Laurence Kaye on Digital Media Law

Ilegal 'P2P', Applicable law and all that stuff

Dear reader

P2P

The search for the right legal framework to encourage business models for legal P2P goes on........... and on. It's a frustrating process - two steps forward, one back, but maybe if not 'green shoots' there are are some signs of as yet unrealised hopes.

On the legal front, Lord Carter's 'Digital Britain' report is due out this week and, amongst a lot of other things, will contain the Government's response to the results of BERR's Consulation on P2P file sharing. BERR announced recently that the response to its consultation was inconclusive. BERR said: "None of the options highlighted in the consultation won widespread support. Rather there was a marked polarisation of views between the rights holder community and consumers and the ISPs over what action should be taken."

On the business side, there's still a way to go. paidContent:UK reports that Virgin Media has abandoned its "groundbreaking" discussions with independent service provider Playlouder to pay music labels for songs downloaded illegally by its customers. Apparently, "lack of support" from the majors was the reason.

In the same story, paidContent reports about a radical model for legal P2P - "Isle of Man’s government this week mooted a plan to legalise P2P in return for raising a €1 levy on ISP customers."

Returning to my theme of my last post, business model innovation has to be solution to the P2P condundrum.

Applicable law

What, you may ask, is the link between the challenges of P2P and the the legal notion of 'applicable law'? It all stems from rules on conflicts of laws which deal with the situation where more than one country's laws apply. Think of copyright infringement on the web. The copyright owner is in country A, the website hosting the content is in country B and the downloader  is in country C. If you're fluent in Latin, you'll immediately recall the principle of lex loci protectionis which says that regarding infringements of copyright, where there is a conflict of laws, it's the law of the country where the protection is sought. So in the above example, if the rights owner wants to take action against the host, it will be the copyright laws of country B.

The European Union's Regulation known as 'Rome II' came into force on 11 January 2009. It spells out the rules for working out applicable law on non-contractual obligations. It's not just confined to intellectual property. It also covers product liability, unfair and anti-competitive acts, environmental issues, unjust enrichment claims and other issues. The Regulation may not be a 'must read' for the non-lawyers, but if you're dealing with legal claims on the Net, it's essential stuff.

Look out for my next post which will be on the 'Digital Britain' report.

Have a good week,

Laurie Kaye

Business model innovation to beat the blues

Dear reader

FT.com reports today (this may be only accessible to subscribers) that Balderton Capital, the venture capital group that backed the Betfair gambling website and Setanta, the pay-TV broadcaster, has raised $430m (£282m) for technology and media investments. Barry Maloney, general partner of Balderton, said “We are about to enter a very interesting time for new investments, if not for exits."

And Techcrunch reported on January 8 that 35 of the UK’s digital/tech companies are going to the US "to get into the vibe over there and hopefully do some business. Specifically this is the “Digital Mission” - a kind of trade mission, but with more sex appeal - to Austin, Texas for the South by South West Interactive (SXSWi) conference from 12-18 March this year. "

So maybe it's a good time to look at the dominant themes for the year, at least as far as the digital media world is concerned. In upbeat mode, I'm going to choose just one: "2009 - the year for innovation." Primarily, I mean innovation in business models, in how we do business, rather than technical innovation although the latter remains absolutely vital.

The theme of business innovation fits very well into the regulatory agenda, because business innovation on the one hand and stronger IP enforcement and better regulation on the other are each indispensable to the other .

And there's lots happening on the regulatory front: 

Lord Carter's Report on Digital Britain is due out shortly.
As I reported on my Blog on December 19th, the IPO has launched a strategic review of copyright, looking particularly at access to works, incentivising investment and creativity, recognising creative input and authenticating works.
Follow up to BERR's Consultation on Illegal P2P filesharing.
The European Commission's follow-up to the responses it has received on its Green Paper on 'Copyright in the Knowledge Economy' dealing with copyright exceptions.
And the Commission's follow up to its 'Content Online Communication'.

 

...to name but a few. But let's return to the theme of business innovation.

Business innovation is essential and is either happening or needs to happen at every stage of the digital media industries' supply chain.

Innovation in how businesses are financed. For example, the use of secured financing of IP assets is still relatively underused.

Innovation in rights management, especially as regards clearing rights on a pan territorial basis and in how everyone in the value chain gets paid. (OK, there's still a mountain to climb in terms of reconciling consumer expectations about online content with the need to 'monetise' - terrible word! - that content).

Innovation in payment models - subscription only, pay per use, advertising support and any other combination you can think of;

Innovation in licensing models - there are a whole host of licensing tools and models available, depending on whether content is being licensed solely for commercial basis, on an open innovation basis (check out an interesting post on that subject), as a public/private partnership or whatever.

Innovation in business partnerships and collaboration.

Innovation in delivery models - see, for example, Apple's recent announcement about 'DRM-free' higher quality music tracks via i-tunes.

Innovation in marketing - just look at the increasing use of widgets, rss feeds and other social network tools to gain consumer's attention.

So it seems to me that the key challenge for all of us this year in the midst of a highly uncertain environment is how to innovate for success. I don't confess to have the answers but I think it's a good question to ask oneself in the still early days of 09.

Have a good week.

Laurie Kaye