IIPA Urges Watch List Countries to Enact Notice and Take Down Provisions to Combat Online Piracy

Hauwa Otori
March 30, 2010

The International Intellectual Property Alliance (IIPA) highlighted the implementation of Internet Service Provider (ISP) liability in domestic law as an essential step in combatting online piracy in its submission to the US Trade Representative for this year's Special 301 Report. In addition to encouraging cooperation between ISPs and rights holders to effectively target online infringements, the IIPA also suggests that countries on the watch lists enact legislation implementing a proper "notice and take down" provision for ISP liability. Despite some countries' attempt to implement this provision, the IIPA is not satisfied with these actions.  Below are a few countries where the IIPA have suggested this legislation:


It is a matter of the greatest priority that copyright reform legislation in Canada address the pervasive problem of Internet piracy. Any liability limitations for Internet Service Providers (ISPs) should be conditioned on affirmative cooperation with copyright owners in combating online infringements. Unfortunately, Bill C-61 fell far short in this regard, since it brought forward, virtually unchanged, the unsatisfactory approach taken in Bill C-60, tabled in 2005.   

For example, most other developed countries have put in place a procedure for “notice and takedown” to deal more efficiently with the problem of pirate material being hosted by ISPs.  A 2004 decision of Canada’s Supreme Court (SOCAN v. CAIP) observed that enacting such a procedure would be an “effective remedy” for the problem.2 But the current Canadian government – and its predecessors – appear to be steadfastly opposed to the procedure. Bill C-61 continued this unfortunate trend, confining itself to the same "notice and notice" regime proposed by the Canadian government years ago.  One approach is not a substitute for the other. Requiring ISPs to forward notices from copyright owners to infringing end-users, and to preserve identifying information on those end-users for six months, has value, particularly in the peer-to-peer (p2p) environment.  But a “notice and takedown” regime is needed to provide an expeditious means of removing or disabling access to infringing content hosted online. Particularly if coupled with an obligation to terminate the accounts of repeat or serious infringers, combining these approaches could be a useful part of a system that gives ISPs strong incentives to "take down" or otherwise effectively address the distribution of infringing materials.
Bill C-61 not only failed to address online piracy effectively; it could in fact have exacerbated it, because it provided sweeping safe harbors to network service providers without creating any incentives for them to cooperate with copyright owners to deal with copyright infringements that take place in the digital network environment.   By immunizing service providers against liability even when they had actual knowledge of infringement and the power to restrict or prevent it, the bill would have provided safe harbors to far more than just innocent intermediaries.  Such an approach seems inconsistent with the stated intentions of the legislation’s drafters, and can hardly be said to comply with the mandate of the WIPO Internet Treaties that national law “permit effective action against any act of infringement of rights covered by this Treaty.”   Bill C-61 also did nothing to clarify liability under Canadian law for those who in the Internet context intentionally ate massive infringements (for example, illicit p2p service). In step with the international trend, exemplified by successful lawsuits in Australia, Korea, Taiwan and the U.S. against p2p services that were facilitating massive worldwide infringement, the Copyright Act should be amended to enable rights holders to obtain effective remedies against those who intentionally encourage, induce or materially contribute to the infringement.  Clear rules on this topic would allow copyright infringement to be dealt with at the source instead of at the point of consumption, thus facilitating the avoidance of litigation against users of illicit p2p services as direct infringers. 
A unique ‘made in Canada’ approach to online infringement liability (as the Canadian government has touted its “notice and notice” regime) could offer a significant contribution, but it must be consistent with international copyright norms, and must encourage ISPs to play a more constructive and cooperative role in the fight against online piracy.  Bill C- 61 failed both tests, and we urge Canada’s government to take a different approach in new copyright reform legislation.  


The provisions on Internet Service Providers’ liability are essential to ensure the distribution and enforcement of legitimate content over the Internet. This issue demanded a lot of attention during 2009 and unfortunately the results are not satisfactory. It seems that the Chilean system has created more problems than solutions; here are a few examples. 

  • The chapter on “Internet Service Providers Limited Liability Provisions” (Chapter III, articles 85-L to 85-U) generally tracks the safe harbors in the FTA (articles 85-L to 85-Ñ). However, for the voluntary removal of infringing content, the new law requires that ISP’s must have “effective knowledge” of the infringement in order to remove infringing content. The final section of article 85-Ñ requires judicial notification from a court of law to provide such level of knowledge to the ISPs. In other words, rights holders’ notifications are not effective as a source of “effective knowledge,” and for that reason the final section of article 85-Ñ severely limits the possibilities for a voluntary cooperation program between ISPs and right holders in Chile.  
  • Article 85-O requires ISPs to have a contractual policy to cancel subscribers’ contracts but only when those subscribers have been convicted twice for copyright infringement. Considering the infrequency of prosecutions in Chile, this condition will likely never be met in reality, and even if someone managed to be caught twice, it is very unlikely that a cancellation sanction would be applied before the passage of many years. This is quite the opposite of a forward looking, flexible and modern approach to deterring online infringement. 
  • Article 85-U creates a “stand alone” obligation for ISP’s to inform its subscribers (in five days after reception) about notifications received from rights holders. Since there is no obligation attached to this provision (nor any sanction for non-compliance) it will be very difficult to determine its effectiveness without an additional agreement between the parties involved.   
  • Article 84-T establishes a procedure for ISPs to notify customers that are infringing copyright, and that procedure offers three options to the customers: (a) “guilty” (and content is removed by the ISP), (b) remain silent (and the ISP will remove content after ten days), or (c) challenge the notification by “insisting” in maintaining the content on-line. Unfortunately, the provision does not limit and/or define the basis for any such challenge. Hence the customer may just insist in keeping the files online and the ISPs have to do it; this is simply an untenable result.  Article 84-T also requires ISPs to notify the customers by “certified mail” which will make such notification lengthy and costly. In sum, it seems that, even with the veto, the Chilean legal landscape has created an incomplete and unworkable notice and takedown system for hosted content, and one that does not comport with either the letter or the spirit of the FTA. Furthermore, it would appear that this provision relates only to content which is hosted on the ISP's server given that it discusses removal of the content by the ISP--something that can only be accomplished where the content is stored on the ISP's network. So not only does this fail to deal with P2P, but it creates a “notice plus notice” architecture for hosted content, instead of the “notice and takedown” procedures required by the FTA. 


While not directly referenced in the Treaties (though required, IIPA believes, under the Treaties enforcement obligations), the issue of secondary liability of ISPs and exceptions to such liability, has been dealt with in the laws of most countries implementing them. Clarity on such issues is indispensable to the fight against online piracy. The draft appears to deal with this issue, at least in part in Section 52(1)(c)(ii), but that treatment is far too terse and oversimplified as to be appropriate for this complex area. We urge again that this provision be substantially revised or replaced by detailed provisions modeled on the way these sets of issues were dealt with in the U.S., the EU and in many other countries in Asia. 


With Internet piracy, including P2P downloading, increasing in Indonesia, it is imperative that the laws adequately address computer-based infringements. The government of Indonesia has reportedly just enacted a new Cyber Law. IIPA has not had an opportunity to review this law, but looks forward to doing so to compare it against the Council of Europe Cybercrime Convention. Reportedly, the law requires some technical implementing regulations including those related to ISP liability, although it is already apparently being employed to prosecute cases involving online pornography or distribution of false information through Internet media, although unfortunately not involving copyright piracy. The law should be used to combat IP-related cybercrime including copyright infringements. It is also very important to ensure that proper incentives are put into place to ensure service providers cooperate with right holders to curtail such infringing activities. Service providers need to be reminded of potential liability for infringements occurring over their networks, and mechanisms need to be available to ensure removal of infringing content, including notice and takedown as well as effective and fair policies in place by ISPs as to potential termination of repeat infringers, and to ensure assistance to right holders in identifying and removing infringing content and P2P piracy. 


There is no specific Mexican legislation establishing liability principles  for ISP’s in piracy cases. It is assumed that ISPs are subject only to the general liability principles contained in the Civil and Criminal Codes. Furthermore, specific provisions in the Telecommunications Law prohibit ISPs from disclosing personal information on customers to rights holders seeking civil recourse against alleged infringers. The lack of specific Mexican laws results in a lack of certainty for ISPs on how to react to Internet piracy and notice and takedown notifications from the copyright industries. Because ISPs are not allowed to provide information on alleged infringers, rights holders must bring a criminal action to PGR in order to obtain those details. ISPs also have been reluctant to include a clause in their contracts with users that would permit termination of the subscribers contract if the subscriber infringed intellectual property rights.    
File-sharing committed through P2P networks is not considered a serious legal violation in civil courts mainly because there are no precedents supporting rights holders’ actions. On the criminal side, Article 424bis of the Criminal Code requires a profit motive as a prerequisite for criminal infringement, and as a result effective prosecutions in P2P cases are unavailable. Just a few Internet piracy cases were filed last year by APCM mainly due to the lack of adequate criminal provisions described above.  
The film and music industries report that they have received a decent level of cooperation from some Mexican ISPs involving hosted content, such as the removal of illegal music files posted on webpages and forums. For example, in November 2009, APCM shut down a major music forum site named “mexicowarez” which had more than 246,000 posts and 35,171 topics mainly decided to music and other illegal copyrighted materials for distribution to its users. The forum contained more than 40,000 full albums with 520,000 illegal music tracks.  82% of the users were from Mexico and 12% from the U.S., and the forum had more than 1.2 million unique visitors each month.  APCM notified the ISP of the massive copyright infringement taking place on this forum site and the ISP shut down the site.  
APCM has worked with IMPI on administrative enforcement measures with most cases followed with sanctions. APCM reports that it issued 997 cease and desist letters (823 for music and 174 for movies), and worked to take down 16 hosted web pages, 128,382 permalinks, plus 32,534 P2Ps links and 1,238,733 cyberlocker links.  
However, in the case of P2P file-sharing, ISPs (especially Telmex, which has about 70% of the domestic broadband connections in Mexico) have to-date been reluctant to take any actions.  It is this inaction on P2P piracy which has prompted heightened concern by the content community.    


The E-Commerce Law 2000 (Republic Act No. 8792) establishes that service providers can be liable for direct infringement, for inducing or causing another person or party to commit any infringement or other unlawful act, or vicarious infringement, i.e., knowingly receiving a financial benefit directly attributable to the unlawful or infringing activity. It also provides in turn a limitation on liability for service providers who “merely provide access” to an “electronic data message or electronic document” that infringes copyright, provided that the service provider does not have actual knowledge of infringement, or is not aware of the facts or circumstances from which infringement is apparent. These provisions are helpful in setting forth important copyright liability principles. However, the law does not provide for a statutory notice and takedown system (e.g., in the absence of court ordered relief) or policies to effectively and fairly address repeat infringers. Instead, service providers must only abide by “injunctive relief issued by a court … requiring that the service provider take or refrain from actions necessary to remove, block or deny access to any material, or to preserve evidence of a violation of law.” 
A systematic and effective approach to address the problem of Internet piracy should be adopted in the Philippines as to intermediaries such as ISPs as well as websites or people providing or facilitating distribution or access to pirate materials. Such a legal system should include a notice and takedown system similar to that in effect in many countries, whereby service providers take down or block access to infringing material or activities or block access to users engaging in infringement: if they know of infringement; are aware of circumstances from which infringement is apparent; or are notified of alleged infringing activity. It should also, as discussed, provide incentives for ISPs to cooperate in investigations into newer forms of online piracy, such as P2P file sharing, torrent sites, cyber lockers, and should likewise ensure that ISPs have in place effective and fair policies to be applied to deal effectively with cases of repeat infringers. 


IIPA reported in the 2008 Special 301 report the activities of the Information and Internet Crime Department at the Ministry of Interior, and that the courts in 2007 handed down a preliminary court decision in what was reportedly the first lawsuit regarding Internet piracy in Egypt, ordering the defendant to pay a fine of EP10,000 (US $1,810). IIPA appreciates that increasing numbers of cases may be needed against major Internet piracy services, or those engaging in large-scale sharing of infringing files. We also believe that a major component of dealing with Internet-based infringements is the establishment of an effective legal structure to deal with such, including laws in place that foster cooperation among IT companies and Internet service providers. At present, industry reports that ISPs do not cooperate with right holders on Internet actions in the “hosted” environment. In meetings with ISPs, copyright owners are refused relief due to the absence of a legal structure. The laws should be amended to provide for notice and takedown for the hosted environment, and incentives to cooperate with respect to other Internet environment.


One noteworthy development in 2009 was the rising use of the Internet in Pakistan. Pakistan now has a 10.6% penetration rate overall, with an estimated 18.5 million users (using 3.7 million Internet subscriptions), according to the International Telecommunications Union, with an estimated 320,500 broadband connections (188,500 DSL and 132,000 cable), according to Point-Topic. Yet, for about the first time, development and deployment of broadband in Pakistan is taking off, with Pakistan’s broadband growing a rapid pace.
As such, the government could, as discussed above, take the opportunity now to enact a system fostering cooperation by Internet service providers with right holders for infringements occurring online, including notice and takedown and an effective and fair mechanism to deal with repeat infringers. As of now, the Prevention of Electronic Crime Ordinance, 2007 (re-promulgated 2009) requires “licensed service providers” to retain real time collection of traffic data which may be requested by any law enforcement or intelligence agency, which could be very helpful going forward. IIPA notes that there is a limitation of liability set out in the Ordinance, namely, network service providers are absolved from any liability civil and criminal for the reason of use of their telecommunication system in certain circumstances (e.g., in connection with the contravention of the Electronic Transaction Ordinance, 2002). 


The fight against online music piracy is further hobbled by the widespread unresponsiveness of Singapore’s Internet service providers (ISPs).  The recording industry sends ISPs, on a weekly basis, notices of infringements carried out by their subscribers.  Nearly 4400 such notices were sent in 2007-09, including many that identified IP addresses of subscribers who had apparently engaged in multiple instances of online infringements, mostly through the use of p2p file sharing services. These notices, and requests for the suspension of the accounts of repeat infringers, have been completely ignored.  There is no evidence that any notices have been passed on to the infringing subscribers, nor that any ISPs even have a policy to do so. A number of ISPs have even refused to meet with the recording industry to discuss ways to cooperate to deal with digital piracy.  The damage inflicted by online music piracy on Singapore’s economy and culture, as well as on the interests of U.S. copyright owners, cannot possibly be addressed without cooperation from the ISPs whose facilities and services are being used to carry out infringements; yet that cooperation has been completely lacking.  
Singapore’s government has a responsibility to contribute to solving this problem, as well. It pledged in its FTA with the United States to “provide … legal incentives for services providers to cooperate with copyright owners in deterring the unauthorized storage and transmission of copyrighted materials.” USSFTA, Art. 16.9.22.a.  Since no cooperation is occurring, any incentives the government is offering are manifestly inadequate.   More specifically, the FTA clearly exhibits a policy to encourage ISPs to “adopt and reasonably to implement a policy that provides for termination in appropriate circumstances of the accounts of repeat infringers.” Art. 16.9.22.b.vi.A of the FTA makes such adoption and implementation a prerequisite for any ISP seeking to limit the scope of remedies available against it for infringements taking place on its network, including infringements as to which the ISP’s liability arises only from its role in transmitting, routing or providing connections, or engaging in associated intermediate and transient storage.  See Art. 16.9.22.b.i.A.  The fact that, from all that is known, Singapore ISPs have not even adopted any such policies, much less implemented them, raises significant issues of FTA compliance.   
IIPA urges USTR to press Singapore’s government to step up to these problems.  There are many steps, both formal and informal, that the government could take to encourage ISPs operating within its jurisdiction to begin to cooperate with right holders as the FTA specifically directs.  These steps should include, but should not be limited to, making responsible repeat infringer policies a regular feature of the ISP marketplace in Singapore.  Whether this is achieved through adoption and active enforcement of reasonable contractual terms of service for provision of Internet access, or whether it takes the form of a required “graduated response” program with appropriate due process safeguards before suspension or termination of user accounts, Singapore must move beyond the status quo if it is to make any headway against this well-entrenched problem.   


To effectively deal with Internet piracy, the government should enact an appropriate legal framework and put in place an enforcement infrastructure that includes a group of competent officials to deal with Internet-based infringements. These officials should also oversee how the private market – meaning mainly ISPs in cooperation with copyright owners – respond to the challenge. Unfortunately, neither the Computer Act nor the Copyright Act of Thailand provide for statutory notice and takedown, nor for service providers to assist right holders in investigations. As a consequence, there is no mechanism for rights holders to learn the identities of suspected infringers. The Royal Thai government should ensure that ISPs are aware of their responsibility to deal with infringements, by enacting statutory notice and takedown and otherwise fostering cooperation to defeat online infringements including P2P file sharing. We urge DIP to call together copyright owners and ISPs to forge an MOU on anti-piracy cooperation in the online space. 


IIPA hopes that the government will amend the law soon to protect technological protection measures against circumvention, circumvention services, and trafficking in circumvention devices. Pursuant to the annual program of the Prime Ministry State Planning Organization (DPT) and Turkey National Program on Undertaking Acquis Communautaire, the government plans to amend the Copyright Law further, to comply with Turkey’s commitment of harmonizing its legislation with EU Directives. As mentioned above, Turkey is in the midst of its accession negotiations to the European Union. Chapter 7 of the accession package obligates Turkey to fully implement EU directives on copyright and related issues.

Please see IIPA 2010 Special 301 Reports for a comprehensive list of reports.

Photo of netbook (cc) by Andy-Beal.



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