Legal Update

Internet Law - Digital Economy Act - Copyrights - Intellectual Property


The Digital Economy Act (DEA) is being challenged by two major internet service providers (BT and TalkTalk) by way of judicial review. The providers are hoping to impede the copyright enforcement Act, which imposes duties on the largest internet service providers (ISPs) to combat copyright infringement of material on the internet. The Act could potentially force ISPs to suspend and slow down broadband connections of potential online copyright infringers.

In its current form the DEA also requires ISPs to:


§  Notify subscribers if their IP addresses have been reported by copyright owners as infringing their rights;


§  Provide an anonymous infringement list to the copyright owner on request, if the copyright is infringed on more than 3 occasions in a 12 month period (“three strike rule”).


The list allows the copyright owner to apply for an order to disclose the identities of the infringers in order to commence proceedings.


The DEA also increases the maximum penalties for copyright infringement offences, and can impose sizeable fines on defaulting ISPs. Such provisions are likely only to apply to the seven largest ISPs, as alluded to above.




The DEA has come under a lot of criticism and is thought to have been rushed through Parliament.


For instance, it does not seem to address the problems caused by infringing parties who do not provide ISPs with correct details, or who use a proxy server or a virtual private network.


Neither does it stop dishonest users from using free Wi-Fi access points to download material. This controversially leads to potentially making those subscribers who offer internet access to others (such as hotels offering Wi-Fi access) responsible for their customers' infringement. 




Even though the law was passed, it has not yet been implemented due to an EU legislation issue and other reasons outlined below.


The Challenge


The DEA is being challenged on the grounds of being disproportionate, incompatible with aspects of EU law and for breaching human rights. Particularly, that its provisions:

§  Should have been notified to the European Commission before enactment.


The EU Technical Standards Directive requires that draft regulations relating to Information Society services such as broadband internet be scrutinised by the Commission to ensure they do not over-regulate or form undue barriers to trade within the EU.


§  Are incompatible with the E-Commerce Directive, which limits the liability of ISPs for information they transmit as a mere conduit for others to access an electronic communications network.


The argument is that in its totality, liability is imposed on ISPs for information transmitted over which they have no control or knowledge.


§  Are incompatible with the Directive on Privacy and Electronic Communications.

If ISPs provide copyright infringement lists to copyright owners, they would be processing and making available personal data and infringing subscribers' rights to confidentiality.


§  Are a disproportionate restriction on the ISPs' right to free movement of services into the UK and breach subscribers' rights to privacy and freedom of expression.


The judicial review began on 23 March 2011 and BT and TalkTalk have been successful in, at the very least, delaying the implementation of the DEA. The earliest if could be implemented is October however it is more likely to be 2012 (although the government is adamant its timetable has not changed).




Mr Justice Penneth Parker of the Administrative Court did not find any substance in the grounds put forward by BT and TalkTalk. Parker J did however find the fact that the ISPs had to pay towards the implementation of the Act and policing of internet users as unlawful. As it was drafted, the Government’s costs order required ISPs to pay 25% of the qualifying costs. This is unlikely to present a significant obstacle to the Government’s plans.


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© RT COOPERS, 2011. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.




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