1. ON-LINE INFRINGEMENT OF MUSICAL COPYRIGHT: THE UK LEGAL PERSPECTIVE Presentation to British Computer Society Seminar on “IT’s Music Industry” on 18 October 2006 Jonathan Cornthwaite Partner Wedlake Bell, Solicitors London jcornthwaite@wedlakebell.com

2. INTRODUCTION The internet: the worst-case scenario for the music industry? “The digital environment poses a unique threat to the rights of copyright owners: digital technology enables pirates to reproduce and distribute perfect copies of works, at virtually no cost at all to the pirate”: US House Committee on Commerce

3. INTRODUCTION (continued) Structure of Presentation:- 1.What is the UK law on the subject, and where is it to be found? 2.How have UK courts applied this law? 3.What future developments are predicted from a legal perspective?

4. 1.What is the UK law on the subject, and where is it to be found? The Copyright, Designs and Patents Act 1988 “Copyright, Designs and Patents …”: in fact, the statute is overwhelmingly about copyright “… 1988”: in fact, the statute has been updated by the Copyright and Related Rights Regulations 2003 in order to harmonize UK legislation with the EU Digital Copyright Directive.

5. 1.What is the UK law on the subject, and where is it to be found? (continued) Reproducing a musical work in any medium by electronic means: INFRINGEMENT (Section 17) Communicating a sound recording to the public without consent (e.g. by digital broadcasting or on-demand service): INFRINGEMENT (Section 20) Circumventing technical protection measures: INFRINGEMENT (Sections 296ZA-F)

6. 1.What is the UK law on the subject, and where is it to be found? (continued) Altering electronic RMI without consent: INFRINGEMENT (Section 296ZG) Power to grant injunctions against ISPs who have actual knowledge of another person using their service to infringe copyright: Section 97A New criminal offences, e.g. knowingly communicating a copyright work to the public without consent, even if not in the course of a business: Section 107(2A)

7. 2.How have UK Courts applied the law in recent decisions? Four areas to be reviewed:- Internet cafés ISPs File sharers Overseas websites

8. 2.How have UK Courts applied the law in recent decisions? (continued) 2.1Internet cafés Sony Music Entertainment (UK) Limited et al v. Easyinternetcafé Limited [2003] Sony sued Easyinternetcafé for copyright infringement in respect of CD-burning service in which it downloaded its customers’ MP3 files onto blank CD ROMs for a fee Held by the English High Court: Easyinternetcafé liable for copyright infringement: the fact that its staff did not see what was recorded did not absolve it of liability, and the purpose in providing the copyright service was commercial.

9. 2.How have UK Courts applied the law in recent decisions? (continued) 2.2ISPs October 2005: English High Court requires four ISPs to disclose to the BPI the names and addresses of 28 individuals suspected of internet file sharing January 2006: English High Court orders ten ISPs to disclose to FAST the names and addresses of 150 suspected file sharers July 2006: two leading ISPs state to the BPI that they would suspend services to file sharers shown to have used illegal file-sharing methods

10. 2.How have UK Courts applied the law in recent decisions? (continued) 2.3File Sharers November 2005: Polydor Limited et al v. Brown et al: summary judgment granted by English High Court in favour of a number of record companies against an individual music file sharer, on the basis that the defendant’s use of P2P software to place music files in a shared directory accessible by the Internet constituted the infringing act of communicating a copyright work to the public January 2006:summary judgment granted by the English High Court in favour of the BPI against two individuals, who were found liable for copyright infringement for making songs available for download using P2P file-sharing programs

11. 2.How have UK Courts applied the law in recent decisions? (continued) 2.4Overseas Websites English High Court grants the BPI leave to serve proceedings on AllofMP3.com, a Russian digital-music download site based in Moscow, and its owner Media Services: July 2006

12. 3.Looking to the future … Three issues to be discussed:- UK equivalents to the Grokster and Kazaa decisions? Law suits against popular community websites? Outcome of The Gowers Review

13. 3.Looking to the future … (continued) 3.1Grokster or Kazaa in the UK? MGM v. Grokster: US Supreme Court decision holding that P2P software services may be held liable for inducing copyright infringement: June 2005 Universal Music Australia v. Sharman Licence Holdings: Federal Court of Australia decision that operators of the Kazaa P2P network infringed the copyright of thirty music companies: September 2005 UK equivalents? Law suits for authorising copyright infringement under CDPA88 Section 16(2)?

14. 3.Looking to the future … (continued) 3.2Community Websites Possibility of suits against websites such as YouTube or MySpace for alleged copyright infringement? Possibility that Google’s acquisition of YouTube this month may stimulate law suits

15. 3.Looking to the future … (continued) 3.3The Gowers Review Major high-level ongoing quasi-independent review of UK intellectual property law commissioned by the Chancellor Specific issues raised by the Review include whether UK law should include a statutory exception for “fair use” that could allow individuals to copy music CDs onto their PC and MP3 players for their personal use.

16. 4.Conclusion Head-on collision between prohibitive legal regime and permissive technology is a fascinating one from a legal point of view. WB1-1633777

17. ON-LINE INFRINGEMENT OF MUSICAL COPYRIGHT: THE UK LEGAL PERSPECTIVE Presentation to British Computer Society Seminar on “IT’s Music Industry” on 18 October 2006 Jonathan Cornthwaite Partner Wedlake Bell, Solicitors London jcornthwaite@wedlakebell.com