Digital Economy Act Costs - an unlawful Prisoners Dilemma

On 17 January 2010, the draft Online Infringement of Copyright (Initial Obligations) (Sharing of Costs) Order 2011 was laid before parliament. It is the first substantive item of secondary legislation made under the Digital Economy Act 2010 and concerns about the simplest thing possible: how much copyright owners and ISP's will have to pay under the Initial Obligations Code (IOC). Despite its simplicity it has been misdrafted and it may also be unlawful.

Background

In case you haven't been following (and why should you?), the Initial Obligations Code is intended to allow copyright owners to send "copyright infringement reports" or CIR's to ISP's, that allege, roughly speaking, that the copyright owner has reason to believe that there has been some copyright infringement associated with one of the ISP's IP addresses. Some of these reports (which and how many to be determined by later legislation) must then be reported by the ISP to its subscriber. If a subscriber collects enough CIR's over a certain period of time (again to be determined) their IP address will go on a list which the copyright owner can then demand from the ISP which will (in theory at least) allow the copyright owner to match up different CIR's to the same subscriber.

There is no such thing as a free lunch. All this has to be paid for. OFCOM which polices the system will need funds to do so, ISP's will incur costs processing CIR's and there will also be an appeal system for subscribers who believe that a CIR was given wrongly which will have to be paid for. The Order is intended to split the cost 75:25 as between copyright owners and ISP's.

I want to avoid engaging in a discussion as to whether the principle of the act is a useful way to encourage people to stop infringing copyright, or a hopelessly misguided waste of time for everybody. I think my views on that are sufficiently well known. What interests me is whether there is anything technically wrong with the order itself, and I think there may be.

A technical miscalculation

Copyright owners are supposed to pay ISP's 75% of the costs that (OFCOM thinks) they will incur in handling the CIR's. OFCOM sets a rate per CIR that copyright owners must pay, which it can change from time to time. Copyright owners pay in advance, and this is where things come unstuck.

Paragraph 2 of the Order's schedule requires the copyright owner to notify in advance any ISP to which it intends to submit CIR's and give an estimate of the number of CIR's it expects to be submitting. Before the start of each notification period, the copyright owner must submit another estimate for the coming notification period and then pay the rate set by OFCOM multiplied by:

(a)the number of copyright infringement reports which the qualifying copyright owner estimates it will make to the qualifying internet service provider under the Code during the notification period; less
(b)the difference between the number of copyright infringement reports which that qualifying copyright owner estimated it would make to that qualifying internet service provider under the Code in the previous notification period and the number it actually made to that qualifying internet service provider in that period, if lower.

Read that carefully. It means that if the copyright owner systematically under estimates the number of CIR's, it will never have to pay the difference. Indeed there is nothing to stop the copyright owner giving an estimate of "1" in each year and paying the fee for exactly one report.

The proportion of fees payable by any copyright owner (or ISP for that matter) to OFCOM are also based on the copyright owner's estimates. The actual number of CIR's submitted never enters into the calculation. This amounts to a zero-sum game between all copyright owners. Each will have an incentive to submit the lowest estimates possible.

Unless I have completely misread the Order this seems quite mad and must (surely) be the result of a misdraft.

UPDATE:

I have been told that OFCOM stated at a stakeholders' meeting that the initial obligations code would limit the number of CIR's a copyright owner could submit in any notification period to the number it had estimated at the start of that period. This would be a change from the draft code published last year and is as suggested by Malcolm Hutty in the comments below.

This does avoid the strong incentive to underestimate the number of CIR's to be submitted, but it does not leave the scheme in a satisfactory state. It is still the case that fees payable to OFCOM are based on estimates and not reality. While that will penalise a copyright owner that overestimates, it will also penalise any ISP that receives an over-estimate of CIR's. The ISP's have no recourse in such a situation.

There is nothing in the Act that prevents the costs regime from dealing with reality and apportioning costs according to actual use (with balancing payments where necessary). OFCOM's suggestion looks like a quick and dirty bug fix, rather than a well thought through statement of policy.

Is the Order lawful?

According to James Firth, it appears that a different concern has been raised by the European Commission. Does the rule on cost sharing comply with the the "Authorisation Directive" (2002/20/EC).

The Authorisation Directive is, as EU directives go, pretty straightforward. The idea behind it is that regulation of those wishing to offer public communication networks should be extremely lightweight. Member States may regulate, but only within fairly tightly defined limits. In particular they may only impose conditions on the operator of a public communications network that fall within one of a list of type of condition (found in Annex A of the Directive).

The list is fairly long, but much of it is pretty common sense. There are only two which could plausibly allow the UK via OFCOM to make ISP's pay for the operation of the Initial Obligations Code.

First, which is what is being referred to in James's post, the UK (via OFCOM) could require ISP's to pay "administrative charges" in order to be authorised to operate a public communications network. Article 12 of the Directive makes it quite clear that "administrative charges" must be just that — charges for the administration of the general authorisation scheme for public communication networks. That does not include an obligation to pay for an appeals body to hear subscriber appeals or money to OFCOM to monitor and run a scheme for assisting copyright owners enforce their rights.

Second, it is permissible to impose a condition restricting the transmission of "illegal content" (such as content which infringes copyright) and "harmful content" (such as indecent images of children). It seems to me that the CIR/initial obligations scheme of the Digital Economy Act 2010 is not a "restriction" on the transmission of illegal content, but something quite different. What is more, a requirement to pay fees cannot be a "restriction" even on a fairly relaxed reading of the Directive.

In other words I cannot see anything in the Authorisation Directive that could allow the UK to impose a requirement to pay for the initial obligations scheme that is compatible with the Authorisation Directive. Unless I am missing something, the Order, as it stands is unlawful.

Interestingly, the 1709 blog asks whether the Order complies with the Technical Standards Directive and suggests that it does, because the imposition of fees and costs under the Order is a restriction permitted by the Authorisation Directive. Alas, whatever view one might take about technical standards, I don't believe the Order complies with the Authorisation Directive.

Conclusion

The Order isn't really news and I am sure the government believes they are complying with the Authorisation Directive. We disagree and only time (and perhaps the ECJ) will tell, but it does worry me that in this already contentious area the first piece of subordinate legislation is already buggy.

A new kind of copyright? Graphical user interfaces in the ECJ.

A decision of the European Court of Justice published before Christmas concerning whether a graphical user interface is protected by copyright causes me concern. I have not seen any detailed analysis of the decision which may be due to Christmas and New Year stupor. I plead the same excuse for what follows.

The case Bezpečnostní‌ softwarová‌ asociace‌ –‌ Svaz‌·softwarové‌ ochrany v Ministerstvo kultury C-393/09 has a rather involved background an excellent account of which is provided by Martin Husovec on his blog. Very roughly speaking, a Czech organisation called the Security Software Association (BSA) wished to set up a collective licensing scheme for computer software which included the right to transmit works by cable television. The point in issue was whether the broadcast of the graphical user interface of a computer program could infringe copyright (and would therefore require licensing).

Copyright in computer programs was harmonised across the EU under the Software Directive (91/250/EEC). Article 1(2) applies the directive to "the expression in any form of a computer program". The first question referred to the ECJ was whether a graphical user interface could be described as a computer program "in any form". The ECJ said "no". One fact influencing the court was that Article 10(1) of the TRIPS Agreement requires the protection of computer programs "whether in source or object code". Clearly source and object code are examples of forms of expression of a computer program.

Similarly the 7th recital to the directive states that the term "computer program" also includes "preparatory design work leading to the development of a computer program provided that the nature of the preparatory work is such that a computer program can result from it at a later stage". The common element of these examples, thought the court, was that they lead to the reproduction or creation of a computer program. A graphical user interface does not enable the reproduction or recreation of a compute program, therefore it is not the expression of a computer program "in any form".

This all seems reasonable so far. Although a graphical user interface might contain one or more images or graphical works that would attract copyright as an "artistic work" in the normal way; attempts to claim copyright in an abstraction of the user interface — such as its mode of operation — have tended to founder in the English Courts in cases such as Nova Productions v Mazooma Games [2007] EWCA Civ 219 (concerning features of the play of two computer Pool games) and in Navitaire v Easyjet (concerning a clone of a air travel booking system).

However, the court went on to consider — although it had not been asked to do so — whether the graphical user interface of a computer program might be protected by the "ordinary" law of copyright. Here the court appears to have committed the logical fallacy of affirming the consequent. To explain why I need to say a something about earlier developments in European Copyright Law.

The Information Society Directive (Directive 2001/29/EC) ("INFOSOC") has partially harmonised other forms of copyright in the European Union. Article 2 INFOSOC requires that Member States create in their domestic law a "reproduction right" for "authors, of their works". Although described as a "right" it amounts to a prohibition on anyone else reproducing (in whole or part) a work without the author's permission. In other words it is a copyright. Although INFOSOC does not define "works" (or indeed "reproduction" or "reproduction in part"), the European Court of Justice in the earlier case of Infopag v Danske Dagblades Forening C-5/08 held that the directive only applies to a work that is "original in the sense that it is the author's own intellectual creation".

So to the apparent fallacy: in Bezpečnostní‌, the ECJ reasons thus:

The Court has held that copyright within the meaning of Directive 2001/29 is liable to apply only in relation to a subject-matter which is original in the sense that it is its author’s own intellectual creation (see, to that effect, with regard to Article 2(a) of Directive 2001/29, Infopaq International, paragraphs 33 to 37).

Consequently, the graphic user interface can, as a work, be protected by copyright if it is its author’s own intellectual creation.

In other words the court deduces from a statement of the form "P implies Q" a conclusion that "Q implies P". Infopaq establishes that being the author's "own intellectual creation" is a necessary condition. That does not mean it is a sufficient one.

Now the judges of the ECJ are, for the most part, bright and well educated. They will be well aware of the dangers of affirming the consequent. I think it is safe to assume they don't mean quite what they appear to be saying. In particular, the idea that any form of intellectual creation is protected by the general law of copyright would be quite revolutionary.

For example, INFOSOC does not exclude from copyright protection inventions that could form the subject of a patent, or designs that might be protectable under one of the European design rights. Although both might well be some author's "own intellectual creation", I doubt very much that copyright is intended by anyone to extend so far.

In English law merely being creatively original is not enough for a work to obtain copyright protection. For example in Creation Records v News Group Newspapers [1997] EMLR 444, the judge held that it was not even arguable that the scene for the Oasis album cover of Be Here Now could be protected by copyright. It simply did not fit into any existing protected category — and the record company attempted to argue that it was a dramatic work, a work of artistic craftsmanship or even a collage.

So I assume (in hope) that all the ECJ are guilty of is a failure to show working and that they have in mind some other criteria that must be satisfied before a work is protected by copyright. What those criteria might be the ECJ do not say which leaves me with the following questions: if a graphical user interface is protected by copyright, what kind of a work is it and what about it is protected?

It may be possible to gain some inkling as to what is in the ECJ's mind from their answer to the second question posed to them. They were asked if graphical user interfaces were protected by copyright in computer programs (the first question), would television broadcasting of the graphical user interface be an infringement of that copyright (by communication of that work to the public)? Although the ECJ had answered "no" to the first question, ever helpful they considered whether, on the assumption that graphical user interfaces were protected by "ordinary" copyright, TV broadcasting of them could constitute infringement. Again the ECJ thought "no" because the viewers "cannot use the feature of that interface which consists in enabling interaction between the computer program and the user".

It seems from this that the ECJ have in mind not the graphical elements of the user interface, but something about its operational behaviour. A sort of copyright in interactivity, which cannot of course be infringed by TV broadcasting because you cannot interact with the subject of the broadcast. If that is what the ECJ have in mind, then I am troubled.

First, what kind of a copyright is this? Is it an artistic work, a literary work or something else (a work of artistic craftsmanship perhaps)? For the purposes of English law this matters. Different species of work are protected in different ways, even if the differences are sometimes rather subtle. The ECJ do not tell us the answer to this question.

Second, where is the graphical user interface "fixed". In English law a work is only protected if and when it is fixed in some permanent form. If I make a really excellent speech, I will have copyright in the speech when, but only when, it is recorded. Similarly if a group of musicians create an exciting musical work while jamming together in the studio, the work will not be protected until fixed in some form. Is the graphical user interface fixed in the computer program's source code? If so, copying the code may be an infringement of the copyright in the graphical user interface. If it is not fixed in the code, where is it?

Lastly, there are numerous special rules that apply to copyright in computer programs. For example there are rights to make back-up copies, to test and to decompile for certain purposes. If the ECJ is right, these would not apply to a user interface which represented an author's own intellectual creation. In English law, moral rights do not apply to computer programs, but would (presumably) apply to a suitable user interface. Both of these conclusions could be awkward.

Not all is bleak. The ECJ emphasize that when assessing whether a graphical user interface is protected by copyright as its author's "own intellectual creation", a national court should ignore components of an interface that are "differentiated only by their technical character". It will not be every, or every aspect, of a user interface that will be protected. Despite this limitation I suspect that this decision, if taken to its logical conclusion and followed by later cases, will require some careful rethinking about copyright in the computer industry. Just what we need.

ACS:Law - at last, a hearing

UPDATE: For professional reasons I won't be commenting on this case for the time being. Please feel free to continue to comment on this post, but don't feel insulted if I do not respond.

After my recent post on ACS:Law's failure to obtain default judgments in some of their claims. Another judgment Media C.A.T Limited v Alan Billington [2010] EWPCC 18 of the patents county court has been pointed out to me.

The facts of the particular case are not particularly crucial. The Defendant, an Aaron Billington, complains amongst other things that there is no "Alan Billington" and that he did not receive a "response pack" (which comes with the Claim Form and which includes a form for acknowledging service). Although he does not say so, there also seems to be a complaint that ACS:Law did not follow good pre-action practice.

What is interesting is that the judge reviewed cases pending before the court (27 in all) and has ordered that a hearing for directions be held at 10:30am on 17th January 2011. At the hearing the court can decide how the cases should be dealt with. Clearly if you are (or know someone who is) one of the defendants and there's a reasonable defence to the claim, or the sum claimed is larger than the claimant is entitled to, then it would be a very good idea to attend the hearing and have your (or their) voice heard.

Although courts do have a power to make orders on their own initiative, without being asked to do so by the parties, many courts do not seem to use this power as much as, perhaps, Lord Woolf envisaged when he created the civil procedure rules. The hearing proves to be interesting as it may give a much broader picture of how ACS:Law are progressing their cases and it may also help the court to tidy up what sounds (from the last judgment anyway) like something of a mess even from a purely technical perspective. Mildly good news I think.

ACS:Law come unstuck

Earlier this month ACS:Law suffered a set-back in their campaign against alleged copyright infringement through peer-to-peer file sharing. ACS:Law (or more pedantically, their clients) had tried to obtain judgments in default against 8 defendants, but failed for a variety of reasons in each case. The judge in the Patents County Court criticised the nature of their claim and the way in which the applications were brought — reported as Media C.A.T Limited v A (and others) [2010] EWPCC 17.

Default judgment is a speedy way for claimants to obtain judgment without a trial. In most cases a defendant served with a claim form and particulars of claim is supposed to acknowledge service and then file a defence. If not acknowledgement or defence is forthcoming the claimant can ask the court to give it judgment in default.

This is where ACS:Law start to come unstuck. In 3 of the cases a defence had been filed in court. So default judgment does not apply. In a further 3 of the cases there was no evidence on the court file that the claim form and particulars of claim had been served on the defendant. It is ordinarily the court's job to serve these documents, but there's no presumption that it has. In my practice I have come across situations where some administrative mistake has been made and the court has failed to do so. Whatever the reason, it is bad practice to issue requests for default judgment without checking with the court that no defence has been filed. A slap on the wrist for ACS:Law in my view. As the judge said "The requests for judgment should never have been filed."

There is an easy way and a not so easy way to ask the court for a default judgment. The easy way simply requires the claimant to file a request to the court. The defendant does not have to be informed of the request and will ordinarily know nothing about it. The not so easy way requires a formal application, with evidence, to the court, which must be served on the defendant, who will therefore have an opportunity to defend against it.

The "easy way" is only available where the claim is for one or more of: a specified amount of money, an amount of money to be decided by the court, delivery of goods where the claim form gives the defendant the alternative of paying their value (CPR 12.4). In each case, the claim was not only for damages for copyright infringement (including additional damages for flagrant infringement), interest and costs but also for:

"a permanent injunction pursuant to the inherent jurisdiction of the Court; ordering the defendant to take reasonable steps to safeguard their internet connection being used, either through the defendant's personal computer and/or third parties taking advantage of the defendant's unsecured wireless connection to repeat the infringement of the claimants copyright in the Work(s)."

Ooops. That doesn't appear to comply with CRP 12.4. The judge thought not. ACS:Law ought to have made a formal application rather than merely filed a request and that would have alerted the defendants to the possibility of default judgment and given them an opportunity to respond. The judge had serious doubts as to whether, in peer to peer file sharing cases, default judgment ought to be given on request without a formal application. He said:

In all these circumstances, a default judgment arrived at without notice by means of an essentially administrative procedure, even one restricted to a financial claim, seems to me to be capable of working real injustice.

Most interesting for me are the criticism that the judge made of the way in which the case was pleaded (one assumes by ACS:Law, but certainly on their behalf).

• The particulars of claim stated that the claimant "represents" the owner of copyright in the films that were the subject of the claim. Only the owner of the copyright or a licensee (and for a non-exclusive licensee only if certain conditions are met) has a right to sue for copyright infringement. Thus the pleadings were defective.
• The allegations relate to unsecured internet connections. It is unclear whether the owner of (say) an open wifi can be held responsible for copyright infringement effected using that connection.
• The claimant's plea was that the defendant was guilty of "allowing" copyright infringement, which, as the judge put it, "is simply wrong". The term used by the act is "authorising", which is rather different.

and more of the same. In short: even accepting all of ACS:Law's allegations, they do not appear to have a proper case. To succeed they would at least have to amend their claim, assuming they have a case at all.

A health warning: this decision is made by a county court. It is not, strictly speaking, binding on any future court. It does however illustrate the extremely dubious nature of the claims being put before the court by ACS:Law and will, I hope, encourage defendants to be more confident in resisting them. The list of defects in the pleadings might make a useful basis for an application to strike out against the claimant.

Hat tip to Philippe Bradley for pointing this case out to me.

Image rights: England v Germany and Philip Woolas's mug

Matt Wardman of the Wardman Wire asks an interesting question on the mySociety:public mailing list. He had created a couple of mug designs poking fun at the former MP Phillip Woolas and submitted them to the online platform Spreadshirt. According to his blog post they refused to accept the designs, saying:

These designs or products most likely infringe legal regulations. If not then the content is considered offensive, discriminatory or glorifies violence.

Now of course the designs were offensive — in the sense that someone could be offended by them — that really was the idea. If there were a law against being offensive Private Eye could never be published. Spreadshirt's Terms and Conditions say nothing to forbid offensive material; nor could the designs possibly seen as discriminatory (except perhaps against MP's who lose election courts) or glorifying violence. What of the "legal regulations" that Spreadshirt thought might be infringed.

A later response gave some clarification:

"Unfortunately we could not admit them for your shop because they infringe on the personal rights of Phil Woolas. These basically state that any image with his photo or name on it that does specifically refer to his person must be authorized by him. "

Such an unqualified statement of law must be rubbish, at least in any civilised society. If it were true then editors would find it virtually impossible to illustrate their newspapers and most of their budgets would be spent on clearing image rights with those depicted.

English law doesn't recognise an image right per se. The use of a person's image is not entirely free. For example if I take a photograph of you, you may be able to prevent me from using it:

• in a way that is defamatory of you — as in Tolley v J S Fry Ltd [1931] AC 333, where an amateur golfer successfully sued for libel when his image was used in a chocolate advert since it carried an implication that he had been paid for the advertisement and was therefore not maintaining his amateur status;
• to pass off your business as mine — this extends as far as using the image of a celebrity to falsely imply that they endorse my business, as Talksport did when the edited an image of Eddie Irvine holding a mobile phone into one holding a radio labelled "Talksport" in Edward Irvine Tidswell Ltd v Talksport [2002] EWHC 367 (Ch);
• in breach of trademark — assuming of course that you have trademarked your image and that my usage amounts to an infringement of that mark;
• in breach of confidence — if I received the photograph in confidence and my use of it is a breach of that confidence
• in a way that infringes your right to privacy derived from Article 8.1 of the European Convention on Human Rights(assuming I obtained the photograph in confidence) — in a case (Campbell v MGN [2004] UKHL 22) brought by Naomi Campbell against the Mirror for the publication of photographs of her going to a Narcotics Anonymous meeting, the House of Lords extended the action for breach of confidence to cover intrusions into an individuals private life;

There is also the Data Protection Act 1998. If the photographs are processed by computer (as they are by spreadshirt in this case) then they must also be “personal data”. If so, then they may only be processed if one of the conditions in Schedule 2 to the act are met. Processing for the purposes of journalism, literature and art is excluded from an obligation to comply with most of the data protection principles (by section 32) which makes life very much easier for newspapers. For use of photographs which is not journalism, literature or art, paragraph 6 of Schedule 2 would have to be relied on which requires that:

The processing is necessary for the purposes of legitimate interests pursued by the data controller or by the third party or parties to whom the data are disclosed, except where the processing is unwarranted in any particular case by reason of prejudice to the rights and freedoms or legitimate interests of the data subject.

Unfortunately there has been little consideration of this aspect of the Data Protection Act. In many cases the act is pleaded, but the eventual decision hangs on some other branch of the law. For example in Campbell's case.

It seems to me that neither of the mugs could possibly be defamatory (“Phillip Woolarse” doesn't come close), no-one coudl think that the mugs implied that Mr Woolas endorsed the Wardman Wire or that they were really the same business as him. The photographs were taken from election leaflets, criticised by the election court, and so are hardly an invasion of Mr Woolas's privacy and, arguably, they are “art” and so defensible against a Data Protection Act 1998 claim.

So much for England, but spreadshirt is German based. Now as an English lawyer, I known next to nothing about German law, but as I understand it the German KunstUrhG (law on the copyright of works of visual arts and photography) recognises a right known as Recht am eigenen Bild, usually glossed as “right in their own image” which I will refer to as “image right”. Section 22 of the KunstUrhG prohibits the distribution or public exhibition of the image of an individual without that individual's consent. A right to control over the use of one's image is also derived from Article 2 of the German Basic Law.

To an English lawyer's eyes this seems, at least at first sight, to give an excessive degree of control by an individual over the use of their image, and also to be a serious impairment of the freedom of speech. But German law is much more nuanced than that, not least because Article 5 of the Basic Law guarantees a right to freedom of expression.

Section 23 of the KunstUrhG makes a number of sensible exceptions, including one for images of people from the sphere of contemporary history (Bereiche der Zeitgeschichte). Until recently the German courts divided contemporary public figures into two groups: absolute figures of contemporary society (absolute Person der Zeitgeschichte) — those who stand out from the rest of society for example because of their political or social position, such as major political figures; and relative figures of contemporary society (relative Person der Zeitgeschichte)— those in whom there is public interest only due to a single event, such as victims of a notorious crime.

Section 23(1) is subject to section 23(2) which prevents distribution or display which harms the legitimate interests of the person portrayed (or after their death, the legitimate interests of their family). But section 23(2) aside, the absolute/relative classification would have meant that absolute figures of contemporary society had little protection against the use of photographs in a way that invaded their private lives unless they could show that a specific legitimate interest had been harmed.

The German law was found to be contrary to Article 8 of the European Convention on Human Rights in von Hannover v Germany brought by Princess Caroline of Hanover. The German Federal Court dropped the absolute/relative distinction (VI ZR 51/06) and held that the proper approach in all cases was to consider the balance between an individual's article 8 (basic law article 2) rights as against the interests of free speech under article 10 (basic law article 5). This approach has been endorsed as constitutional by the Federal Constitutional Court in a decision [link to English version] which usefully summarises a lot of the background.

Even after Princess Caroline's victory in the European Court of Human Rights, not everything has gone her way. Although the German courts agreed to prevent the distribution of some pictures of her, they permitted others. They have upheld the principle that sometime the interests of journalism, even where that is merely for entertainment rather than purely for information, outweighs the rights of an individual to their image. Princess Caroline is pursuing further action before the European Court of Human Rights.

My apologies for that long digression into German law (or what little I understand of it). In short: Spreadshirt's statement about image rights is rubbish even in German law. It seems to me extremely unlikely that using a picture of a Member of Parliament taken from an election leaflet that was the subject of a notorious and important trial could fall foul of the German image right as I have explained it. Spreadshirt staff may be forgiven for not realising that (if they are based in Germany) but for knowing that Mrs Thatcher (who cast a long long shadow) was a public figure.

Matt Wardman also wondered whether there might be a problem with copyright in the original election leaflet. The short answer is that

• copyright subsists in election leaflets just as in almost everything else (there is no special exception for them);
• copying the image is therefore a potential infringement, unless there is some defence available;
• there is no “fair use” defence in English law, contrary to the situation in the United States;
• there might be a defence of fair dealing for the purposes of criticism or review (to be found in section 30 of the Copyright Designs and Patents Act 1988, on the basis that the images on the mugs are a critical work, criticising the election leaflets which brought about Mr Woolas's downfall and that they are fair because they only use a small part of the offending leaflet;
• there might also be (and in this case there really ought to be) a public interest defence.

Copyright exceptions are so open textured that it is very difficult to be certain as to any of these, but I suspect any copyright suit would look very stupid.

Final draft of ACTA is out - nothing to see here

Thanks to the Patently-O blog on the subject, I learn that the Final Draft of the Anti-Counterfeiting Trade Agreement (ACTA) has been released. The EFF's web page on the subject has some background.

Earlier drafts contained a great deal of "pick and mix" material which still up for debate between the parties. The Final Draft suggests that those differences have been ironed out (though since the deliberations have been in secret I do not know the details).

My skim read suggests that there is not much in the treaty that would require the UK government to change our copyright law either in substance or as to the procedures used to enforce it. That does not mean that ACTA won't be used as an excuse (or opportunity depending on your outlook) to make changes, but there is a sufficient amount of flexibility in the treaty and a sufficient number of weasel words, that there should be no need for it to do so.

The Patently-O blog post does a good job of summarising the feel of the treaty. My own further thoughts follow.

Measures of damages

Article 2.2(2), which survives from earlier drafts, is particularly unreasonable. It starts uncontroversially enough:

Each Party shall provide that in civil judicial proceedings, its judicial authorities shall have the authority to order the infringer ... to pay the right holder damages adequate to compensate for the injury the right holder has suffered as a result of the infringement.

in other words damages should be compensatory and aim to compensate the injured for the wrong done to them — the usual position in English law. The treaty goes on:

In determining the amount of damages for infringement of intellectual property rights, its judicial authorities shall have the authority to consider, inter alia, any legitimate measure of value submitted by the right holder, which may include the lost profits, the value of the infringed good or service, measured by the market price, the suggested retail price.

Now just how bad this is depends on quite what effect "shall have the authority to consider" will have. Logically merely because a court may consider something, does not automatically mean that the court will pay much attention to it. In practice a legislative requirement to consider a factor will often mean that a court feels obliged to give that factor more weight than it would otherwise do.

What is so odd about that is that "market price" and "suggested retail price"may be a very long way from a good measure of the actual loss suffered by a rights holder. For physical goods, production costs may make up a large part of that price, but even for digital goods, the loss effected by infringement will almost always be less than the actual price because not everyone will have been prepared to buy at that price.

It is also very unusual to have a law that requires a court to consider one of the party's evidence as to damages, but not the other. The usual practice is for the court to have one or more objective measures for awarding damages and for the parties to submit evidence as to what those damages should be.

Since, strictly speaking, an English court certainly has the authority to consider any measure of damages put forward by either of the parties, this particular article should require no change to English law.

More damages

Article 2.2(3) obliges that party's to the treaty to implement one of 3 mechanisms for establishing damages for copyright infringement. All parties would have to chose one of:

• pre-established damages (that is some fixed measure that the court can apply mechanically
• presumptions for determining the amount of damages — in other words a pre-established mechanism for computing the amount
• additional damages — that is extra damages over and above those used to compensate

Section 97(2) of the UK's Copyright Designs and Patents Act 1988 already provides for additional damages. So there is no need for change here.

In my last post on ACTA I pointed out that the United States does have a rather draconian form of statutory damages, but only awarded to those who had the presence of mind to register their copyright — surprisingly many do not. At first sight it looks like the US will have to remove that precondition or implement one of the other options for pre-computing damages.

As I said then, it seems odd to me that copyright owners should be put in a better position than most other classes of claimant in civil proceedings (who have to prove their loss in the normal way and who are generally entitled to compensation for their loss and that's all). Rights in real property are not protected in this way. Similarly, someone carelessly injured and left quadriplegic (to use an emotive example) would have to prove all their loss and would expect to obtain no more. Why should IP be so special?

Costs

Article 2.2(5) requires parties to allow courts to award the winner their costs in copyright proceedings. That seems uncontroversial from the English point of view, where "costs follow the event" but the usual US rule is that each party bears their own costs. Copyright is special. 17 USC 505 allows the prevailing party to be awarded their costs and attorney's fees, but this is restricted by which requires that the copyright be registered at the time of the infringement (or soon after where the infringement takes place shortly after publication) as a prerequisite of costs recovery. Again the US may be forced to relax this requirement as a consequence of ACTA.

Summary

There's lots more in the treaty. The criminal provisions are probably already compatible with UK law, though they are triggered by "wilful" copying on a "commercial scale", rather than the various specific situations set out in places like Section 107 of the Copyright Designs and Patents Act 1988. There are all sorts of requirements for the parties to the treaty to work together to eliminate IP infringement and even (in article 3.4) a requirement to engage in pro-IP propaganda (one wonders at a time of budget cuts why we need to spend money on this but...). As far as I can see there's not much in the treaty that needs to directly impinge on our law. What our government chooses to do in response is another matter.

Libellous freedom of information responses

For those that have yet to encounter it WhatDoTheyKnow (“WDTK”) is a website that helps members of the public make requests under the Freedom of Information Act. It displays the request and any subsequent communication (that was made via the site) between the person making the request and the public body in question. Anyone else may add comments, known as “annotations” at any stage of a request.

Like most other websites to which members of the public may contribute, WDTK has to be concerned about libellous contributions. As they note although they are forced to hide only a small proportion of the total number of requests, doing so still represents a significant effort for their volunteers. Most of the issues of libel arise either in the original request, or in subsequent correspondence including annotations made by third parties. But there is a more difficult problem where the libel is contained in the FOI response itself.

Consider the recent case of McLaughlin v Lambeth [2010] EWHC 2726 in which one of the alleged libels was contained in a “briefing report” prepared by the local authority and sent to the Department of Education. If a member of the public made a successful FOI request via WDTK for that report, WDTK's software would automatically republish it on their site. The Claimants in McLaughlin might well ask WDTK to remove the disclosed material — what then is WDTK supposed to do?

The difficulty is the classic chilling effect. WDTK are in no position to decide whether the briefing report is libellous, or whether their publication of it is defensible under some general libel defence — for example under public interest “Reynolds” qualified privilege. Unlike the commercial news media, who can take a view that profit made from publication is offset by the occasional loss of a libel suit and have the funds to insure against defamation claims, WDTK is a charity funded, volunteer run site. They are in no position to take the risk which means they cannot as robustly defend the public interest in freedom of information as they would like.

There is an absurdity about this since if one FOI request is successful then (because of the “applicant blind” approach) so ought a subsequent one. If I can obtain the briefing report under FOI, then so can you. It is unclear whether WDTK could display a message stating that a particular response had been removed because it was libellous, but that anyone can request their own copy by clicking on a particular link which would then send a fresh request to the authority. Such an approach might be a “publication” of the libel, depending on how one reads some rather old authorities.

The common law might recognise this absurdity and decide that publication of FOI responses was a form of qualified privilege. There is a line of old authorities that the publication of a fair and accurate copy of (or extract from) any register kept pursuant to statute and which by law the public are entitled to inspect attracts the defence of qualified privilege. For example publication of a copy of a county court judgment would attract common law qualified privilege. The reason for this defence was explained by Lord Esher MR in Searles v Scarlett [1892] 2 QB 56:

“The law provides that the register shall be a public document which anybody may consult for this purpose. That being so, the publisher of such a list ... is only doing for the public what they may do for themselves, and is only giving that information to the public and to tradesmen which the legislature has thought it right they should have.”

That reasoning appears to be equally applicable to republication of an FOI request. It is true that the cases are all concerned with documents or registers that the public is entitled to inspect, rather than request, but it seems to me that the right to email a public body and have a document sent in response is a very similar one and the common law reasoning could be extended if a court were properly persuaded to do so.

All this is not of much use to WDTK. The last thing they would wish to do is to litigate this question. What is interesting to lawyers is rarely rewarding to their clients. It would be much better if the question were settled by statute. Most of the old common law forms of qualified privilege of this type have been given statutory force by section 15 of the Defamation Act 1996. If any of you have the ear of government you might suggest that the addition of an exception for the publication of information released under the Freedom of Information Act (and similar legislation) should be added to part II of Schedule 1 of the Defamation Act 1996. If I am right that the common law covers this situation anyway, all such a change would so is enact in statutory form a defence which already exist.

Of course a wider reform of the law of defamation is also desirable, but failing that, this would be a useful improvement.