Skip Page Banner  
Skip Navigation

Punitive Responses to Cyber Piracy: Is ''Three Strikes, You're Out'' the Answer? - Part One, Contributed by Adam Bialek and Amanpreet Kaur, Wilson Elser

Friday, October 21, 2011

As most legal systems have adopted a "don’t shoot the messenger" mindset when addressing Internet conduct, many entertainment industry and related groups believe that the "messenger," in this case the Internet service provider ("ISP"), holds the key to controlling the conduct of infringers and cyber pirates. Several legal systems have adopted a "Three Strikes" rule that requires ISPs to cut off service to users after multiple warnings against infringement. This is part one of a two-part article that examines the question of whether the Three Strikes system is effective in accomplishing its purpose, and is likely to spread as the preferred method of combating global piracy.

The Cyber Piracy Problem

In the early days of writing, copying was extremely difficult. Whether stone tablets, clay tablets or other devices were used, it was next to impossible to make a duplicate of another’s writing. If someone copied a work of art or re-wrote the Bible, it would often take months or years. In today’s world, a simple “right click, copy, right click, paste” can create an infringing work in a fraction of time. A drag of a cursor and a dropped file can create a duplicate recording with relative ease. Since most of this copying is done in private, without others watching the theft, cyber piracy has flourished without the stain of being labeled a criminal. If one were to walk into a book store, grab a book, put it under a sweater and walk out of the store without paying, that person would be looked at with disdain as a shoplifter. However, the same person who downloads a copy of that book without paying for it is not noticed and, if exposed, might not be held to the same ridicule as the shoplifter. The online theft that occurs in today’s environment has created levels of theft unrivaled in the past. A study by Envisional, commissioned by NBC Universal, for the analysis of "bandwidth usage across the Internet with the specific aim of assessing how much of that usage infringed upon copyright" revealed that 23.76 percent of traffic on the global Internet (exclusive of pornography) was estimated to be infringing, while 17.53 percent of U.S. Internet traffic (exclusive of pornography) was estimated to be infringing.1 Peer-to-peer networks, where infringing content often is transferred, account for a substantial portion of this traffic. In 2007, the Institute for Policy Innovation ("IPI") released "The True Cost of Sound Recording Piracy to the U.S. Economy"2 with startling figures. The study found that "as a consequence of global and U.S.-based piracy of sound recordings, the U.S. economy loses $12.5 billion in total output annually."3 The study determined that as a result of sound recording piracy, the U.S. economy loses 71,060 jobs, with U.S. workers losing $2.7 billion in earnings, and federal, state and local governments losing a minimum of $422 million in tax revenues.4 The Recording Industry Association of America ("RIAA"), a trade organization that promotes the “financial vitality of the major music companies,” recognized this impact and categorized "piracy" as "too benign of a term to adequately describe the toll that music theft takes on the enormous cast of industry players working behind the scenes to bring music” to the public.5

The Three Strikes, or Graduated Response, System

In 2008, the RIAA, among other large entertainment industry groups, made a decided shift in its strategy for battling digital copyright infringement.6 The RIAA moved away from suing individuals for file sharing and cyber piracy after realizing such suits failed to discourage individuals from participating in such practices, and launched a campaign to engage ISPs to deliver the ultimate punishment to suspected infringers.7 This new strategy became widely known as the Three Strikes, or graduated response, system for dealing with Internet piracy, and has since been enacted into law in a limited number of European and Asian countries.8 Essentially, with some variations discussed below, the Three Strikes system involves a copyright holder notifying an ISP that his or her intellectual property is being infringed. Thereafter, the ISP, either mandated by law or voluntarily, sends out a notice of the allegation to the Internet subscriber implicated in the alleged infringement. After three such notices, if the subscriber does not remove the infringing content or cease the infringing activity, the subscriber’s Internet connection is temporarily terminated. All countries that have implemented graduated response-type legislation permit the suspension or termination of Internet access only after the accused subscriber has been notified that his or her connection is being used for infringing activity and further cautioned of the repercussions of such continued activity (i.e., termination of Internet access).9 A recent report by the World Intellectual Property Organization ("WIPO") noted an inherent problem with these notices: "At present, there do not appear to be any infringement notice models that require an infringement notice to be sent only to an infringing Internet user."10 Although some of the graduated response models provide vehicles to dispute the allegations of infringement, the lack of a mandate to direct the notices only to actual infringers demonstrates concerns over due process voiced by the critics of this system. The same WIPO report further noted that it would be impossible to reliably identify the actual infringer, and moreover, "such a policy may discourage business models that allow anonymous access to the Internet (a feature that can be indispensable for the exercise of freedom of expression)."

South Korea Enacts First Three Strikes Law

South Korea was the first country to push through one of the most punitive Three Strikes laws. The Committee on Culture, Sports, Tourism, Broadcasting & Communications of South Korea’s National Assembly passed a bill to amend South Korea’s Copyright Act in order to implement a Three Strikes system, taking effect in July 2009.11 The new law permitted the Minister of Culture, Sports and Tourism ("MCST") to order online service providers ("OSP"s) to suspend for up to six months accounts of infringers who had received three or more warnings.12 In addition to the authority provided to the MCST in this regard, amendments to the Copyright Act further authorized the Korea Copyright Commission ("KCC") to recommend to OSPs that they send warnings and/or suspend accounts of infringers.13 Although the KCC is only authorized to “recommend” such measures to an OSP, the OSP most often takes such recommendations as mandates, since the law offers KCC the option of turning to the MCST to issue an order in cases of noncompliance. On November 3, 2010, the Motion Picture Association International announced that the world’s first graduated response sanctions were imposed in South Korea, with the MCST ordering the suspension of 11 online accounts of "known copyright infringers."14 Within the first year of enforcement, the KCC had sent out 32,878 warnings, and there had been 32,209 cases of deletion or blocking of content, and 31 total cases of suspension of user accounts.15

The French Three Strikes Law

Although France lagged behind South Korea by a few months in passing a graduated response law, it nevertheless received the most publicity. With the passage of its Loi favorisant la diffusion et la protection de la cr

To view additional stories from Bloomberg Law® request a demo now