Written evidence
1. Letter and memorandum to the Chair of the Committee
from Rt Hon Lord Mandelson, Secretary of State for Business, Innovation
and Skills, dated 25 February 2010
DIGITAL ECONOMY BILL
I am grateful for the Committee's Report (HC327)
about the online infringement of copyright provisions of the Digital
Economy Bill. Detailed responses to the Report's key recommendations
are attached. In addition, the Government has tabled a number
of amendments to the Bill, which address a number of issues raised
both by the Report and in the Committee stage debate on the Bill.
Nevertheless, I thought that it might be helpful if I highlighted
our views on the four key issues raised by your report.
Copyright infringement reports
We welcome the Committee's recognition that it is
unlikely that these proposals alone will lead to a significant
risk of a breach of individual internet users' rights to respect
for privacy, their right to freedom of expression or their right
to respect for their property rights.
The Committee asked for a further explanation of
why we think our proposals are proportionate. In essence this
is due to two factors. The first factor is the harm suffered
from online copyright infringement by those industries that rely
on copyright to get a return on the investment of developing,
producing and marketing innovative content; we set out further
details of this in our attached response below.. The second factor
is the difficulties that copyright owners face in using the legal
mechanisms available to act against online infringement of copyright,
particularly when it is on a mass scale as with peer- to peer
file-sharing. Those difficulties centre around the fact that
a substantial harm is done by millions of small infringements
in the aggregate but the legal mechanisms available mean that
separate action must be taken against individual infringers.
Copyright owners cannot take action against every individual infringement
so a way is needed to identify those responsible for the most
serious infringements against whom the cost of legal action is
likely to be justified by the harm done by those infringements.
The proposals in clauses 4-8 of the Bill will help copyright
owners to take action against individuals in relation to infringements
causing serious harm in a way that they simply cannot now.
Technical measures
The Government hopes and expects that the initial
obligations will produce a significant reduction in online infringement
of copyright. However, in the event that this is not sufficient
technical measures could be applied - this may include bandwidth
shaping or temporary suspension. The Government has not suggested
that technical measures should include permanent suspension. Indeed,
as was mentioned in the Committee stage debate on technical measures,
the dictionary definition of "suspension" is "an
interruption or temporary revocation".
The amendments which we have tabled to clause 11
for Report give effect to the Government's graduated approach
by providing that technical measures may not be introduced until
at least 12 months after the introduction of the initial measures.
In addition, we have tabled amendments that provide that the Secretary
of State will have to take account of not only any reports produced
by Ofcom on the introduction of technical measures but also any
progress reports produced by Ofcom about online infringement of
copyright. We have already made an amendment to ensure that technical
measures under clause 11 can only be introduced in relation to
those subscribers who are to be placed on a copyright infringement
list under clause 5. Finally, we have tabled amendments for Report
regarding appeals against technical measures; this is dealt with
further below.
Right to a fair hearing
The Committee suggested that there should be greater
clarity about the rights of appeal. The Bill provides for rights
of appeal by subscribers to an independent body and, as regards
technical measures, a further right of appeal from that body to
a First-Tier Tribunal. The amendments which the Government has
tabled for Report in relation to the subscribers' right to appeal
under the initial and technical obligations provide clarity on
the grounds of appeal, what is expected of copyright owners and
ISPs by way of proving the existence of an infringement and its
connection with a particular subscriber account and what the appeals
body can do when an appeal is successful. They also require the
technical obligations code to provide that a technical measure
is not taken against a subscriber until the appeals process is
exhausted and for costs of a successful appeal to be recoverable
by the subscriber.
Reserve powers
The Government is clear that the power to amend the
Copyright, Designs and Patents Act 1988 would only be used if
considered necessary to address problems around online infringement
of copyright. If we are to protect copyright we need to deal with
nascent and emerging types of copyright infringement in an effective
and timely way. And we remain firmly of the view that this power
is a crucial tool to provide future proofing in an area of emerging
technology. We agree with the Committee that there is a delicate
balance to be struck between the right to freedom of expression
and the property rights of copyright holders. But we believe that
the amendments we have made and the further amendments tabled
further narrow its scope and enhance the information that will
be available to the Secretary of State and to Parliament in considering
any orders made under this provision.
The Government believes that the super-affirmative
procedure will provide the opportunity for adequate parliamentary
scrutiny, including of human rights issues. The procedure provides
that the Secretary of State must have regard to resolutions of
either House of Parliament and recommendations of a committee
of either House of Parliament charged with reporting on the draft
order. This will allow the House to make clear its views on any
orders, including any concerns relating to human rights issues.
I would also like to offer the Committee an assurance that the
explanatory document which must be submitted to Parliament together
with the draft of any order will include an assessment of the
Government's view of the compatibility of the proposals with human
rights obligations.
The Committee asked about which Committees should
consider any relevant proposal. That is a matter for the House
but the Government would have no objection to the Committee considering
any orders made. Should the Joint Committee on Human Rights consider
any proposal made under this provision, the Government would consider
very carefully any negative recommendation made, given its commitment
to human rights.
I hope that you find this letter and the attachment
helpful.
ANNEX: MEMORANDUM
DIGITAL ECONOMY BILL: GOVERNMENT RESPONSE TO JOINT
COMMITTEE ON HUMAN RIGHTS (HL PAPER 44; HC327)
Below is the Government's detailed response to the
Committee's recommendations.
Copyright infringement reports (Clauses 4-8)
2. We consider that despite the lack of information
on the face of the Bill, it is unlikely that the operation of
these proposals alone will lead to a significant risk of a breach
of individual internet users' right to respect for privacy, their
right to freedom of expression or their right to respect for their
property rights (Articles 8, 10, Article 1, Protocol 1 ECHR).
The limited impact on these rights by the operation of the copyright
infringement reporting mechanism proposed is likely to be justifiable.
However, in the light of the concerns raised by
internet users and human rights organisations, we recommend that
the Government provide a further explanation of its views on why
these proposals are proportionate, including by outlining the
harm currently suffered by individual copyright holders and the
wider public interest in promoting creativity, and why that harm
cannot be appropriately addressed by existing civil and criminal
penalties for copyright infringement. (Paragraph 1.23)
Online copyright infringement is estimated by the
creative industries to cost them in the region of £230 m
per year. In addition to the losses incurred because of lost
sales, this extensive infringement acts as a significant dampener
on the ability of the creative industries to build new, commercial,
online models due to their inability of compete with "free".
This is a threat to the ability of an important part of the UK
economy to modernise and develop to take advantage of the significant
opportunities offered by the digital age.
Estimates vary, but industry has estimated as many
as 6.5m people regularly infringe copyright by filesharing online.
Because of the nature of the infringement it is currently impossible
for copyright owners to identify those who are infringing their
copyright without going to court to get an order to require an
ISP to release their name and address. Additionally, they can
do so only in regard to a specific individual infringement, rather
than focusing their efforts on serious infringers of copyright.
This is a costly and time consuming process for the copyright
owner and they therefore only do this where they are considering
taking legal action against the infringer.
However, research indicates that many of those who
infringe online do so because they don't appreciate that it is
unlawful or because they don't know how to get access to the material
lawfully. The copyright infringement report process established
by the Bill will enable subscribers to be sent information which
will make it clear to them that their infringement can be detected,
that infringement of copyright online is unlawful, where to find
legal online sources of content and how to protect their internet
accounts to prevent others infringing copyright online over their
connection but without their consent. This will introduce a simple,
non-confrontational and relatively low cost way of educating the
majority of infringers and hopefully changing attitudes and behaviour.
As the Committee's report rightly notes, all this would be done
without a significant risk of a breach of individual internet
users' rights to respect for privacy, their right to freedom of
expression or their right to respect for their property rights.
There is considerable evidence from surveys which
indicates that people do react positively to notification letters
of this type and change their behaviour. Across a range of surveys,
typically between 30 and 70% of people surveyed say they would
cease any unlawful filesharing activity if they were receiving
such letters. A 2009 industry survey of unlawful filesharers indicated
that 30% of respondents would stop such activities in response
to a single letter with no sanctions implied. There is also some
real world evidence to support this - one ISP which sent notification
letters to subscribers found some 70% did not re-appear as copyright
infringers within 6 months of the first alleged infringement.
[11]
As noted in our letter to the Committee, the proposals
in clauses 4-8 of the Bill will help copyright owners to take
action against individuals in relation to infringements causing
serious harm in a way that they simply cannot now. They will provide
a way to identify those responsible for the most serious infringements
against whom the cost of legal action is likely to be justified
by the harm done by those infringements.
The Committee's report also questions the time limits
within which infringement reports might be received to contribute
to the copyright infringement list. We have proposed amendments
for Report stage effectively limiting this to a twelve month period.
The report further queried the rights of the individual to appeal
against inclusion on a copyright infringement list; again, we
have proposed amendments to this effect.
Finally, we would also like to reassure the Committee
on the question of the minimum threshold for any copyright infringement
list. We cannot see any reason for the threshold to be set at
one; the system is designed with regard to multiple infringements,
and would be inefficient for all parties with regard to individual
infringements.
Technical measures (Clauses 9-16)
4. The lack of detail in relation to the technical
measures proposals - and in particular in relation to the scope
of technical measures the criteria for their imposition and the
enforcement process - has made our assessment of the compatibility
of these proposals with the human rights obligations of the United
Kingdom extremely difficult. As we have explained in the past,
flexibility is not an appropriate reason for defining a power
which engages individual rights without adequate precision to
allow for proper parliamentary scrutiny of its proportionality.
(Paragraph 1.28)
With regard to the Committee's recommendations 3
and 4, we remain of the view that the detail of any technical
obligations and the criteria on which they are to be applied can
only be considered if and when a decision is taken to introduce
such obligations at all. Whilst the legislation does provide
a list of illustrative measures we are clear that those are simply
the options that seem likely to work at this time. Technology
moves fast and by the time we might be considering technical obligations
it is quite possible that there may be tools available that we
simply don't know of now and conversely those that might be effective
today may not be tomorrow.
We accept the Committee's recommendation that legislation
must be sufficiently clear to allow proper Parliamentary scrutiny.
It remains our intention to provide such clarity. To this end
we have proposed amendments at Report Stage, to the process by
which any order to introduce technical obligations may be made.
Under our new proposals no technical measures can be introduced
within a year of the initial obligations code coming into force.
In addition the Secretary of State will have to take into account
an assessment from Ofcom on whether technical obligations should
be introduced and if so, what sort of technical measure, and any
reports that Ofcom has produced under clause 9 on the progress
of the initial measures.
The Committee also expressed a concern that there
is no time limit on potential temporary suspension. I should
make it clear that the Government has no intention of cutting
anyone off the internet permanently.
Indeed, as was mentioned in the Committee stage debate
on technical measures, the dictionary definition of "suspension"
is "an interruption or temporary revocation". Furthermore,
as the committee recognises, there is also no restriction on a
subscriber who is subject to a technical measure taking an account
with another internet subscriber. Thus although it is in principle
possible for the Secretary of State to require long term suspension
it would in practice result in subscribers moving to other ISPs.
This might not undermine the effectiveness of the
measure (changing ISP is not without cost and difficulty, especially
if you are part way through a contract) since people are unlikely
to want to have to change ISPs regularly, but it would mean that
no-one would be forced to be without an internet connection for
an extended period of time. Under his duty in the Human Rights
Act, the Secretary of State will need to be satisfied that any
criteria set out in an order imposing technical measures are proportionate.
And as we note below, the code governing technical measures would
be scrutinised for proportionality before it could be implemented.
5. We reiterate our invitation to the Government
to provide fuller justification for its proposals. (Paragraph
1.38)
In our response to your recommendation (2) above,
we expanded on our case for the initial obligations proposed in
the Bill. In relation to the justification for technical measures,
we have said that we hope and expect that the initial obligations
will lead to a significant drop in online copyright infringement.
If that does not happen and the widespread and substantial harm
to the creative industries continues then it will be important
to take some steps to resolve the problem. Our proposals with
regard to technical measures are intended to prevent or reduce
infringement by limiting internet access where a subscriber's
account is associated with significant and repeated infringements,
despite all efforts to reduce this by other means.
In the 2009 BPI industry survey of unlawful file-sharers
mentioned in our response to (2), further responses indicated
that adding the potential for a sanction in the case of continued
infringement may result in a reduction of 60 -70% of such activity.
We believe that the process we are putting in place
in the Bill, with repeated warnings to those whose accounts are
associated with multiple infringements, coupled with advice on
how to ensure that internet connections are not subject to abuse,
will give subscribers a reasonable opportunity to ensure that
copyright infringement on their account is stopped. If this does
not happen it is reasonable to take further action to prevent
or reduce such infringement.
We are providing subscribers with a right to appeal
at any stage of the process. At appeal the onus will be on the
copyright owners and ISPs to prove that an infringement did take
place and that it was associated with the relevant account. Furthermore,
if the subscriber can show that they did not carry out the infringement,
and that they took reasonable steps to prevent others from using
their account to infringe then the appeals body will uphold the
appeal. Any technical penalties will be designed to make it impossible,
or more difficult to infringe copyright and we will expect Ofcom,
in any reports under clause 10 - and the Government and Parliament,
in considering any order under clause 11 - to look at the extent
to which any proposed technical measure will have unintended consequences
in case these might make it disproportionate.
We have further introduced an amendment to allow
the appeals body to require the measure not to be taken or substitute
another technical measure if there are exceptional circumstances
that justify it.
7. There are a number of issues which could helpfully
be clarified; some on the face of the Bill, in order to reduce
the risk that these proposals could operate in a manner which
may be incompatible with the Convention. We recommend that the
Minister clarify:
a) the precise intended impact of these proposals
on individual accounts, including (i) whether technical measures
may include indefinite suspension of an account and whether any
service limitations imposed will be for a specified time-frame
and/or renewable; and (ii) any potential impact the imposition
of technical measures may have on the ability of a user to secure
an alternative service; (Paragraph 1.40)
b) the minimum criteria which would be required
to be satisfied before the imposition of technical measures. The
Government has indicated that technical measures will follow the
issue of copyright infringement notices. It would be helpful if
the Government could clarify whether (i) the imposition of technical
measures will be subject only to the initial assessment of the
copyright holder that it appeared that the individual service
user had breached his or her copyright; and (ii) if so, would
the same standard of evidence and proof be required for the imposition
of technical measures as would be required for the issue of copyright
infringement reports? (Paragraph 1.40)
In relation to (7a), please see our answer to the
Committee's recommendation (3) above. The Bill does not explicitly
rule out indefinite suspension but we do not believe it would
be a useful or practical option for the reasons set out above.
The Bill does not place any restriction on a subscriber in relation
to securing an alternative service.
In relation to b) we have now tabled amendments which
make it clear that the imposition of technical measures can only
be applied to some or all of the subscribers who meet the criteria
to be on the copyright infringement lists - i.e. those who have
passed the threshold set out in the code (most likely to be based
on the number of CIRs received over a period of time). The standard
of evidence expected in the first instance will, therefore, be
the same as that required for a CIR, but in respect of multiple
CIRs. As mentioned above, the subscriber will have the right
to appeal at any time, and at such an appeal the copyright owner
and ISP will have an obligation to prove the copyright infringement
and its association with the particular subscriber account.
8. We recommend that the Bill be amended to make
it clear that technical measures may only be introduced after
an assessment by OFCOM of the necessity and proportionality of
these new measures taking into account the impact of the initial
obligations code. In so far as it is possible, we recommend that
the Bill should be amended to provide additional details on the
minimum criteria for the imposition of technical measures including
the standard of proof which must be applied; the "trigger"
for the imposition of such measures; and any relevant defences
for service users who have taken all reasonable measures to protect
their service from unauthorised use, and who have not knowingly
facilitated the use of their service for the purposes of infringing
copyright. (Paragraph 1.41)
We agree that Ofcom's assessment is crucial to the
decision to proceed with technical measures, if needed. In Committee
we made clear our intention - delivered by our proposed amendments
- that technical obligations should not be introduced until a
minimum period of 12 months from the coming into effect of the
initial obligations code. The Government also agrees that the
Secretary of State should take into account an assessment by Ofcom
under clause 10 and any reports produced under clause 9. The Secretary
of State's consideration of Ofcom's assessments under clause 10
will cover the necessity and proportionality of these new measures.
On defences and levels of proof, please see our answers
to the Committee's recommendation 5 and 7. We have tabled amendments
which make it clear that at appeal the starting point is that
the copyright infringement and its association with a particular
subscriber account will have to be proved. If the subscriber
can demonstrate that they did not carry out the infringement,
and that they took reasonable steps to prevent other people from
infringing copyright on their account then the appeal will be
upheld.
Right to a fair hearing (Article 6 ECHR)
9. We accept that there is no clear answer to
whether the decisions taken during the process of issuing copyright
infringement reports and infringement lists involve the determination
of any individuals' civil rights and that it is unlikely that
Article 6 ECHR is engaged. However in the light of the acceptance
by the EU that a fair process is necessary for regulation of individual
service users' access to the internet we consider that statutory
provision for a right to appeal to an independent body against
inclusion on any infringement list at this stage would lead to
a fairer procedure and so be a human rights enhancing measure.
(Paragraph 1.44)
The amendments the Government has tabled for Report
provide further clarity in relation to the subscribers' right
to appeal under the initial and technical obligations - the grounds
on which they can appeal, what is expected of copyright owners
and ISPs by way of proving the existence of an infringement and
what the appeals body can do when an appeal is successful. In
particular, we are proposing amendments to provide the following
protections:
- Clarification of possible grounds
for appeal.
- An explicit requirement that at appeal the onus
will be on the copyright owner to prove an infringement occurred
and on the copyright owner and ISP to prove that it was properly
associated with the subscriber's account.
- A provision that if an appeal is on the ground
that there was no infringement of copyright or that it was not
right to associate this with the subscriber's account and the
appeals body is satisfied that the subscriber did not carry out
the infringement, it should uphold the appeal if satisfied that
the infringing act was not done by the subscriber and that the
subscriber has taken reasonable steps to prevent others using
his account to infringe copyright.
- Provision that the appeals body may use its discretion
not to uphold the imposition of a technical measure, or may impose
an alternative measure, in the light of the particular circumstances
of a particular case or user.
- Following the report from the Committee, provision
that a subscriber who successfully appeals may recover the costs
of the appeal.
11. Without a clear picture of the criteria for
the imposition of technical measures, it is difficult to reach
a final conclusion on the fairness of the substantive decision
making process for the imposition of technical measures and its
compatibility with Article 6 ECHR and the common law. We recommend
that at a minimum, the Government must be required to confirm
that the First Tier Tribunal will be able to consider whether
an infringement of copyright has occurred and any defence that
no infringement of a copyright holders' rights has been committed
or knowingly permitted by the account holder. Further information
about the quality of evidence to be provided and the standard
of proof to be applied should be provided, ideally on the face
of the Bill, and at a minimum by the Minister during the course
of debates on these provisions. In addition, we recommend, for
the avoidance of doubt, that the Bill require that the technical
obligations code must provide for any appeal rights to suspend
the application of technical measures and for costs of any successful
appeal to be recoverable by any successful applicant. (Paragraph
1.50)
We appreciate the importance of this issue and believe
that the amendments to the appeals provisions of the Bill described
above that we have tabled for Report meet the concerns of the
Committee. Our amendments also require the technical obligations
code to provide that a technical measure is not taken against
a subscriber until the appeals process is exhausted and for costs
of a successful appeal to be recoverable by the subscriber.
Reserve powers (Clause 17)
12. In the light of the breadth of this proposed
reserve power and the need for a delicate balance to be struck
between the right to freedom of expression and the property rights
of copyright holders in any changes to copyright law, we are concerned
that Clause 17, as amended, remains overly broad. (Paragraph 1.55)
13. We welcome the Government's decision to introduce
the use of the super-affirmative procedure. However, we recommend
that:
a) The Minister should explain why parliamentary
scrutiny of any relevant human rights issues will be adequate
without any power for Members of either House to propose amendments
to the draft order. (Paragraph 1.56)
b) Any explanatory memorandum accompanying an
order made under Clause 17 should include an assessment of the
Government's view on the compatibility of the proposals with the
human rights obligations of the United Kingdom, including the
European Convention on Human Rights. (Paragraph 1.56)
c) The Government should be required to clarify
which Committees it would consider 'charged' to report on any
relevant proposal, other than the Joint Committee on Statutory
Instruments (JCSI). We are not required to report on any secondary
legislation other than remedial orders laid under the Human Rights
Act 1998, but we do report from time to time on proposals in secondary
legislation which we consider raise particular human rights concerns.
We would be grateful if the Government would explain how a negative
recommendation from our Committee or its successors would affect
the Government's approach to an order. (Paragraph 1.56)
Breadth of the power
The Government remains firmly of the view that there
is a need for this power. It is, in our judgement, the most effective
and proportionate way to ensure that we do not have to continually
react to crises but can consider and act within specified limits
if Parliament agrees and depending on the results of consultation.
While the power is necessarily flexible in order to function as
intended and allow future unknown challenges to be addressed,
the safeguards surrounding its use, and the wording of the clause
itself, limit its application to a specific focus.
For example, the power cannot be used to create or
amend criminal offences. Due to the way the Copyright Designs
and Patent Act is structured, this means that no changes can be
made to the definition of an infringing act, i.e. what is lawful
and reasonable now, will remain so in the future. Furthermore,
the power can only be used to address 'on-line infringement of
copyright' as explicitly stated in the clause. This again targets
the allowable uses of the power at just those issues it is intended
to address. The power cannot be used to make arbitrary changes
to copyright law for other purposes.
Nevertheless, we have proposed an amendment which
makes clear that the scope of the clause is limited to Chapter
6 of Part 1 of the Copyright Act, which deals with "Remedies
for Infringement". This makes clear that the clause can only
be used to change civil enforcement measures (the power cannot
be used to create or modify a criminal offence, already an important
and proper restriction), not the definition of what constitutes
copyright infringement.
Super affirmative procedure
As detailed in the amended clause, super affirmative
procedure introduces a number of safeguards to the exercise of
the power. One of these is that a draft order cannot continue
through parliament if a relevant Committee of either House recommends
that it does not. This means that if, for example, the Joint Committee
on Human Rights recommended against any planned used of the power,
no further progress could be made unless the recommendation of
the Committee is overturned by resolution of the whole House.
Given the support shown by all parliamentarians for Human Rights
considerations, this in effect provides a very powerful safeguard
against misuse.
It is best practice that any legislative proposal
with Human Rights implications should be accompanied by an assessment
of those implications when introduced to parliament. It would
certainly be the Government's intention to provide for such an
assessment to accompany any order made under this power if there
are any Human Rights implications to the content of that order.
Given the freedom of Committees of both Houses to
consider statutory instruments if they raise concerns in their
particular areas of practice, we do not consider it is appropriate
for the Government to say which Committees would consider themselves
'charged' to report on a draft order made under this power. If
a draft order made under this power had Human Rights implications
of any sort, then it would certainly seem that the Joint Committee
on Human Rights could consider itself charged to report on the
order. As such a negative recommendation would have the effect
detailed above, and stop the progress of the order unless subsequently
overturned by the whole House.
11 IPOS 2006 survey; Harris Survey (2009) commissioned
by the BPI; THUS response to the BERR P2P 2008 consultation. Back
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