The Digital Economy Act is the first major step by the UK government to protect creative output on the internet. This can include films, TV shows, music files, online books and more. By attempting to abolish unauthorised sharing of peoples’ creative works, the Government hopes to help secure the future of the creative industries in the UK.

In short, the Act creates new obligations for Internet Service Providers (ISPs) to co-operate with rights holders (the people or companies who have created the content) to tackle digital copyright theft. It is simplest to see the Act in three parts:

1. The first part is that ISPs will be obliged to send letters to their customers if they have been informed by rights holders that their copyright has been infringed using that customer’s IP address.*
2. The second will allow technical measures to be introduced if Ofcom, the independent regulatory body, reports that the written notices haven’t succeeded in reducing digital copyright theft.
3. The third part allows Government to introduce further measures to enable ISPs to block certain infringing websites (for example, a website that allows illegal content to be shared).

• Much of the detail will be set out in a Code of Practice. Ofcom has published a consultation document on the Draft Initial Obligations Code. The deadline for responses is 30th July 2010.
• The Government will then send the Code to the European Union for approval. Subject to due process, the Code will be published in January 2011 – and after this point, ISPs will be required to start sending letters to their customers that are identified as engaging in unlawful peer-to-peer filesharing.
• The initial notice will inform the user that their connection (IP address) has been identified as being used for illicit filesharing activity and request that the activity stops. It will provide information and advice about how they can better secure their connection, how to use the internet safely, where to access legal services and what will happen if their connection continues to be used for illegal activity.
• The owner of the IP address will remain anonymous. Only ISPs will know the identity of their customers and they will be legally obliged to hold a database of infringing IP addresses.
• If illegal activity continues subsequent notices will be issued and rights holders may take civil actions – these can currently take place anyway.
• There will be opportunities to appeal against the notices in a simple accessible way to ensure that users’ concerns are taken into consideration.
• Following this, there will be a review process, where the effectiveness of the existing measures is assessed by Ofcom. Technical measures (such as band-width throttling or temporary account suspension) may then be put in place. There is no desire within the audio-visual industry to see that happen, but if copyright theft persists, it will be a necessary last resort.

Ofcom will be consulting on this process in the summer of 2010. The Act sets out an obligation on Ofcom to establish an independent body to hear appeals against the notices. The audio-visual industry is keen that this process should be efficient, effective and transparent.

The Act envisages band-width throttling or temporary account suspension at most and any such technical measures are a long way off. If the preliminary round of notice sending and civil actions is effective, there will be no need for further measures.

Technical measures are a last resort and the hope is that it won’t come to that. Along with notice letters and civil actions, the hope is that by increasing access to legal content sources and continuing a consumer education drive, there will be no need for such measures.

An Act does now exist though, which we didn’t have before and demonstrates how seriously this issue is being taken. It provides a framework for the reduction of copyright infringement that could go a long way to tackling a problem that is threatening jobs and costing the UK economy over £1bn a year.

1. With the major advances in the speed and content of internet services, there is a great opportunity for the creative industries to offer new and exciting ways of accessing content and this is one they’re grabbing with both hands.
2. However, this ‘digital revolution’ brings dangers too. A recent study* found that the UK's creative industries experienced losses of 1.4bn euros in 2008 because of copyright theft. This is set to put a quarter of a million jobs at risk by 2015 in the UK alone.
3. The internet is a fantastic resource and a great tool that has revolutionised the way we communicate and access knowledge. But some sites are specifically designed to facilitate illegal content, such as the Pirate Bay, and these are the target of this measure. The majority of social networking sites understand this and have agreed to uphold creators’ rights through agreements with rights holders.
4. This Act is the first step towards establishing a legal framework which, if it works, will go a long way towards helping tackle this problem and securing the livelihoods of the two million people who work in the creative industries in the UK.

^{* Research conducted by economics firm TERA Consultants on behalf
of the International Chamber ofCommerce.}

There are some measures in the Act which enable rights holders to require ISPs to block access to internet sites which have been, or are likely to be, used to provide access to a ‘substantial amount of material’ that infringes copyright. Before any legislation is brought forward, the Secretary of State would have to:

• consult widely
• be clear that any action is proportionate and is not having a serious adverse impact
• be clear that any action wouldn’t prejudice national security
• take into account impact on legitimate users and have regard to freedom of speech
• allow for any proposals brought forward to be subject to a secondary legislative process called a super affirmative resolution, which ultimately means greater Parliamentary scrutiny.

Rights holders already monitor networks where their copyright is being infringed so they will simply pass on to ISPs the IP addresses of users who engage in illegal activity, which are publicly viewable by anyone. ISPs are then obliged to send a notice letter to the user. This notice will contain details of the identified infringing activity and links to detailed information about how to better secure one’s internet connection and where to download legally. The infringing user will remain completely anonymous to rights holders and to the general public – only the ISP will have the details linking the IP address to the account holder.

There will be an open and easy appeals process to dispute notice letters.

An ISP (Internet Service Provider) is a company that provides third party access to the Internet.  Customers use a device called a modem to connect to the ISP, which then links them to the Internet automatically.  For more information, visit the ISPA, the UK's Trade Association for providers of Internet services at www.ispa.org.uk

“Bandwidth throttling” is when an ISP or web server limits users' speeds across certain applications (such as BitTorrent) or limits upload speeds.  Technical measures such as band-width throttling or temporary account suspension may be put in place through the Digital Economy Act (DEA), but only after the rights holder has applied to a court in the appeals process.  There is no desire within the audiovisual industries to see that happen, but if copyright theft persists, it will be a necessary last resort.

An Internet Protocol address, or IP address as it is commonly known, is a label that is always made up of numbers, given to any device that sits in a computer network.  Each computer device you have in your home will have an individual IP address.  It’s used to identify the users on any network, and for computers connected to the internet, an IP address is assigned by an ISP.  For more information about your IP address, simply visit your ISP’s website.

Just like a "property" right which belongs to the owner of a house and allows that owner to prevent others from entering or moving into that house, an "intellectual property" right belongs to a person or company that has generated some form of intellectual or creative work and allows that person or company to prevent unauthorised use of their intellectual creation.
 
Like other property, intellectual property rights can be either owned (by the rights owner) or licensed by the rights owner for use by other people. Use of an intellectual property right that you do not own or have the proper license or permission to use, is an infringement of that intellectual property right.   For more information, just visit the copyright clinic section of our website.