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c om p u t e r l aw & s e c u r i t y r e v i ew 2 9 ( 2 0 1 3 ) 3 8 2e4 0 2

Available online at w

www.compseconl ine.com/publ icat ions/prodclaw.htm

Combatting peer-to-peer file sharing of copyrightedmaterial via anti-piracy laws: Issues, trends, andsolutions

Wan Man Jason Fung, Avnita Lakhani

City University of Hong Kong School of Law, Hong Kong

Keywords:

Peer-to-peer file sharing

Anti-piracy law

Digital economy

Directive 2001/29/EC

Digital rights management

1 [2007] CFA 36.2 Chan Nai Ming v HKSAR [2007] CFA 36 [543 An earlier conviction in the United States,

that shared to the public. ‘US Peer-to-peer4190581.stm> accessed 18 February 2012.0267-3649/$ e see front matter ª 2013 Wanhttp://dx.doi.org/10.1016/j.clsr.2013.05.006

a b s t r a c t

This article analyses potential end-user copyright violations associated with peer-to-peer

(P2P) file sharing and the anti-piracy efforts currently underway in order to tackle them.

This article discusses international developments in terms of trends, issues and solutions

aimed at addressing peer-to-peer file sharing of copyrighted material. First, the article

introduces P2P file sharing, its increasing significance in the growing digital media econ-

omy, and the legal issues surrounding this topic. Next, the article provides a comparative

analysis of global efforts and trends in preventing digital piracy by analyzing relevant

legislation, case law and practices in multiple jurisdictions, including the United States,

United Kingdom, France, Sweden, and Japan. In addition, the article reviews Hong Kong’s

current case law and proposed legal reforms including an analysis of their deficiencies with

respect to addressing P2P copyright infringement. The article concludes with an analysis of

existing trends in preventive measures against copyright infringement through P2P file

sharing and suggests directions on future legal and non-legal measures that Hong Kong as

well as the international community can take in combating digital piracy and copyright

infringement through peer-to-peer file sharing.

ª 2013 Wan Man Jason Fung & Dr. Avnita Lakhani. Published by Elsevier Ltd. All rights

reserved.

1. Introduction laws.2 The court has in effect, for the first time in history,3

It has been five years since the Hong Kong Court of Final Ap-

peal’s decision in Chan Nai Ming v HKSAR,1 where it upheld the

original ruling that the use of the BitTorrent Peer-to-Peer (P2P)

software, which simultaneously shares copyrighted material

that it downloads to other users, constituted, in certain cir-

cumstances, an active step towards copying and distributing

copyrightedmaterial, thereby violating Hong Kong’s copyright

].although related to P2P, cpirates convicted’ (BBC

Man Jason Fung & Dr. Av

convicted a private citizen for publicly sharing copyrighted

material over the internet using P2P file sharing software, a

technology most synonymous with internet digital piracy.

This landmark case has not only been a driving force

behind Hong Kong’s efforts to increase protection against

piracy of digital content, but also coincides with a growing

international interest in legal issues revolving around the fast-

evolving digital content market.

harged the operators of a private P2P hub instead of a normal userNews, 20 January 2005) <http://news.bbc.co.uk/2/hi/technology/

nita Lakhani. Published by Elsevier Ltd. All rights reserved.

c om p u t e r l aw & s e c u r i t y r e v i ew 2 9 ( 2 0 1 3 ) 3 8 2e4 0 2 383

In an attempt to explore the effectiveness of Hong Kong’s

legal protection against P2P piracy, this article analyses po-

tential end-user copyright violations associated with P2P file

sharing and the anti-piracy efforts made in order to tackle

them, done with respect to international developments and

also a special focus on Hong Kong. First, the article introduces

P2P file sharing, its increasing significance in the growing

digital media economy, and legal issues surrounding this

topic. Then, the article provides a comparative analysis on

global trends in preventing digital piracy as well as analyzing

related legislation, case law and practices in multiple juris-

dictions, including the United States, United Kingdom, France,

Sweden, and Japan. Next, the article reviews Hong Kong’s

current case law and proposed legal reforms, including an

analysis of their deficiencies with respect to addressing P2P

copyright infringement. The article concludes with an anal-

ysis of relevant existing trends in preventivemeasures against

copyright infringement through P2P file sharing and suggests

directions on future preventive measures that Hong Kong as

well as the international community can take in combating

digital piracy and copyright infringement through peer-to-

peer file sharing.

2. Impact of P2P piracy on today’s digitalcontent landscape

It must first be explained that the existence and development

of P2P file sharing software has an increasingly significant

impact on the evolving digital content economy. Coupledwith

faster hardware and conduits for transmission, there exists a

new threat that may warrant focus (legislative or otherwise)

on P2P-specific digital piracy.

7 Ibid.8 It has been claimed that one quarter of internet traffic in the

world consists of pirated material. Basse (fn 5) 184.9 CarinHolroyd and Ken Coates,Digital Media in East Asia: National

Innovation and the Transformation of a Region (Cambria Press 2012) 24.10 Holroyd and Coates (fn 9) 115.11 Dina Lordanova and Stuart Cunningham, Digital Disruption:

2.1. The concept of P2P file sharing

P2P file sharing is a specific internet-based technology that

allows computer userswith P2P software to connect with each

other to seek and share digital media.4 P2P file sharing tech-

nology was first used in its nascent form in 1999 under the

name Napster, which consists of a remote central server that

facilitated the searching of users’ files (music in the form of

Mp3s) and the establishment of a connection between those

who seek the file and those who have it available for down-

load.5 The most recent incarnation of P2P software is called

BitTorrent. BitTorrent allows users to create “torrent files”6 to

help direct other users to establish a connection to a specific

file on their computer. Instead of searching for digital media

through this software, users will look for the torrent files on-

line, which can be created and simply distributed anywhere

on the internet. The torrent files are, in essence, a down-

loadable “roadmap” to the shared material.

When a downloader obtains a torrent file and initiates a

sharing request, the source’s computer is instructed to break

4 Chan Nai Ming v HKSAR [2007] CFA 36 [19]e[20].5 Sara Baase, A Gift of Fire: Social, Legal and Ethical Issues of

Computing Technology (Pearson 2013) 194.6 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]

EWHC 268 (Ch) [19].

the file into small-sized “packets” of data that is transferred to

the downloader, which are later reconstituted into a copy of

the original file when all the packets are successfully down-

loaded. To speed up the process, users who are simulta-

neously accessing the source file are not downloading the

same packet, but different parts of the file. Each downloader

would, in turn, establish a separate connection with another

downloader and share theirmissing packets. Moreover, once a

complete copy is reconstituted on a downloader’s computer,

the softwarewould automatically activate it as another source

file, and enable it for download. Packets are, therefore, being

retrieved simultaneously from multiple sources (seeders) and

downloaders (peers) in a decentralized manner.7 The impact

of this process is that thousands of files which are protected

under the jurisdiction’s copyright laws are being shared

without recognition of, payment to, or protection for the

copyright owner under copyright laws.8

2.2. The changing digital economy

The impact of P2P file sharing is arguably more severe if one

considers the current development of personal computing,

the internet and digital media.

As personal computing power advances, users are less

bound by the capabilities of their computers and can more

easily process complex content of higher quality. A demand

for high-definition movies, music and live multimedia expe-

riences has pushed the entertainment industry to provide

higher quality media effects and higher resolutions at faster

turnaround times than ever before.9 The increased speed of

internet connectivity also removes the limitation of what one

can enjoy over the web,10 allowing users to access larger,

higher quality content from the comfort of their homes.

Moreover, with the recent emergence of handheld portable

devices such as smartphones and tablets, digital content can

be accessed and enjoyed on mobile devices,11 creating even

more demand for high-speed, high-quality digital content.

The culmination of these technologies now rivals tradi-

tional forms of content distribution. The experiences offered

by radio, TV, movie theatres and even books are now readily

available online and, in most cases, the online experience in

the form of streaming digital content, is gaining greater

acceptance in the market than their traditional counterparts.

This has caused a marked shift in the transfer of original

content to the digital world.12 For example, songs are pur-

chased and delivered online,13 television shows and movies

Cinema Moves On-line (St. Andrews Film Studies 2012) 85.12 Holroyd and Coates (fn 9) 14.13 Gil Kaufman, ‘Bowie To Deliver New Song Exclusively Online’(MTV.com, 6 September 1996) <http://www.mtv.com/news/articles/508169/bowie-deliver-new-song-exclusively-online.jhtml>accessed 18 February 2013.

c om p u t e r l aw & s e c u r i t y r e v i ew 2 9 ( 2 0 1 3 ) 3 8 2e4 0 2384

are advertised on social networks and broadcasted exclusively

online,14 and books can be purchased in electronic form,

downloaded and read on mobile devices such as the Kindle

and iPad.

The traditional concept of “digital media publishers” was

once limited to large software and game companies. With a

boom in the digital contentmarket, this is no longer the case.15

Due to smaller capital requirements for producing digital con-

tent,16 more and more start-up companies deal exclusively in

the digital domain and conduct business directly with the

customer in a “peer-to-peer economy.”17 A change in the dy-

namics and business model of the market economy combined

withadvances in technologyhas fosteredgrowth in thenumber

of companies that consists of a sole author or software devel-

oper who thrives in an environment that recognises and re-

wards their creativity without the traditional complications of

using middlemen to distribute content to the end-consumer.18

With the rising popularity of this small-scale businessmodel,19

one must now consider whether the interests of copyright

holders of digital content are adequately protected.

The advancement in technology is a double-edged sword.

It was noted that end-user digital piracy posed little threat in

the past, as unauthorized copies were crude, low quality re-

productions, making it seemingly impracticable to obtain over

a consumer’s slow network speeds and hardware.20 We are

now, however, at a point of technological development where

the quality of reproductions rival that of the original,21 and

increased internet speeds, aided by distribution software such

as P2P, allow users to share files of any size, ranging from

music to full-length high-definition movies, in a matter of

minutes.22 Average end-users can now use readily available

consumer products to pirate original works and effortlessly

distribute them on a global scale, ruining companies and

affecting livelihoods practically overnight.

3. Legal issues surrounding P2P piracy

The basic digital end-user piracy scenario consists of a person

who makes an unauthorized copy of the copyrighted work

and distributes it to the public in a manner that affects the

prejudicial interests of the copyright owner.23 Infringement

14 David Lieberman, ‘Eisner to take on the Internet’ (USA Today,13 March 2007) <http://usatoday30.usatoday.com/tech/webguide/2007-03-11-eisner-vuguru-promqueen_N.htm> accessed 18February 2013.15 Alison Flood, ‘Self-Publishing sees massive growth’ (TheGuardian, 25 October 2012) <http://www.guardian.co.uk/books/2012/oct/25/self-publishing-publishing> accessed 18 February2013.16 Holroyd and Coates (fn 9) 15.17 Basse (fn 5) 15.18 Virginia Heffernan, ‘The Rise of Self-Publishing’ (The New YorkTimes, 30 April 2010) <http://www.nytimes.com/2010/05/02/magazine/02FOB-medium-t.html> accessed 18 February 2013.19 Holroyd and Coates (fn 9) 206.20 Martin Peitz and Joel Waldfogel, The Oxford Handbook of TheDigital Economy (Oxford University Press 2012) 491.21 Peitz and Waldfogel (fn 20) 491.22 Ursula Smartt, Media & Entertainment Law (Routledge 2011) 346.23 Copyright Ordinance (Cap 528) 1997, s 118 (1)(f)e(g).

would occur, for example, if a person shares an unauthorized

electronic copy of amovie on awebsite, where any public user

can search for it on the internet and download it bywhim. The

unique operation mechanisms of P2P software, however, give

rise to certain grey areas that are not covered by this definition

and line of logic. The following are scenarios in the P2P world

which invoke key legal issues that remain to be resolved.

3.1. Passive distributor involvement

It is arguable whether P2P transfer, which is an automatic

process, initiated by the downloader without the involvement

of the alleged distributor actively making the copy and

distributing it himself, would not fit the traditional model of

“copy and distribute” and therefore would not constitute an

offence.

3.2. Multiple seeders

P2P software appears to encourage downloaders to become

seeders once their copies are reconstituted. The result is that

there are usually multiple source files (in the magnitude of

thousands of copyrighted files) of the samework being shared

online simultaneously. Sorting out and prosecuting the orig-

inal seeder who made the copy would, by then, be nearly

impossible because every new seeder has technically

committed the same offense as the original seeder.

3.3. Unintentional seeders

The principle of P2P is to amass the collective resources of

multiple users to share files quickly. Most P2P software,

therefore, have a built-in function to automatically share files

upon their reconstitution and turn downloaders into addi-

tional sources open for download. This is done without the

need for the downloader’s authorization and often without

their knowledge. Moreover, the exponentially widespread

popularity of P2P software would almost guarantee that a fair

amount of users are ignorant of the intricacies (and conse-

quences) of its operation. It is almost certain that many users

would use and consider this software as a means to download

and be oblivious to its sharing capabilities and the potential

for copyright violations. This would muddle the prosecution’s

case for proving beyond a reasonable doubt the mens rea of

intending to commit the infringing act of sharing.

The user’s intention would be complicated further when

one considers recent changes in software that now grant op-

tions to stop and prevent automatic sharing upon download

completion. The ownership and usage of this software would

therefore no longer imply24 as strongly an intention to actively

share the files it has access to, but shifts the question to

whether the user has knowledge of this function.25

24 Chan Nai Ming v HKSAR [2007] CFA 36 [54].25 However, a recent UK judgement of the High Court in Dra-matico Entertainment Ltd. has made the inference that since usingthe P2P protocol would render users both downloaders anduploaders, mere use would make users guilty of distributingillegal copies to the public. Dramatico Entertainment Ltd. v BritishSky Broadcasting Ltd. [2012] EWHC 268 (Ch) [68].

c om p u t e r l aw & s e c u r i t y r e v i ew 2 9 ( 2 0 1 3 ) 3 8 2e4 0 2 385

3.4. No seeders, only peers with incomplete copies

One must remember that that the simple operation of P2P

would require for seeders to share even while downloading. It

is entirely possible for new complete copies of the infringed file

to be reconstituted from merely downloading partial packets

from other peers, with those who truly intend to distribute

nowhere to be found. Thiswould again challenge the notion of

where one would draw the line on defining what constitutes

“distribution.” The law requires that a copy must be made

(transient or otherwise) for there to be an offense.26Would the

possession of an incomplete copy suffice, or would the term

“transient” also cover incomplete copies? Would the distri-

bution of incomplete copies still be considered to have

economical (or any) prejudicial effect to the copyright owner if

each by itself is unusable and would not have any commercial

value?

3.5. User identification and OSP cooperation

Moreover, each internet user is assigned an IP address, which

is commonly considered a digital footprint of their internet

activities. This is the most direct way to trace and identify

anyone involved in files transfers, except that Online Service

Providers (OSPs)27 usually reuse and randomly assign a

limited number of IP addresses to users every day, further

complicating the tracing process.28 Even if it is possible to

define and identify the perpetrators, there is naturally also the

hurdle of enlisting the OSP’s cooperation to identify said of-

fenders,29 as any enforcement would discredit the OSP as a

service provider and surely affect its business.

30 See generally, World Intellectual Property Organisation,Agreement on Trade Related Aspects of Intellectual Property Rights(TRIPS) (1994), <http://www.wto.org/english/docs_e/legal_e/27-trips.pdf> accessed 18 February 2013 (hereinafter TRIPS).31 See generally, Anti-Counterfeiting Trade Agreement (ACTA) (May2011), <http://www.mofa.go.jp/policy/economy/i_property/pdfs/acta1105_en.pdf> accessed 18 February 2013 (hereinafter ACTA).32 See generally, Trans-Pacific Partnership Agreement (TPPA or TPP),Intellectual Property Rights Chapter e Draft February 10, 2011,available at <http://keionline.org/sites/default/files/tpp-10feb2011-us-text-ipr-chapter.pdf> accessed at 18 February 2013

3.6. Lack of traditional hosting of infringed materials

As stated before, the “smoking gun” of digital piracy is to catch

a distributor sharing copyrighted material from a server that

stores and lists out publicly said files. The operation of Bit-

Torrent, however, only requires public posting of torrent files,

which are by themselves not copyrighted. In order to catch the

distributor red-handed, it would usually require law enforce-

ment agencies or copyright holders to at least complete a P2P

download process, which again would give rise to the prob-

lems already mentioned above.

Due to the potentially severe effects of P2P end-user piracy,

it is in the best interest of any legal system to adequately

address these issues to some degree to ensure individuals and

organizations are afforded effective protection against wide-

spread digital copyright infringement. The next few sections

will attempt to analyse the global anti-piracy effort as well as

Hong Kong’s legal developments to see if the region can

counter P2P piracy effectively.

26 Copyright Ordinance (Cap 528) 1997, s 23(6).27 This includes online storage vendors, forum owners, InternetService Providers (ISPs), etc.28 Davy Winder, ‘Can you really be traced by your IP address’(PCPro 28 March 2011) <http://www.pcpro.co.uk/features/366349/can-you-really-be-traced-from-your-ip-address> accessed 18February 2013.29 Smartt (fn 22) 383.

4. Global trends in preventing P2P piracy

In addressing the increase in copyright infringement activ-

ities, including, in part, copyright infringement caused by

illegal P2P file sharing, several multi-lateral international

treaties and agreements are worth noting. Specifically, this

section analyses the World Intellectual Property Organisation

(WIPO) and World Trade Organisation (WTO)’s Agreement on

Trade Related Aspects of Intellectual Property Rights (TRIPS),30

the Anti-Counterfeiting Trade Agreement (ACTA),31 the recent

Asia-Pacific focused Trans-Pacific Partnership Agreement

(TPPA or TPA),32 and the Convention on Cybercrime (also

known as the Budapest Convention)33 in light of provisions

which may govern and prevent P2P file sharing and piracy of

copyrighted digital content.

The TRIPS Agreement is one of the first and most compre-

hensive international treaties aimed at providing the mini-

mum intellectual property rights and enforcement

mechanism for WTO member-states. The scope of TRIPS in-

cludes copyright and related rights, trademarks, geographical

indications, industrial designs, layout-designs (topographies)

of integrated circuits, protection of undisclosed information

and trade secrets, and anti-competition practise in contrac-

tual licences.34 With respect to copyright, Section 1, Article 9

of TRIPS extends copyright protection to “expressions and not

to ideas, procedures, methods of operation or mathematical

concepts as such.”35 Article 10(1) makes specific reference to

protecting computer programs as literary works under the

Berne Convention (1971) in addition to protecting compila-

tions of data or other material which by their arrangement

are “intellectual creations”, though Article 10(2) does not

protect the actual data or material itself that was used in

creating the compilation.36 The only reference to pirated

copyright goods is under Part III, Section 4, Article 51 which

requires members to “adopt procedures to enable a right

holder, who has valid grounds for suspecting that the

importation of counterfeit trademark or pirated copyright

goods14 may take place, to lodge an application in wri-

ting.for the suspension by the customs authorities of the

release into free circulation of such goods.”37 Under TRIPS,

(hereinafter TPP).33 See generally, Council of Europe, Convention on Cybercrime(2001), <http://conventions.coe.int/Treaty/en/Treaties/Html/185.htm> accessed 18 February 2013 (hereinafter Convention onCybercrime).34 TRIPS (fn 30) Part II.35 TRIPS (fn 30) Part II, Section 1, Article 9.36 TRIPS (fn 30) Part II, Section 1, Article 10(2).37 TRIPS (fn 30) Part III, Section 4, Article 51.

c om p u t e r l aw & s e c u r i t y r e v i ew 2 9 ( 2 0 1 3 ) 3 8 2e4 0 2386

pirated copyright goods is defined as “any goods which are

copies made without the consent of the right holder or person

duly authorized by the right holder in the country of pro-

duction and which are made directly or indirectly from an

article where the making of that copy would have constituted

an infringement of a copyright or a related right under the

law of the country of importation.”38 These provisions

demonstrate that under TRIPS, the main focus is on copyright

infringement of physical goods that may be physically

controlled from entering the stream of commerce. Digital

content, in the form of illegal P2P file sharing that result in

copyright infringement, does not appear to be directly within

the scope of TRIPS protection.

The Anti-Counterfeiting Trade Agreement (ACTA) was pro-

posed in October 2007 by the United States, European Com-

mission, Switzerland and Japan after three years of

negotiations. The ACTA is designed to be a plurilateral inter-

national treaty aimed at creating a new global standard for the

enforcement of intellectual property rights in trademark and

copyright only,39 in particular the enforcement of IP rights

against counterfeiting and internet piracy.40 To date,

Australia, Canada, Japan, Morocco, New Zealand, Singapore,

South Korea, the United States, and the European Union have

signed the agreement,41 which will become law for those

countries upon ratification of at least six member states. To

date, the European Parliament rejected the agreement and

only Japan has ratified the agreement. The final draft of the

agreement was published in May 2011, amidst controversy

and criticisms even though, according to some, the content of

the final draft are considered ‘tame’ as compared with pre-

liminary drafts.42 The May 2011 final text contains several

provisions aimed at combating the issues of copyright

infringement in the digital environment.

The Preamble to the ACTAmakes clear that the problem of

copyright or related rights infringement in the digital envi-

ronment must be addressed “in a manner that balances the

rights and interests of the relevant right holders, service

providers, and users” through cooperation between service

providers and rights holders.43 A primary focus of ACTA is

pirated copyright goods in the digital environment. This in-

cludes illegal P2P file sharing of copyright content. Section 2,

Article 5(k) of the ACTA text defines pirated copyright goods as

“any goods which are copies made without the consent of the

right holder or person duly authorized by the right holder in

the country of production and which are made directly or

38 TRIPS (fn 30) Part III, Section 4, Article 51, fn 14(b).39 Kimberlee Weatherall, ‘Politics, compromise, text and thefailures of the Anti-Counterfeiting Trade Agreement’ (2011) 33(2)Sydney Law Review 229, 230.40 John Lambrick, ‘Piracy, File Sharing.and Legal Fig Leaves’(2009) 4(3) Journal of International Commercial Law and Tech-nology 185, 191.41 Bryan Christopher Mercurio, ‘Beyond the Text: The Signifi-cance of the Anti-Counterfeiting Trade Agreement’ [2012] 15/2Journal of International Economic Law, 361.42 Erik Kain, ‘Final Draft of ACTA Watered Down, TPP StillDangerous On IP Rules’ (Forbes.com 28 January 2012) <http://www.forbes.com/sites/erikkain/2012/01/28/final-draft-of-acta-watered-down-tpp-still-dangerous-on-ip-rules/> accessed 18 February2013.43 ACTA (fn 31) Preamble.

indirectly from an article where the making of that copy

would have constituted an infringement of a copyright or a

related right.”44 A right holder is defined as “federation or an

association having the legal standing to assert rights in in-

tellectual property”45 while person is defined as a natural or

legal person.46 In this respect ACTA affords all rights holders,

whether persons, entities, or federations, to assert copyright

protection against copyright infringement in the digital

environment.

Section 5 of the ACTA includes several provisions aimed at

protecting and enforcing intellectual property rights in the

digital environment. While Section 5 aims to preserve the

“fundamental principles such as freedom of expression, fair

process, and privacy”,47 it does impose, arguably, very strict

and harsh measures against those who infringe the copyright

of rights holders over digital networks, including the “un-

lawful use of means of widespread distribution for infringing

purposes.”48

With respect to illegal P2P file sharing, Section 5, Article

27(4), Article 27(5) and Article 27(6) are particularly relevant.

Article 27(4) gives a Party to the ACTA discretion to provide,

under national law, authority to order an online service

provider to disclose the identity of a subscriber who the

rights holder or person feels has used the subscriber account

for the purposes of infringement activity. In addition, Article

27(5) compels a Party to the ACTA to provide adequate legal

protection and legal remedies against those who would

circumvent effective technological measures, such as

encryption, scrambling, and copy control mechanisms,

which are used to offer copyright protection to the rights

holder or person.49 Furthermore, Article 27(6) imposes an

obligation on a Party to the ACTA to provide adequate legal

protection and legal remedies against manufacturers, im-

porters, and distributors of devices, products, or services that

are “designed or produced for the purpose of circumventing

an effective technological measure”50 or whose products and

services have “only a limited commercially significant pur-

pose other than circumventing an effective technological

measure.”51 In most cases, the remedies will involve civil

remedies. Under Section 4, Article 23, criminal enforcement

and penalties appear to be reserved strictly for instances

where there is “wilful trademark counterfeiting or copyright

or related rights piracy on a commercial scale.”52 Commer-

cial scale is further defined to include at least those activities

carried out for “direct or indirect economic or commercial

advantage.”53

44 ACTA (fn 31) Section 2, Article 5(k).45 ACTA (fn 31) Section 2, Article 5(l).46 ACTA (fn 31) Section 2, Article 5(j).47 See, for example, Anti-Counterfeiting Trade Agreement (ACTA)(May 2011), Section 5, Article 27(2). This language of aiming toprotect the principles of freedom of expression, fair process, andprivacy while still holding infringers liable is stated throughoutthe ACTA in various sections.48 ACTA (fn 31) Section 5, Article 27(2).49 ACTA (fn 31) Section 5, Article 27(5), fn 14.50 ACTA (fn 31) Section 5, Article 27(6)(b)(i).51 ACTA (fn 31) Section 5, Article 27(6)(b)(ii).52 ACTA (fn 31) Section 4, Article 23(1).53 ACTA (fn 31) Section 4, Article 23(1).

c om p u t e r l aw & s e c u r i t y r e v i ew 2 9 ( 2 0 1 3 ) 3 8 2e4 0 2 387

Finally, ACTA requires a Party to the agreement to offer

protection against those who would knowingly perform any

act that destroys or defaces electronic rights management

information with the knowledge that it “will induce, enable,

facilitate, or conceal an infringement of any copyright or

related rights.”54 Electronic rights management information

includes informationwhich identifies thework(s) with respect

to its author, producer, or owner. In addition, this includes the

terms and conditions of the work(s) as well as numbers and

codes that represent thework(s)55 if such information is either

directly attached to a copy of the work(s) or appears in

communication making the work(s) available to the public.56

With such seemingly sweeping provisions against

infringement of digital content and pirated copyright goods, it

is perhaps understandable that the ACTA has been sur-

rounded by controversy and criticism since its inception. In

the United States, there is some debate that the ACTA can be

enacted as an “executive agreement” signed by the President

instead of requiring approval from the Senate57 (as oppose to

SOPA and PIPA, which required Senate approval, and there-

fore, oversight by the Senate). For the European Union, it will

not become law unless the European Parliament has voted it

through, which as of July 2012 has rejected the agreement in

its plenary session. Early drafts of the agreement were

compared to the US’s DCMA and SOPA bill.58 Much of the

criticismof the early drafts of the ACTA sparkedmass hysteria

because it was alleged that the ACTA infringed on personal

and civil liberties. For example, it was publicised that the

ACTA’s overly generalized protection of patent law would

prevent generic branded pharmaceutical drugs from entering

developing countries or worse, that such generic drugs would

be seized at airports from average users.59 Critics of the ACTA

also argued that there would be severe restrictions on internet

content and that the ACTA would compel online service pro-

viders to block or monitor internet traffic for infringing ma-

terial.60 A further criticism of the ACTA is that it would

introduce a three-strikes enforcement mechanism against

repeat offenders, perhaps in violation of human rights law.61

In addition, because Section 2, Article 8 of the ACTA dictates

that judicial authorities can intervene and prevent infringing

goods from entering into channels of commerce,62 mass

media has gone so far as to warn of airport searches of iPods

and laptops for illegally obtained mp3s.63

54 ACTA (fn 31) Section 5, Article 27(7).55 ACTA (fn 31) Section 5, Article 27(7), fn 16.56 ACTA (fn 31) Section 5, Article 27(7), fn 16.57 Kain (fn 42).58 Ibid.59 Mercurio (fn 41) 374.60 Eric Limer, ‘22 Countries in the EU Signed ACTA and WhyThat’s Bad’ (Geekosystem 27 January 2012) <http://www.geekosystem.com/acta-primer/> accessed 18 February 2013.61 Kain (fn 42); Alberto Cerda Silva ‘Enforcing Intellectual Prop-erty Rights by Diminishing Privacy: How the Anti-CounterfeitingTrade Agreement Jeopardizes the Right to Privacy’ (2011) 26(3)American University International Law Review 601, 630e636(discussing the three-strikes system or graduated response andconcerns from a human rights perspective).62 ACTA (fn 31) Section 2, Article 8.63 Mercurio (fn 41) 366.

To date, the actual text of the ACTA does not appear to

impose a three-strikes enforcement mechanism (i.e., a grad-

uated response),64 require airport searches of digital devices,

or compel OSPs to monitor internet traffic for infringing ma-

terials. However, the ACTA does appear to impose an implied

obligation on the part of OSPs to have procedures in place to

prevent intentional and wilful acts which may constitute

facilitating in pirated copyright goods or acts which may

induce, enable, facilitate, or conceal an infringement of any

copyright or related rights. Furthermore, the text of the ACTA

does appear to allow national lawswhichmay compel OSPs to

divulge the identities of potential infringers for the purposes

of enforcing the rights of a valid and authorized rights holder

or person. This, in turn, has caused critics such as Silva to

argue that the ACTA infringes on privacy rights at the expense

of protecting intellectual property rights.65

It should be reiterated, however, that as of March 2013,

only Japan has ratified the ACTA. More recently, the European

Parliament, due to continuing pressure from widespread

public protests and recent reactions to SOPA/PIPA bills in the

US, has voted to reject the agreement entirely.66 It has been

stated that the primary purpose of the ACTA is to combat

commercial-related large-scale piracy and counterfeiting or-

ganizations,67 as opposed to end-user P2P operation, which as

discussed earlier, consists of numerous individuals down-

loading mainly for private use. However, the preamble lan-

guage of the ACTA is wide-reaching. While the ACTAmakes a

clear distinction between commercial-scale infringement ac-

tivities resulting in criminal penalties68 and non-commercial-

scale infringement leading to civil liability, the language does

seem all-encompassing and sweeping with respect to civil

remedies in the case of pirated copyright material in the dig-

ital environment. It remains to be seen whether the statutory

language of the ACTA would, in theory, affect P2P-related

infringement.69

The Trans-Pacific Partnership Agreement (TPPA or TPP) is a

multi-lateral free trade agreement currently under negotia-

tion between the United States and several Asia-Pacific region

nations. The intellectual property protection and enforcement

sections of the TPP are apparently heavily influenced and

borrowed from the ACTA. To date, the official text of the TPP

has not been released to the general public. As such, this

section includes information on the leaked sections of the TPP

intellectual property provisions dated February 2011, which

64 Cf Michael Boardman, ‘Digital Copyright Protection andGraduated Response: A Global Perspective’, (2011) 33 Loy. L.A. Int’l& Comp. L. Rev. 223, 227e230 (discussing several jurisdictionswhich have adopted a graduated response strategy, includingSouth Korea, Taiwan and the United Kingdom).65 See generally, Silva (fn 61) 612e618.66 ‘Acta: Controversial anti-piracy agreement rejected by EU’(BBC News 4 July 2012) <http://www.bbc.co.uk/news/technology-18704192> accessed 18 February 2013.67 European Commission, “10 Facts and Myths about ACTA”<http://trade.ec.europa.eu/doclib/docs/2012/january/tradoc_148964.pdf> accessed 18 February 2013.68 ACTA (fn 31) Chapter II, Section 4, Article 23(1), fn 9.69 ACTA Art 27 states “each Party’s enforcement proceduresshall apply to infringement of copyright or related rights overdigital networks, which may include the unlawful use of meansof widespread distribution for infringing purposes.”

78 Convention on Cybercrime (fn 33) Title 1 (Offences against theconfidentiality, integrity, and availability of computer data andsystems), Articles 2e6.79 Convention on Cybercrime (fn 33) Title 2 (Computer-relatedoffences) (includes computer-related forgery and fraud), Articles7e8.80 Convention on Cybercrime (fn 33) Title 3 (Content related of-fences), Article 9.81 Convention on Cybercrime (fn 33) Title 4 (Offences related to

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are alleged to be part of the negotiating text.70 The scope of the

TPP intellectual property protection and enforcement extends

to trademarks (including geographical indications), copy-

rights, and patents. Similar to the ACTA, the Section 4.9 of the

TPP is similar to Section 6(b) of the ACTA with respect to anti-

circumvention of effective technological measures used to

prevent copyright infringement. One key point of difference is

that while the ACTA prohibits products and services that are

“designed or produced for the purpose of circumventing an

effective technological measure”,71 Section 4.9(a)(ii)(c) of the

TPP prohibits products and services to the extent that they

enable or facilitate the circumvention of effective technological

measures. The TPP’s provisions on providing legal rights and

remedies for the protection of rights management informa-

tion is identical to the ACTA’s Article 27(7)(b), imposing civil

liability against those who, with reasonable grounds to know,

“distribute, import for distribution, broadcast, communicate,

or make available to the public copies of works.knowing that

electronic rights management information has been removed

or altered without authority.”72 The TPP does not have a spe-

cific section on digital content but it does contain provisions

that protect temporary copies of copyrighted works.73 Neither

the ACTA nor TRIPS, which references the Berne Convention,

provide specific protection for temporary copies, especially in

a digital environment.

Finally, the Counsel of Europe’s Convention on Cybercrime

(also known as the Budapest Convention on Cybercrime) focuses

on combating cybercrime. To date, 39 states have signed,

ratified and acceded to the Convention, including the United

States, United Kingdom, Australia, France, Germany,

Switzerland and Japan.74 Cybercrime is viewed in the broad

sense as computer-related crimes and, in the narrow sense, as

computer crimes.75 Computer related crimes includes “any

illegal behaviour committed by means of, or in relation to, a

computer system or network, including such crimes as illegal

possession and offering or distributing information by means

of a computer system or network.”76 In contrast, computer

crimes may be defined as “any illegal behaviour directed by

means of electronic operations that target the security of

computer systems and the data processed by them.”77

While the Convention does not specifically define ‘cyber-

crime’, its provisions appear to recognise and delineate be-

tween computer crimes and computer-related crimes. In

particular, the Convention on Cybercrime recognizes four

70 Trans-Pacific Partnership Agreement (TPPA or TPP), IntellectualProperty Rights Chapter e Draft February 10, 2011, available at<http://keionline.org/sites/default/files/tpp-10feb2011-us-text-ipr-chapter.pdf> (accessed at 12 February 2013).71 ACTA (fn 31) Section 5, Article 27(6)(b)(i).72 ACTA (fn 31) Section 5, Article 27(7)(b).73 TPP (fn 32) Article 4.1 (rights holders may “authorize or pro-hibit all reproductions of their works, performances, and pho-nographs, in any manner or form, permanent or temporary(including temporary storage in electronic form.”)).74 Council of Europe, Convention on Cybercrime (CETS No: 185)Signatories (2013).75 Marco Gercke, Understanding cybercrime: phenomena, challengesand legal response (ITU Telecommunication Development Bureau2012) 11.76 Ibid.77 Ibid.

different types of cybercrimes: 1) offences against the confi-

dentiality, integrity and availability of computer data and

systems78; 2) computer-related offences79; 3) content-related

offences80; and 4) copyright-related offences.81

With respect to copyright-related crimes, a Party to the

Convention must establish criminal offences under its na-

tional lawswhere infringement of copyright and related rights

results from “acts [which are] are committed wilfully, on a

commercial scale and by means of a computer system.”82

Where a Party to the Convention elects not to impose crim-

inal liability in limited circumstances, other effective mea-

sures and legal remedies must be in place consistent with the

party’s obligations under related international conventions to

which it is a party.83 In addition to imposing liability for wil-

fully engaging in copyright infringement, the Convention also

imposes criminal liability against those who are “intention-

ally, aiding or abetting the commission of any of the offences

established in accordance with Articles 2 through 10 of the

present Convention with intent that such offence be

committed.”84

According to the explanatory report to the Convention, this

does not automatically mean that OSPs will be liable. For

example, a person needs the help of an OSP to transmit

harmful content or a malicious virus. However, if the OSP did

not have the requisite criminal intent to aid or abet the

transmitter in this transmission, the OSP cannot incur liability

under the Convention.85 With respect to punishment, Article

13 of the Convention envisions criminal liability for both

natural persons and legal persons (corporations). Article 13(1)

states that criminal offencesmust be “punishable by effective,

proportionate and dissuasive sanctions, which include

deprivation of liberty.”86 Article 13(2) states that legal persons

found liable for cybercrimes be “subject to effective, propor-

tionate and dissuasive criminal or non-criminal sanctions or

measures, including monetary sanctions.”87

infringements of copyright and related rights), Article 10.82 Convention on Cybercrime (fn 33) Title 4 (Offences related toinfringements of copyright and related rights), Article 10(1) andArticle 10(2). See also, Sylvia Mercado Kierkegaard, ‘CrackingDown on Cybercrime Global Response: The Cybercrime Conven-tion’ (2005) 5(1) Communications of the IIMA 59, 60.83 Convention on Cybercrime (fn 33) Title 4 (Offences related toinfringements of copyright and related rights), Article 10(1) andArticle 10(3).84 Convention on Cybercrime (fn 33) Title 4 (Offences related toinfringements of copyright and related rights), Article 11(1). It isworth noting that “intentionally attempting” to commit a copy-right or related rights infringement is not an offence under thescope of Article 11(2).85 Convention on Cybercrime (fn 33) Explanatory Report, Article11, para 119.86 Convention on Cybercrime (fn 33) Article 13(1).87 Convention on Cybercrime (fn 33) Article 13(2).

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The Convention appears to target infringing activity that is

on a commercial scale rather than for private or non-

commercial use. This language is similar to the language in

TRIPS which also imposes criminal sanctions for copyright

piracy on a commercial scale. Unfortunately, neither TRIPS

nor the Convention define what is meant by ‘commercial

scale’. In addition, the Convention and TRIPS do not reference

the ACTA, which defines commercial scale as including those

activities which have a “direct or indirect economic or com-

mercial advantage.”88 Most P2P file sharing thatmight infringe

on copyright is not done on a commercial scale though it may

be argued that there is some level of indirect commercial

advantage. Nevertheless, Article 10 of the Convention is likely

not applicable to copyright violations in P2P file sharing

systems.89

The plurilateral and multilateral conventions and free

trade agreements discussed above attempt to address the

issue of copyright infringement of digital content yet, collec-

tively, fail to provide clear, consistent, and effective intellec-

tual property rights and enforcement with respect to the

issues surrounding illegal P2P file sharing. TRIPS does not

directly address non-commercial copyright infringement ac-

tivity of digital content, ACT and TPP are not in force, and the

Convention on Cybercrime, similar to TRIPS, only targets

infringing activity that is on a commercial scale. In addition,

proving the mental elements of wilfully and intentionally

infringing or knowingly aiding and abetting in piracy of

copyrighted digital content is likely to be a difficult task

against natural persons or ordinary consumers who are most

likely to infringe yet who do not have extensive knowledge of

copyright law and do not understand the legal implications of

such activities.90

The next section provides a cross-jurisdiction comparative

analysis of select jurisdictions and how they have elected to

deal with the issue of piracy of copyrighted materials through

P2P file sharing. In particular, the next section focuses on the

United Kingdom, the United States, France, Sweden, and

Japan.

92 Band (fn 91); See generally, 17 U.S.C. Chapter 12, <http://www.copyright.gov/title17/92chap12.pdf> accessed 18 February 2013(hereinafter 17 U.S.C. followed by section).93 Band (fn 91); See 17 U.S.C. x 1201.94 Band (fn 91); See 17 U.S.C. x 1202.95 Band (fn 91); See 17 U.S.C. x 1201(a)(2); See also 17 U.S.C. x

5. Cross-jurisdiction comparative analysis

5.1. United States

In an effort to address copyright infringement issues in the

digital environment as well as to harmonise United States

(U.S.) law with the WIPO requirements and the international

treaties which the U.S. signed in 1996, the U.S. Congress

passed the Digital Millennium Copyright Act (DCMA) in

October 1998.91 The DMCA introduced sweeping changes to

88 ACTA (fn 31) Section 4, Article 23(1).89 Gercke (fn 75) 219.90 Nicolas Christin, ‘Peer-to-Peer Networks: InterdisciplinaryChallenges for Interconnected Systems’ in Melissa J Dark (ed),Information Assurance and Security Ethics in Complex Systems: AnInterdisciplinary Perspective (IGI Global 2010) (on file with theauthor).91 Jonathan Band, Digital Millennium Copyright Act Guide(2012), available at <http://www.ala.org/advocacy/copyright/dmca/guidance> accessed 18 February 2013.

the existing U.S. Copyright Act in terms of addressing copy-

right issues in the digital age. The DMCA was incorporated

into the U.S. Copyright Act, codified as Chapter 12 of Title 17 of

the U.S. Code.92

First, the DMCA provides a legal remedy against those who

gain unauthorized access to copyrighted work by circum-

venting the technological protection measures that is pro-

tecting it.93 Second, the DMCA provides a legal remedy for

tampering with copyright management information, also

referred to as electronic rights management information.94

Third, the DMCA prohibits the manufacturing or making

available any products or services designed to defeat or

circumvent technological protection measures to control ac-

cess to copyrighted material.95 These prohibitions apply only

to devices, products and services that are: a) primarily

designed and used for circumventing technological protection

measures; b) are of only little or limited commercial purpose

other than circumvention; and c) marketed specifically for the

purpose of circumventing technological protection

measures.96

The DMCA allows for eight specific exceptions to the pro-

hibition on circumventing technological protection measures

or circumvention devices. These exceptions recognise the

reality that it may be necessary to bypass technological pro-

tection measures in limited circumstances.97 The recognised

exceptions are: a) reverse engineering; b) law enforcement

and intelligence activities; c) encryption research; d) security

testing; e) exception regarding minors; f) protection of per-

sonal identification information; g) non-profit libraries, ar-

chives, and educational institutions, and h) specific analogue

devices and certain technological measures.98 Both civil and

criminal penalties may apply. In particular, criminal penalties

apply for wilful violations of the Act which are committed for

commercial advantage or private financial gain.99

With respect to P2P file sharing activities, the DMCA pro-

vides for three safe harbour exemptions for OSPs. The first

safe harbour exemption limits the OSP’s liability for copyright

infringement for material stored on the OSP’s servers at the

request of the user.100 The second safe harbour limits the

OSP’s liability where the OSP refers users to materials at other

online locations via, for example, a search engine or hypertext

link.101 The third safe harbour provision applies to system

caching, where the OSP “makes a temporary copy of popular

Internet material requested by a User so that the OSP can

1201(a)(3)(a) (‘“circumvent a technological measure” means todescramble a scrambled work, to decrypt an encrypted work, orotherwise to avoid, bypass, remove, deactivate, or impair atechnological measure, without the authority of the copyrightowner’).96 Band (fn 91); See 17 U.S.C. x 1201(b).97 Band (fn 91).98 Band (fn 91); See 17 U.S.C. x 1201(d)e(k).99 Band (fn 91); See 17 U.S.C. x 1203e1204.

100 Band (fn 91).101 Band (fn 91).

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deliver that copy to subsequent Users, which can be done

more quickly and efficiently than obtaining the original ma-

terial from each subsequent User.”102

To avail itself of the first and second safe harbour exemp-

tions, the OSP must meet five conditions. First, the OSP must

show it had no knowledge that the material was infringing.

Second, the OSPmust show it is not aware of the source of the

infringing material. Third, where the OSP acquires knowledge

or knows that the material is infringing, it must show that it

took immediate steps to remove the infringing material from

its site. Fourth, the OSP must show that it did not or does not

receive financial benefit from storing thematerial. Finally, the

OSP must demonstrate that it complied with any ‘notice and

take down’ procedures under the Act, the equivalent of a

graduated response system.103 In order for the OSP to be

protected under the third safe harbour exemption for tem-

porary and intermediate storage, it must meet several condi-

tions as outlined in the Act.

Since the enactment of the DMCA, two notable U.S. Su-

preme Court cases have been heard on the issue of illegal P2P

file sharing and the liability of users and OSPs involved in such

alleged copyright infringement activities. In Sony Corp of Am. v

Universal City Studios, Inc.,104 also known as the Betamax case,

the U.S. Supreme Court reinforced the legitimate fair use

exemption under Section 107 of the Federal Copyright Act

(2005)105 with respect to online users’ liability of storing digital

content. The Court held that consumers can record content

from television using a “time shifting” device such as a VHS,

save it on the device and watch it at a later time without

seeking permission of the content or copyright owner and yet

not incur secondary liability.106 However, the fair use concept

seems inapplicable to illegal P2P file sharing since the intent of

P2P appears to be beyond the scope of exploitation of copy-

right works as intended by the fair use standard.107

In Metro Goldwyn-Mayer Studios, Inc. v Grokster, Ltd.,108 the

U.S. Supreme Court dealt with P2P file sharing networks and

the liability of OSPs and end users. The Court made it clear

102 Band (fn 91).103 Band (fn 91).104 Sony Corp of Am. v Universal City Studios, Inc., 464 U.S. 417, 456(1984); See also A&M Records Inc. v Napster Inc. 114F. Supp. 2d 896(N.A. Cal. 2000) (one of the first cases to deal with potential illegaldownloading of music files where Napster was found guilty ofcontributory infringement of copyright as well as vicariouslyliable for their users’ copyright infringements); A&M Records, Inc. vNapster, Inc., 239 F.3d 1004, 1014 (9th Cir. 2001) (affirming thedistrict court’s holding that users of Napster infringed on thecopyright holder’s exclusive rights of reproduction anddistribution).105 Copyright Act, 17 U.S.C. x 107 (2005). Cf Guy Pessach, ‘An In-ternational Comparative Perspective on Peer-to-Peer File-Sharingand Third-Party Liability: Framing the Past, Present and NextGenerations’ Questions’, (2007) 40 Vanderbilt Journal of Trans-national Law 87, 96 (citing that lower courts do not agree that thefacts in the Sony case are not protected under the fair useexemption).106 Boardman (fn 64) 241e242 (discussing the ‘fair use’ exceptionin Sony Corp of Am. v Universal City Studios, Inc., 464 U.S. 417, 456(1984)); Pessach (fn 106) 91e92.107 Boardman (fn 64) 242.108 Metro Goldwyn-Mayer Studios, Inc. v Grokster, Ltd., 545 U.S. 913(2005).

that it was not overturning the Sony decision but providing a

narrowly tailored precedent.109 While the Court acknowl-

edged that P2P file sharing could occur legally, the respondent,

Grokster, was found liable based on the Court’s construction

of the ‘inducement theory.’110 The inducement theory

extended the liability of third parties who produced or

distributed devices which were capable of being used for both

infringing and non-infringing use and, effectively, induced

end users into committing copyright infringement.111 The

Court rejected the respondent’s fair use arguments and held

that “one who distributes a device with the object of pro-

moting its use to infringe copyright, as shown by the clear

expression or other affirmative steps taken to foster

infringement, is liable for the resulting acts of infringement by

third parties.”112

Shortly after the Grokster case, U.S. claimants were

involved in another high-profile case in Sweden about copy-

right infringement resulting from illegal P2P file sharing.

5.2. Sweden

Sweden is a Scandinavian country and a member of the Eu-

ropean Community (EC). While it has its own Copyright Act

(the Act) as well as related legislation,113 the Act has under-

gone several amendments, most notably as a result of the

Directives issued by the European Community. Directives are

binding on all member states though member states and its

national authorities may decide on the form and methods of

implementing the Directives.114 Of particular importance is

the EC Directive on Copyright in the Information Society

(Directive 2001/29/EC), which was implemented in Sweden via

amendments to the law and which came into force in 1 July

2005.115 This was followed by the implementation of the EC

Directive on the Enforcement of Intellectual Property Rights

(Directive 2004/48/EC).116 Collectively, the EC Directives

imposed liability and provided legal remedies to right holders

and those with neighbouring rights against OSPs and users

who engaged in copyright infringement resulting from illegal

P2P file sharing.

109 Pessach (fn 106) 91.110 Lambrick (fn 40) 188.111 Pessach (fn 106) 91.112 Metro Goldwyn-Mayer Studios, Inc. v Grokster, Ltd., 545 U.S. 913(2005); See also Pessach (fn 106) 91 (citing Metro-Goldwyn-Mayer,125 S. Ct. at 2779e80); Cf Universal Music Australia Pty Ltd. v Shar-man License Holdings Ltd. (2005) 220 A.L.R. 1 (decision of the FederalCourt of Australia which also recognised the ‘inducement ac-tions’ of the defendants but ultimately held the respondentsliable under a negligence-type theory which “impos[es] uponmanufacturers and distributors of peer-to-peer file sharing soft-ware a duty of care to adopt standards and mechanisms for theprevention of copyright infringement.” Pessach (fn 106) 93 (citingUniversal Music Austl., 220 A.L.R. at 99)).113 See generally, Act on Copyright in Literary and Artistic Works(The Copyright Act) (Swedish Code of Statutes, SFS 1960:729amended); Copyright Regulation (SFS 1993:1212, amended); In-ternational Copyright Regulation (SFS 1994:193,amended).114 EC Treaty art. 249 (as in effect 1992) (now TFEU art. 288).115 Ministry of Justice (Stockholm, Sweden), A brief overview of theSwedish copyright system (2006) 7.116 Council Directive 2004/48, 2004 O.J. (L 157) 1 (EC) (commonlyknown as “IPRED”).

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Until 2005, The Pirate Bay, a Swedish company well known

for being one of the world’s largest BitTorrent sites, operated

conspicuously in what some consider the “world capital of

Internet piracy: Stockholm, Sweden.”117 By 2008, The Pirate

Bay had reached over 25million peers.118 However, starting as

early as 2004 and perhaps even sooner, the Pirate Bay (TPB)

was receiving take down notices, under the U.S. DMCA’s

notice and take down provisions, from attorneys in the United

States who represented some of the largest entertainment

companies in the world.119 TPB executives actively ignored

these take down notices and asserted that their site only

contained the torrent files and not the actual copyrighted

content.120 In addition, TPB executives argued that U.S. law

did not apply in Sweden and that under Swedish law, they

were not doing anything illegal. By 2005, Sweden had begun to

complywith the variousWIPO international treaties aswell as

its obligations under the EC Directives. Inevitably, in 2006,

Swedish police raided the Stockholm offices of one of the TPB

executives and confiscated servers and computers.

In January 2008, Swedish authorities charged TPB’s four

executives with facilitating and promoting copyright

infringement through their website, The Pirate Bay.121 The

claimants were a consortium of media, film, and music com-

panies led by the International Federation of Phonographic

Industries. On 17 April 2007, the Swedish trial court found all

four TPB executives guilty of aiding copyright infringement by

assisting in the distribution of illegal content online.122 Of

special note is that The Pirate Bay, while only providing links

to the actual copyright content files, were not operating out of

charity or without some private financial gain. The TPB web-

site contained sponsored advertising links and other features

which generated income for the company to an estimate of $1

million per year or more. As such, the court found that their

activities were of a commercial scale, albeit perhaps indi-

rectly.123 The court ordered each defendant to one year in jail

and a collective total of 30 million Swedish kroner (approxi-

mately $ 4.5 million) in fines. The defendants appealed.

In November 2010, the Swedish Court of Appeals upheld

the trial court’s verdict. However, the Court of Appeals

117 Dennis H, A Pirate’s Life in Sweden’ (February 23, 2011),<http://www.yalelawtech.org/p2p-law-piracy/a-pirates-life-in-sweden/> accessed 18 February 2013.118 Dennis H (fn 118).119 Dennis H (fn 118).120 Dennis H (fn 118).121 Chris Connolly, Hot Topics: legal issues in plain language (Sydney,N.S.W.: Legal Information Access Centre, 2009) 21 (providing acase study of the Pirate Bay trial); Anna Ringstrom, ‘Sweden toCharge Pirate Bay in Copyright Case’ (Reuters, Jan. 27, 2008),<http://www.reuters.com/article/2008/01/27/us-sweden-piratebay-idUSL2723733820080127> accessed 18 February 2013.122 Jemima Kiss, ‘The Pirate Bay trial: guilty verdict’ (The Guardian,17 April 2009), <http://www.guardian.co.uk/technology/2009/apr/17/the-pirate-bay-trial-guilty-verdict> accessed 18 February 2013;Cyrus Farivar, ‘Evasive action: How The Pirate Bay Four evadedSwedish Justice — for a while’ (Ars Technica, 4 October 2012)<http://arstechnica.com/tech-policy/2012/10/evasive-maneuvers-how-the-pirate-bay-founders-dodged-swedish-justice/>accessed 18 February 2013.123 Note: This was also recognised in Dramatico Entertainment Ltd.v British Sky Broadcasting Ltd. [2012] EWHC 268 (Ch) along with adetailed discussion of TPB’s business practices.

reduced the prison sentences but increased the collective

fines to 46 million Swedish kroner (approximately $ 6.8

million).124 While the defendants appealed again, in February

2012, the Swedish Supreme Court declined to hear the case,

effectively closing the door on any further appeals. To date,

The Pirate Bay website is still active despite this judgment

since the judgment only affects its active status in Sweden. In

addition, none of the TPB executives have paid the collective

fines and have, to date, evaded Swedish authorities in terms of

complying with their prison sentences, except for Carl Lund-

strom, who served several months of house arrest.

This case is particularly noteworthy because Sweden was

the first country to implement the EC Directive or “IPRED”

despiteheavycriticismaboutprotectinguser’sprivacy.125At the

same time, the Pirate Bay case shows the difficulties of not only

imposing liability but inenforcing thefinesandpenalties.While

the sentence andfines should serve as a deterrent to others, the

Pirate Bay and other similar sites are still very active today.

In fact, The Pirate Bay was once again a defendant in

another illegal P2P file sharing copyright infringement case,

this time in the United Kingdom.

5.3. United Kingdom

The Digital Economy Act 2010 (DEA) is the United Kingdom’s

(UK) attemptat regulatingdigitalmedia services andpreventing

illegal P2P file sharing. Despite the judicial review of the DEA,

launched byBritish TelecomandTalkTalk, to questionwhether

the DEA was a “proportionate and legal response to online

copyright infringement”,126 the High Court of Justice dismissed

the challenge, leaving the legislature, and not the courts, to

decide the balance of interests with respect to copyrighted

works.127 The UK has laws which include the concept of an all-

encompassing right of communication for copyright owners

thatwill cater to futuremodesofcontentdistribution.128TheUK

law also has provisions that impose criminal sanctions on the

unauthorized transmission of data to the public to an extent

that prejudicially affects the copyright owner.129 Despite the

fact that the UK law states that violators of transmission over

124 Farivar (fn 123); Aron Lamm, Sweden’s Controversial PirateBay Trial Concludes Appeal (Epoch Times, 16 October 2011)<http://www.theepochtimes.com/n2/world/swedens-controversial-pirate-bay-trial-concludes-appeals-62880.html>accessed 18 February 2013.125 Boardman (fn 64) 227.126 W Edward Steinmuller, ‘Copyright infringement online: Thecase of the Digital Economy Act judicial review in the UnitedKingdom’ (2013) New Media & Society <http://nms.sagepub.com/content/early/2013/01/08/1461444812470429.full> accessed 18February 2013.127 Steinmuller (fn 127); See also Mansell R, Steinmuller WE,British Telecommunications plc (“BT”) and TalkTalk Telecom GroupLimited v Secretary of State for Business, Innovation and Skills (“BIS) Inthe matter of an intended claim. Report for BT Legal. 1 July.(London: LSE Enterprise 2010).128 Bills Committee on the Copyright (Amendment) Bill 2011,Comparison of Copyright Laws in Hong Kong and Overseas Jurisdictions(LC Paper No. CB(1)3061/10-11(02) 2011).129 It seems that out of all these jurisdictions, only Hong Kong hasa statutory guide on how to determine what is “prejudicial” to thecopyright owner.

138 Ibid.139 Ibid.140 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch) [9]e[15] (discussing reasons for the absence of TPBand the defendants in the proceedings).141 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch) [37].

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P2P networks would be convicted, in reality, such convictions

rarely happen, most likely due to the cost and practicality rea-

sons as expressed recently by the UK court.130

Common law development in the UK has not only shown a

history of “Norwich Pharmacal orders” that will compel

internet service providers (ISPs) to divulge user details for the

purpose of prosecuting those who have committed illegal

conduct,131 but also set precedent for right holders being able

to seek court orders against online service providers (OSPs) to

block access to torrent-hosting sites. The reason for such

court orders is that OSPs are alleged of not only being guilty of

assisting in the copying and distributing of infringed material

but their existence violates the copyright laws in that they

“sanction, approve and countenance”132 the infringement

activities of their users, which makes them equally guilty for

aiding and abetting or, as the U.S. courts above have stated, of

inducing their users to engage in copyright infringement ac-

tivities. In addition, the UK has provisions related to “Notice

and Take down” procedures,133 similar to the U.S., Australia,

Singapore, and New Zealand.134

Under the DEA, the UK advocates for a three-strikes system

as part of its anti-piracy goals; however, due to public outcry

and criticism on provisions that appear to circumvent the

judicial process, UK has delayed the implementation of these

specific provisions of the Digital Economy Act 2010 until 2014.

With respect to safe harbour provisions, the DEA does not

appear to offer any. The DEA allows the owner of a valid copy-

right to file a copyright infringement report with ISPs and im-

poses adutyon the ISP tonotify subscribersof the infringement

report.135 With respect to remedies, UK may impose both

monetary damages against other OSPs as well as allow certain

injunctive or equitable relieves against OSPs, particularly if the

OSP had actual knowledge of the infringement in question.

In 2012, the UK courts were faced with the issue of poten-

tially illegal P2P file sharing activities and the liability of the

OSP dedicated to the hosting of torrent files as well as the lia-

bility of its users in Dramatico Entertainment Ltd. v British Sky

Broadcasting.136 In Dramatico, the High Court of Justice, Chan-

cery Division heard from the claimants, a consortium of nine

major record companies in the entertainment industry. The

defendants were six retail internet service providers, with

a combined market share of 94% of UK internet users.137

The claimants sought an injunction against the defendants

under section97Aof theUKCopyright,DesignsandPatentsAct

1988 (“the 1988 Act”). The 1988 Act implements “Article 8(3) of

130 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch) [14].131 Norwich Pharmacal Co. & Others v Customs and Excise Commis-sioners [1974] AC 133.132 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch) [81].133 Godfrey v Demon Internet Ltd., QBD [1999] 4 All ER 342, [2000] 3WLR 1020; [2001] QB 201.134 Notice and Take down procedure has been outlined in theElectronic Commerce Directive 2002 of the European Parliament.135 Digital Economy Act (2010), s 3 (Obligation to notify sub-scribers of reported infringements).136 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch).137 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch) [1].

European Parliament and Council Directive 2001/29/EC of 22

May 2001 on the harmonisation of certain aspects of copyright

and related rights in the information society (“the Information

Society Directive”)”.138 The claimants argued that the Act and

the Directive requires the defendants to take preventative

measures to block access or impede access by the defendant’s

customers to a P2P file-sharingwebsite, namely The Pirate Bay

(“TPB”).139 TPB was not joined in the action, nor was this

required underArticle 8(3) of the Information Society Directive

and section 97A of the 1988 Act, which gives jurisdiction to the

court to grant injunctions against intermediaries.140 In addi-

tion, the Information Society Directive was incorporated into

the 1988 Act by the Copyright and Related Rights Regulations

2003, SI 2003/2498 (“the 2003 Regulations”).141

After establishing jurisdiction to hear the case, The High

Court addressed four key legal issues: 1) whether the users of

TPB infringed on the copyrights of the claimants under section

17of the 1988 Act by copying sound recordings142; 2) whether

the users of TPB infringed on the copyrights of the claimants

under section 20 of the 1988 Act by communicating sound re-

cordings to the public143; 3) whether the operators of TPB are

liable for copyright infringement because “the operators have

committed the tort of authorising infringements by UK

users”144; and 4) whether the operators of TPB are liable for

copyright infringement because “theoperators are jointly liable

for infringements by UK users (i.e., liable as accessories).”145

With respect to the users of the TPB, Arnold J held that the

UK users with accounts at TPB, acting as both uploaders and

downloaders, infringed and continue to infringe on the

copyright of the claimants both by copying the claimants’

sound recordings on a large scale146 as well as by communi-

cating sound recordings to the public.147 In his judgement,

Arnold J made a clear stance similar to the Hong Kong Court of

Final Appeal’s judgment in Chan Nai Ming, reasoning that

users of a torrent hosting site (The Pirate Bay), and therefore

use of the torrent protocol to obtain infringed materials,

would infringe on the claimant’s copyright.148 Furthermore,

he had concluded that the use of P2P software would

142 Ibid.143 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch) [39].144 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch) [72].145 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch) [72].146 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch) [43].147 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch) [71].148 However, recent UK judgement in the court of DramaticoEntertainment Ltd. has made the inference that since using the P2Pprotocol would render users both downoaders and uploaders,mere use would make users guilty of distributing illegal copies tothe public. Dramatico Entertainment Ltd. v British Sky BroadcastingLtd. [2012] EWHC 268 (Ch) [68].

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automatically render the users both downloaders and

uploaders and that by distributing copies to the public via

electronic means, the users were in violation of section 20 by

communicating the sound recordings to the public.149

With respect to theoperatorsof theTPB, theHighCourtheld

that the operators of TPB, in open defiance of the rights of the

copyright owners, “authorise its users’ infringing acts.[and]

go far beyond mere enabling or assisting.[in that] they

‘sanction, approve, and countenance’ the infringement of

copyright committee by its users.”150 On the final issue, Arnold

J found that the operators of TPB “induce, incite, or persuade its

users to commit infringements of copyright”,151 acting under a

common purpose designed to infringe on the claimants’

copyrights.152 The court noted that TPB did profit from their

activities and, as such, they were jointly liable for the in-

fringements committed by the users of their BitTorrent site.

The High Court’s judgment on these issues may appear to

have a chilling effect on users and OSPs; however, TPB is still

active, operators of the TPB collectively have yet to fulfil the

terms of their sentences and penalties in Sweden, and uses of

P2P file sharing networks continue to engage in illegal P2P file

sharing causing copyright infringement. It has also been

noted in the UK court that those who seek to obtain infringed

material via a torrent file would infringe copyright laws153;

however prosecuting individual P2P “downloaders” would be

costly and impractical.154 These issues of effective prosecu-

tion and enforcement are echoed in other jurisdictions such

as France and Japan.

5.4. France

France’s copyright law with respect to digital content is

codified in the HADOPI law, named for the agency created to

enforce the law. In French, HADOPI stands for Haute Autorite

pour la Diffusion des Œvres et la Protection des Droits sur Internet.

In English, this means “the High Authority for the Dissemi-

nation of Works and Copyright Protection on the Internet”.155

The HADOPI law has been controversial yet, after some

modifications,156 it passed both the French National Assembly

and French Senate in May 2009.

Under the HADOPI, the online infringement of copyright is

regulated by applying a graduated response system (i.e.,

149 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch) [68].150 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch) [81].151 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch) [83].152 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch) [83].153 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch) [40], [43].154 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch) [14].155 Alexis Koster, ‘Fighting Internet Piracy: The French ExperienceWith The Hadopi Law (2012) 16(4) International Journal of Man-agement & Information Systems 327, 328.156 Koster (fn 156) 328 (discussing the major modification ofremoving the power of the HADOPI to suspend a user’s accessto the Internet and shifting that to the courts based on areview).

three-strikes system) that is enforced by the Committee of

Copyright Protection (CPD) consisting of three judges.157 In

effect, the internet activity of users in France is monitored by

the government. The first step in the graduated response

system is an email warning to the alleged offending user

based on a complaint received from the copyright holder or

representative to HADOPI.158 In addition, the email warning

requires the ISP to monitor the subscriber’s internet connec-

tion while the subscriber is invited to install a filter on their

internet connection. If the alleged offender repeats the

infringing activity within six months of the first step and the

copyright holder files a complaint, the HADOPI will invoke the

second step in the graduated response system, namely send a

certified letter with similar warnings as the email message. If

the alleged offender continues to infringe on the right holder’s

copyright and is accused of repeated offences, the CPD may

forward the offender’s file to court, which has the sole au-

thority to suspend the subscriber’s account and issue fines.159

In addition to measures targeted at offending users, the

HADOPI encourage ISPs to be responsible and provide valid

copyrighted content as well as encourage users to visit such

responsible sites by awarding a “PUR” label, a French acronym

translated into English as “Encouragement for Responsible

Use”.160 Copyright holders and rights holders may also

comment on the HADOPI’s intent to issue a PUR to certain ISPs

and websites through an online consultation period. France’s

first conviction under the new law involved an internet sub-

scriber (Prevost) who failed to ensure the security of his

internet connection, which inadvertently resulted in his soon-

to-be ex-wife taking advantage of the connection to illegally

download Rihanna songs. The court found the man guilty of

failing to secure the internet connection after being given

warnings and preventing his ex-wife from downloading the

infringing content even though he was aware the circum-

stances. The man was fined US $194.161 At the time of Pre-

vost’s conviction, 13 other cases were pending.162

Two years after its implementation, theHADOPI conducted

two random sample surveys consisting of 1500 users (in

October 2010 and March 2011), to test the effectiveness of the

new law. Koster discusses some of the salient results

including: “1) the number of respondents approving of Hadopi

has gone from 41% to 50%; 2) the number of respondents who

decreased their use of illegal downloading, or stopped it, went

from 25% to 41%; and 3) of the 100 respondents who received a

warning or knew somebody who did, 50% completely ceased

illegal downloading.”163 Despite the seemingly positive results

157 Ibid.158 Ibid.159 Koster (fn 156) 328.160 Koster (fn 156) 328e329.161 Greg Sandoval, ‘France sees first conviction under new antipi-racy law’ (CNET News, September 13, 2012)<http://news.cnet.com/8301-1023_3-57512506-93/france-sees-first-conviction-under-new-antipiracy-law/> accessed 18 February 2013.162 Sandoval (fn 162).163 Koster (fn 156) 329; See also Megan Geuss, ‘French anti-piracyagency Hadopi only sued 14 people in 20 months’ (Ars Technica,September 6, 2012) <http://arstechnica.com/tech-policy/2012/09/french-anti-piracy-agency-hadopi-only-sued-14-people-in-20-months/> accessed 18 February 2013.

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and deterrent effect, the law has both political and consumer-

related organization detractors who question the law on the

basis of both constitutional and privacy grounds. However, as

compared with other jurisdictions, namely United Kingdom

and United States, France does appear to take a more active

approach in tackling copyright infringement of digital content

by focussing on a clear and active enforcement mechanism

and measuring results. This is in line with many who argue

that reducing online copyright infringement through illegal

P2P file sharing is largely a matter of educating users and

changing the mind-set of alleged infringers.

172 Joshua Williams, ‘Man Arrested for BitTorrent File-sharing inJapan’ (Examiner.com, July 20, 2010) <http://www.examiner.com/article/man-arrested-for-bittorrent-file-sharing-japan> accessed18 February 2013.173 ‘Avatar Uploader Arrested Due to Japanese New Anti-PiracySystem’ (P2P On!, April 6, 2010) <http://www.p2pon.com/2010/04/06/avatar-uploader-arrested-due-to-japanese-new-anti-piracy-system/> accessed 18 February 2013.174 ‘Perfect Dark P2P User Arrested for Sharing Anime’ (P2P On!,October 9, 2010) <http://www.p2pon.com/2010/10/09/perfect-dark-p2p-user-arrested-for-sharing-anime/> accessed 18 Febru-

5.5. Japan

Japan’s copyright law contains provisions similar to Section 17

of the United States Code which covers the copyright protec-

tion of digital content. Article 113 of the Japanese Copyright

Act defines copyright infringement as involving both distrib-

uting and possessing content for the purpose of distributing it

and infringing on the rights of the copyright owner.164 The

Japanese Copyright Act allows for recovery of damages and

injunctive relief.165 In 2010, an amendment to the Japanese

Copyright Act was introduced which makes it illegal to

download copyrighted material without the owner’s consent

as this is committing copyright infringement.166 However, the

language of the Act imposes a burden on the user to know that

the file was illegally uploaded and does not offer any criminal

penalties or punishment, though civil action is still available

to the rights holder.167

From a cultural standpoint, Japan stresses the importance

of handling issues outside the litigation arena, making it less

likely that copyright owners will enforce their rights.168 Thus,

it is not unusual to find that despite the significant increase in

Japan’s file-sharing population since 2000, there have been no

civil lawsuits filed by copyright owners against file-sharers.169

While individual copyright owners have not enforced their

rights, the Japanese government has taken an active role in

copyright enforcement, especially with respect to illegal P2P

file sharing.170 For example, in 2009, police from all over Japan

arrested 10 people for illegally sharing copyright material

using the software “Share P2P”.171 In 2010, a thirty-one year

old man was arrested for illegally sharing TV programs over

164 Chosaku-ken-h�o [Copyright Act], Law No. 48 of 1970, art.113(ii), available at Japanese Law TranslationeCopyright Act,MINISTRY JUST. <http://tinyurl.com/6xycfrh> accessed 18February 2013 [hereinafter Japanese Copyright Act].165 Japanese Copyright Act, art. 114(3); Japanese Copyright Act,art. 112(1).166 Christopher Siebens, ‘Divergent Approaches to File-SharingEnforcement in the United States and Japan’ (2011) 52(1) Vir-ginia Journal of International Law 155, 178e179 (prior to theamendment, only uploading copyright content without permis-sion was prosecutable offence).167 Siebens (fn 167) 179.168 Siebens (fn 167) 182.169 Siebens (fn 167), 174 (Japan’s file-sharing population was 1.8million in 2008 up from 1.3 million in 2005).170 Siebens (fn 167) 175e177.171 Jared Moya, ‘Japanese Cops Arrest 10 File-Sharers’ (ZeroPaid,December 2, 2009) <http://tinyurl.com/6gx5w2h> accessed 18February 2013.

the BitTorrent network,172 a sixty-two year old man was

arrested for illegally uploading major US movies,173 and a

forty-two year old woman was arrested for illegally uploading

animation using a file sharing software that was supposed to

mask her identity.174 In 2011, police arrested eighteen file-

sharers across fifty locations in Japan for illegal uploading

copyrighted works and illegal P2P file sharing.175

Perhaps the most well-known Japanese court case

regarding illegal P2P file-sharing occurred in 2002 against a

former researcher at the University of Tokyo, Isamu Kaneko

(Kaneko). Kaneko designed a file-sharing tool known as

“Winny”, which became increasingly popular with users and

did not require the use of a central server like Napster.176 In

2004, Kaneko was arrested by the Kyoto Prefectural Police on

“suspicion of conspiracy to commit copyright infringe-

ment”,177 subsequently released on bail, and then convicted in

December 2006 in Tokyo District Court of assisting in copy-

right violations by making Winny available online with the

knowledge that it would be used for copyright infringe-

ment.178 Kaneko always insisted that he did not intend for

Winny to be used for copyright infringement and did not

design the tool to assist in infringing activities. He appealed

the decision of the Tokyo District Court. In October 2009, the

Osaka High Court overturned the district court’s ruling,

reasoning that Kaneko never promoted the Winny tool with

the intent to cause copyright infringement.179 In its decision,

Judge Masazo Ogura ruled that “Merely being aware of the

possibility that the software could be abused does not

constitute a crime of aiding violations of the law, and the court

cannot accept that the defendant supplied the software solely

ary 2013.175 ‘Police Arrest 18 Alleged Movie, Music and Software Upload-ers’ (TorrentFreak, January 15, 2011) <http://torrentfreak.com/police-arrest-18-alleged-movie-music-and-software-uploaders-110115/> accessed 18 February 2013.176 Siebens (fn 167) 164.177 Siebens (fn 167) 164.178 Siebens (fn 167) 164; See also Jun Hongo, ‘File-sharing: HandleWinny at Your Own Risk’ (Japan Times, October 27, 2009) <http://aws.japantimes.co.jp/news/2009/10/27/news/file-sharing-handle-winny-at-your-own-risk/> accessed 18 February 2013; SteveMcClure, ‘Winny’sKanekoFinedForCopyrightViolation’ (Billboard.biz, December 14, 2006) <http://www.billboard.com/biz/articles/news/1328688/winnys-kaneko-fined-for-copyright-violation>accessed 18 February 2013.179 Siebens (fn 167) 164; See also, ‘File-Sharing App CreatorNot Guilty of Copyright Infringement’ (Torrent Freak, December23, 2011) <http://torrentfreak.com/file-sharing-app-creator-not-guilty-of-copyright-infringement-111223/> accessed 18 February2013.

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to be used for copyright violations.”180 Thus, enforcement

was left to the individual copyright holders.

The prosecution appealed the decision. In 2011, Japan’s

Supreme Court heard the case and upheld the Osaka High

Court’s decision in favour of Kaneko and cleared all charges

against him, thus ending a seven-year legal battle.181 This

was considered an important decision because it is the first

time a developer was convicted. In addition, the case was

considered important especially by technology developers

and tech companies because it was thought that

convicting Kaneko would have a chilling effect on tech-

nology innovation. In comparison with other jurisdictions,

the final verdict appears to be in line with international

standards and case law, which does not generally impose

liability on products and services which are not marketed

for the purposes of inducing or assisting in copyright

infringement.

Across this multi-jurisdictional comparative analysis, the

next section focuses on legal developments in Hong Kong and

the recent 2007 judgment by the Hong Kong Court of Final

Appeal in Chan Nai Ming v HKSAR, a seminal case on illegal P2P

file sharing and allegations of copyright infringement under

Hong Kong’s copyright law. This discussion is followed by an

analysis of whether the Court of Final Appeal’s decision and

Hong Kong’s proposed legal reforms are in line with interna-

tional standards and adequately address outstanding issues

in this field.

185 Copyright Ordinance (Cap 528) 1997, s 17e22. Most works willbe protected 50 years after the death of the author, with theexception of typographical arrangements of published workssuch as magazines and newspaper, which is set at 25 years.186 Copyright Ordinance (Cap 528) 1997, s 64.187 Copyright Ordinance (Cap 528) 1997, s 118.188 The appellant had argued that distribution would usuallyrequire active involvement of the distributor, where a copy would

6. The current law on copyright protection inHong Kong

Copyright protection is crucial in maintaining any healthy

economy by protecting intellectual property of its domestic

and foreign investors. Having one of the cheapest and fastest

internet connections available,182 Hong Kong is not only an

ideal business hub for a digital content market, but also a

potential breeding ground for digital piracy. It is therefore

imperative that effective legal protections exist against this

particular type of copyright infringement.

6.1. The copyright ordinance in Hong Kong

Traditional copyright law in Hong Kong, consistent with in-

ternational standards, protects the original expression of

ideas such as literary works, dramatic performances, art,

music, broadcasts, films and published works.183 Related laws

grant the owners of such works the right to authorize or

restrict its copying, distributing, renting, adapting or public

broadcasting.184 This protection is automatically granted to

the owners of the original works without any formal

180 Andre Yoskowitz, ‘Winnie Creator Wins Conviction Appeal’(News by Afterdawn, 9 October 2009) <http://www.afterdawn.com/news/article.cfm/2009/10/09/winny_creator_wins_conviction_appeal> accessed 18 February 2013.181 ‘File-Sharing App Creator Not Guilty of Copyright Infringe-ment’ (fn 180).182 Holroyd and Coates (fn 9) 115.183 Copyright Ordinance (Cap 528) 1997, s 5e10.184 Copyright Ordinance (Cap 528) 1997, s 22.

registration and will last between 25 and 50 years after the

death of the author, depending on the type of work.185

In Hong Kong, the Copyright Ordinance (Cap 528) stipulates

that copyright infringement occurs if any of the author’s

rights are carried out by anyone other than the author without

his permission, such as the original work being copied in

material form, and includes its storage in electronic me-

dium.186 Part II of the Copyright Ordinance outlines the rem-

edies available for infringement, and grants the owner civil

remedies of damages and injunctions to take down the public

availability of the work. In addition, there is also criminal li-

ability in selling, leasing or displaying an infringed copy for

financial gain or in the course of trade or business, as well as

making, importing, or exporting a copy for the same

purpose.187

6.2. The decision in Chan Nai Ming v HKSAR (HongKong Court of Final Appeal)

The case of Chan Nai Ming v HKSAR, decided by the Hong Kong

Court of Final Appeal (CFA) in 2007 has at least clarified the

application of section 118(1)(f) of the Copyright Ordinances

and whether P2P seeding constitutes unauthorized copying

and distributing.188 The appellant Chan was found to have

made digital copies of movie VCDs that he owned and shared

online by posting torrent files on an internet forum. Issues

raised in court were whether the digital reproduction and

transmission of a copyrighted work in electronic form

(without the physical transfer of a tangible storage medium)

would satisfy the definition of “copying” in law,189 and

whether a process in which the downloader initiates the

production and transmission of a copy would still constitute

an act of “distribution.”190

Ribeiro PJ, upholding the Magistrate and Court of Appeal’s

decision, agreed that distribution of copies “in material form”

need not be a transfer of tangible medium and, using the

obvious example of consumers purchasing and downloading

software from online stores, recognised that copyrighted

works can be bought and distributed entirely via the internet

just like tangible products sold at a physical store.191 The CFA

also stated that, in the particular situation of P2P software,

copies of the infringedmaterial (in the form of packets) would,

in fact, first be made on the distributor’s machine and then

be made and transferred such that the distributor would nolonger possess it afterwards.189 Copyright Ordinance (Cap 528) 1997, s 23(2) (“Copying of awork means reproducing the work in any material form. Thisincludes storing work in any medium by electronic means.”).190 The Appellant had argued that distribution would usuallyrequire active involvement of the distributor, where a copy wouldbe made and transferred such that the distributor would nolonger possess it afterwards.191 Chan Nai Ming v HKSAR [2007] CFA 36 [43].

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transmitted to the downloader, which qualifies as distribution

in accordance with the ordinance. Moreover, the CFA held

that the distributor’s act ofmaking the infringedwork publicly

available by the use of P2P software and the effort he took to

keep the computer online and software running for “seeding”

(albeit through an automated process) was enough to consti-

tute active distribution of said copies.192

196 Copyright (Amendment) Ordinance 2007 <http://www.legco.gov.hk/yr06-07/english/ord/ord015-07-e.pdf> accessed 18 Febru-ary 2013.197 Copyright (Amendment) Ordinance 2009 <http://www.gld.gov.hk/egazette/pdf/20091348/es12009134815.pdf> accessed 18February 2013.198 Legislative Council Panel on Commerce and Industry, Pro-posals for Strengthening Copyright Protection in the Digital Environ-ment (Hong Kong Intellectual Property Department 2009) para. 25<http://www.cedb.gov.hk/citb/ehtml/pdf/consultation/Panel_Paper_Digital_Eng_Full.pdf> accessed 18 February 2013.199 Legislative Council Panel on Commerce and Industry, Proposalsfor Strengthening Copyright Protection in the Digital Environment(Hong Kong Intellectual Property Department 2009) para. 25http://www.cedb.gov.hk/citb/ehtml/pdf/consultation/Panel_Paper_Digital_Eng_Full.pdf accessed 18 February 2013 (hereinafterProposals for Strengthening Copyright Protection).200 Copyright (Amendment) Bill 2011, [2]e[3].

6.3. Ambiguities in Chan Nai Ming

It was clear that Chan Nai Ming was built upon very

straightforward facts. The judges were satisfied that the

evidence before them indicated there was full transmission

of copyrighted work, in full violation of the Copyright

Ordinance.193 Despite this recognition, the prosecutor

opted to convict on attempting to distribute in order to

“avoid any difficulties that might be posed by the require-

ment in the full offence of showing that distribution was to

such an extent as to cause prejudice to the copyright

owner.”194 This, however, leaves the question as to

what minimum requirements would be needed for a

conviction of attempting to distribute copyrighted material

under Ordinance.

This also hints at the reality that the operation of P2P file

sharing is often more complex and confusing. The appellant

was indeed caught red-handed by identifying himself on an

internet forum by posting a torrent file that directs to illegal

copies of movies that hemade personally. Recalling our issues

of P2P file sharing discussed earlier, the scenario of having

multiple sources of this illegal copy could not and was not

addressed with those facts.

Also related to the issue of unintentional seeders, the court

in Chan Nai Ming based its decision partially on the fact that

the mere usage of this software, particularly by leaving it on

for extended periods for others to continue to download from

it, constitutes active and wilful steps in distribution that sat-

isfies the definition in section 118(1)(f) of the Copyright Ordi-

nance. The court, however, failed to take the extra step of

addressing the legality for the other users downloading the

same file along with the customs officer running the sting, all

of whom are technically guilty of infringement if they leave

their P2P software running to “seed.”

The same facts can be applied to the issue of sharing

incomplete copies. The court in Chan Nai Ming was not

particularly clear on what would constitute an “attempt” to

commit the offense. If we also consider that themere usage of

P2P software implies intention to distribute,195 it would mean

that every downloader may be easily found guilty of

attempting to distribute an infringed copy, even if no suc-

cessful transmissions were made. The implications of this

direction would have significant and systemic effects that

should not be overlooked by the court.

From the above analysis, it seems clear that there are

still open-ended questions left unanswered by current

192 Chan Nai Ming v HKSAR [2007] CFA 36 [54].193 Chan Nai Ming v HKSAR [2007] CFA 36 [6].194 Ibid.195 This was the approach taken by the High Court in DramaticoEntertainment Ltd.

authoritative case law. Since the case of Chan Nai Ming, there

have been amendments to the Copyright Ordinance in2007196

and 2009,197 but these amendments did not address the le-

gality of end-user piracy in downloading pirated software for

private use, which remains a sensitive and controversial

subject.198 To this date, there is no legislationwhich addresses

this particular subject and there are few, if any, legal cases

that deal with providing further guidance on the grey areas

left by Chan Nai Ming on P2P file sharing.

6.4. The Hong Kong Copyright (Amendment) Bill 2011

The most recent amendments, recommended by the Copy-

right (Amendment) Bill 2011 (“the Bill”), are an extension of

the government’s 2009 proposal on Copyright Protection in

the Digital Environment.199

In an effort to make the ordinance more adaptable to un-

foreseeable technological developments, the Bill proposes to

expand owner rights and not limit such rights to the cate-

gories of transmission in the existing ordinance.200 In addi-

tion, the Bill intends to criminalize any transmission of

infringed material in the course of business and trade for

profit, aswell as the distribution and transmission of infringed

material to the extent that it prejudicially affects the owner of

the copyright. To aid the court in determining what is “prej-

udicial” to copyright owners, a non-exhaustive statutory list

of factors was proposed.201

To combat content piracy specifically, the Bill has set up a

“Notice and Take down” process202 similar to that discussed

earlier, which states that OSPs who facilitate the transmission

of infringed material such as hosting said files on their

servers, even holding the data in cache, are technically sec-

ondary infringers guilty of facilitating the file transfer. By

following the optional guideline to take down any infringed

data upon receiving notices from alleged owners, the OSPs

would gain a “Safe Harbour” exemption from any liability that

might fall on them as a facilitator for making the material

public.203

201 Copyright (Amendment) Bill 2011, Clause 51, s.118(8C),s118(8D).202 Copyright (Amendment) Bill 2011, Clause 45.203 OSPs are also to follow a “notice and notice” procedure thatrequires them to forward any complaints from copyright ownersto potential infringers who are their subscribers.

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6.5. The 2011 Amendment in relation to P2P file sharing

Under the current proposed changes outlined in the Bill, it

would seem that the 2011 Bill avoided the subject of illegal

downloading. The current amendments appear to depart from

the 2006 consultations on Copyright Protection in the Digital

Environment, which went into detail about the need to start

discussion on the legality or illegality of downloading

infringed materials and even advocate consideration of the

impact of the development of P2P technology.204 The more

recent Bill has deemed this subject controversial yet has

refused to implement any actions to target the abuses and

copyright violations created by the use of P2P technology to

illegally download copyright content.205 Instead, the current

Bill targets those who share files with an intention to make a

profit or thosewhowould share files in amannerwhichwould

have a “prejudicial effect” to the copyright owners, which in

most circumstances refers to commercial piracy run by

criminal organizations, or exceptional cases of users

announcing a massive collection of copyrighted material, and

not the lone downloader.

The Hong Kong Administration plainly declared its goal to

target large scale piracy instead of end-user digital piracy

when it tried to defend its decision to not include any mea-

sures that would penalize downloading of infringedmaterials,

such as a graduated response system to retard internet access

for repeat download offenders, or even imposing any kind of

liability for those posting or forwarding links to the shared

material.206 Remedies against specific downloaders would

remain a civil matter limited by the resources of individual

copyright owners.

This final version of the Bill hardly mentions P2P technol-

ogy anymore. In fact, the 2009 proposal clearly states that it is

satisfiedwith the decision of Chan Nai Ming and is comfortable

with how existing law deals with P2P related crime207 (of

which case law authority more or less consists only of Chan

Nai Ming e a point that becomes apparent when it can be

observed that Chan Nai Ming was the only relevant case law

the Bill could reference from to generate its statutory list of

factors to determine the “prejudicial” effect).208

Consistent with the decision in Chan Nai Ming yet without

considering the evolving operation of significant internet file

sharing, the amendments focus on targeting people (or crim-

inal organizations) who intends to share files on a massive

level and have shifted the law’s gaze away from the unan-

swered issues mentioned above. The same ambiguities and

204 Legislative Council Panel on Commerce and Industry, Copy-right Protection in the Digital Environment (Hong Kong IntellectualProperty Department 2006) [1.9]e[1.12].205 Bills Committee on the Copyright (Amendment) Bill 2011,Administration’s response to Comments raised by Deputations (LCPaper No. CB(1)3061/10-11(09) 2011) item 9(ii).206 Bills Committee on the Copyright (Amendment) Bill 2011 (fn224) Response to item 1(vi).207 Legislative Council Panel on Commerce and Industry, Proposalsfor Strengthening Copyright Protection in the Digital Environment(Hong Kong Intellectual Property Department 2009) <http://www.cedb.gov.hk/citb/ehtml/pdf/consultation/Panel_Paper_Digital_Eng_Full.pdf> accessed 10 September 2012 [24].208 Copyright (Amendment) Bill 2011 [6].

lack of proper guidelines about P2P file sharing of copyright

materials would remain if this bill were to pass, granting no

advantage to copyright owners, especially those small busi-

nesses that have insufficient resources to pursue and obtain

civil remedies from every infringer when criminal law can do

nothing.

Since end-user P2P file transfers are almost always done

outside the course of business or trade, most cases would

focus on the alternate requirement of “to such an extent as to

affect prejudicially the copyright owner.”209 Therefore,

particular scrutiny should be placed on how the term “preju-

dicial” is defined. The non-exhaustive list of factors covered in

the Amendment,210 while general, are explained and justified

in a white paper accompanying the 2011 Bill,211 which pro-

vides more insight as to how the court should consider the

issue of prejudice. The document proposed that the codifica-

tion of “prejudice” should involve consideration of the com-

mercial value of the original works, whether the copy is

complete and may substitute the original, whether the mode

of transmission may allow potential widespread sharing (i.e.:

the internet, P2P, etc.), and whether the infringed act may

potentially affect the demand for the original work. From

simply applying these factors, it is clear that they would still

not cover the case where the files being shared are incomplete

and unusable by themselves. The document also placed

particular attention to the scale of the transmission, citing the

decision in Chan Nai Ming that 30e40 downloaders would

“inevitably involve prejudice to the copyright owners.”212

Although any number of downloads would affect copyright

owners to a certain degree, the document, and therefore the

amendment, seems to indicate that the number of down-

loaders laid out in ChanNai Ming is theminimum requirement.

Unfortunately, 40 users is such an infinitesimal number

compared to the tens of thousands of P2P users involved in

sharing a single file that such a threshold would seem

extremely low. It is therefore plainly observed that when

considering P2P, some statutory factors may seem too vague

while others are too general and all-encompassing, implying

the simple fact that there probably was minimal consider-

ation for P2P issues by the legislature, or that lawmakers had

truly taken their “large-scale” policy to heart and aimed

strictly at clear-cut massive scale infringements.

The Amendment’s policy to only target large-scale piracy

can also be seen from its stance (or the lack thereof) against

links to the infringed material. In the eyes of the drafters, the

issue of downloading infringed files appears to be too

controversial a subject to legislate. In effect, this exempts

users who share links to copyright material from criminal

prosecution.213 Posting of links, such as URLs or even the

209 Copyright (Amendment) Bill 2011, s 118(g).210 Copyright (Amendment) Bill 2011, Clause 51.211 Bills Committee on the Copyright (Amendment) Bill 2011,“Prejudice” in Criminal Copyright Infringement Cases in HongKong and Overseas Jurisdictions (LC Paper No. CB(1)3061/10-11(06)2011).212 Bills Committee on the Copyright (Amendment) Bill 2011 (fn231) 7.213 Response to item 1(vi), Administration’s response to Com-ments raised by Deputations, Bills Committee on the Copyright(Amendment) Bill 2011. LC Paper No. CB(1)3061/10-11(09).

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torrent files (the backbone of the BitTorrent system), on

servers, forums, or other public places would not be illegal, as

opposed to sharing or streaming the infringed copies yourself,

when you have a degree of control to “determine the content

yourself.”214

The proposed guidelines only cover cases where OSPs have

inadvertently hosted infringed materials, where upon notifi-

cation of this activity, the infringing materials would be taken

down. The way that P2P operates clearly does not involve

hosting or caching of any infringed copies by OSPs, so these

guidelines do nothing to regulate P2P piracy. The only things

that are hosted are torrent files or links, which are by them-

selves not classified as infringed material, and therefore

would go unregulated and unpunished.

The resulting effect of the implementation of this

amendment on P2P-related piracy is therefore arguably little

to none. Not only would it fail to complement existing

enforcement measures, it clearly does not afford any rem-

edies for publishers of copyrighted works, particularly those

of smaller scale. As discussed above, single or small-business

publishers do not have the resources to launch in-

vestigations or sue individual infringers for civil remedies.

They certainly would not have enough negotiating powers to

persuade OSPs to assist in identifying the seeders to begin

with.

A comparison between Hong Kong’s 2011 Bill and laws in

other jurisdictions show similar approaches to incorporate

and protect more general communications rights, as well as

provisions that actively involve OSPs in anti-piracy activ-

ities. In general, the 2011 Bill is arguably a move in the

positive direction towards the international standard.

However, as compared with the trends in the US, UK, and

France, for example, towards adopting more aggressive

deterrent measures, such as penalizing unauthorized

downloads, restricting links to copyrighted materials and to

desperately push for even more aggressive solutions (albeit

unsuccessfully for now), Hong Kong’s recent legislative

amendments can more accurately be described, at best, as

a conservative effort to catch up with international stan-

dards with respect to tackling digital piracy of copyrighted

works.

Furthermore, it can be argued that the 2011 Bill fails to

recognise that piracy is currently winning the war on a global

scale. Pirated and counterfeited goods are a 250 billion dollar

business215 that is on the rise, a fact well known to many

developed nations (those who carry and export the most

intellectual property). These nations appear desperate to

come up with more aggressive countermeasures to this

epidemic, leading to an international surge in advanced

copyright protection measures and related legislation. In

order to maintain its reputation as an international business

hub and gateway to the Asia-Pacific region, Hong Kong would

benefit from taking a more forward thinking approach in

devising ways to protect its individual and collective intel-

lectual property.

214 Copyright (Amendment) Bill 2011. Clause 13, sec.28A(5).215 ‘Anti-Counterfeiting Trade Agreement (ACTA)’, Intellectual Prop-erty Office. (United Kingdom 10 Feb 2012). <http://www.ipo.gov.uk/pro-crime-acta> accessed 20 October 2012.

7. Future recommendations for combatingP2P piracy

Although existing case law has applied the current ordi-

nances of Hong Kong specifically to P2P file sharing, it only

clarified the issue of passive distribution. The circum-

stances of the case did not give rise to the opportunity for

the Hong Kong court to more deeply address other issues

common to unauthorized P2P distribution. The proposed

amendment to the Hong Kong Copyright Ordinance (CO) has

also overlooked these issues and left them to the interpre-

tation of the courts pending future legal challenges under

the ordinance. Moreover, the CO only focuses on applying

criminal sanctions on those who intend to initiate the dis-

tribution but does not impose such criminal sanctions on

those who download or advertise the means to do so (for

example, the posting of links and torrent files). This not only

does nothing to stem most cases of end-user P2P piracy, but

left a grey area implicating every downloader as a potential

distributor, thereby making every P2P user liable for crim-

inal prosecution under the current interpretation of the law.

That is not only impractical to the goal of stemming piracy

but also increases the administration’s workload by a

thousand-fold, creating a counterproductive solution to the

real issues.

Current case and legislation appears inadequate to address

the full-scale implications of P2P-specific piracy. Further

changes may be needed to effectively stem P2P digital piracy.

This section discusses and recommends several legal and

non-legal measures towards this goal.

7.1. Future case law to resolve P2P-specific scenarios

While the Hong Kong 2011 Bill’s proposed list of factors for

determining a “prejudicial effect” appears to work for clear

and obvious instances of large-scale digital piracy, it may fail

in addressing the more complex situations mentioned in

section 3, such as those of multiple seeders, unintentional

seeding and sharing incomplete copies.

P2P, as the most well-known medium for internet piracy,

requires special considerations that cater to its unique

characteristics. To balance the crucial goal of implementing

an Ordinance that is technology-neutral with the increas-

ingly fast evolving nature of technology, this analysis con-

cedes that future legal challenges and resulting case law,

instead of additional legislation, would be better suited to

address the unresolved issues discussed above, particularly

in areas such as legally identifying the line between

“distributor” and “downloader” in relation to P2P piracy.

For example, greater thought and care must be placed on

clarifying the elements for establishing whether an

individual is ‘attempting to distribute’, what constitutes ‘a

complete transmission’ in relation to incomplete file seed-

ing, and procedurally, the extent to which a downloader is

criminally liable under the Copyright Ordinance. These

answers to these detailed issues may only come to light

when the court is faced with a legal challenge against po-

tential P2P infringers and forced to reckon with these

issues.

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7.2. Aggressive penalties and criminalizingunauthorized downloads

Having said this, it is observed that criminalizing unauthorized

downloads, or even going after individuals for participating in

end-user piracy, has repeatedly been declared as impractical216

and futile. The process of identifying individual users for legal

actionhasbeenabusedandoverusedby lawyersandcompanies

as a scare tactic or even as an alternative source of income.217

Organizations such as the Motion Pictures Association of

America (MPAA), famously accused for threatening thousands

of users with copyright lawsuits,218 have halted such actions

because of the overwhelmingly bad press it generates.219

Aggressive penalties such as the three-strikes system are also

still in its nascent form.220 Although the use of the three-strikes

system (i.e., graduated response) is used in countries such as

France with some success, its social-economic impacts are still

heavily debated,221 andwould also require close support of OSP

monitoring and user identification, of which execution is prob-

lematic on its own. Due to its controversial and largely untested

nature, Hong Kong’s 2011 Bill report indicates a decision to not

implement such a graduated response system.222

7.3. OSP cooperation in monitoring linking sites

As mentioned earlier in this article, OSPs are known to be hes-

itant in revealingcustomer identitiesorcuttingoff their services

due to their reluctance in accepting accountability as “internet

police” but mainly because it is clearly bad for business.223

Moreover, due to the aforementioned technical difficulties in

identifying users through their IP addresses, highly publicised

cases of mistaken identity224 have lessened the appeal of this

approach. In the face of disappointing results from targeting

individual end-users, it is suggested that lawmakers and policy

analysts should, instead, shift their focus more upstream and

target the posting of links and hosting of torrent files.

Ever since the law had specifically targeted those who host

and facilitate the transmission of infringed works, P2P soft-

ware had “delegated” the process of searching and storing of

the “index” of said files to online forums and torrent tracking

sites.225 The P2P piracy community continues to thrive and

expand using these links. Therefore, the logical approach is

not to target individual users but to control the extent to

which online forums and bulletin boards, the very places that

potential infringers congregate, can thrive in fostering P2P

sharing of infringed works.

216 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch) 14.217 Ramon Lobato, Shadow Economy of Cinema: Mapping InformalFilm Distribution (Palgrave Macmilan 2012) 108.218 Lobato (fn 300) 107.219 Ibid.220 Julie Cohen, Configuring the Networked Self (Yale UniversityPress 2012) 163.221 Smartt (fn 22) 376, 381.222 Bills Committee on the Copyright (Amendment) Bill 2011,Administration’s response to Comments raised by Deputations (LCPaper No. CB(1)3061/10-11(09) 2011) response to item 1(vi).223 Smartt (fn 22) 383.224 Smartt (fn 22) 381.225 Lobato (fn 300) 100.

This analysis suggests that lawmakers should revisit the

exemption for posting of URL links and torrents files, not to

target the people who post them, but to regulate the publishing

of these torrents files the same way it would for copyrighted

material. The 2011 Bill has already been developing a code of

practice forguidingOSPs to takedowninfringingworksthat they

may be hosting. A similar process can be made for the public

posting of directions to these works: safe harbour from liability

(from facilitating transmission of infringed works) will be gran-

ted to OSPs such as forum owners if they agree to, upon (well

supported) notice from potential copyright owners, take down

such links and files, or that they can show they have already

made substantial efforts to curb posting of infringed materials

(such as assigning staff or enabling automated programs to act

as a monitor and red flag any infringed links for further action).

Jurisdictions, such as the United Kingdom, have found

torrent-tracking sites guilty of infringement and deem it

appropriate to compel OSPs to deny user access to these

sites.226 UK’s Digital Economy Act has also delegated similar

responsibilities to independent regulator Ofcom, whom will

assist in processing complaints and facilitating user identifi-

cation, take down notices as well as civil action processes to

lighten the OSPs’ load.227 The United States has similar laws,

such as the Digital Millennium Copyright Act, to treat links to

infringed material similar to that of the copyrighted material

itself when it comes to liability of OSPs.228 This appears to be a

trend in other jurisdictions as more countries are recognising

the significance and potential copyright violations of

addressing links to infringed materials.

Currently, forum editors routinely filter for or take down

inappropriate material posted on their sites upon notice.229

Given this existing practice, it is not too far-fetched an idea

for them to do so with links to infringed material as well.

There are also ways to outsource monitoring to third party

contractors230 or even to independent regulators similar to

Ofcom which, in Hong Kong’s case, is the Office of the Com-

munications Authority. In addition, since regulatory parties

such as the Customs and Excise Department have anti-

internet piracy teams and computer forensic laboratories to

host stings, which led to the Chan Nai Ming prosecution,231

similar efforts can be made to monitor and red flag potential

links for the OSPs. This combined effort will make sure that

even small business owners have an official venue for

reporting and seeking remedies for copyright infringement,

however small in scale but nevertheless damaging.

Consistent with international practice, it will be up to

individual copyright owners to report the not so obvious

links e a process much easier and more affordable for small

226 Dramatico Entertainment Ltd. v British Sky Broadcasting Ltd. [2012]EWHC 268 (Ch).227 Smartt (fn 22) 374; ‘New measures to protect online copyrightand inform consumers’ (Ofcom June 26, 2012) <http://media.ofcom.org.uk/2012/06/26/new-measures-to-protect-online-copyright-and-inform-consumers/> accessed February 18, 2013.228 Digital Millennium Copyright Act 1998 (US) s 512(d).229 Smartt (fn 22) 379.230 Lobato (fn 300) 106e107.231 ‘Intellectual Property Protection’ (GovHK, November 2012)<http://www.gov.hk/en/residents/communication/infosec/intproperty.htm> accessed 18 February 2012.

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businesses than the traditional hunt for private information

and subsequent legal action towards every uploader, sharer

and downloader.

Finally, the 2011 Bill does not include a cost-sharing

mechanism that aids copyright owners in seeking remedies

or OSPs in setting up the recommended guidelines.232 How-

ever, in light of the changing landscape of digitalmedia and an

increase of copyright ownerswith dramatically less resources,

this point needs to be revisited, specifically for small scale

businesses, which, if they satisfy a predetermined threshold,

should be afforded aid, financial or otherwise, in seeking legal

advice or remedies.

7.4. Cross jurisdictional piracy

There is a cross-jurisdiction element to piracy which needs to

be considered, especially since many internet forums are

housed overseas and outside Hong Kong’s jurisdiction.

Traditional remedies would rely on international agreements

such as the Berne or Universal Copyright Conventions,233

which affords some protection to Hong Kong Copyright vio-

lations in signatory nations,234 especially if these copyrighted

works were already made available in those nations.235 What

could presumably happen in the case of a foreign torrent

tracker site is that if that particular country has similar

copyright legislation against links to copyrightedmaterial, the

Hong Kong copyright owner may initiate a notice and take

down procedure or other legal actions where available.

That said, the expansion of the internet and globalization

of media has guaranteed that copyright infringement may

occur in non-signatory nations that afford little or no copy-

right protection.236 The US has encountered this problem.

Although their existing laws allow injunctions to take down

infringing materials and links, they have considerably less

control if the infringement occurs overseas, even if the

infringed copyright belongs to US citizens. This was the

rationale behind the proposed SOPA bill, which was designed

to block internet access andmoney flow to overseas infringing

sites and companies. Unfortunately, the thought of entire

sites being blocked for small, unsubstantiated infringements

caused major OSPs to incite enough public opposition to stop

the bill, leading to the conclusion that it is unlikely that Hong

Kong is ready for SOPA-like approaches. This is especially the

case given that one of the major criticisms of SOPA was that it

placed a burden on local OSPs to cut off access to infringers

immediately (5 days) upon notice,237 while the burden of proof

of innocence is placed on the accused.

232 Paper for the House Committee meeting on 20 April 2012 (LCPaper No. CB(1)1610/11-12 2012) 45.233 Hong Kong Intellectual Property Department, ‘InternationalAgreements to which Hong Kong, China is a party’ <http://www.ipd.gov.hk/eng/ip_practitioners/international_agreements.htm>

accessed 18 February 2013.234 Basse (fn 5) 266.235 Smartt (fn 22) 379.236 Basse (fn 5) 197.237 Julianne Pepitone, ‘SOPA explained: What it is and why itmatters’ (CNN Money 20 January 2012) <http://money.cnn.com/2012/01/17/technology/sopa_explained/index.htm> accessed 18February 2013.

This analysis therefore further suggests an alternative to

SOPA-like remedy as a last resort to copyright infringement in

non-signatory nations: Instead of immediate action, access

should only be cut off after the infringers are allowed a

reasonable time and easily accessible methods (i.e.: web

forms) to respond with counter-arguments and supporting

material, at which point each OSP must take reasonable care

(and hopefully given a statutory guideline) to gauging the

merit of each side’s argument and decide whether to cut ac-

cess. This alternate process may not cut off infringement as

quickly as SOPA intended, but it will insure that both parties

get a fair “hearing” before penalties are imposed, without

engaging in expensive international law suits.238

7.5. Digital rights management

In addition to legal reforms, there is also hope in technical

remedies to P2P piracy. Forms of protection such as “Digital

Rights Management” (DRM) software and Content Scramble

System (CSS) encryption methods are only a few ways to

insure that material is used as the copyright holder inten-

ded.239 Such protection ranges from preventing music in CDs

to be ripped into MP3s to limiting the number of times a file

can be played, transferred or duplicated. In theory, if files need

authorization to be opened, their unauthorized distribution

on P2P networks would be harmless as each user would need

to seek individual authorization from the copyright owner

before they can enjoy the content.

While such limitations may protect copyright holder in-

terests and limit piracy, there are downsides to these

methods. While DRM protects the value for copyright holders,

the product’s perceived value for consumers would drop as

less can be done with the product they purchased.240 Con-

sumers have less use for files they cannot edit, copy or

transfer, and will certainly pay less for them. The myriad of

proprietary and competing DRM technologies in the market-

place also prevent users from viewing the same file across

different platforms.241 In response, companies such as Apple

and EMI Group, previous proponents of DRM, have ceased the

integration of DRM technology into their digital content sold

online.242

7.6. New business models and alternative revenuesources

Another school of thought proposes that internet piracy could

be stemmed by beating the pirates at their own game. It has

been theorized that consumers’ focus on price, quality and

availability of digital content overtook concerns for legality,

which in part drove the popularity of digital piracy into the

mainstream.243

238 Which may still end up fruitless as the cross jurisdictional“The Pirate Bay” legal battle saga has shown us.239 Simon Stoke, Digital Copyright: Law and Practice (Hart Publishing2009) 7.9.240 Peitz and Waldfogel (fn 20) 516.241 Peitz and Waldfogel (fn 20) 517.242 Basse (fn 5) 206.243 Smartt (fn 22) 386.

c om p u t e r l aw & s e c u r i t y r e v i ew 2 9 ( 2 0 1 3 ) 3 8 2e4 0 2 401

One approach is to legally make the same content readily

available online.244 Previous efforts by Hollywood to create an

online store for digital content failed because of technical

limitations and low consumer interest.245 Many considered

this concept to be ahead of its time 10 years ago yet techno-

logical limitations led to the piracy option as the more

convenient choice.246 Today, many digital media publishers

have taken this direction of trying to legally make copyrighted

content more readily available online.247 Companies like

Netflix, which used to offer DVD-rentals, shifted to on-

demand streaming content enabled by high-speed internet

connections,248 while services like Spotify offer a large song

catalogue for streaming and limited download for members

who pay a subscription fee.249 Companies like Hulu also

popularized offering television programs for a subscription fee

plus limited content for free and more companies are

following suit.250

The idea of making digital content and programs readily

available, more convenient, and of a higher quality than

those acquired through P2P, is a step in the right direction

towards directing more users back to legitimate means of

accessing digital content while still generating income for

copyright owners. Such income is shifted from individual

purchases to bulk subscription or even strictly to advertise-

ments shown during free programs.251 In fact, more content

copyright owners now favour the release of free digital

content like songs as a way to promote other products,252

such as live concerts or merchandise,253 leading to a more

lucrative source of revenue. In addition, it has also been

suggested that lower-quality versions can be released for

free via P2P networks for those who to sample the content

and to use this as a means to promotion the purchase of

higher-quality versions for those who wish to experience it

in full.254

However, this method is far from perfect, especially for

small business owners with a small customer base, who are

unattractive to advertisers and therefore would not make

enough advertising revenue to replace traditional methods to

obtain profits. It should also be noted that subscription fees

and advertising revenue is currently still generating less

profits than traditional means of content delivery such as

DVDs and pay-per-view on TV.255

244 Kamalla Sanders, ‘How to Fix The Entertainment IndustryWithout Passing Stupid Laws’ (Business Insider 31 January 2012)<http://www.businessinsider.com/how-to-stop-online-piracy-without-stupid-laws-2012-1?op¼1> accessed 18 February 2013.245 Lordanova and Cunningham (fn 11) 50.246 Lobato (fn 300) 97.247 Lordanova and Cunningham (fn 11) 53.248 Lobato (fn 300) 98.249 Smartt (fn 22) 372.250 Keith Regan, ‘EMI Agrees to Make Content Available on Ad-Supported P2P Network’ (E-Commerce Times, 06 June 2006)<http://www.ecommercetimes.com/story/50937.html> accessed18 February 2013.251 Basse (fn 5) 207.252 Peitz and Waldfogel (fn 20) 520.253 Smartt (fn 22) 367.254 Peitz and Waldfogel (fn 20) 500.255 Lobato (fn 300) 99.

8. Conclusion

Specifically for Hong Kong, its current law reform proposals

on protecting copyright of digital content aims to catch up to

international standards of protection. However, recent legis-

lative attempts have not adequately addressed the issues

raised by the use of P2P technology. Ambiguities in law

regarding P2P-specific scenarios still need to be addressed by

the courts in order to provide greater guidance regarding the

legal parameters of P2P file sharing and copyright infringe-

ment. In addition, this article has also highlighted that a shift

in the digital contentmarket hasmade small business owners

especially vulnerable to P2P piracy, causing an unprecedented

threat to the economy that current law reform efforts have

failed or are unable to address, threats which may demand a

more aggressive remedy.

Through a comparative analysis of P2P laws in other,

similar jurisdictions, this article has attempted to highlight

the reality that aggressive approaches such as access re-

strictions or graduated response systems are becoming more

common as nations are desperate for a cure to the rising

digital piracy threat. However, it appears that such aggressive

measures may not be an appropriate response andmay touch

on sensitive issues of civil liberties and privacy that may

generate disproportionate public outcry, especially if done so

without enough legislative transparency, proper public edu-

cation and buy-in, or failure to balance the interests between

copyright protection and protecting personal freedoms.

The article recognises that criminalizing individual down-

loads may not be a practical and cost-effective approach and

may, instead, create more problems than it solves. Instead,

more creative and commercially reasonable solutions should

be explored. For example, a more viable solution is to make

illegal downloading of copyright content much more difficult

by regulating the posting of links or files that direct potential

downloaders to the infringed files. In addition, refinement of

legal definitions and requirements forprosecutionas related to

P2P piracy can provide greater guidance in terms future

enforcement against those who truly intend to share copy-

righted work.256 Furthermore, this article has explored non-

legal approaches, and while technical solutions such as DRM

systems seem to be losing popularity, a change in business

models to compete with the price, quality and availability of

pirated content seems to be a promising direction to pursue.

Digital piracy has already established a firm grip on our

culture and social values. Instead of avoiding the issue of

managing P2P piracy of copyrighted digital content, the public

needs clear, advertised guidelines and education on legitimate

means of using copyrighted digital content as well as a clear

understanding of the consequences and effects of copyright

infringement. These efforts will ensure that piracy does not

become a deep-seated, socio-economic norm257 and, at the

same time, direct the public’s focus back to welcoming

256 This may include those who regularly create and supplyinfringed works for sharing. ‘MPAA helps land criminal caseconviction in P2P piracy case’ (CNET 29 June 2008) <http://news.cnet.com/8301-10784_3-9980256-7.html> accessed 18 February2013.257 Peitz and Waldfogel (fn 20) 493.

c om p u t e r l aw & s e c u r i t y r e v i ew 2 9 ( 2 0 1 3 ) 3 8 2e4 0 2402

legitimate means of accessing and enjoying copyright con-

tent. The end result is likely to be exactly what the govern-

ment, the public and copyright owners desire most: respect

for the creative process and creative content, a climate that

encourages innovation, and an environment in which parties

can enjoy digital content without fear of undue prosecution

for copyright infringement of digital content.

Man Wan Jason Fung is a JD candidate at City University of Hong

Kong School of Law, Hong Kong.

Dr. Avnita Lakhani (alakhani@cityu.edu.hk) is Assistant

Professor at City University of Hong Kong School of Law, Hong

Kong.