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

Thursday, December 8, 2011

This is Part Two 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. In Part One, we introduced the Three Strikes System and the problem it was developed to solve, the early adopters of the System, and the efforts of other nations attempting to implement similar systems.1 In Part Two, we consider the future of the System. The Three Strikes System essentially involves a copyright holder notifying an Internet service provider ("ISP") that his or her intellectual property is being infringed. The ISP, pursuant to a mandate by law, or voluntarily, then notifies the Internet subscriber implicated in the infringement. After three such notices, if the subscriber does not remove the infringing content and cease the infringing activity, the subscriber’s Internet connection can be terminated, at least temporarily. This system, however, has not been without criticism, and the efficacy of the program remains to be determined. It appears that regardless of the system that is ultimately employed, the public perception of cyber piracy will need to change in order for such conduct to be thwarted.

Criticism of the System

— The United Nations

The most notable criticism of the Three Strikes approach has come from the Human Rights Council of the United Nations General Assembly. The "Report of the Special Rapporteur on the promotion and protection of the right to freedom of opinion and expression" noted the Special Rapporteur’s alarm caused by proposals to disconnect users from Internet access if they violate intellectual property rights.2 The Special Rapporteur specifically pointed to the legislation based on the concept of graduated response as enacted in France and as contemplated in the UK’s Digital Economy Act 2010. The Report notes that "the Special Rapporteur considers cutting off users from Internet access, regardless of the justification provided, including on the grounds of violating intellectual property rights law, to be disproportionate and thus a violation" of civil and political rights. The Report calls on states to "refrain from adopting such laws."3

— Sweden

The Swedish government's speech at the 17th session of the Human Rights Council was one of its most recent public announcements that it does not approve of the Three Strikes system by indicating its support for the concerns noted by the Special Rapporteur on the right to freedom of opinion and expression.4 This speech was addressed on behalf of multiple nations, including Austria, Brazil, Canada, Denmark, India, Israel, Japan, Mexico, the Netherlands, New Zealand, Norway, Palestine, South Africa, Switzerland, Turkey and the United States. New Zealand is the noteworthy signatory to the speech, considering the Three Strikes provision in its Copyright (Infringing File Sharing) Act.

Alternative Approaches

— Notice and Takedown

The United States is recognized for its "notice and takedown" approach, included within the Digital Millennium Copyright Act ("DMCA"). Under the Act, an ISP is provided a "safe harbor" and exempted from liability for monetary, injunctive or other equitable relief for copyright infringement as long as it (1) does not have actual knowledge that the material or activity using the material on the system or network is infringing; (2) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or, most importantly, (3) upon obtaining such knowledge or awareness, acts expeditiously to remove or disable access to the material.5 A similar limitation on liability contingent on notice and takedown was included under a European Union-wide E-Commerce Directive in 2000.6 In it, a provider of hosting services for user-generated content can avoid liability for such content if it does not have actual knowledge of illegal activity and if it expeditiously removes or disables access to such content when made aware of it, in the observance of the principle of freedom of expression and of procedures established for this purpose at the national level. However, these notice and takedown regimes also have been the subject of criticism due to the possibility of improper use and lack of transparency. As explained by the Special Rapporteur in a report on promotion and protection of the freedom of opinion and expression: "Users who are notified by the service provider that their content has been flagged as unlawful often have little recourse or few resources to challenge the takedown."7 Moreover, the service providers often are inclined to err on the side of safety by over-censoring potentially illegal content.8 "Lack of transparency in the intermediaries’ decision-making process also often obscures discriminatory practices or political pressure affecting the companies’ decisions. Furthermore, . . . [ISPs], as private entities, are not best placed to make the determination of whether particular content is illegal, which requires careful balancing of competing interests and consideration of defences."9

— Chile’s Requirement of Court Orders

Chile has resisted a Three Strikes system of combating piracy, where the ISP or a quasi-judicial body is responsible for determining the guilt of an accused infringer. However, recent amendments to the Chilean La Ley Propiedad Intelectual (No. 173336) allow only a court to order the termination of Internet service between an ISP and its subscriber once the subscriber has been found by the court to be a repeat infringer.10

International Trade Agreements

The Anti-Counterfeiting Trade Agreement ("ACTA") is a proposed plurilateral agreement on intellectual property rights enforcement. Although an early draft of the agreement included a Three Strikes system, the most recent version does not. Instead, the latest version has adopted an approach similar to that in the DMCA. Specifically, it limits the civil liability of OSPs for online copyright infringement on condition, among other things, that the OSPs remove or disable access to infringing material or infringing activity upon obtaining actual knowledge of the infringement. This may be a sign that the Three Strikes system, at least as it now stands, is losing popularity.

ISPs Voluntarily Implementing Three Strikes System

One of Ireland's ISPs, eircom, announced at the end of 2010 that "coinciding with the launch of eircom’s new . . . on line music service eircom MusicHub," it would maintain its initiative with the Irish Recorded Music Association ("IRMA") to implement a graduated response program as part of the company’s approach to combating copyright infringement.11 Only a brief description of the protocol was provided by eircom: IRMA would provide eircom with notifications containing the IP address implicated in the file sharing, and eircom would in turn notify the subscriber of the finding. Where there is a third notification of the same customer, eircom will withdraw the customer’s broadband service for seven days. With a fourth notification, the broadband service will be disconnected for one year. In the United States, ISP Suddenlink may have adopted a similar Three Strikes policy. It was reported to have disconnected alleged copyright infringers who received three DMCA notices.12

Landmark Agreement Between Top U.S. ISPs and Big Entertainment Companies

Not waiting for further government intervention, the Motion Picture Association of America ("MPAA"), the RIAA and top entertainment companies reached an agreement on a new warning system and graduated response initiative with several of the United States' top ISPs, including AT&T, Cablevision, Comcast, Time Warner Cable and Verizon. The agreement provides that the ISPs will send "copyright alerts" to subscribers whose Internet connection was implicated in copyright infringement.13 The agreement does not include the possibility of disconnection, but may involve providing severely curtailed bandwidth, leading to slower speeds.14 The new "alert" system recognizes that subscribers to Internet service often do not even know when their service is being used for piracy and content theft. The new copyright alert system provides for up to six electronic notices, advising the subscriber that their account has been used for content theft.15 The system also will provide for "mitigation measures" for those accounts that are serial offenders and that fail to respond to the alerts.16 The agreement establishes the Center for Copyright Information, which is charged with implementing the system and educating the public.17 Finding that up to 70 percent of users would cease infringing conduct if notified that it is occurring, that it is illegal and that there are consequences associated with it, the coalition developed a system of alerts as follows: First Alert: In response to a notice from a copyright owner, an ISP will send an online alert to a subscriber, such as an email, notifying the subscriber that his/her account may have been misused for content theft, that content theft is illegal and a violation of published policies, and that consequences could result from any such conduct. This first alert will also direct the subscriber to educational resources which will (1) help him/her to check the security of his/her computer and any Wifi network, (2) provide explanatory steps which will help to avoid content theft in the future and (3) provide information about the abundant sources of lawful music, film and TV content. Second Alert: If the alleged activity persists despite the receipt of the first alert, the subscriber may get a second similar alert that will underscore the educational messages, or the ISP may

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