Gathered as part of the Winnik International Telecommunications & Internet Forum, a panel of experts addressed the protection of intellectual property rights on the Internet. Moderator Peter Watts, partner in the Hogan Lovells’s London office, noted that it was not until almost 300 years after the invention of Gutenberg’s printing press that the first copyright law was implemented. And it was not for another 200 years after that until there was an international agreement protecting copyrighted works. By breaking down physical and social barriers, the current information and technological revolution is spurring change in the content and communications industries in a manner that is seemingly in constant tension with protecting the intellectual property rights of the creative class.
Jill Lesser, Executive Director of the Center for Copyright Information, explained that these innovations have revealed that a new, multistakeholder approach to copyright protection is necessary. The existing legal structures simply were not created with these innovations in content delivery and social networking in mind. Because of these issues, the content community has partnered with Internet Service Providers and formed the Center for Copyright Information. This multistakeholder effort seeks to change norms regarding protecting intellectual property and to help consumers find legal alternatives for enjoying digital content. Through a series of notifications (with each subsequent alert progressing in severity), the Center warns Internet users regarding activity associated with their accounts that potentially violates copyright laws and provides information regarding legal avenues for accessing the content.
Although this alert system is currently only available in the United States, Jill Lesser and Mark MacCarthy, Vice President of Public Policy at the Software and Information Industry Association, explained that this system represented an experiment that, if successful, could be scaled to protect intellectual property throughout the international community. Mark MacCarthy described the approach as one of the most exciting developments in the area in a long time.
As Mark MacCarthy discussed, the Center for Copyright Information system offers a particularly important step in protecting intellectual property: enlisting the intermediary – here, the Internet Service Provider – to protect the content. As little as fifteen years ago, Internet Service Providers were disclaiming any responsibility for pirated content downloaded on their networks; they contended that they were merely operating a conduit into the home and had no control over what information traveled through that pipe. But as the Center for Copyright Information model shows, intermediaries often hold the key to stemming illegal activities, and when they recognize an ethical responsibility to act, big changes can occur.
The role of a robust legal system in copyright protection, moreover, cannot be taken for granted, as Hogan Lovells Hong Kong partner Gabriela Kennedy reminded the audience. Voluntary multistakeholder and consumer education efforts can only work if there is a sufficient legal backdrop to penalize wrongdoers, as illustrated in China. Piracy has been a large problem there, in part due to the lack of an effective penalty system for intellectual property violations. Hopefully, as China is undergoing revisions of its copyright law, the government will adopt stronger and more effective penalties to deter would-be violators.
The panelists also discussed the inherent tension between exclusive (i.e., monopoly) intellectual property rights and antitrust law. Dr. Andreas Gruenwald, Partner in Hogan Lovells’s Berlin office, and Conor Ward, Partner in Hogan Lovells’s London office, illustrated this issue in the context of territorial licensing of satellite broadcasts in the European Union. While there is an effort to promote economic integration throughout the E.U., content owners want to maintain licensing regimes based on territory (i.e., maintain the right to price content differently depending on the country).
This issue came to the fore in the European Court of Justice case, Football Association Premier League Ltd. v. QC Leisure; and Murphy v. Media Protection Services Ltd., Joined Cases C-403/08 and C-429/08, (Oct. 4, 2011). In this case, a United Kingdom pub owner was sued for showing a Premier League football match that she had purchased from a Greek broadcaster. This Greek broadcast was less expensive than that offered by the U.K. broadcaster holding the exclusive U.K. broadcasting rights. In its decision, the European Court of Justice affirmed that territorial licenses are not per se anticompetitive, but it also explained that there is some (unspecified) limit to such differential pricing. And such territorial licensing can be problematic if it is dividing national markets. This decision, however, left many questions unanswered, and panelists agreed that similar problems present themselves in a range of contexts (e.g., variably-priced online streaming rights, transportation of physical goods, such as textbooks, across borders, and others).
Ultimately, panelists recognized that technological developments continue to challenge traditional intellectual property regimes. These trends, when combined with changing government and consumer practices, may make alternative, multi-stakeholder options more attractive – and more important – than ever before.