Record companies take on ISP over file sharing

Four major record companies have launched a case against Eircom, Ireland’s largest internet service provider (ISP), in conjunction with the Irish Recorded Music Association (IRMA). EMI Records (Ireland) Ltd, Sony BMG Music Entertainment (Ireland) Ltd, Universal Music (Ireland) Ltd and Warner Music (Ireland) Ltd claim that Eircom is infringing their copyright through members who share and download copyrighted material. In the action, which has now been transferred to the Commercial Court, the plaintiffs are seeking orders restraining Eircom from infringing their copyright by making available copies of this material.

Previously, rights holder organisations targeted individuals who breached copyright using internet service providers (ISPs). However, actions brought against individuals proved to be time consuming and costly. The record companies believe that selective legal action on an individual-by-individual basis is insufficient to safeguard their IP rights.

In recent years the Irish market for sound recordings has suffered a 30 per cent decrease in sales, from €146 million in 2001 to €102 million in 2007; record companies attribute a significant proportion of the drop in record sales to the dramatic upsurge in peer-to-peer (P2P) file sharing and illegal downloading of music, combined with the proliferation of broadband use in Ireland.

The record companies have brought their claims under the Irish Copyright Act and the EU IP Rights Enforcement Directive. They come in response to Eircom’s October 2007 notification that it could not run specialist software provided by a company called Audible Magic, which can filter P2P traffic and block specific copyrighted recordings from being illegally shared. Eircom denied that it had any responsibility for monitoring customer activity and contended that it was “not on notice of specific illegal activity that infringed the rights of the companies”.

The directive, implemented by Ireland in July 2006, granted broad new liberties to rights holders, allowing them to pursue not only parties which infringed their IP rights directly, but also parties which are deemed to facilitate infringement. This creates a contradictory position for ISPs, as it appears to require them to monitor user activity, whereas the EU E-commerce Directive exempts parties acting as “mere conduits” from any liability for information channelled through their systems.

In June 2007 the Irish High Court ordered several Irish ISPs to disclose the identities of 23 of their customers who were allegedly involved in sharing copyrighted material online. However, later that year Advocate General Juliane Kokott said that telecommunications firms in Europe are not required to disclose customer information in civil copyright infringement cases. This opinion resulted from a case brought after telecommunications firm Telefonica refused to disclose identifying information to Spanish music association Promusicae regarding customers suspected of sharing copyrighted music files.
The most recent development in the Eircom Case was in April 2008, when the ISP agreed to take advice from experts as to whether the Audible Magic filtering software could be run on its servers. Discovery in the case is potentially vast and the court has agreed that discovery should await the outcome of the exchange of information between the experts for both parties in the hope that this will reduce the scope. It remains to be seen how the Irish court will deal with this issue.

This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight

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