ADVISORY COUNCIL

                                      October 2008


1. The British Screen Advisory Council (BSAC) is an independent, industry-funded
umbrella group bringing together the widest range of interests, experiences and contacts
in the UK audiovisual industry. We represent stakeholders across the value chain for
audiovisual material encompassing broadcasts, films and video games. BSAC is,
therefore, well placed to comment on copyright policy issues and is pleased to provide a
short response to this consultation on penalties for copyright infringement.

Gowers Recommendation 36
2. BSAC welcomed the recognition in the Gowers Review that the law would be more
coherent, with some changes to the penalties applying to the copyright offences. The
equalisation of penalties relating to equivalent offences in the on and offline world is
important, as the most serious types of illegal activity could take place in either
environment. In particular, the Gowers Review noted that the maximum term of
imprisonment for the dealing offences in the physical world is ten years, whilst it is only
two years for illegal dissemination of copyright material over the internet. The Gowers
Review, therefore, proposed an amendment to section 107 of the Copyright, Designs and
Patents Act 1988. This introduced parity for the terms of imprisonment for online
commercial infringement and commercial dealing in the physical world (and also non-
commercial online infringement to an extent that prejudicially affects the right holder).
We cannot think of any reason to support the current difference in maximum penalties.
The most serious offending behaviour in the online world could have the same sort of
damaging impact on right holders, and society more generally, as the most serious
offending behaviour in the physical world.

3. We are puzzled by the very limited scope of this consultation on penalties for
copyright infringement, not least because the proposals do not deliver any changes to the
maximum terms of imprisonment explored in the Gowers Review. This consultation
does not, therefore, appear to actually take Gowers Recommendation 36 forward. That is

not to say that the possible changes to sentencing possibilities, by way of fines in the
magistrates’ court, should not be explored. The current maximum fines for the copyright
offences have not, we believe, been changed for a very long time. So a review of these to
at least take account of inflation seems long overdue. But any changes to fines in the
magistrates’ court fall quite some way short of the recommendation made by the Gowers
Review. It is true that the consultation also goes beyond Gowers by considering the
limited issue of financial penalties that might be awarded in a magistrates’ court for other
IP offences. But it is, at the same time, very much more limited than Gowers on the
question of parity for online and physical world copyright infringement. As such it does
not seem fair to be taking the ‘broader approach’ as claimed in paragraph 29 of the
consultation paper.

Online copyright infringement

4. In order not to undermine the public’s perception of copyright, especially at a time
when it is hard to get consumers to understand and respect copyright, it is important that
criminal offences are only used to tackle more serious copyright infringements.
Maximum penalties do, however, need to be tough to deal with these. In this respect, we
fully support the quoted comments of Jack Straw on sentencing strategy that ‘prison is,
and will remain, the right place for the most serious offenders’ (see paragraph 8 of the
consultation paper).

5. It is, however, important to understand the differing nature of copyright infringement
in different environments. Online copyright infringement could encompass a wide range
of illegal behaviour, but at the moment the prevalent activity is P2P file sharing. In
general, individuals uploading copyright works illegally for file sharing are not getting
payments from those who then illegally download copies. It is possible that some
instances of file sharing fall within the scope of the offence of illegally communicating a
copyright work to the public to an extent that prejudicially affects the right holder. And it
is certainly the case that a great deal of money is made by those hosting illegal
downloading sites who sell advertising space and other services. They usually hide
behind foreign servers located in jurisdictions with very relaxed IP laws. IP laws in the
UK therefore certainly need to make provision such as that in Gowers Recommendation
36 to ensure that such activity is not seen as attractive here. But the individuals engaging
in illegal P2P file sharing in the UK are generally not doing so for financial gain.

6. There are, therefore, genuine differences in the most common type of illegal activity
at the moment in the online world and the physical world. Indeed, given the wide
availability of illegal, but free, infringing material available online, criminals seeking
commercial gains for themselves are likely to face the same difficulties in getting
consumers to participate in illegal online ‘business models’ that involve direct payments
to them, as right holders currently face in rolling out legal business models! Changes to
financial penalties that might be awarded in the magistrates’ court, which would require
an investigation into the profit from the crime, will not, therefore, really tackle the very
difficult issue of P2P file sharing. The consultation paper, however, seems to be based on
a belief that online infringements, carried out for financial or economic gain, are a major

concern. And so what is proposed will be of real value for dealing with online copyright
infringement in the UK.

7. The parallel consultation, currently being undertaken by BERR on legislative options
to address illicit P2P file sharing, quite rightly recognises that illicit file sharing in the
vast majority of cases does not involve financial gain (see paragraph 3.22 of that
consultation paper for example). We are, therefore, surprised that this consultation on
penalties for copyright infringement appears to be presented without any
acknowledgement of this current reality. Issues such as those in this consultation need to
be addressed with a proper understanding of the linkages between different strands of
copyright policy. Only with the right oversight at a high level of the various individual
copyright issues that are currently being pursued will policy options and decisions on
those options be holistic.

Gowers Recommendation 44

8. The complexity of IP law and offences was recognised by the Gowers Review. We,
therefore, welcomed Recommendation 44 on the training needs of judges and magistrates
and are pleased that work to deliver this is continuing. However, given that illegal
activity in the online world is something that is rarely going to be solved using the
criminal law, much wider efforts to improve understanding about copyright is relevant
here. In the audiovisual sector right holders continue to develop, either alone or
collaboratively with other stakeholders, new business models that must play a large part
in countering illegal activity online. In this respect, BSAC is at the forefront of
discussions and debates about the future and we are providing, herewith, the report
recently released by our Blue Skies Working Group. We hope that this report will inspire
wider discussions, both within BSAC and elsewhere, including on the appropriate
regulatory framework in years to come.
9. But Government engagement on delivering better public understanding about IP is
important in addition to the development of attractive new business models to deter
illegal activity. This was to some extent recognised by Gowers. But the need to embed IP
in the school curriculum, as promised by the Government in its response to the
recommendations of the Creative Industries Forum on Intellectual Property, was not part
of a recommendation by Gowers. There is, of course, much useful work being
undertaken by the UK IPO and industry to deliver attractive resources with educational
messages about IP to schools. However, we feel that the Government should take a more
proactive role in coordinating all the activity to avoid the risk of mixed messages being
delivered, and to ensure that appropriate teaching takes place in every school. Moreover,
it would be appropriate to consider the inclusion of education on copyright within the
agendas of those public agencies with responsibility for promoting media literacy.

Exceptional summary maxima in the magistrates’ courts
10. The consultation paper does recognise that offending behaviour in the copyright area
is often pursued via a prosecution for a trade mark offence, given the greater ease of
proving those offences. If exceptional summary maxima are to be introduced for any IP

offences, then these should certainly cover trade mark as well as copyright offences. For
the reasons explained above, we do not, however, really see the provision of exceptional
summary maxima for copyright offences, that are dealt with in the magistrates’ courts, as
providing a solution to the immediate problems of online copyright infringement.
11. Nor, as we have already mentioned, does this deliver Gowers Recommendation 36 in
that it fails to address the differing maximum terms of imprisonment for online and
physical copyright infringement. In this respect, we note that the more serious trade mark
offences, that is those involving manufacture or distribution of counterfeit goods, are
identified as being appropriate for a custodial sentence in the recent sentencing guidelines
that this consultation paper refers to in paragraph 22. This type of offence is equivalent
to the manufacture, physical dealing and online dissemination offences in the copyright
area. It, therefore, highlights the need to provide more deterrent levels for the terms of
imprisonment for the online copyright offences as recommended by Gowers. If, in the
future, there are particularly damaging incidences of unauthorised online dissemination
of copyright material for commercial gain in the UK, it would be right for custodial
sanctions to be considered.

Proceeds of Crime Act 2002
12. The consultation paper notes in paragraph 32 that the offences applying to online
copyright infringement are not specified in the Proceeds of Crime Act (POCA) as ones
that demonstrate a criminal lifestyle. Given that the consultation paper otherwise seeks to
argue that there should be parity between the online and offline copyright dealing
offences, and the latter are specified in POCA, it is surprising that there is no proposal to
add the online offences to POCA. This would make it easier to prove a criminal lifestyle
and so seek an order to seize the profits of the crime. Although, for all the reasons we
have said, this sort of change will not be relevant to most of the illegal activity in the
online world. There is, again as we have already said, no reason to treat the most serious
types of copyright infringement differently, depending on whether they are on or offline.
Such an amendment to POCA, therefore, seems to be just as important as considering the
introduction of exceptional summary maxima. Indeed, seizing the profits of crime under
POCA, or imposing a higher fine in a magistrates’ court, both appear to require some sort
of investigation into the profits from a crime. It would, therefore, not really make sense
if both courses of action are not as easy to pursue for online crime as for crime in the
physical world.

13. We are concerned that nearly two years after the Gowers Review was published there
are issues, such as that in Recommendation 36, that have not been taken forward.
Moreover, it has not been made clear in this consultation when, if ever, that
recommendation will now be fully delivered. In some ways, of course, this
recommendation may not in the short term make very much difference, given the nature
of most current illegal activity on the internet. Perhaps this illustrates a more general
concern we have about the Gowers Review. The Gowers Review is two years old yet the
reality of what is happening in the online world changes almost daily. There is a danger
that the Government’s decision to pursue the recommendations in Gowers, and the

piecemeal approach to doing this, could be distracting policy-makers too much from
engaging in debates about the future.

14. BSAC believes that it is more important than ever for policy-makers to understand the
environment for which they are making policy. We have explained our concerns about
this in more detail in our recent response to the All Party Intellectual Property Group’s
New Inquiry into Gowers, a copy of which is provided herewith. We would be very
happy to discuss what we say in that response and our Blue Skies Working Group paper
with those faced with the difficult task of making the right policy decisions, should that
be helpful.


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