BT and TalkTalk lose copyright infringement appeal against UK government
TELECOMS giants BT and TalkTalk have lost their British Court of Appeal challenge against Government moves to tackle copyright infringement online.
They asked three appeal judges to overturn a High Court ruling backing controversial measures intended to curb illegal internet file-sharing.
The creative industries estimate the practice is costing them some £400m (€480) a year, especially with regard to films, music and books.
BT and TalkTalk, which are two of the UK's largest internet service providers (ISPs), say the proposed measures are incompatible with EU law.
Their lawyers also argued at an appeal court hearing in January that the measures would result in an invasion of privacy and run up disproportionate costs for ISPs and consumers.
Today, Lady Justice Arden, sitting with Lord Justice Richards and Lord Justice Patten, disagreed and dismissed their appeal.
High Court judge Mr Justice Kenneth Parker rejected the challenge in April last year.
Today, the appeal judges ruled that he had reached the correct decision, his ruling was "soundly based" and there was no need to refer the case to the European Court of Justice for a final ruling.
The High Court judge had declared the proposals under the Digital Economy Act 2010 a proportionate parliamentary response to the serious economic problem of peer-to-peer file-sharing, and the likely costs were justified.
He upheld submissions made by lawyers for the Department for Culture, Media and Sport (DCMS) that there were sufficient safeguards to protect the rights of consumers and ISPs.
Lawyers for BT and TalkTalk unsuccessfully asked the appeal court to rule that the High Court had "erred in law", and the contested provisions were incompatible with a number of EU directives related to "electronic commerce".
Today's ruling was welcomed by employers and unions in the creative industries, who say copyright infringement - online "piracy" - is taking place on "a massive scale", costing millions and threatening livelihoods.
John McVay, chief executive of the Producers Alliance for Cinema and Television (Pact), said: "We always believed that the judicial review was misconceived.
"Rather than needlessly spending more time and money on further legal challenges, BT and TalkTalk now need to focus on working with (copyright) rights holders and the Government in implementing the Digital Economy Act (DEA) with immediate effect."
Actors' union Equity also called on BT and TalkTalk to "stop fighting and start obeying the law".
General secretary Christine Payne said: "Once again the court is on the side of the almost two million workers in the creative industries whose livelihoods are put at risk because creative content is stolen on a daily basis."
Lord Puttnam, president of the Film Distributors' Association, said: "Hopefully this brings to an end a long chapter of uncertainty, and the DEA can now help in implementing a mass consumer education programme so that people, especially young people, can come to appreciate the damage piracy inflicts on the whole of the creative community."
Geoff Taylor, chief executive of the British Recorded Music Industry (BPI), which represents independent and major record companies in the UK, said the BT/TalkTalk challenge had meant "another year of harm to British musicians and creators from illegal filesharing".
Mr Taylor joined the chorus from the creative world calling on the ISPs "to work constructively" with the Government and rights-holders and now implement the DEA.
Lavinia Carey, director general of the British Video Association, which represents UK publishers and rights owners of all forms of video entertainment, expressed delight with today's ruling.
Association members were "blighted by the endemic use of unlawful P2P file-sharing to avoid paying for video content".
Ms Carey said several other countries were adopting measures to tackle the problem and "it would be bad for Britain's creative industries to be left behind more forward-thinking nations who are supporting their creative economies at this difficult time of transition towards increased digital consumption during this period of recession".
A spokesman for the Department for Culture, Media and Sport (DCMS) said: "We are pleased the Appeal Court has upheld the original ruling that the Digital Economy Act is a lawful and proportionate response to the threat posed by online piracy."
BT said it would now be considering the implications of today's ruling and its next steps, while TalkTalk said it would "continue to fight this ill-judged legislation".
BT stated: "We have been seeking clarification from the courts that the DEA is consistent with European law, and legally robust in the UK, so that everyone can be confident in how it is implemented.
"Now that the court has made its decision, we will look at the judgment carefully to understand its implications and consider our next steps".
A TalkTalk spokesman said: "We're disappointed that our appeal was unsuccessful, though we welcome the additional legal clarity that has been provided for all parties.
"We are reviewing this long and complex judgment and considering our options.
"Though we have lost this appeal, we will continue fighting to defend our customers' rights against this ill-judged legislation."
The new legislation went through in the final days of the last Labour government.
The coalition decided not to repeal it and is now working on implementing the DEA's mass notification system.
The legislation is a response to the growing problem of subscribers to internet services uploading and accessing material online in breach of copyright.
The legislation requires internet service providers (ISPs), like BT and TalkTalk, to warn file-sharers that complaints have been made against them and to provide lists of alleged infringements to copyright owners.
ISPs are also required to contribute to the costs of making the new laws effective.
They won their only victory in the appeal court when the judges ruled they should only be required to pay towards the "relevant costs" in carrying out their obligations under the DEA. They will pay 25% of the total amount, with copyright holders meeting the remaining 75pc.
The judges overturned the High Court decision that ISPs should also have to pay 25% of "case fees" - the fees which will be charged in respect of subscriber appeals.
On all other issues the ISPs were defeated.
The judges rejected their submissions that controversial aspects of the DEA should have been notified to the EU Commission under the Technical Standards Directive.
They also rejected arguments that certain provisions were incompatible with the Electronic Commerce Directive and in breach of European rules governing the processing of personal data and its free movement under the Data Protection Directive.
The judges ruled that the DEA was a proportionate response to the need to deal with illegal file-sharing and enforceable under both European and domestic law.