Digital Economy Act extends online copyright infringement penalties

  • Insight

27 June 2017

Following on from last month’s update on the legality of using unauthorised Kodi add-ons, the Digital Economy Act 2017 has been granted royal assent (although the majority of the Act is not yet in force).

There has been a recent wave of news reports with headlines warning that the new Digital Economy Act 2017 introduces a 10 year prison sentence penalty for any Kodi users, however that isn’t strictly the case.

The Act introduces some interesting developments in relation to domestic copyright laws which could affect those who unlawfully share content online. The new Act extends criminal penalties for online copyright infringement to match those of physical copyright infringement. It also amends the test for their application. Sections 107(2A) and 198(1A) of the Copyright, Designs and Patents Act 1988 provide a maximum two year sentence for a person who:

  • infringes copyright in a work by communicating the work to the public; or
  • infringes a performer's “making available” right.

Currently the requirements of both criminal offences is that the infringement is:

a. in the course of a business, or
b. otherwise than in the course of a business to such an extent as to affect prejudicially the owner of the copyright,

and that the person knows or has reason to believe that, by doing so, he is infringing copyright in that work.

The new Act replaces the concept of ‘prejudicial effect’ of the copyright owner with “gain” and “loss” in money. The requirements will be that the accused (P):

a. knows or has reason to believe that P is infringing copyright in the work, and
b. either:

i. intends to make a gain for P or another person, or

ii. knows or has reason to believe that communicating the work to the public will cause loss to the owner of the copyright, or will expose the owner of the copyright to a risk of loss.

This has therefore lowered the threshold for criminal sanction and will now include infringement where there is merely a risk of loss to the owner.

Criminal sanctions under these sections may therefore apply to those hosting copyrighted works and offering the works without the consent of the copyright holder. The offences to which this increased sentence apply are those making copyright works available to others.  It is therefore unlikely to extend to end users who are not communicating the work to the public.  Nonetheless, users who stream unauthorised content may still be infringing copyright by copying and could face action by the copyright owner.

These new provisions could however arguably apply to those downloading infringing content using the BitTorrent protocol, where the downloader also uploads (or seeds) the content they have downloaded. The ten-year sentence would however be reserved for the most serious of criminal circumstances.

Other changes

  • Digital Service Access – the Act introduces a new broadband universal service obligation giving every household in the UK a legal right to access to internet at speeds of at least 10 megabits per second. Ofcom will be granted wider powers to review broadband speeds to ensure their sufficiency.
  • Digital infrastructure – An Electronic Communications Code is introduced which aims to lower the cost and simplify the rollout of mobile and superfast broadband infrastructure.
  • Online pornography regulation – Under the Act, individuals and organisations who provide pornographic material available on a commercial basis must ensure that the material is not normally accessible by persons under the age of 18. Provision is also made for the Secretary of State to appoint an age-verification regulator who will have the power to: request the production of information from ISPs or individuals involved in the provision of such material; impose financial penalties of up to £250,000 for contravention of the obligations; and issue notices on ISPs to take steps to prevent non-complying individuals to accessing material.
  • Digital Government – The Act permits the sharing of personal and non-personal data between public authorities for shared objectives. The Act requires the relevant Minister to issue a code of practice to regulate the conditions under which the information may be shared.
  • Online ticket sales – Power is granted to the Secretary of State to introduce regulations restricting and criminalising the use of digital software, or ‘bots’, to obtain tickets from online sales.

The provisions in relation to Digital Service Access come into force on 27 June 2017. The rest, including the infringement provisions discussed above, have yet to have a date appointed for their commencement.