The Court of Appeal recently handed down its judgement that was brought by BT and others against the Secretary of State for Culture, Media and Sport in which the claimants alleged that certain provisions of the Digital Economy Act 2010 were unlawful and in breach of the European Electronic Commerce Directive.
The Digital Economy Act places Internet Service Providers (ISP's) under a number of obligations, including to notify a user if they have downloaded copyright protected content, and if the owner of that content has made a complaint; And to provide a copyright owner with a list of users susbsribed to the ISP who are infringing copyright protected content belonging to that owner(for example by illegally downloading free music and other files from unauthorised filesharing websites) . However, this is made possible only where there is a code of practice betwen the copyright owner and the ISP. At present such a code is not yet in force, being recently published as a draft.
BT and Talk talk claimed that these provisions are in breach of the European Electronic Commerce Directive, which provides that an ISP is not liable for infringements committed by its subscribers if the ISP is acting only as a “mere conduit”. For an ISP to act as a conduit, it must not initiate the file sharing, it must not create the network of file sharers and it must not modify the information, or content that is distributed during the file sharing. BT argued that the provisions of the Digital Economy Act rendered ISP's responsible for illegal filesharing by their subscribers, more so since the code of practice (in its current draft) requires an ISP to contribute to any costs incurred in satisfying the obligations the Act places on them. This it was alleged, amounted to a breach of the “mere conduit” provisions of the European Electronic Commerce Directive.
BT's claims were rejected by the Court of Appeal which found that any liability imposed upon an ISP by the Digital Economy Act was not for acts of illegal file sharing activity themselves, but was dependent upon the regulatory regime put in place to combat illegal file sharing. This meant that the ISP's liability in terms of costs and compensations would most probably be as a result of their failure to implement systems under the regulatory framework designed to combat persistent infringers.
Thus, the Court concluded that the provisions of the Digital Economy Act were not in breach of the European Electronic Commerce Directive.
Although this case goes some way to clarify the scope and aims of the Digital Economy Act, there still remains doubts as to how the code of practice, once finalised, will be put info force.