law Review 1 at 27 July 2007]
[6] Lichtman & Posner (2004) “Holding Internet Service Providers Accountable”
[7] Supra Note 4.
[8] One of the current recommendations is based on the three-strikes policy began in France late last year. The violation of digital rights management or other similar infringements including provisions for Internet users that are caught distributing copyrighted files would require the ISP to send an e-mailed warning to the infringing user. The second offence would then have file-sharers face a temporary account suspension. On a third offence, they would be entirely cut off from the Internet. (See also http://arstechnica.com/news.ars/post/20080218-three-strikes-infringement-policy-may-be-headed-down-under.html).
[9] The UK Privacy & Electronic Communications (EC Directive) Regulations 2003 and Directive 2002/58/EC (the E-Privacy Directive) may create problems. The juxtaposition of privacy versus control creates a fine line that is easily crossed.
[10] The “Creative Britain; new talents for the new economy” strategy was issued on the 22nd Feb 2008 and is available online.
[11] Supra Note 4.
[12] Supra Note 4.
[13] The most obvious example of this action can be found in the history of the Communications Decency Act. Congress directly responded to the ISP liability found in Stratton Oakmont, Inc. v. Prodigy Services, 23 Media L. Rep. (BNA) 1794 (N.Y. Sup. Ct. 1995), 1995 WL 323710, by including immunity for ISPs in the CDA, 47 U.S.C. § 230(c)(1) (2004) (exempting ISPs for liability as the “publisher or speaker of any information provided by another information content provider”), which was pending at the time of the case. Similarly, Title II of the Digital Millennium Copyright Act, codified at 17 U.S.C. § 512, settled tension over ISP liability for copyright infringement committed by their subscribers that had been created by the opposite approaches to the issue by courts. Compare Playboy Enters., Inc. v. Frena, 839 F. Supp. 1552, 1556 (M.D. Fla. 1993) (finding liability), with Religious Tech. Ctr. v. Netcom, Inc., 907 F. Supp. 1361, 1372 (N.D. Cal. 1995) (refusing to find liability).; The fear of being seen as a publisher rather than mere conduit has resulted in many ISPs and ICPs to a state of inaction.

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