26‐Aug‐15
Ministry of Culture Training In cooperation with IP Key
Monday 31 August 2015, Zhengzhou, Henan
COPYRIGHT ENFORCEMENT TRENDS IN THE EU & INTERNATIONALLY
Overview • Part 1 – Threats to the creative industries in the digital era • Part 2 – How to tackle the threats: approach to enforcement ***Break*** • Part 3 – Countermeasures: different ways to tackle the problem • Part 4 – Sample cases: • Part 5 – Cyber Trust • Questions
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PART 1 – THREATS TO THE CREATIVE INDUSTRIES IN THE DIGITAL ERA
Overview • 1 – Music Industry • 2 – Games Industry • 3 – Publishing Industry
THREATS TO THE MUSIC INDUSTRY
• Music industry was the first of the creative industries to come under threat • As early as 1999, music piracy exploded with the Napster peer‐to‐peer (P2P) service • Key cases in the 2000s around the world established key principles as to when the parties involved would be liable • Example cases: – P2P cases: Napster, Grokster, Kazaa – Search/links cases: Yahoo! China, Baidu, Cooper/mp3s4free – P2P/BitTorrent cases: The Pirate Bay, IsoHunt – Cyberlocker cases: RapidShare, Hotfile, MegaUpload
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THREATS TO THE MUSIC INDUSTRY
• Today, music industry today still faces many threats • From a technology point of view, many threats remain the same as ten years ago • Key threats today include: – unlicensed websites/download sites
these services simply offer illegal music content for download by the consumer
the music is downloaded directly from the service operator – music search/deep‐linking services
these services collect links to unlicensed music being hosted around the Internet on third party servers
users search the services database of links for music they want
the music is then downloaded directly from the third party host
THREATS TO THE MUSIC INDUSTRY
• Key threats continued: – peer‐to‐peer (P2P) services
various different P2P technologies exist; most popular today is BitTorrent
in a P2P system, files are not on central servers, but held by individual users
the P2P service allows users or ‘peers’ that want a file to find other users that hold the file
the file (or at least part of it) is then transferred directly from the peer holding the file to the peer requesting the file
in a BitTorrent service, the coordination of the peers requesting the file (known as ‘leechers’) and peers holding the file (known as ‘seeders’) is done by a ‘tracker’ – pirate apps
these services can be accessed by downloading apps from smartphone app stores
various different versions exist
typically, services allow users to download music from their own servers or third party sites
technically similar to search/deeplinking services
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THREATS TO THE MUSIC INDUSTRY
• Key threats continued: cyberlockers – at their most simple, cyberlockers are simply file hosting and storage services – users upload e.g. music files to the cyberlocker, which is like an online warehouse – the cyberlocker stores the file and sends the user a link to the hosted file – the user can then very easily distribute the link to the file to other users, for instance by posting on BBS and blog services; no need to distribute the file itself – the cyberlockers themselves have limited interfaces and it is not possible to search within a cyberlocker for particular content – by using the link, other users download a copy of the file from the cyberlocker – cyberlockers are not necessarily liable for infringement – but where cyberlocker services induce or encourage users to store commercial, copyright‐protected content then they can be indirectly liable
THREATS TO THE GAMES INDUSTRY
• Games industry suffers from similar threats to other industries, in particular music and film. • Differences in the games industry mean threats impact the games industry differently from, e.g. music and film industries – game files can be huge >30GB; a lack of bandwidth means these files simply cannot be distributed as easily as smaller music or film files – historically the distribution model for many games has been quite different, with games being played on proprietary games consoles – games consoles include technical protection measures (TPMs) that prevent pirate copies of games being played on genuine consoles – commercial models may be different, e.g. subscription‐based games • Some threats are particular to the games industry, e.g. TPM circumvention
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THREATS TO THE GAMES INDUSTRY
• Key threats today include: – P2P services
technically these services work in an identical manner as they do for other content, e.g. music and film – cyberlockers and unlicensed sites
again similar to the music industry, cyberlockers are a major problem for the games industry
links to pirate games that have been uploaded to the cyberlocker are distributed on the internet, e.g. on BBS and blogs
users can download the pirate games by following the links
some websites aggregate and offer many links to pirate games and may be acting with the cyberlocker, sharing revenues
THREATS TO THE GAMES INDUSTRY
• Key threats today continued: – TPM circumvention
technical protection measures (TPMs) are technical measures that prevent users from copying copyright content, including playing pirate copies of games
major games publishers and console manufacturers use TPMs to allow only genuine games to be played on their consoles
major console manufacturers include: – Nintendo, who produce the WiiU and 3DS – Sony, who produce the PlayStation PS4 – Microsoft, who produce the X‐Box
the most common form of TPM circumvention device allows pirate copies of games to be played on the consoles (these devices are sometimes known as ‘modchips’)
the manufacture, distribution and sale of physical devices and software that circumvent TPMs is a huge industry
once a user has purchased a console, a TPM circumvention device allows the user to play pirate games that it has downloaded for free
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THREATS TO THE PUBLISHING INDUSTRY
• The publishing industry faces similar threats to other creative industries, but the most serious threats are quite particular to publishing • Differences in the industry mean threats impact the industry differently from other industries, e.g. music – physical products, in particular books and magazines are still very popular – e‐books are becoming very popular, but e‐books typically come with technical protection measures (TPMs) and/or digital rights management systems (DRM) – those TPM and DRM systems tend to be attacked (‘cracked’ or ‘hacked’) less that in other industries, e.g. games • Some threats are particular to the publishing industry, e.g. the collaboration with licensees in cases of journal piracy
THREATS TO THE PUBLISHING INDUSTRY
• Key threats today include: journal piracy services – academic, scientific, technical and medical journal publishers publish thousands of different journals – these are typically licensed to institutions, such as universities and libraries, on a subscription basis; a licence gives access to a huge database of current journals and past issues – pirate journal service providers collaborate with one or more licensed institutions – this allows the service to offer a huge volume of current and past issues of journals – the involvement of the institutions is outside the terms of their licence from the publisher – articles requested from the service provider are either emailed directly to the user or uploaded to the user’s account, from where they can be downloaded directly – services are often commercial, charging users, but no money goes back to the publishers
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THREATS TO THE PUBLISHING INDUSTRY
• Key threats continued: document sharing platforms – users upload documents to the platform operator – uploaded documents are then made available to other users, who search for what they want – users can then download the documents they are looking for – document sharing platforms operate in various ways commercially – document sharing platforms are not necessarily liable for infringement – but where the platforms induce or encourage users to upload commercially available, copyright‐protected content then they can be indirectly liable – document sharing platforms are either stand‐alone or may be one of the services offered by, for instance, larger search providers • Key threats continued: e‐book piracy – e‐books normally contain DRM content and/or TPMs – hackers often try to ‘crack’ the DRM or TPM to allow the hackers easier access to the content and to allow them to distribute the content freely
PART 2 – HOW TO TACKLE THE THREATS: THE APPROACH TO ENFORCEMENT • A structured approach can be taken to analysing infringing services • Online infringement generally involves two acts of copyright infringement: – infringement of the right of communication to the public – infringement of the right of reproduction • Need to understand in detail who is responsible for each act • Need to understand who benefits from the infringement occurring • Often the ‘mastermind’ is not the primary infringer
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PART 2 – HOW TO TACKLE THE THREATS: THE APPROACH TO ENFORCEMENT Relevant legal provisions are same internationally, in Europe and in China: 1. the unlicensed making available to the public of their works – WIPO Copyright Treaty 1996, Article 8: Right of communication to the public – EU Copyright Directive 2001, Article 3: Right of communication to the public – Chinese Copyright Law 1990, Article 10.1(12): Right of communication through an information network 2. the unlicensed reproduction of the work – Berne Convention 1886 (1971 edition), Article 9: Right of reproduction – EU Copyright Directive 2001, Article 2: Right of reproduction – Chinese Copyright Law 1990, Article 10.1(5): Right of reproduction
STRUCTURED APPROACH TO ANALYSING INFRINGING SERVICES
• understand the technology – what does the service actually do? – where is the infringing content actually being stored? – who technically is making the content available to other users to allow them to reproduce it? – how is the content reproduced from the storage location to the user? • understand the commercial model – who is making money from the service and how?
simple cash payments? or cash donations?
advertising on the site?
receiving money from an ISP for generating traffic over their network? – who is sharing in that revenue?
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STRUCTURED APPROACH TO ANALYSING INFRINGING SERVICES
• who is the ‘mastermind’? – who created the service? who benefits primarily from the service? • who are the primary infringers? – who is actually making available the content? – who is actually reproducing the content • what is the involvement of the ‘mastermind’ in the primary infringer’s acts? – providing the technology to enable it to happen? – actually effecting the infringement? • what level of knowledge does the ‘mastermind’ have? – general knowledge that infringement is occurring? – anything more detailed? • how to evidence the primary acts of infringement and the knowledge and involvement of the mastermind?
STRUCTURED APPROACH: EXAMPLE – DEEPLINKING/SEARCH SERVICE
• understand the technology – crawlers crawl the internet looking for specific types of files, e.g. mp3 – search service analyses the files to determine what the contents are – service indexes location of the files and information about their contents – the user enters search terms, the service provides relevant results/links – the user clicks on the links to download the file at that location • understand the commercial model – search provider wants to offer attractive content to users to drive traffic to the site to increase the value of advertising shown on the site • who is the ‘mastermind’? – search provider is the mastermind • who are the primary infringers? – the hosts of the infringing content being made available to users – the user who copies the file from the host to his device
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STRUCTURED APPROACH: EXAMPLE – DEEPLINKING/SEARCH SERVICE
• what is the involvement of the ‘mastermind’ in the primary infringers’ acts? – mastermind/service provider finds likely infringing content on the Internet – provides relevant search results with links to the infringing content • what level of knowledge does the ‘mastermind’ have? – this is a critical question; showing infringement depends on finding evidence to show the mastermind had sufficient knowledge – how likely is it that commercial, copyright content files are being found? – how popular is the content being found – how is the service advertised? – are there charts of popular content being downloaded? – is the content categorised to help users search? – are search terms for commercial content automatically suggested? • how to evidence the primary acts of infringement and the knowledge and involvement of the mastermind? – can be challenging; to be covered in the afternoon session
PART 3 – COUNTERMEASURES: DIFFERENT WAYS TO TACKLE THE PROBLEM
• It may be very clear that infringement is happening. It may be very difficult to show exactly who is doing what and where that is happening. It may therefore be very difficult to take action to stop it. • It may be easier to take action with or against the larger, more stable, more easily identifiable parties that are involved. • This may be an innocent party, but one whose involvement means that its has the power to prevent the infringement happening. • This can include: – the ISPs giving users access to infringing services – the payment providers that enable money to be received by infringing services, such as Visa, MasterCard and Paypal – the advertisers who support the service by providing revenue – a service operator, using content recognition technology to trigger royalty payments
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COUNTERMEASURES: ISPS AND WEBSITE BLOCKING
• Action with innocent parties able to prevent infringement: ISPs and website blocking – Under European law, rightsholders must be able to apply for an injunction against intermediaries whose services are used by a third party to infringe copyright (Article 8(3) of the ‘Information Society’ Directive 2001/29/EC) – In practice this means that ISPs (Internet access providers) can be ordered to block the access of its subscribers to certain infringing websites or services – This is now widely used in Europe and elsewhere – Mostly used where sites are infringing copyright works. In the UK this has been extended to cases where trade marks have been infringed – See later case examples
COUNTERMEASURES: PAYMENT SERVICE PROVIDERS
• Action with innocent parties able to prevent infringement: payment service providers – The UK has very strict anti‐money laundering laws. If a payment service provider becomes aware that it is handling payments that are the proceeds of illegal activity, it can itself be liable unless it stops – The UK's City of London Police Intellectual Property Crime Unit (PIPCU) has been very active – Widespread support from major credit card companies: VISA, MasterCard and American Express – Active support from other major payment service providers, such as Paypal
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COUNTERMEASURES: ADVERTISERS
• Action with innocent parties able to prevent infringement: advertisers – many services survive by making money from advertising; by generating traffic to the sites in order to be to sell advertising at a higher value – Often advertisers don’t even know their adverts are appearing on infringing services – advertisers buy advertising space targeted at a specific audience; often bought from third party specialising in placing adverts who chooses the websites to advertise on – in EU and internationally rightsholders and law enforcement agencies work with advertisers – first step is to educate advertisers; help them understand they are supporting infringement and may be supporting much more serious criminal activity
COUNTERMEASURES: CONTENT RECOGNITION AND FILTERING
• Measures can also be applied by service providers to prevent infringement occurring and/or to correctly identify when royalties are due • Content recognition technology identifies the content of media files. • Content recognition service providers have databases of millions works submitted by the music, TV and motion picture industries. By creating ‘fingerprints’ from the original works, it is possible to match other media files against the originals. • Under European law, a court cannot require an ISP to install a filtering system to prevent the illegal copying of files (Scarlet v. SABAM ‐ ECJ Case C‐70/10, 24 November 2011)… • …though it may be a ‘reasonable measure’ that a service needs to have in place to avoid liability (see Rapidshare cases below). • Many service providers choose to install them to prevent infringing content from being uploaded to or shown on their service and/or to monetise content by sharing advertising revenue, e.g. Facebook, DailyMotion, YouTube
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LIMITATIONS AND EXCEPTIONS: HOW THEY RARELY APPLY
• Under European Law, there are few limitations or exceptions to the exclusive rights of reproduction and communication to the public. • Exceptions to the right of reproduction are only allowed when copies are ‘by a natural person for private use and for ends that are neither directly nor indirectly commercial, on condition that the rightsholders receive fair compensation’ (Article 5.2(b), Information Society Directive) • Exceptions to the right of communication to the public are not permitted at all for private use (Article 5.3, Information Society Directive). • So, if a work is reproduced and communicated to the public and: – the use of the work is by a private individual, and – the rightsholder does not get paid then no exceptions can apply; the rightholders right will be infringed.
PART 4: SELECTED CASES
• In this section we look at four international cases which illustrate recent developments in considering liability and other countermeasures • Case 1 – Cooper v. Universal Music Australia (the ‘mp3s4free’ case) – considers secondary liability of site operator and hosting ISP • Case 2 – Rapidshare cases – considers secondary liability of cyberlocker operator – considers obligations that can be imposed on ISPs to prevent infringement • Case 3 – UPC Telekabel v. Constantin Film (the ‘Kino.to’ case) – considers the implementation of blocking injunctions • Case 4 ‐ Nintendo v. PC Box – considers the use of TPMs to protect games from piracy
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CASE 1 ‐ COOPER V UNIVERSAL MUSIC AUSTRALIA (2006) 156 FCR 380
• Facts: Cooper ran a website called ‘mp3s4free’, a links site that hosted links to a large amount of infringing music. Cooper allowed users to post links to infringing material, and encouraged users to infringe copyright. Universal Music sued Cooper and the ISP for copyright infringement. • Findings: – Primary infringements occurred when users followed links from the website to download infringing sound recordings – Cooper was liable for authorising those infringements – The ISP hosting the site on its servers was also liable
The ISP knew the website linked users to infringing material, and could have reasonably prevented the infringements by declining/ceasing to host the site
Instead, it agreed to provide free hosting with the intention of attracting business from the third party infringers – The director of the ISP was also liable, as he had the requisite knowledge and encouraged the further infringement
CASE 2A – ATARI V. RAPIDSHARE (2012) & GEMA V. RAPIDSHARE (2013)
• Facts: Rapidshare was a cyberlocker. Users uploaded content to the site and were given a link to the content which they could then distribute. Rapidshare. At its height, Rapidshare was extremely popular with >100 million users per month. A lot of copyright works, including games and music, were stored on the service. • Rapidshare was sued by Atari, the Japanese games publisher, for distribution of the game ‘Alone in the Dark’. Rapidshare deleted the specific file but refused to implement additional measures to prevent repeat infringement. • Findings: – Rapidshare can be liable for infringement (indirect/secondary liability) if it was notified of similar infringements before and failed to implement measures to prevent repeated infringements which could be reasonably expected – Reasonable measures could include in the installation of filtering software
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CASE 2B – GEMA V. RAPIDSHARE (2013)
• Facts: Rapidshare was sued by GEMA, the German author’s collecting society regarding 4,800 titles that we being stored on the service and downloaded from the service by users using the links. • Findings: – Rapidshare’s business model in itself is not infringing – Rapidshare was not directly liable for infringement, but was liable for its involvement (secondary/indirect liability) – Rapidshare made attempts to prevent infringement, but these were not enough:
terms and conditions forbidding copyright infringement
automated interface for rightsholders to take down infringing files
an ‘abuse team’ of 17 people
a ‘hash’ filter that stopped the identical file, but not different files of the same work, being uploaded again
CASE 2B – GEMA V. RAPIDSHARE (2013)
• Findings continued: – Rapidshare must take on the following obligations:
it has to take down the content that was notified to it
it has to search on external sites as to whether there are more files being hosted on its servers, including Google, Facebook and Twitter.
it also has to prevent “similar” infringements of the same titles, not just the identical file. In other words, the court confirmed that once taken down, content must stay down, whether uploaded by the same or another person. – the obligations are proportionate notwithstanding the potential risk that legal files are being taken down – the obligations remain the same regardless of the number of titles
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CASE 3 – UPC V. CONSTANTIN (‘KINO.TO’) – CJEU C‐314/12, 24 MARCH 2014
• Facts: Kino.to was a website hosting links to unlicensed copies films and TV shows. Kino.to did not host works itself. Works were hosted by and streamed from third party site. Owners of copyright in two films obtained an injunction against UPC, an ISP, requiring the ISP to block access to Kino.to to prevent infringement. The rightsowners relied on the Austrian version of Article 8(3) of the Information Society Directive. UPC appealed. • Findings: – the court can grant blocking injunctions and it not necessary to specify the exact measures the ISP must take (e.g. DNS and IP blocking), but it may do so – measures must prevent access unauthorised content or, at least, make it difficult to access and seriously discourage users from accessing the content – measures taken must not unnecessarily deprive users of the possibility of lawfully accessing the information available
CASE 3 – UPC V. CONSTANTIN (‘KINO.TO’) – CJEU C‐314/12, 24 MARCH 2014
• Findings continued: – blocking measures do not infringe an ISP’s freedom to conduct a business even though they:
may have a significant cost
may impact on the organisation of the ISP’s activities, or
may require a complex technical solution. – Regarding users, injunctions must be strictly targeted so that they bring an end to the copyright infringement without unnecessarily depriving users of the ISP’s services from lawfully accessing information.
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CASE 4 – NINTENDO V. PC BOK – CJEU CASE C‐355/12, 23 JANUARY 2014
• Facts: Nintendo sells video games consoles and games to play on them. Nintendo uses technical protection measures (TPMs) to prevent users of its consoles from playing unlicensed copies of its games on its consoles. PC Box marketed devices which circumvented the TPMs in Nintendo consoles. Under European law (Article 6, InfoSoc Directive), it is unlawful to market devices primarily designed to circumvent TPMs. Nintendo sued PC Box. • Findings : – Nintendo and other console manufacturers can use TPMs to protect their games and the games of other publishers from piracy, and to stop unlicensed copies of their games from being played on their consoles – But TPMs must be suitable to prevent infringement of copyright and must not go beyond what is necessary for that purpose – Courts must examine TPMs to see if there are alternatives – Courts must also examine circumvention devices to determine whether they actually enable legitimate activities, and if so, how much they are used for that
SUMMARY OF COPYRIGHT ENFORCEMENT TRENDS: KEY TAKE‐AWAY POINTS
• Courts will look very closely at all parties involved in infringement; if they had sufficient knowledge of the ongoing infringements and were sufficiently involved, they may be liable – indirect or secondary liability • where service providers are liable, they may be required by courts to implement reasonable measures to prevent repeated infringements which could be reasonably expected • under European law, where a service provider does not have sufficient knowledge but is in a position to prevent infringement, it can be ordered to take steps to do so, e.g. by blocking access to an infringing website • as enforcement directly against operators of services becomes more difficult, courts are more willing to order other service providers, e.g. ISP and payment providers, to implement effective measures • in some countries, criminal and administrative authorities will work with or order service providers to do the same
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CYBER TRUST
• Where there are legitimate services offering copyright content: film, music, games, software etc online, rightsholders in Europe are keen to ensure customers can trust those services • Where there are illegal, unlicensed services offering copyright content: online, rightsholders in Europe are keen to ensure that: – all online service providers and intermediaries take their share of responsibility for ensuring that their services are not used to facilitate copyright infringement – the illegal services that infringe copyright do not enjoy the support of legitimate, trusted brands and service providers, which can make customers trust the services • European governments have supported rightsholders by implementing or enabling self‐regulation and codes of conduct for intermediaries including online service providers, advertisers and payment providers.
QUESTIONS?
Any questions?
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Thank You!
Tim Smith [email protected] +86 10 5405 5413 www.rouse.com
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