Presentation on hadopi laws

October 10, 2012

Anne-Sylvie Vassenaix-Paxton

Partner

The French Laws « Hadopi #1 & 2 »

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Introduction

Internet piracy was on the rise in France

Estimated impact of piracy on the entertainment sector as a whole in 2007 (report bythe French National Assembly):

€1.2 billion

• €605m € for the video production

• €369m for the music industry

• €147m for the book industry

loss of approximately 5,000 jobs

• 2,400 lost jobs for the video production industry

• 1,600 lost for the music industry

• 750 lost for the book industry

Massive illegal downloading over peer-to-peer sharing networksNapster, MegaUpload, etc.

Introduction

Legal framework before Hadopi laws was strong but mostlyineffective

Criminal penalties incurred for copyright infringement

(article L. 335-2 of the French Intellectual Property Code (IPC))

€300,000 fine

3 years imprisonment

Criminal proceedings and associated penalties were disproportionate when applied tomass illegal downloading

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Introduction

Legislative background to Hadopi laws

two objectives

To put an end to the illegal peer-to-peer sharing of creative works over theInternet

To encourage the development of legal content available for download

September 2007

Launch of a consultation process between (i) professionals in the music, filmand media industries and (ii) Internet Service Providers (ISP)

Drafting of the « Olivennes report »

The outcome

The “Elysee Agreement” (November 23, 2007)

List of measures for the development and protection of creative works andcultural programmes on the new networks

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I. Hadopi #1 or the « law promoting the distribution andprotection of creative works on the Internet »

A controversial bill partly censored by the ConstitutionalCouncil (Conseil constitutionnel)

Inspired by the Olivennes report

Creation of a new independent administrative body

“The High Authority for the Dissemination of Works and the Protection of Rightson the Internet” (Haute Autorité pour la Diffusion des Oeuvres et la Protectiondes Droits sur Internet (HADOPI))

Intended to deal with the protection of online works of arts

Has the power to recommend legislative and/or regulatory changes

May be consulted by the government when drafting bills and/or decreesinvolving the protection of literary and artistic works

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New anti-piracy scheme

“The progressive response” or “three strikes and you’re out”

Progressive warning procedure for Internet users who have engaged in illegalonline file-sharing

(i) 1st strike: e-mail message to the Internet user

(ii) 2nd strike: registered letter with return receipt requested sent to theInternet user

(iii) 3rd strike: suspension of Internet access for a 3 to 12 monthsperiod

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Annulment by the French Constitutional Council of the repressive provisionsof the “progressive response” (decision of June 10, 2009)

(i) Disproportionate infringement of the freedom of expression andcommunication (Article 11 of the French Human Rights Declaration)

• Only a judicial authority can suspend Internet access, not an administrative body as freedom ofspeech implies access to online communication services

• Need to distinguish the warning phase (HADOPI) and the sanctions (Criminal Courts)

(ii) Infringement of the presumption of innocence

• Burden of proof should not lie on the Internet subscriber who should not be required todemonstrate that he is not responsible for the alleged piracy

(iii) Infringement of Internet subscribers’ privacy rights

• Warnings issued on the basis of personal data collected and processed by sworn agents(representing copyright holders). The transmission of personal data to HADOPI is anunwarranted infringement of Internet subscribers’ privacy rights

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The main measures of the amended version of the Hadopi #1law

Law of educational value (enacted June 12, 2009)

Objectives given to the HADOPI authority (articles L. 331-12 et seq. IPC)

(i) the « encouragement of the development of the legal offer on theInternet »

(ii) the « protection of works to which a copyright or related right is attachedagainst any infringement »

(iii) the « regulation of the uses of the technical measures of protection andinformation »

Implement the preliminary phase of the so-called “progressiveresponse” (warnings)

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The warning phase

• Investigations by the HAPODI through sworn and accredited agents responsible for:

collecting from ISPs the identity, postal address, e-mail address and phonenumbers of the Internet subscriber

and distribution of rights societies

industry defence bodies

• HADOPI’s sworn and accredited agents are appointed by:

industry rights defense organizations

rights distribution societies

National Cinema Center (Centre national de la Cinématographie)

• The Authority, through its Rights Protection Committee (RPC), composed of threemagistrates, examines the facts and, if appropriate, warns the Internet subscribers

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• Warnings procedure (article L. 331-25 of the IPC)

First warning

o by email

Second warning

o by email and by registered letter with return receipt requested

in case of repeated acts constituting a breach,

6 months after sending the first warning

• Warnings’ content (identical for both warnings)

Information relating to:

The Internet’s subscriber’s duty to monitor his Internet access, toensure that it is not used for any copyright infringement (article L.336-3of the IPC)

the existence of securitization measures to prevent a breach of this duty

the penalties incurred

the legal offer of online cultural content

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Involvement of the Courts (article L. 336-2 of the IPC)

Competent jurisdiction

The Court of First Instance (“Tribunal de Grande Instance”)

Power

To order any measures likely to prevent or terminate any copyright infringement

Request can be made by:

i. rightholders

ii. rights collection and distribution societies

iii. industry defense bodies

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Conditions of referral to the HADOPI (article R. 331-35 of the IPC; decree datedMarch 5, 2010)

• List of bodies which can make referrals to the RPC via their sworn agents (L. 331-24IPC):

Industry defense bodies

rights collection and distribution societies

the Centre national de la cinématographie

• An individual rights holder cannot make a claim directly to the HADOPI

• The RPC may also act based on the basis of information provided by the Prosecutor’sOffice

• To be admissible, referrals made to the RPC must provide information on the actslikely to constitute a breach (date and time of the acts), the IP address of the Internetsubscriber concerned, etc.

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• Referral should be accompanied by:

a “sworn declaration that the author of the referral has standing to actin the name of the holder of the rights over the protected work ormaterials concerned“ (article R. 331-35 of the IPC)

• Referrals cannot be made based on acts dating back more than 6 months

• Upon receipt of the referral, the RPC will acknowledge receipt by electronic mail

If the referral is not processed within 2 months from that, the HADOPIis required to delete the personal data provided with the referral

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New obligations for ISPs

• Duty to inform Internet subscribers (in their subscription contract):

of their duty to monitor their internet access

of the measures that can be taken by the RPC

of the civil and criminal sanctions incurred in case of copyright infringement

of the existence of security means to prevent a breach of their duty to monitor

• Duty to communicate contact information of alleged infringers (names, postaladresses, e-mail addresses, etc.) (decree of July 26, 2010)

to members of the RPC

in case of alleged copyright infringement


Promotion of legal content available for download over the Internet

• Creation of a legal framework for online editors

• Creation of a « Music Card » (Decree of October 25, 2010)

card specially dedicated to young people aged between 12 and 25

can purchase 50 euros worth of music for half price by choosing from alist of platforms and online services associated with the project

government subsidized card

• Shortening of media release windows

After a theatrical release, a movie should be available:

on Video (DVD / video on demand): 4 months later

On pay TV: 10 months later

On free television: 22 months later

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II. Hadopi #2 or « the law for the criminal protection ofartistic and literary works on the Internet »

Enactement of a new statute (Hadopi II) (October 28, 2009)

As a result of and in response to the decision of the Conseil constitutionnel

Implementation of the repressive provisions of the « graduated response »mechanism (i.e suspension of internet access)

Delegation of the sanctionning power to a judicial authority rather than anadministrative body

Balance between education and repression

Preventive and repressive measures adapted to the specific handling of amassive phenomenon of unlawful downloading over the Internet

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II. Hadopi #2 or « the law for the protection of artisticand literary works on the internet under criminal law»

New additional penality: suspension of internet access

Article L. 335-7 of IPC

Copyright infringement is punishable by a « suspension of access to a publiccommunication service for a maximum period of one year »

May be imposed only by Criminal Courts taking into account:

i. the circumstances and the seriousness of the offenses

ii. the personality of the perpetrator, his professional activity and his socio-economic situation

Possibility in some cases to impose the additional penalty as the main penalty

Internet subscribers must continue to pay their subscription to the ISP during thesuspension period

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II. Hadopi #2 or « the criminal law for the protection ofartistic and literary works on the Internet »

1. Tortious cases (Article L. 335-7-1 of the IPC)

• In addition to the penalties already incurred for copyright infringement:

€300,000 fine

3 years imprisonment

Suspension of Internet access for up to 1 year

• Criminal Courts Courts have significant leeway in assessing the tortuous act whichhas been committed and the quantum of damages

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2. Misdemeanour cases (Article L. 335-7 of the IPC; Article R. 335-5 of the IPC)

• New 5th class misdemeanour (contravention de 5ème classe):

€1,500 fine

suspension of Internet access for up to 1 month

• Punishement for characterized negligence in connection with illegal dowloading

• Penalty associated to the duty to monitor Internet access :

the person holding the access to public online communication services findshimself “without legitimate cause” in one of the following two situations:

(i) “has failed to put in place means of securing such access” or

(ii) “has failed to use diligence in implementing these means”.

• Passive behaviour of the Internet user who has not himself committed an act ofunlawful dowloading

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II. Hadopi #2 or « the criminal law for the protection ofartistic and literary works on the internet »

Procedures leading to the penalty being imposed

• New judicial police functions of the RPC (Article L. 331-21-1 of IPC)

to identify the facts likely to constitute a copyright infringement

to obtain observations of the alleged infringers in writing or at a hearing

(but no coercive power to summon)

• Transmission to the Prosecutor’s Office of the files

• Additional investigations by the Prosecutor’s Office possible but the Prosecutor’sOffice is encouraged to decide whether to prosecute on the sole basis of the elementsprovided by the RPC

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1) Suspension on a misdemeanour basis

Warnings sent but despite such warnings, the offender has not installed means tosecure his Internet access

PRC members will decide if the facts contained in the file constitute the offense ofcharacterized negligence, in which case they will refer the file to the Prosecutor’sOffice

If the Prosecutor’s Office prosecutes the Internet subscriber, the Police Court(“Tribunal de Police”) will be responsible for determining whether the offense hasindeed been committed

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2) Suspension on a tortious basis

• Introduction of simplified and quicker proceedings

ensuring the speed of the criminal response

• Prominent role of the evidence collected by the RPC

• The Court cannot impose a prison sentence in this type of simplified proceedings

Maximum penalty: € 300,000 fine and suspension of Internet access for a period of 1year

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i. Copyright offense may be heard by a « tribunal correctionnel » sitting in a single-judge formation

Before: only collegiate formation

Article 398-1 of the French Criminal Procedure Code (CPC)

Decision on the basis of the evidence produced by the Prosecutor’s Office,without the defendant appearing in court

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ii. Copyright offense can be prosecuted under the ex-parte summary judgmentprocedure (« ordonnance pénale »)

Article 495-1 (2) of the CPC: “The President shall adjudicate without priordebate through a criminal order in summary judgment imposing dismissal ora fine as well as, if applicable, one or more additional penalties”

No due hearing of the defendant

Becomes res judicata if the defendant, on whom the order has been notified,does not oppose it within a period of 45 days

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II. Hadopi #2 or « the law for the protection of artisticand literary works on the internet under criminal law»

Implementation of the Internet access suspension penalty andcontrol thereof by the HADOPI

• Prominent role of the RPC

Informed and a recipient of all enforceable decisions including an Internetaccess suspension penalty (Articles R. 331-44 and R. 331-45 of the IPC)

Responsible for implementing such penalties and ensuring duecompliance

• RPC will inform the “person whose activity it is to provide access to public onlinecommunication services of the suspension penalty imposed against its subscriber”(Article R. 331-46of the IPC)

• In turn, the ISP will inform the RPC of the “date when the suspension period began”

(Article R. 331-46 of the IPC)

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• Failure to comply for the ISP with the suspension decision

Punishable by a €5,000 fine

• Non-compliance with the injunction not to take out a new Internet subscription

i. Tortious basis

Punishable by a €30,000 fine and 2 years imprisonment (Article 434-1 ofthe French Criminal Code)

ii. Misdemeanour basis

Punishable by a €3, 750 fine (Article L. 335-7-1 of the IPC)

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Conclusion

• Studies show a clear downward trend in illegal peer-to-peer downloads

Drop of approximately 43% in the illegal sharing of works on peer-to-peernetworks in France over the year 2011(study by Peer Media Technologies)

• No indication that there has been a massive transfer to streaming technologies

• Too early to assess the impact of MegaUpload shutdown in January 2012

• At the same time, a wide range of legal content offers has been made available

• Dissuasive effect of the progressive response process:

95% of those having received a first-time notice do not need to be sent asecond notice for illegal behaviour on peer-to-peer networks

71% of peer-to-peer users surveyed indicate that they would stopdownloading ilegal content if they received a warning from the HADOPI

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Conclusion

• After 18 months in operationg, the HADOPI has:

Sent 1,150,000 e-mails as first warnings

Sent 105,000 registered letters as second warnings

Submitted 340 cases to the PRC

Transferred 14 files to the Prosecutor’s Office for prosecution.

• In September 2012, for the first time, a Criminal Court ordered an Internet user to pasas a deferred sentence a € 150 fine for not securing his Internet access

• One of the future tasks for the HADOPI is to

Set forth measures for better copyright protection in light of anincreasing number of “streaming” sites or direct downloading

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Documents

Presentation on hadopi laws