*New Digital Economy Act 2017*
In addition to the Intellectual Property (Unjustified Threats) Bill receiving Royal Assent last week on 27 April 2017, (click here for our blog on this), the Digital Economy Bill 2016-17 also received Royal Assent in what is known as the "wash up" procedure before the dissolution of Parliament on 3 May 2017 (as bills cannot be carried over from one Parliament to the next). See the government's press release here. The official Act has not yet been published and we will link to this when it has (NB. See EDIT below). In the meantime, please click here for the link to the text of the Bill as introduced in the House of Commons in July 2016.
We have been following the progress of this Bill and have blogged throughout its passage through Parliament – click here and here for previous blogs. It is also strangely reminiscent of the Digital Economy Act 2010 (DEA 2010) which was rushed through Parliament in the "wash-up" procedure in 2010. Many of the provisions of the DEA 2010, however, never came into force and were ultimately shelved.
This Act aims to introduce 'measures to modernise the UK for enterprise' and the Minister of State for Digital and Culture, Matt Hancock, stated,
I’m delighted the Digital Economy Act has become law. This legislation will help build a more connected and stronger economy. The Act will enable major improvements in broadband rollout, better support for consumers, better protection for children on the Internet, and further transformation of government services.
The Bill, as introduced in 2016, makes changes in three areas of intellectual property law:
Increase in criminal penalty for online copyright infringement
The Bill increases the maximum sentence for online copyright infringement to ten years. This will harmonise the penalties for online and physical copyright infringement. Previously, under sections 107(2A) and 198(1A) of the Copyright, Designs and Patents Act 1988, the maximum sentence for online copyright infringement was two years.
The Bill also changes the offence provisions to introduce an additional "mens rea" element so that a person must either intend to make monetary gain, or know or have reason to believe that their actions will cause loss to the owner of the right.
This provision has come up against some strong opposition. There have been concerns that the threshold for criminal liability is far too low and that small scale infringers or even ordinary internet users could face a long custodial sentence. The government, however, responded by saying that the ten year sentence would only be applied in the most serious criminal circumstances and it was highly unlikely that small inadvertent infringement would be considered an offence.
Repeal of section 73 of the Copyright, Designs and Patents Act 1988
Section 73 of the Copyright, Designs and Patent Act 1998 provided that the copyright in the broadcast of public service broadcaster (PSB) channels (and the copyright in any work included in the broadcast) was not infringed where the broadcast was retransmitted by cable. In effect, this meant that cable platforms were not required to provide copyright/retransmission fees in relation to the core PSB channels.
The proposal for the repeal of section 73 followed concerns that section 73 was outdated and should be removed. The government noted that section 73 was introduced to support the development of analogue cable infrastructure in the 1980s/90s (ie to facilitate retransmission of PSB broadcasts in areas where aerial reception was poor). As this is no longer relevant in today’s multi-platform/channel environment, a consultation was launched, the results of which led to the conclusion that the defence should be repealed.
It is hoped that the repeal will create a new market in copyright where one did not exist before in that rights holders can claim copyright fees for the retransmission of their work in a PSB channel.
Web-marking for designs
Section 24B of the Registered Designs Act 1949 will be amended to allow the owners of UK and EU registered designs to mark products with a website address containing details of a registered design ("web marking"), rather than having to put the design numbers directly on the product, in order to provide notice of such rights to potential infringers. This should allow design owners to give notice of their rights more cheaply and freely. This system is already in place in relation to patents.
Comment
It is hoped that the new Act goes some way to updating and modernising the intellectual property rules so that they are fit for the digital industries. It will be interesting to see in which circumstances the most controversial provision in relation to the 10 year maximum penalty for online copyright infringement is applied.
We will update this blog with the official text of the Act as soon as it is published.
*POSTSCRIPT (31/07/2017):*
The Digital Economy Act 2017 (Commencement No. 1) Regulations 2017 have now been published introducing various changes to copyright and design law as follows:
- On 31 July 2017, the Regulations will bring into force section 34 of the Digital Economy Act 2017 (DEA) repealing sections 73 and 73A of the Copyright, Designs and Patents Act 1988 (CDPA) and associated provisions, which provide that copyright is not infringed when a wireless broadcast is retransmitted by cable.
- On 1 October 2017, the Regulations will bring into force section 32 of the DEA, amending section 107 of the CDPA to raise the maximum custodial penalty for copyright infringement from two to ten years.
- On 1 October 2017, the Regulations will bring into force section 33 of the DEA, amending section 24B of the Registered Designs Act 1949, making it possible to give notice of registered design rights by marking products with a website address at which the details of the registration are published.