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Saturday, 22 October 2016

Unauthorised communication to the public in an online environment as a criminal offence in the UK?

"The UK’s digital economy is growing fast and digital technology is transforming every sector and all aspects of our lives. If the UK is to remain ahead and be a world leader in the digital economy we need to continue to raise our ambition".

With these words, on 5 July last UK Government justified the introduction in the House of Commons of the Digital Economy Bill 2016 [currently at the Committee stage], ie a series of measures to:

·             empower consumers and provide better connectivity so that everyone has access to broadband wherever they live;
·             build a better infrastructure fit for the digital future;
·             enable better public services using digital technologies;
·             provide important protections for citizens from spam email and nuisance calls and protect children from online pornography.

The Bill also contains measures in the area of intellectual property. 

Of particular interest is clause 26 on "infringing copyright and making available right" [isn't the making available right one of the rights granted by copyright?] and targeting online copyright infringements. In particular the second paragraph proposes to amend the current wording of section 107(2A) of the Copyright, Designs and Patents Act 1988 (CDPA):

“In section 107 (criminal liability for making or dealing with infringing articles, etc), for subsection (2A) substitute—
“(2A)A person (“P”) who infringes copyright in a work by communicating the work to the public commits an offence if P—
(a)knows or has reason to believe that P is infringing copyright in the work, and
(i)intends to make a gain for P or another person, or
(ii)knows or has reason to believe that communicating the work to the public will cause loss to the owner of the copyright, or will expose the owner of the copyright to a risk of loss.
(2B)For the purposes of subsection (2A)—
(a)“gain” and “loss”—
(i)extend only to gain or loss in money, and
(ii)include any such gain or loss whether temporary or permanent, and
(b)“loss” includes a loss by not getting what one might get.””

Translated: an unauthorised act of communication to the public in an online environment might be a criminal offence in the UK. How?

A UK-based copyright academic [who wishes to remain anonymous] explains it all.

Here’s what he/she writes:

I have been trying to think through the change made to section 107(2A) by the Digital Economy Bill 2016.

Section 107(2A)

Section 107(2A) Copyright, Designs and Patents Act 1988 currently states:

"A person who infringes copyright in a work by communicating the work to the public—
(a) in the course of a business, or
(b) otherwise than in the course of a business to such an extent as to affect prejudicially the owner of the copyright,
commits an offence if he knows or has reason to believe that, by doing so, he is infringing copyright in that work."

There is very little authority on the meaning of the phrase “to such an extent as to affect prejudicially the owner “.

Copinger (17th ed), [22-18], p 1626, n 94 cites the Hong Kong case of Hksar v Chan Nai Mang (2005), in which it was held that the meaning of “affect prejudicially” was wide in scope and not necessarily restricted to economic prejudice, although that was the obvious area at which the section was directed. The correct analysis was that the infringer must have intended to distribute much more widely than to one downloader, and thus his acts amounted to an attempt to distribute to such an extent as to affect prejudicially the copyright owner.

Laddie et al (5th), [20.26], p 823, referring to the phrase in section 23(d) of the CDPA, calls it “a sweeping up provision which would appear to cover most forms of handling of infringing copies not covered elsewhere.” Referring to the same provision, Copinger (17th ed), [8-15] 689 states: “It is not, however, easy to imagine a case in which distribution is neither in the course of trade or business nor prejudicial to the owner of the copyright, except perhaps where only a few copies are distributed to persons who would never have bought the work anyway.”

The current law: summary

Overall, one might conclude that on the existing law:

(i)     Prejudice to the owner is part of the actus reus (that is, the objective conditions for the offence rather than the mental state – mens rea - of the offender);
(ii)    Prejudice need not necessarily be economic;
(iii)   It can be direct as well as indirect;
(iv)    It is not an onerous standard;
(v)     It might require more than distribution or communication to one or two person, but once the number is in the 20s or 30s, it seems, one can assumed prejudicial effect (through loss of sales).

Actus reus ...
Clause 26 of the Digital Economy Bill 2016

Clause 26 of the Digital Economy Bill 2016 proposes to amend this. The definitions of gain and loss seem to derive from section 5 of the Fraud Act 2006 (though restricted in clause 26).

a.      Broadening the actus reus

As before, there must be a communication to the public. There is no longer a requirement that the communication be in the course of business, or that there be a prejudicial effect. Instead, the new provision offers a narrowing of the mental (mens rea) requirement.
b.      Narrowing the offence: the mens rea element

The proposed clause would also narrow the scope of the offence by elaborating the mens rea requirement. If enacted, this requires not just (as now) that the alleged offender knows or has reason to believe there is copyright infringement, but also that he she (i) intends to make a gain or (ii) knows or has reason to believe that the act will cause a loss or expose the owner to a risk of loss.

It seems that “intends to make a gain for [himself] or another person” is regarded as approximating to the previous condition that the act be “in the course of business.” Thus, for example, a publican who, without a licence, shows a broadcast of a football game to its customers doubtless does so with intent to gain (attracting customers, increasing sales).  A more difficult example is a lecturer who includes unlicensed images (falling outside the CLA/DACS licence) on its “slides”. Here there is a communication “in the course of business” (under existing law), but whether it can be said to be with an intent to make a gain is more difficult. There is no monetary gain for the lecturer, and probably not in any real sense for the employer, the University. So this might be an example where the changed language brings about a sensible redefinition.

However, private actors not acting as business people might intend to make some sort of gain, and thus now be caught within the criminal regime. One example might be uploading to a platform  a sound recording that infringes copyright by employing a “sample” where some small portion of the platform’s advertising revenue will be paid to the uploader. One might wonder whether posting user-generated content should be so easily categorised as a criminal offence. Another example might be a person who establishes a blog and includes unlicensed images reproduced from sites elsewhere on the Internet. As long as the “gain” they are hoping for is reputational, then there is no criminal act (under this head). However, if in due course they hope to sell the blog, it might be that there is the relevant “intent to gain.”

The loss component of the offence can also be unpacked. A Defendant will be liable where he/she

knows the act will cause a loss;
has reason to believe the act will cause a loss;
knows the act will expose the owner to a risk of loss;
has reason to believe the act will expose the owner to a risk of loss.

So the broadest of the circumstances in which a Defendant will be liable is where he/she communicates the work to the public, (i) having reason to believe that this act infringes copyright and (ii) having reason to believe the act will expose the owner, P, to a risk of loss by P not getting what P might get (even if only temporarily).

If a Defendant knows, or has reason to believe, that the act (communication to the public) will mean that a single person, who would have purchased a copy of the work (or access to it, for example, through an Internet stream), will not do so (for example, because they can and will now download a copy, or because having read the work or seen the images, they no longer would want to access it), it seems to follow that said Defendant has reason to believe the infringing act will cause a loss. Equally,creating a hyperlink to material that is normally subject to conditional access by payment would cause loss in the relevant sense.

If a Defendant knows, or has reason to believe, that the act (communication to the public) could be licensed, and that licence would involve payment, then it also seems to follow that said Defendant has reason to believe the infringing act will cause a loss. One example might be playing music at a garden fete, knowing that a licensing scheme is operated by the PRS, and thus not obtaining a licence has cause loss to the copyright owner.

If a Defendant knows, or has reason to believe, that the act (communication to the
A case in which the mens rea is self-evident
public) could be licensed to others, and that such a licence would involve payment, but that Defendant’s use will mean that such a licence will not occur, then it also seems to follow that said Defendant has reason to believe the infringing act will cause a loss. One example might be including a photograph on a blog, knowing that photographer’s obtain remuneration for authorising use of photographs on a basis that the licensee has “exclusivity”, and this will not be possible after the photograph has featured on a blog.

c.      Mens rea v prejudicial effect

While the differences between the existing law and the proposed law are rather subtle, ultimatey the effect of the new clause will be mostly to broaden the scope of criminal liability:

(i)     It clearly broadens the offence by replacing requirement of use in the course of business with one of intent to make (financial) gain;
(ii)    It clearly broadens the concept of “prejudicial effect” to include any financial loss (whereas under the existing law it is conceivable that trivial levels of financial loss might not have amounted to a “prejudicial effect”);
(iii)   It extends the breadth of “effect” to include "risk of loss".

However, the new clause narrows criminal liability in three respects:

(i)     In so far as some uses in the course of business might not have involved and “intent to gain”;
(ii)    By replacing prejudicial effect with losses in terms of money, it excludes from consideration non-monetary losses (eg losses of privacy);
(iii)   It adds a new mental (“mens rea”) element with respect to the gain/loss in question, which makes liability dependent not merely on the likelihood of loss (the provision in fact seems to contemplate that such loss is certain – it “will” occur), but on an appreciation of the certainty of such loss by the Defendants. In some situations, this might mean that the Defendant would need to know about the relevant licensing arrangements, at least at a general level. A Defendant who downloads and posts an image on a blog might well be able to argue that it appreciated this was a technical infringement of copyright, but did not believe, and had no reason to believe, it would cause any loss (for example because the image had already circulated widely on the Internet).

d.      Other objections

It might be wondered what is hoped to be achieved by this change. Certainly, the existing requirement that the communication “affect prejudicially” the right-holder is not a model of clarity, and the change will bring the terms of the subsection into line with other areas of criminal law such as the Fraud Act. However, if clarity and consistency are the goals, one might wonder why the same  language, “affect prejudicially,” is to be left in CDPA s 23(d), s 107(1)(e), 296ZB(1)(d), all in relation to distribution of copies. It seems strange to change this just for s 107(2a)(b) and s 198(1A)(b).

Moreover, in so far as the change substantially broadens criminal liability, one might question how far this represents good policy. Shouldn’t criminal liability (leading potentially to a 10 year prison sentence) be targeted at the obvious wrongdoers – the Kim Dotcoms, Megauploads and The Pirate Bays of the Internet-world? The criminal law, it should be remembered, can be deployed by way of private prosecution, so can become a very significant weapon in the hands of those involved in “speculative invoicing” or similar forms of harassment. Where prosecutions are launched (rather than threatened), the Crown Prosecution Service can in some circumstances take over the prosecution and discontinue proceedings, but there is no system in place for ensuring this occurs.  Perhaps the solution would be to abandon the slippery notion of “prejudice” with the more concrete notion of “loss” and “gain”, but to introduce a threshold, for example, a requirement that any loss/gain is 'commercially substantial' or ‘on a commercial scale’ to clarify that the criminal law is not to be used as a weapon with which to harass those committing trivial acts of infringement.”


Anonymous said...

According to the Government's response to the consultation submissions, "the policy intention is that criminal offences should not apply to low level infringement that has a minimal effect or causes minimum harm to copyright owners, in particular where the individuals involved are unaware of the impact of their behavior." (Yes, the US spelling is in the original...) Prosecutors may struggle to prove reason to believe that financial loss will be caused to the right holder.

The real problem with the UK criminal provisions is that, unlike in many civil law countries, where any wilful infringement is a criminal offence, commercial accessories to non-criminal acts of individual infringement do not commit a copyright offence. It is for this reason that prosecutors have to have recourse to the common law offence of conspiracy to defraud, with unreliable results. The UK needs an offence of in the course of a business facilitating the infringement of copyright.

The Cat That Walks By Himself said...

Eleonora, would you still a car?

Anonymous said...

What is going to happen if empirical evidence shows that piracy leads to increase in sales of the relevant pirated material, rather than the assumed loss of sales? There are certainly a number of studies that show that this can be the case for certain types of pirated material (e.g. leaked album releases). Does this mean that distributing such material for no gain will not be a criminal act?

Anonymous said...

It may be of interest to note that the Trans Pacific Partnership, Ch 18, Art 18.77 requires criminal remedies to be available with respect to "significant acts, not carried out for commercial advantage or financial gain, that have a substantial prejudicial impact on the interests of the copyright or related rights holder in relation to the marketplace".

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