Who will enforce IP laws?

Ars Technica and TorrentFreak are reporting that Australian ISP iiNet (Wikipedia backgrounder) recently released a policy report calling for changes in the way that IP laws are enforced:

The ‘Hollywood solution’ (in very simple terms) involves the employment of private detectives, hired by content owners, to trawl the public internet and gather information. The content owner uses this information to generate notices which are sent to internet service providers. The notices demand that the ISP should terminate the service of a customer subsequently determined by the ISP (not the content owner).

Naturally, ISPs find this approach unattractive and unsatisfactory, to say the least.

Rather than merely passively complaining about Hollywood’s solution, however:

iiNet has developed a model which it believes addresses ISP concerns and is likely to be far more effective. We believe it to be attractive to all participants and one which offers a sustainable strategy that includes an impartial referee, for resolution of disputes between the parties and the issue of penalties to offenders.

Here is iiNet’s proposal:

1.    A content owner will carry out their own detective work and identify an offending computer making unauthorised copies of their content available for sharing via (typically) bit-torrent software. This will provide them with an ‘IP Address’ that can be traced by the issuing ISP to a specific internet service.

2.    The independent body will determine whether the evidence meets a test of ‘cogent and unequivocal evidence’.

3.    IP addresses can be provided to an independent body who is able to identify the issuing ISP and ask that ISP for contact details for the service account holder. The ISP provides those matching contact details to the independent body.

4.    Using those contact details the independent body can issue notices to the account holder informing them that they had been detected making unauthorised copies available, provide educative information, advise the consequences that may follow continued behaviour and ask the account holder to ensure that the behaviour stops.

5.    The independent body keeps records of the notices and may modify the notice for a repeat infringer, or seek further sanctions. Some of those sanctions may include fines, court charges or changes to the internet service.

6.    Consumers who believe the allegations are incorrect will be able to appeal the notice to the independent body. These appeals and/or complaints would be dealt with by the independent body.

7.    Consumers who believe an insecure wireless access (or other technical issue) may be involved, will be referred, by the independent body, to their ISP for technical assistance.

As I read the proposal, it seems like iiNet is primarily trying to do two things:

  1. Remove itself as arbiter of IP-related disputes; and
  2. Lower the transaction costs involved in full-blown litigation by setting up a quicker (and cheaper?) arbiter of disputes.  (Perhaps they have something in mind like the Uniform Domain-Name Dispute-Resolution Policy, which administratively resolves certain types of domain name disputes without having to go to court.)

With respect to #1, I agree with iiNet.  ISPs are ill-positioned to adjudicate IP disputes, especially since the cheapest solution (and thus a compelling business model) is simply to comply with any content owner’s request, no matter how tenuous the underlying legal cases.

With respect to #2, however, I have serious doubts.  iiNet’s proposal could be read as an ISP’s attempt to shift online infringement clearly from a malum in se crime (crimes that are inherently wrong, like murder) to a malum prohibitum crime (crimes that are wrong by statute, like minor speeding violations).  Acts that are malum prohibitum generally require less evidence for conviction (e.g., strict liability), but this is supposedly outweighed by lesser penalties and less social censure (e.g., fines for speeding are relatively small and do not carry the social opprobrium of murder).

Here’s the problem:  current copyright statutes don’t have the malum prohibitum “balance” built in.  While there may be lesser social censure for copyright infringement than for other crimes, it is hard to think of many non-violent crimes with higher penalties.  U.S. law assesses damages as high as $150,000 per infringing act, and there are never-ending proposals to increase penalties.  Even if such penalties seem grossly disproportionate to the underlying crimes and raise serious constitutional concerns regarding due process and punitive damages, they nonetheless are “the law” as it exists on the books.

Given the reality of enormous statutory penalties for infringement, streamlining copyright enforcement procedures could lead to disaster.  As a policy matter, it’s one thing to argue for streamlined procedures (i.e., fewer due process protections) in exchange for lower penalties.  Under certain circumstances, that can be a reasonable policy tradeoff.  But it’s a dangerous thing to argue that every content owner in the world should have a fast, easy way to sue individuals up for $150,000.  Copyright trolls like Righthaven exist even in a world with the due process protections of courts; it’s truly frightening to imagine how many new trolls will arise if the potential payoffs remain the (astronomical) same but the bar for suit is set even lower.

To be fair, iiNet appears to recognize this danger and suggests:

Infringements can be ranked as minor (say, single instances), major (say multiple instances of different files) or serious (at a commercial level). Each level having prescribed penalties….A scale of fines can be established, relative to the economic loss represented, and demerit points could also be awarded in line with the severity of the infringements.

Nonetheless, I fear that their report does not highlight just how pivotal such gradation and balancing would be to any implementation.