In our August update, we reported to you on the Digital Economy Act 2010.

This Act aims to tackle online copyright infringement by giving copyright owners the right to report suspected infringements to Internet Service Providers (ISPs), and requiring ISPs to police online infringement.

After a period of consultation, OFCOM has now published its decision that 75% of the costs associated with the new regime will be met by copyright owners, with the remaining 25% to be covered by ISPs. Whilst ISPs and consumer groups objected to ISPs bearing any costs, OFCOM considered that responsibility for part of the costs will encourage ISPs to police on-line infringement as efficiently as possible.

Website subscribers have a right of appeal under the Act. OFCOM has decided not to charge subscribers an appeal fee at this stage, but reserves the right to introduce one in the future if it considers that there are a large number of frivolous appeals.

The Act will be implemented by OFCOM's initial obligations code. The introduction of this code has been slightly postponed to reflect OFCOM's obligation to report its costs sharing decision to the European Parliament, which can take a minimum of three months. Therefore, the Act is expected to come into force by around April 2011.

Penningtons will keep you up to date on developments and on the introduction of the code.