Marco Civil

Nesta sexta-feira(21),  a equipe do Marco Civil da Internet recebeu por e-mail a colaboração da Federação Internacional da Indústria Fonográfica (IFPI), abaixo reproduzida, com a devida autorização:

IFPI submission on the Draft Proposal for a Regulatory Framework for the Internet

May 2010

EXECUTIVE SUMMARY

IFPI, the International Federation of the Phonographic Industry, welcomes the opportunity to comment on the Draft Law Setting Forth the Civil Rights Regulatory Framework for the Internet in Brazil (the “Draft Proposal”) presented by the Ministry of Justice’s Legislative Affairs Department (Secretaria de Assuntos Legislativos do Ministério da Justiça) on 8 April 2010 for a 45 day Public Consultation.

The Draft Proposal raises serious concerns from the perspective of creators and copyright owners.

Most fundamentally, it fails to take into account its potential effect on the ability to enforce copyright in the online environment. In this respect, the Draft Proposal is out of line with similar legislation on the same issues in countries around the world; indeed many of its provisions are
entirely without precedent.

More specifically, the Draft Proposal in its current form does not reflect the following key and widely accepted points regarding copyright:

1. The importance of achieving an appropriate balance between creators’ rights and other fundamental rights in the online environment.

2. The need for any implementation of net neutrality to accommodate a distinction between legal and illegal content and services.

3. The need for appropriate incentives for Internet Service Providers (“ISPs”) to take reasonable actions to address online piracy.

In order to create a trusted online environment where legitimate commerce can flourish, a critical principle must be the effective protection of copyright. Legislation regarding the Internet in other countries has evolved to reflect this – the Draft Proposal’s provisions and overall framework strike an entirely different path, and are inconsistent with the evolving approach to these challenges around the world. While the Brazilian Government may of course choose to design its own approach, it should take into account the fact that the converging rules around the world are the product of extensive reflection, debate, negotiation and compromise, and should serve as an
important template.

INTRODUCTION AND BACKGROUND

IFPI represents the recording industry worldwide, with a membership comprising some 1400 record companies in 66 countries and affiliated industry associations in 45 countries, including Associação Brasileira dos Produtores de Discos (ABPD) in Brazil.

With the ever-growing importance of online communication and commerce, it is of vital importance for governments to consider the effect that uses of the Internet have on copyright.
The creative content industries are based on the value of intangible assets and rights, and ensuring meaningful protection of those rights is a key factor in future economic growth and employment, sustaining local culture, and providing employment for many and substantial state revenue in the form of tax.

As new business models evolve on the Internet, effective protection and enforcement of copyright is a prerequisite for enabling legal online commerce to flourish. Illegal acts – whether related to intellectual property (“IP”) rights, such as copyright infringement or trademark abuse,
or related to other property rights, such as credit card fraud or identity theft – must be stemmed in order to provide incentives to businesses to continue investing and to rightholders to continue expanding their creative endeavours.

The protection of IP and copyright is governed by many international conventions and recognised as a fundamental right in many countries. For example, the Universal Declaration of Human Rights – which has been adopted by 48 States including Brazil – includes copyright among the
rights that States are to respect and secure in their “universal and effective recognition and observance”; Article 27(2) reads “Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.” In the European Union, to cite another example, the Charter of Fundamental Rights of 2000 sets out in Article 17 that the protection of the right to property includes IP; Article 17(2) of the Charter reads “Intellectual property shall be protected.”

Brazil has recognized the importance of copyright and neighbouring rights and committed to the standards for protection and enforcement set out in several international conventions, including the Berne Convention for the Protection of Literary and Artistic Works 1886, the Rome Convention 1961 for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations, and the WTO TRIPS Agreement.

In order to assist the Government in evaluating its approach, this submission points out the key areas in which the Draft Proposal differs strikingly from Internet legislation in countries around the world. Unlike all other such laws to date, the Draft Proposal does not include elements to ensure effective protection of copyright online, differentiating between illegal content on the one hand, and legal content and services on the other hand. Nor does it provide appropriate incentives for ISPs to help prevent the abuse of their proprietary networks for the commission of illegal acts.

It is critical for any regulation of the Internet to recognise and incorporate these values and goals.
Accordingly, IFPI urges that the Draft Proposal’s approach be revisited, and that any new proposal be drafted in ways that are consistent with international precedents.

KEY CONCERNS

a) The importance of achieving an appropriate balance between creators’ rights and other fundamental rights in the online environment.

All would agree that access to the Internet is important and desirable, and implicates a number of fundamental rights. As other governments have recognised, however, all of the implicated rights must be balanced against each other, including the right to the protection of property such as copyright. No such balancing occurs in the Draft Proposal, which does not even mention or acknowledge this right, let alone engage in any effort to reconcile competing rights, considering the principle of proportionality.

To begin with, the Draft Proposal is unprecedented in establishing access to the Internet per se as a “fundamental right”, or as Article 6 puts it, “a right of the citizen”. We are not aware of any other country where such a right has been recognised – not surprisingly, as it is hard to see how one particular communication medium can in itself become a fundamental right. For example, under EU law, there is no fundamental right of access to the Internet. Moreover, the different rights concerned in using the Internet must be balanced, including the right to IP protection. This is repeatedly confirmed by case law, most recently by the European Court of Justice in its
decision in the Promusicae v Telefonica case in January 2008 (case reference C-275/06), in which the Court held that there is a need to balance and reconcile the right to privacy, the right to IP protection and the right to effective remedies.

b) The need for any implementation of net neutrality to accommodate a distinction between legal and illegal content and services.

The Draft Proposal’s definition of “net neutrality” is too broad. If the principle of network neutrality is to be adopted,1 it can be achieved without doing damage to copyright goals, by appropriately building in a distinction between legal and illegal Internet content and services. As recognised in other jurisdictions, this distinction should be one of the cornerstones of any Internet regulation framework.

In the US for example, the Federal Communications Commission (“FCC”) approved in 2005 four general Internet policy principles. Under these principles, consumers are entitled to access the Internet content of their choice, but only to the extent that this content is “lawful”. Consumers
are entitled to run applications and use services of their choice, but subject to the needs of law enforcement. Consumers are also entitled to connect their choice of devices, as long as these devices are “legal” devices “that do not harm the network”. In October 2009 the FCC tabled a proposal to build on those principles by adding a principle of non-discrimination of lawful
content, again premised on the principle that no unlawful conduct is to be protected.

By omitting this critical distinction, the Draft Proposal would prevent reasonable efforts to curb online piracy. To build a thriving online commerce environment, it is vital that the rule of law is upheld also on the Internet. Assuming that the goal of neutrality is pursued, it should not be read to eliminate the vital distinction between lawful content and illicit material – whether this is copyright-infringing material, child pornography or cases of identity theft, defamation, or tax evasion. Unless net neutrality is interpreted to permit enforcement action against illegal online content, it could place ISPs in a difficult position when courts grant appropriate injunctive relief to halt ongoing unlawful conduct – such as copyright infringement – that occurs via particular websites or web applications. It could also frustrate potential voluntary efforts by ISPs to stem the flow of illegal traffic going over their networks.

The overbroad definition set out in the Draft Proposal would therefore constitute a drastic step with a major negative impact not only on ISPs, but also on all copyright industries, including software and communications companies and other content providers such as the recording industry. Any regulation on net neutrality must be done with care, in order not to inadvertently protect the dissemination of illegal content.

c) The need for appropriate incentives for ISPs to take reasonable actions to address online piracy.

The Draft Proposal fails to address the need for a trusted online environment that protects the rights and freedoms of all, including creators and copyright owners, through responsible behaviour by all stakeholders. This is the issue where the Draft Proposal differs most from similar legislation in countries around the world.

ISPs are the gatekeepers of the Internet and have a unique role in interacting with online consumers. They should be appropriately incentivised to cooperate with rightholders in the fight against online infringement. Many countries have adapted their laws accordingly, ensuring legal incentives for ISPs to take reasonable and effective action against various forms of piracy.
As a basic backdrop to any ISP legislation, there must be the potential for secondary liability of ISPs for infringements occurring over their networks. Against this backdrop, many countries have enacted “safe harbours” for ISPs who act appropriately. ISPs are typically exempted from monetary liability for infringement under certain specified conditions, based on the different
functions that they perform. Even where such an exemption applies, the possibility to obtain injunctive relief against the ISP always remains available, allowing a court to issue orders to stop infringement. This combination of potential liability together with monetary safe harbours where the ISP acts responsibly provides effective incentives for ISPs to help combating piracy. Yet none of these conditions are reflected in the Draft Proposal.

IFPI takes no position here on the appropriate treatment of network neutrality generally, but notes that it raises many complex issues in addition to the copyright concerns discussed in this submission.

Where the infringing content is hosted on the ISPs’ servers, these laws have recognised that the ISPs can – and should – expeditiously remove infringing content. Such a “notice and takedown” procedure, as the most effective way to deal with hosted infringing content, has been successfully implemented in many countries – including all the EU Member States, the US, Australia, New Zealand, China, Singapore, Korea, and Japan. Under these countries’ laws ISPs are only protected from liability if they do not promptly take down or block infringing content upon having the requisite level of awareness of the infringement. None of these laws allows the content to be put back online other than in narrow circumstances where its removal is challenged
on specific grounds by the person who posted it and the copyright owner does not follow up with a legal claim. The Draft Proposal is inconsistent with these laws in many respects.

In addition to the above, more and more countries are considering new solutions to address online piracy that involves content that is not hosted on ISP servers but resides on individual users’ computers and is distributed over peer-to-peer file-sharing networks. These acts of infringement are most effectively addressed by “graduated response” mechanisms with deterrent
sanctions available against repeat infringers who ignore a series of notices and warnings. The Draft Proposal would block consideration of most versions of such reasonable and effective solutions.

Cooperation from ISPs is necessary to enable meaningful IP protection and enforcement in the online context – and any bill setting up a regulatory framework for the Internet should address this and provide for clear and appropriate incentives, in line with the emerging international consensus.

CONCLUSION

IP assets and their protection online are a critical element of Brazil’s future economic and cultural development. The approach of the Draft Proposal should therefore be rethought and amended substantially with the input of IP experts and the direct involvement of the copyright and cultural communities to establish an appropriate legal framework providing the necessary conditions for legitimate markets to develop online. The central prerequisite is the recognition of the need for effective protection of copyright and the ability to ensure that action can be taken against
unlawful conduct.

■ ■ ■

For further information, please contact:

■ Shira Perlmutter (shira.perlmutter@ifpi.org), IFPI London, 10 Piccadilly Street, London W1J 0DD, United Kingdom; Tel: +44 (0)20 7878 7900; Fax: +44 (0)20 7878 7950.

■ Juan Luis Marturet (jlmarturet@ifpi.org), IFPI Regional Office for Latin America, 10451 NW 117th Avenue, Suite 105, Miami, FL 33178, USA; Tel: +1 305 567 0861; Fax: +1 305 567 0871.

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