It's gloves off as the BPI attacks ISPs over filesharing

The music industry is not only rich and powerful, it is also raging a war against illegal filesharing. But after focusing its wrath on individual filesharers, music industry body the British Phonographic Industry (BPI) is now eyeing bigger prey - the internet service providers (ISPs).

Last week the BPI, advised by media specialist firm Wiggin, wrote to providers Tiscali and Cable & Wireless (C&W) demanding that they suspend 59 internet accounts used for filesharing. But by doing this it might have scored an own goal, invoking the anger of established internet players that until now have been on the sidelines in the music industry's war on filesharing.

Legal actions of this nature against ISPs without a High Court order have no precedent, making the legal ground a little shaky. And the ISPs are ready for a fight.

The response the BPI got was immediate and scathing and struck at the heart of the role it can effectively play in prosecuting copyright infringement on the internet.

Tiscali looks ready to be the first to test the BPI's convictions. In its response to the BPI, seen by The Lawyer, Tiscali writes: "It is not for Tiscali, as an ISP, nor the BPI, as a trade association, to effectively act as a regulator or law enforcement agency and deny individuals the right to defend themselves against the allegations made against them."

C&W general counsel Nick Cooper is still preparing his company's response to the BPI's request, but was surprised to read the claim in the news before seeing the official letter. "The press release had gone out before we got a chance to look at the letter. All we can do now is look at it, think about it and respond," he says.

Publicising legal actions against individuals has served a purpose by making some filesharers go legal, but has alienated millions of others. Suing your potential customers is a risky strategy and suing potential business partners could be a disastrous move.

But the BPI is only risking its own credibility by going after the ISPs in such a public way rather than sticking to the established private routes. It is a little tactless. These are companies that have established legal departments and access to sizeable legal budgets. Unlike individuals, they are unlikely to be intimidated by BPI's aggressive approach.

The BPI and Wiggin have given the companies 14 days to respond, but it looks likely that the ball will return to the BPI's court.

The BPI is sticking to its guns. General counsel Roz Groome is bullish. "Both Tiscali and Cable & Wireless state in their terms of use for subscribers that internet accounts should not be used for copyright infringement. We now invite them to enforce their own terms of use," she says.

UK copyright law suggests that ISPs should be liable for copyright infringement on their network, but this has never been tested in court.

Since the introduction of the new Copyright Act in 2004, the BPI's legal strategy against filesharing has targeted individual uploaders. This is much safer ground legally, but very time-consuming. Simon Baggs, a partner at Wiggin and an external adviser to the BPI, explains: "You go online, search for music, download it, get the IP [internet protocol] address, locate the ISP, apply to the High Court for a third-party disclosure order and write to the individuals demanding costs and damages payment."

In the past three years the BPI has brought claims against 139 uploaders, 111 of which have chosen to settle out of court, paying an average of £2,000 each and a maximum of £6,500. Four cases have gone to court and each has gone in the BPI's favour.

Despite its apparent success, this is a costly and time-consuming way to approach a type of copyright infringement that one in 20 internet users worldwide commit on a regular basis.

The BPI's pursuit of ISPs is an attempt to find more effective ways to stop filesharing, but it may prove to be just as frustrating.

Tiscali stated that it would not respond without a court order, challenging the BPI to take up the matter with the individuals involved. "Should you wish our customers to enter into your undertakings, you will need to approach them directly," says the response. "It is a matter for them to decide whether they wish to enter into such undertakings or defend proceedings against them in the courts."

Indeed, this would take the BPI back to square one.

Internationally, the music industry is in a similar situation. The International Federation of Phonogram and Videogram Producers (IFPI) estimates that there are more than 800 million copyrighted tracks readily available on the internet worldwide.

And it is not just pride but money at stake. According to the IFPI's 2006 digital music report, the recorded music industry is worth $100bn (£54.39bn) worldwide. Any threat to those dollars is taken seriously.

As such, the IFPI has been following a similar route to the BPI, but on a much larger international scale. Last year the organisation brought legal action against 20,000 people in 17 countries. Settlements have averaged around $3,000 (£1,600), while challenges on data protection grounds in Sweden and Canada have failed.

IFPI general counsel Geoff Taylor says the world is still not legally ready for internet filesharing. "Too many nations still have vinyl-era copyright laws in a digital age. Many governments, including those of developed nations like Canada, have not ratified and implemented international copyright agreements, such as the World Intellectual Property Organisation treaties and the World Trade Organisation Trips agreement," he says.

The UK Government is looking to update its legislation as well. The Gower Report, a nationwide consultation on the state of IP legislation, could spur the Government into clarifying certain aspects of the law in response to rapid technological change.

Expected in a few weeks, the report is likely to have an impact on the
#the worldwide web closes in on filesharers
USA
The Supreme Court voted unanimously to shut down peer-to-peer filesharing network Grokster for profiting from copyright infringement.

Lawyers: Jenner & Block for MGM, Farr & Taranto for Grokster.

Australia
Kazaa, one of the world's biggest names in internet piracy, met its end in the Australian Federal Court in September last year. Kazaa's encouragement of infringement and direct financial interest led to its downfall.

Lawyers: Gilbert & Tobin for the recording industry, Clayton Utz for Kazaa.

Russia
The BPI's attention has turned to allofmp3.com, a Russian-based online music service with copies of more than 450,000 sound recordings.

Lawyer: Wiggin for BPI.