The US judge who presided over the nation's only successful copyright infringement case for file-sharing by an individual, has declared it a mistrial. He said he had committed a "manifest error" in his instructions to the jury and the award of damages of $222,000 was "unprecedented and oppressive". This decision is likely to have wide implications for the US record industry's fight against fie-sharing, but could the same outcome occur in the UK?

Judge Davis originally returned a landmark verdict in favor of the Recording Industry Association of America ("RIM") against Jammie Thomas, for making songs available on the Kazaa peer-to-peer CP2P") file-sharing network. It was the first time the US record industry had won a trial for file sharing, as most cases settle out of court for a few thousand dollars. The heart of the issue was whether making a copyrighted work available for download over a P2P network constitutes "distribution" under US laws.

Ms Thomas was found liable for sharing 24 songs so the record companies' award worked out at $9,250 per song. Ms Thomas appealed, arguing that the level of damages was disproportionate to loss suffered.

There was no dispute that Ms Thomas had violated RIM's reproduction rights by uploading the songs, but Judge Davis had incorrectly told the jury that the act of "making songs available" via a P2P network was sufficient to prove unauthorised distribution, "regardless of whether actual distribution has been shown". In his revised opinion calling the mistrial, Judge Davis now states that the US Copyright Act doesn't use the words "making available", and that simply putting songs into file-sharing networks does not equate to distribution unless you can prove that someone else downloaded those songs. The RIM had not, so a re-trial has been ordered.

What would happen if the "Ms Thomas" case came before a UK court?

Unlike the US, the UK now has a "making available" right introduced as a result of the 2001 EU InfoSoc Directive, as implemented by the UK Copyright and Related Rights Regulations 2003 (amending the Copyright, Designs and Patents Act 1988 ("CDPA"). Therefore as well as section 16 of the CDPA, which receives to the copyright owner exclusive rights to copy and communicate their works to the public, there is now a section 20 right that covers the "making available" of literary, dramatic, musical or artistic works, sound recordings or broadcasts to the public. A communication to the public includes making a copyright work available:

"... by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them (Section 20; 2b CDPA)

This is aimed at prohibiting unauthorised posting of copyright material on the web (including illegal activity over unlicensed P2P networks). The UK equivalent to the RIM, the British Phonographic Industry (BPI) that represents most of the UK record industry, has previously won two cases in the High Court against individual file sharers for making sound recordings available over P2P networks, with individuals in each case settling on average for damages of £1500 and £5000.

Another difference with the approach in the US is that in the Thomas case, for example, infringement was dealt with by means of a hearing before a jury who had power to award statutory damages of up to $150,000 per infringement. In the UK this type of case, like the vast majority of instances of file-sharing, would usually be heard in the civil courts before a judge only and damages for civil infringements in the actual loss suffered rather than punitive, as is often the case in the US.

In his revised opinion Judge Davis refers to current US statutory damages for copyright infringement, as being "wholly disproportionate" and says that Congress should amend the Copyright Act to address statutory damages, where a party did not infringe in search of Commercial gain. He goes on to say: 'Unfortunately, by using Kazaa Thomas acted like countless other internet users. Her alleged acts were illegal, but common. Her status as a consumer who was not seeking to harm her competitors or make a profit does not excuse her behaviour. But it does make the award of hundreds of thousands of dollars unprecedented and oppressive".

Judge Davis' change of heart in the case may be a blow to the US music industry's campaign against illegal file-sharers. However, despite the apparently stronger legal position of record companies in the UK, the prospect of having to track down, successfully identify and attempt to take legal action against thousands of individual illicit file-sharers (very often with only an e-mail alias to identify them), has so far not been proving particularly attractive.

One option (which the BPI has been exploring) is to enlist the support of Internet Service Providers ("ISPs") to act against customers who infringe copyright. At the same time there has been reluctance on the part of ISPs to become actively involved in monitoring content, due to the legal consequences for themselves. Specifically, they may no longer be able to rely on the "mere conduit" defence available under the Electronic Commerce Regulations 2002 if they became aware of infringement. There is also the more basic question of who bears the costs involved in policing user activity over their networks. Indeed, following strong pressure from consumers, privacy groups and the telecoms industry, MEPs recently rejected the idea that ISPs should filter all downloads and punish copyright infringers proposed as part of the EU telecoms reform package.

However, in July 2008 a Memorandum of Understanding was signed between the BPI and the six largest ISPs in the UK to co-operate in tackling illegal fie-sharing (with ISPs Initially sending letters to alleged infringing account holders). This was hailed as a "significant step forward" by the record industry. The UK Government Department for Business Enterprise & Regulatory Reform (SERR) is also currently considering possible legislative solutions to the illegal file-sharing issue. The Government's preferred option appears to be to foster a co-regulatory system, under which ISPs and rights holders would agree non statutory codes of practice (which would be applied to Ofcom) setting out a procedure for taking action against persistent infringers, and educating consumers.

Whatever the result, these and other legislative developments are also being watched closely by other creative industries (notably film and television), who are similarly feeling threatened by file-sharing as well as internet piracy generally.

Kenneth Mullen is a partner specialising in media and technology law at leading UK law firm Shepherd and Wedderburn LLP.

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