UK IPO calls for comments on penalties for Copyright Infringement

September 2008

All Areas

(Closing date: 31 October 2008)

Currently the maximum fine that Magistrates’ Courts can award for online copyright infringement is £5,000. To reflect the commercial damage that large scale copyright infringement causes, the UK-IPO is consulting on increasing the level of fine handed down by a Magistrates’ Court to a maximum of £50,000. This consultation takes forward Gowers Review recommendation 36, which recommended matching penalties for online and physical copyright infringement by increasing sanctions for online infringements. Further to this in February this year “Creative Britain: New Talents for the New Economy” was published by the Departments for Culture, Media and Sports (DCMS), Business, Enterprise and Regulatory Reform (BERR), and Innovation, Universities and Skills (DIUS). It included a commitment to consult on increasing the fines available in the Magistrates’ Court from the current £5,000 limit to a maximum of £50,000 for online copyright infringement. Scotland does not have Magistrates’ Courts; therefore the consultation considers introducing maximum levels of fines for Scottish summary courts that deal with equivalent cases in Scotland.

Magistrates Court currently do have extended powers to levy fines in certain specific instances including fines of up £50,000 under the Environmental Protection Act 1990 and up to £20,000 under the Water Resources Act 1991 and the Health & Safety at Work Act 1974.

Our Editor Ben Challis writes: As well as my music law practice I also sit as a lay magistrate in Cumbria. I was quite surprised when I saw this Consultation and this would be a very interesting development. Currently magistrates’ usual maximum financial penalty is a fine of up £5,000 – this covers some quite serious offences including offences against the person (such as assault), burglary, thefts and serious traffic offences such as drink driving. Compensation can also be ordered. Fines are available as a disposal alongside community penalties and custodial sentences – here magistrates can imprison for a maximum of six months for a single offence. Where magistrates feel that their powers to sentence are insufficient they would usually decline jurisdiction and pass the case up to the Crown Court for trial (or sentencing).

A Magistrates’ Court’s powers to fine are extended to £20,000 for a number of specific offences. These are offences concerned with the health and safety of workers and the general public and offences concerned with the protection of the environment. These offences can be found under the Health & Safety at Work Act 1974 (eg for breaching health and safety duties, for failing to comply with an improvement or prohibition notice) and the Water Resources Act 1991 (eg for polluting controlled waters). S33 of the Environmental Protection Act 1990 (depositing, recovering or disposing of waste without a site licence and fly tipping) provides for fine u p to £50,000 on summary conviction and/or 6 months imprisonment. The Court of Appeal ( R v Howe)have said that with these offences the fine needs to be substantial enough to have a real economic impact which, together with the bad publicity often associated with such cases, will bring home to those who manage a company, and their shareholders, the need to improve regulatory compliance.. A deliberate breach of legislation by a company or an individual with a view to profit seriously aggravates the offence.

So should similar powers be extended to prosecutions for copyright infringement? Certainly commercial piracy can have a huge economic effect on the copyright industries and these themselves are at the heart of the creative industries which now represent over 7.3% of the UK’s economy, or £60 billion in revenues each year (OECD/DCMS). The IFPI estimate that only one in twenty music downloads are paid for by consumers with the remaining nineteen illegally downloaded or burnt from consumers own, or others, CDs. But still the question must be asked – why should copyright infringement (and in particular online infringement) be treated any differently in magistrates courts than any other offences – including offences including premeditated dishonesty or violence? The offences detailed above which protect workers, the public, our water and our environment are clearly there to protect all members of society.

Copyright theft, whilst not a ‘victimless crime’ as some advocate, does not in itself effect the whole of society. The victims are the owners of copyright – sometimes authors, artists, performers and musicians – but more often companies which have acquired copyrights from the creators of copyrights. Should these victims have a ‘preferential’ treatment when compared to the public at large and society in general? And these victims will have clear civil law remedies for damages available under The Copyright Designs and Patents Act 1988 and relevant trade mark legislation.. The same week this consultation was published, the Patents County Court awarded £6,000 in damages to a games producer for infringement of copyright against a woman who fileswapped their video games.

I am also somewhat unclear why online infringement is highlighted. If the proposed new fine levels were for commercial piracy I feel this might make more sense. But I cannot understand why separating out online piracy from physical piracy (which is still a major problem for the music, games and film sectors) makes any sense at the moment. Without this separation individual fileswappers – even those not concerned with profit or gain – and technically even those who make copies of their OWN files for other players and devices – would be liable for these high level fines.

In my personal opinion until the totality of the Gowers Report is considered, including the suggested personal right to make private copies – and the whole issue of DRM is explored in more detail, it seems unwise to increase Magistrates’ powers in isolation – particularly as offences can still be sent to the Crown Court where Magistrates feel their powers are limited. Whatever else, I feel that those who want this change need to explain why the change is for the good as at the moment I feel uneasy that the copyright industries gain unusual and special exception for online infringements.
How to respond to the Consultation: Please send any comments, by 31 October 2008 by email , by fax to +44 (0) 1633 814922 or post to the following address;
Gowers 36 consultation
Copyright and Enforcement Directorate, Concept House, Cardiff Road, Newport, South Wales
NP10 8QQ

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