BUSINESS OPINION: Legal complexity and stout opposition from interested parties are no reason for inaction

AMONG THE many items sitting in Minister for Enterprise Richard Bruton’s in-tray is the mess that is illegal file sharing, or as copyright owners prefer to call it, “theft”.

Last November, the High Court found that there was a gap in Irish copyright law that prevented the courts from compelling internet service providers such as UPC and Eircom to shut down or block illegal file-sharing sites from which people download millions of euro worth of music and movies each year.

The gap can apparently be closed through a statutory instrument and indeed reports circulated in the last days of February that signing such an order would be one of the final acts of the outgoing government.

In the end, they didn’t, but not before the opponents of any attempt to restrict illegal file sharing had got hot under the collar once more.

The opposition to any attempt to reign in the illegal downloading tends to fall into one of two camps.

The first can be characterised – perhaps unfairly – as the geeks who still hold fast to the notion that the internet is some sort of iconoclastic force for good and any attempt to regulate its is part of the wider fascist/breadhead conspiracy.

The recent Arab revolts aside, it’s harder and harder to subscribe to this view, particularly as the leitmotif of the internet in recent years has been that big brains equals easy money; think Mark Zuckerberg and the whole social media phenomenon.

The other – and more significant – grouping are the “disruptive” businesses that prosper in the unregulated web environment, in part at the expense of other business in the regulated world.

They include some of the biggest names in the internet, such as Google.

Prospering alongside them are the internet service providers who don’t care much what goes through their infrastructure as long as there is plenty of it.

They will use every argument they can muster to try and prevent themselves becoming the nexus of efforts to prevent the use of the internet to facilitate illegal activities such as copyright theft and illegal downloading.

Hence the stout and ultimately successful defence mounted by UPC when five record companies sought orders compelling it to block access to file-sharing sites for subscribers who were downloading illegally.

Lots of other businesses were watching from the sidelines, hoping to ride on the coat tails of the music industry.

Among them Xtra-Vision, the video-rental business bought from Blockbuster by businessman Peter O’Grady Walshe and members of the Furlong family in August 2009 for a reported €20 million with backing from NCB’s Ulster Bank Diageo Venture Capital Fund.

Xtra-Vision has now entered the fray writing to the Taoiseach and Richard Bruton, pointing out that 1,400 jobs and €20 million a year in tax revenues to the State are at risk if something is not done to prevent the illegal downloading of the movies and games they sell and rent.

They have adopted a less confrontational approach than the music industry and arguably a more persuasive one.

Rather than go after individuals they want the service providers to be compelled to take the same sort of “reasonable steps” that any other business would be expected to take to ensure that they are not dealing in counterfeit goods.

The situation for UPC should be no different to a large retailer such as Eason, argue Xtra-Vision.

They are not expected under the law to check that every thing they sell does not infringe someone else’s intellectual property rights, but if it is brought to their attention that something they are selling is counterfeit, they are expected to remove it.

The extension of this principle into the online sphere would mean that if it is brought to the attention of a service provider that a particular site is facilitating illegal downloading, the provider should block it.

There would appear to some basis for believing this would be effective.

DVD rental rates jumped in Sweden after the Government stamped down on illegal downloading in April 2009. There was an equally abrupt fall-off in internet traffic, down 40 per cent according to a research by media consultancy IHS, which goes some way to explaining the service providers’ lack of enthusiasm for something similar in Ireland.

However, the Swedish government’s legislation was challenged and the whole thing has been kicked off to the European Court of Justice rendering the law ineffectual, say IHS.

Not surprisingly the sales of DVDs have started to fall again. It’s clear then that Ireland is not the only country struggling to find a workable solution to this complex problem.

However, this should not dissuade the Government from making it a priority.