8.4 The content layer

It is probably at the content layer that the developments are most visible, though. Increasing numbers of legal threats and lawsuits are being brought alleging intellectual property infringement and breach of anti-circumvention provisions of law. Companies such as Grokster (owned by Streamcast) and Sharman Networks, which owns a number of P2P file sharing services, have been targeted by the entertainment industry's representative bodies, the Motion Picture Association of America and the Recording Industry Association of America. In June 2005 the P2P companies lost the MGM v Grokster case in the US Supreme Court, though the Dutch Supreme Court (the highest European court so far to hear a P2P case) in December 2003 ruled that the developers of the Kazaa P2P file sharing software, Niklas Zennstroem and Janus Friis, could not be held liable for the actions of the users of the software.

The RIAA and the International Federation of the Phonographic Industry (IFPI) are now suing tens of thousands of individual P2P users. In the autumn of 2007 they were awarded $222,000 in damages against a woman proven to have shared 24 songs on a P2P network. By the autumn of 2008 the judge accepted that he had inadvertently misdirected the jury and therefore declared a mistrial. The RIAA failed to get this decision overturned in December 2008 and the case went to a retrial with a jury increasing the damages to $1.92 million in June 2009. The RIAA also stated towards the end of 2008 that they were intending to change their strategy somewhat by focussing less on suing individuals and more on co-opting ISPs into the efforts to combat illicit file sharing.

The International Federation of the Phonographic Industry (IFPI) sued file sharers in parts of Europe. The British Phonographic Industry (BPI) did likewise in the UK, with the first 23 people settling out of court for sums of between £2000 and £4500 in early March 2005. Both the IFPI and the BPI are also now concentrating considerable efforts on getting ISPs involved in their Internet copyright war. There are also keen to have a 3-strikes regime incorporated into law, whereby ISPs would send two warnings to suspected file sharers followed by cutting off their internet access should the suspicious activity continue. There has been considerable concern about this approach from legal and civil rights experts and it would arguably contravene the European Convention on Human Rights. (See http://b2fxxx.blogspot.com/2008/03/3-strikes-copyright.html)

In one case, a printer company, Lexmark International, sued a competitor, Static Control Components, for allegedly breaching the anti-circumvention provisions of the Digital Millennium Copyright Act 1998 (DMCA). Lexmark alleged that its competitor, in supplying replacement printer cartridges for some Lexmark printers, bypassed copy control technology built into Lexmark cartridges to enable the printers to identify them as legitimate replacements. In March 2003 a court ordered Static Control to stop making the replacement cartridges. By October 2003 the US Register of Copyrights reiterated the point that reverse engineering copy protection technologies to allow interoperability was allowed under the DMCA. She mentioned the Lexmark case in this context but was very careful to say that ‘wholesale copying of a copyrightable computer program is likely to be an infringing use’ and this is partly what Lexmark are alleging. Also, at least one state, North Carolina, was supporting legislation to combat what they saw as Lexmark's abuse of the DMCA. In October, 2004, Lexmark lost their case in the Appeal Court, and the same court denied the company's request for a re-hearing in February 2005.

There have been moves in the US Congress to introduce bills that water down what advocates like Lessig see as the draconian provisions of the DMCA, but there is no indication yet that these have any real likelihood of becoming law. At the opposite end of the scale bills like the CCCBDA (Communications, Consumer's Choice, and Broadband Deployment Act of 2006), ACCOPS (Author, Consumer and Computer Owner Protection Security Act of 2003), the PIRATE (Protecting Intellectual Rights Against Theft and Expropriation) and the INDUCE (Inducing Infringement of Copyright Act 2004), which could lead to the jailing of P2P file swappers, the Justice Department pursuing civil legal action on behalf of the entertainment industry, and the facilitation of wire tapping for civil copyright infringement.

Only two European countries, Denmark and Greece, succeeded in implementing the European Copyright Directive (the EU equivalent of the DMCA) into their national laws by the required deadline of December 2002. Austria, Italy and Germany (mostly) followed suit in 2003. In the UK, the implementation was partly delayed by concerns identified through the public consultation exercise initiated by the UK Patent Office. The directive has now been implemented in the UK and took effect at the end of October 2003. By 2005 the Commission were suing France, Spain, Finland and the Czech Republic for failing to implement the directive. In August 2006 France was the final member state to introduce the directive provisions into their own national law. In February 2007 the Commission published a Study on the Implementation and Effect in Member States of Directive 2001/29/EC on the Harmonisation of Certain Aspects of Copyright and Related Rights in the Information Society, concluding:

In sum, it is fair to conclude that the Directive has at best only partly achieved its main goal of promoting growth and innovation in online content services. As our benchmark test has revealed, the Directive deserves particularly low marks for its (lack of) harmonising effect and its (lack of) legal certainty. While the harmonised right of communication to the public is a model of technology-neutral regulation, the Directive's convoluted rules on TPM's have little more to offer to the Member States and its market players than confusion, legal uncertainty and disharmonisation. While the Directive's regime reflects the EC's faith in a future where DRM and contract rule, it is ironical to observe that the main stakeholders themselves seem to have lost their belief that the answer to the machine actually lies in the machine.

In March 2004 an ‘Enforcement of intellectual property rights’ directive was approved by the EU Parliament and the Council of Ministers, in order ‘to bolster the fight against piracy and counterfeiting.’ Essentially the idea is to apply the different enforcement mechanisms in individual member states to every country in the EU and also broaden the criminal sanctions. Proposals to allow the patenting of software are also taking place at a European level.

There have been a multitude of developments on intellectual property at EU level since 2005, including proposals to extend copyright term in sound recordings and introduce an EU-wide 3 strikes regime. Likewise in the US there have been endless proposals and several changes in the law. The whole intellectual property landscape is in a state of almost constant upheaval.

8.5 Update on patents