UK broadband providers BT and TalkTalk have lost an appeal over measures which forces ISPs to act against copyright infringement online.
This means that ISPs would have to put filters and blocks in place. It would also mean that ISPs would have to shoot off letters to illegal downloaders threatening them that their connection will be cut off if they do not stop refrain from taking content from illegal sites.
The ISPs had argued that the Digital Economy Act (DEA), which was passed in the Parliament in the previous Labour government’s tenure, was incompatible with European law.
This would cost both ISPs and consumers disproportionately, the firms lawyers had argued.
TalkTalk was quoted by the BBC as saying it was now considering its options.
"We’re disappointed that our appeal was unsuccessful though we welcome the additional legal clarity that has been provided for all parties," TalkTalk said.
But, the creative industry argues that piracy costs £400m a year in lost revenue.
A spokesman for BT told the BBC it has 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.
Adam Rendle, copyright lawyer at international law firm Taylor Wessing, said although some will view this as a succesful result, there is still work to do.
"The government and rights owners will view this as a significant victory in the fight against unlawful online file sharing. Parliament’s view on who should carry the burden of policing and preventing online copyright infringement has been upheld," he said.
"ISPs now have a role to play, as well as rights owners, in identifying the wrongdoer. But it is the rights owners who have to identify and prove the infringement," he went on. "We now have to wait for the Ofcom Initial Obligations Code to be published and approved before the warning letters start arriving on file sharers’ doormats. The Code will contain the detail on how the process will work."
"The government had already announced that the more controversial website blocking measures in the Digital Economy Act would not be introduced, but it would not be surprising to see public outcry at the warning letters process similar to that which greeted ACTA, SOPA etc," Rendle concluded.
Peter Bradwell of the Open Rights Group slammed the decision. "There is one thing the court cannot tell us: that this is a good law. The Department for Culture, Media and Sport had no evidence when they wrote this act, except for the numbers they were given by a couple of industry trade bodies. This is a policy made on hearsay and assumptions, not proper facts or analysis," he said.
"So significant problems remain. Publicly available WiFi will be put at risk. Weak evidence could be used to penalise people accused of copyright infringement, and people will have to pay £20 for the privilege of defending themselves against these accusations. The Government needs to correct these errors with a proper, evidence-based review of the law," Bradwell added.
However The Federation Against Software Theft (FAST) welcomed the news. "[This decision] is a step forward in stakeholders taking on board to some degree some responsibility the fight against piracy. We must not erode the perception of value in digital product to where all online product is considered ‘free’," said Julian Heathcote Hobbins, General Counsel, at FAST.
"As a matter of principle, this is a tremendous step forward and one that puts the provisions of the Digital Economy Act beyond this dog fight, dispelling legal confusion moving forward," he added. "The news means effectively that no longer does the Act reside in the hands of the court and that means the intellectual property rights of a great many businesses, the fruits of labour, now have the option to benefit from the DEA mechanism if required. The central issue is growth and prosperity at this time."
