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Disrupting the Flow: Advertising Revenue and Online Piracy

By Rajkumar Akella, posted on 10 June 2017

Online content theft, driven primarily by advertising revenue, remains a highly profitable business which detrimentally impacts India’s creative community, its technological innovators, and our social fabric. The Telugu Film Chamber of Commerce has noted unofficial estimates that annual losses to the Indian Media and Entertainment industry due to piracy are close to $2.5 billion. Baahubali: The Beginning, released in 2015, at one time had 1,485 active piracy links and has been downloaded illegally more than 24.76 lakh times. New solutions addressing the bottom line of film piracy have proven effective in other markets and provide a good example for India to consider.

A recent report commissioned by the Federation of Indian Chambers of Commerce and Industry (FICCI) and released during the 2017 FICCI FRAMES conference in March took a close look at how India’s most popular copyright-infringing sites make their money, and confirmed that advertising revenues remain the primary economic driver for the copyright theft industry. The report, entitled ‘Badvertising: When Ads Go Rogue’ updated earlier research undertaken four years ago and found that 73% of more than 1,000 pirate sites surveyed, many of which are hosted in and operated from India, were ad-supported and have the potential of generating millions of dollars for the site operators.

More than half of the advertisers were for products and services for ‘mainstream’ or otherwise legitimate industries – consumer goods, transportation companies, telecommunication services and the like – while a significant portion involved so-called ‘high-risk’ advertisements for goods or services related to malware, gambling, adult dating & pornography among others. Because the pirate sites are accessible free of charge to any internet user in India, those (often very graphic and explicit) advertisements can easily be seen by children and teenagers. The social impact of online piracy cannot be overlooked. The study observed that a number of the sites included in the research have already been the subject of blocking orders directed by the High Court of India, but have bypassed them by launching proxy sites through which they continue to operate and gain income. The continued proliferation of pirate sites provides a disincentive against continued investment in legitimate online platforms, such as Hotstar, Spuul, and Voot.

Advertising revenue has for some time been the preferred business model upon which the world’s most egregiously infringing sites and networks is based and the phenomenon is by no means restricted to India. A 2012 report commissioned by Google and others entitled ‘The Six Business Models for Copyright Infringement’ investigated advertising networks and their support for major pirate movie and music sites around the world. That report found that advertising financed 86% of the P2P search sites that featured illegally distributed content. That research also showed that many major brands were not aware that they are, in fact, the key source of funding for the piracy industry. Subsequent research by the University of Southern California starting in 2013 confirmed that large, illicit file sharing sites were distributing illegal content with the unknowing assistance of both ad networks and popular brands, siphoning millions of dollars away from the creative community. A study commissioned by the Digital Citizens Alliance in 2014 estimated the advertising revenue of 596 popular pirate sites to be in excess of $227 million, with the top 30 sites earning an estimated $4.4 million each.

By now a number of countries around the world have taken steps to choke the flow of revenue funding through various means of intervention. In some instances, such intervention has taken the form of voluntary cooperation between brands and advertisers to minimize the likelihood of good ads ending up in the wrong place. Other countries have opted for greater oversight by regulatory authorities to stop the flow of funding altogether.

For example, FICCI’s study mentioned in particular the United Kingdom’s development of an Infringing Website List (IWL), based on industry coordination and subsequent investigation by the Police Intellectual Property Crimes Unit, or PIPCU. PIPCU is a specialist national police unit dedicated to protecting the UK industries that produce legitimate, high quality physical goods and online and digital content from intellectual property crime. As a law enforcement gatekeeper against online content theft, upon evidence of criminality the unit is authorized to undertake a range of interventions available under UK law.

In May, 2016 PIPCU announced the launch of ‘Operation Creative’, a ground-breaking initiative coordinated with the creative and advertising industries to disrupt and prevent websites from providing unauthorized access to copyrighted content. That initiative involved rights holders in the creative industry identifying and reporting copyright infringing sites to PIPCU, providing a detailed package of evidence indicating how the site is involved in illegal copyright infringement. PIPCU then evaluates the websites to verify that they are in fact infringing and thereafter contacts the site owner and offers them the opportunity of engagement to correct their behavior and operate legitimately. If a website fails to comply and engage with the police, PIPCU employs a variety of tactical options including advert replacement and disrupting advertising revenue through the use of an Infringing Website List (IWL).

The IWL is an online portal containing an up-to-date list of copyright infringing sites, identified and evidenced by the creative industries, verified by PIPCU, and made available to those involved in the sale and trading of digital advertising so that they can voluntarily decide to cease advertising placement on the illegal websites thus disrupting the flow of advertising revenues to the site operators. Research released by PIPCU in March estimated a 64% decrease over the previous twelve months in advertising from the UK’s top ad spending companies on copyright infringing websites.

This model seems highly replicable in India, where both the Telegana Intellectual Property Crimes Unit and the Maharahstra Intellectual Property Crimes Unit (each of whom were modeled on PIPCU) maintain close relations with content providers in these states. FICCI’s report, which specifically lists 1,143 torrent and P2P portals, direct download host sites, linking, and video streaming sites is surely a good starting point for such an initiative. I have every confidence that these units could coordinate with the copyright and advertising industries to identify new sites, monitor enforcement results, and raise awareness amongst the general public.

India’s music, film, and television industries deserve all the protection that can be mustered. As the content theft industry continues to evolve and embrace new market opportunities, so too must our enforcement agencies. Stopping the flow of revenues to pirate sites is an effective way to address this insidious problem.

1 ‘The Six Business Models for Copyright Infringement’, A Google and PRS for Music commissioned report with research conducted by BAE Systems Detica, June 2012.
2 ‘USC Annenberg Lab Ad Transparency Report’, January 2013.
3 ‘Good Money Gone Bad: Digital Thieves and the Hijacking of the Online Ad Business’, a report on the Profitability of Ad-Supported Content Theft, February 2014.

Rajkumar Akella is the Honorary Chairman of the Anti Video Piracy Cell of the Telegu Film Chamber of Commerce in Hyderabad, Telangana, and the receipient of the Motion Picture Association’s Asia Pacific Copyright Educator (ACE) 2016 award.

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The Continued Evolution of Site Blocking

By Frank Rittman, posted on 20 May 2017

Recent news out of Australia following a third successful application for injunctive relief against overseas copyright-infringing sites, and an unrelated related case in the United Kingdom, further illustrates the global effectiveness and evolution of site blocking to contain online infringement. By now more than 42 countries worldwide, including Singapore, have adopted one or another legislative or administrative means that rights owners have utilized to effectively restrict access to notoriously infringing online locations, such as the Solar Movie and the Pirate Bay, within their jurisdictions. Because the relevant means of redress in both Australia and Singapore was were modeled on Section 97A of the UK’s Copyright Act, evolving UK jurisprudence provides even further insight into how site blocking legislation might be similarly utilized to address even newer forms of online infringement in Asia.

Section 97A enables a means of ‘no-fault’ redress by which aggrieved rights owners can petition courts and obtain orders compelling internet service providers to employ reasonable measures to disable their consumers’ access to defined online locations found to be primarily engaged in the infringement of their works. Singapore adopted similar provisions into its Copyright Act in 2014, while Australia followed suit the following year. Since then, copyright owners from the music, film, and television industries have collectively mounted four successful actions in the two jurisdictions resulting in blocking orders issued against six different infringing locations.[1]

Most recently, Australia Federal District Court Justice Burley ruled in favor of Universal Music Australia Pty Limited and others on their application against Kickass Torrents, requiring carriage service providers TPG, Telstra, Optus, Foxtel and others to employ DNS blocking or such other means agreed between the parties to disable access to seven different domain names through which the since-seized network could be obtained[2] (see here).

This comes on the heels of previous orders issued by Justice Nicholas last December in favor of films and television industry plaintiffs against Solar Movie, the Pirate Bay, Torrentz, Torrent Hound and IsoHunt. In February, Village Roadshow and others filed another application (yet to be heard) seeking relief against more than 41 additional infringing sites.   Petitioners in Singapore have meanwhile obtained orders in that jurisdiction disabling access to Solar Movies and are reportedly preparing further actions. This shows that rights owners there (and here) will make good use of available remedies to protect their investments against pilferers and thieves.

Because of the UK’s influence on evolving common-law, and particularly commonwealth jurisprudence, courts in Australia and Singapore, among others throughout Asia, invariably view legal developments there for guidance with respect to matters within their own jurisdictions. This is particularly relevant in the light of evolving modes of online infringement. Whereas unauthorized file sharing remains a primary concern for the creative industries, consumers worldwide are increasingly turning to so-called illicit streaming devices and mobile device apps through which they can access infringing content, rather than sourcing it through specific websites locatable by means of web browsers running on computers.

For a number of years, both Singapore and Australia have been plagued by the proliferation of such consumer-friendly devices – sometimes called Kodi-style boxes – allowing users to view illicit content on their TVs by means of set-top devices pre-loaded with third party add-on applications providing direct access to various unnamed servers from which the infringing content is communicated. This has detrimentally impacted both traditional and emerging subscription-based delivery services providing lawful and relatively inexpensive content to consumers in each market. But a game-changing UK High Court decision issued in March provides further guidance for plaintiffs and practitioners in each territory (and ostensibly elsewhere in the region) by extending the interpretation of Section 97A to encompass not only individually infringing websites, but also various and frequently changing IP addresses of ‘target servers’ onto which infringing content is deposited and stored and from which it is disseminated.

In that case[3], (see here) Justice Arnold determined that the operators of such target servers, which frequently incorporate advertising targeted at UK consumers into their delivery networks, were the crucial link through which infringing content (specifically unauthorized transmissions of Premier League football competition) is typically embedded onto individual websites and/or otherwise delivered to individual consumers. Illicit streaming devices typically combine separate and individual component servers performing customer authentication, electronic programming guidance, and content delivery functionalities. IP investigators operating in the market effectively de-constructed such a device and forensically traced the source of the various servers in question, thus enabling the identification of one or more IP addresses that Justice Arnold determined were statutorily responsible for unauthorized communications of copyrighted works to the public.

In a related development, the Court of Justice of the European Union ruled on April 26th that the mere sale of multimedia players which enable films that are available illegally on the internet to be used easily and for free on a television screen could constitute an infringement of copyright.[4] (see here).

In light of these rulings, it would seem that copyright owners in Australia and Singapore could also petition their courts for similar relief against target servers communicating live streams of infringing content, particularly live sporting events, into their respective jurisdictions, as well as retailers of such devices. It will be interesting to see whether any suitably qualified plaintiffs based in either country might now mount a test case along these lines, since the prospects for success in each country appear favorable.

The growing awareness by legislatures and courts around the world that site blocking provides cost-effective and meaningful (if not total, silver-bullet) relief against online infringement without inordinately disrupting unrelated internet operations has therefore helped staunch the flow of misappropriated content from some of the most egregiously infringing sites to which internet users have historically flocked. In the UK, at least, the tool also seems available to address infringing content sourced from illicit streaming devices, too. Site blocking provisions in Asia, in whatever form, should likewise apply to new and evolving forms of online infringement whenever and wherever possible.

[1] It should be noted, however, that the order against the six sites listed a number of different domain names through which the target sites could be accessed.

[2] The United States Department of Justice announced in July, 2016 that the alleged mastermind behind the site had been apprehended and the main site, http://kat.cr,and various permutations had been seized by the authorities. The site nonetheless remained available in Australia and elsewhere through other, different proxies.

[3] The Football Premier League Ltd. v British Telecommunications Plc & Ors [2017] EWHC 480 (Ch) (13 March 2017)

[4] Case C-527/15 Stichting Brein v Jack Frederik Wullems (26 April 2017)

Frank Rittman is the Founding Director and Counsel for the Centre for Content Promotion. He previously served for more than a decade as the Senior Vice President, Deputy Managing Director, and Regional Policy Officer for the Motion Picture Association.

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Drawing the Line: Infringement or Fair Use?

By George Ford, posted on 23 March 2017

I was very excited to visit Singapore for my first time last week. While I was there, I had the privilege of meeting with a number of local and international industry and government representatives, including officers from the Ministry of Law and the Ministry of Information & Communications about ongoing and upcoming reviews of Singapore’s Copyright and Broadcasting Act(s), respectively, along with business executives in Singapore’s film, television, music, and book publishing industries. Significantly, all of the stakeholders I met with are very much committed to positioning Singapore as a regional hub for technological innovation based on a solid foundation of strong intellectual property rights.

My big takeaway from my meetings is that there’s already been significant feedback on the Government’s proposed copyright review, and much of our discussion fell upon expanding limitations and exceptions to copyright infringement, and in particular the debate surrounding amendments to their fair dealing provisions which are more accurately termed “fair use” exceptions given their “for any purpose” catchall language. The debate over the amendment seems to focus on whether these current “fair use” provisions (there are two articles affected), should be widened or narrowed and how best to accomplish that.

Last September, my colleagues and I at the Phoenix Center for Advanced Legal & Economic Public Policy Studies in Washington, D.C. published a treatise entitled Fair Use in the Digital Age. It’s available in its entirety here, but the purpose of the paper was to construct an economic model to help policymakers derive an optimal line of fair use when struggling to draw the line between infringement and allowed use.

In essence, our model is rooted in the purpose of copyright and informed by judicial precedent, of which there is abundance in the United States but a comparative dearth in Singapore. Among other things, we found that optimal fair use should be stricter where: the cost of the original work is high, the size of the market for the original work is small, piracy and other forms of leakage are large, the cost of distributing secondary works is lower, small amounts of transformation matter a lot to consumers, and the fixed cost of producing secondary works are smaller.

This economic analysis of fair use, and the modeling derived from it, argues that fair use should be narrowed especially in a small market like Singapore where the leakages due to piracy, costs of enforcement and the misapplied carve outs of certain safe harbor applications that encourage, if not down-right enable, piracy.

This would suggest that Singapore – with regional aspirations to be an IP hub but where illicit streaming devices providing access to pirated audio-visual content are readily available and detrimentally affecting the Pay-TV market yet – should fall on the side of creators’ rights whenever possible, and against any further expansion of the fair dealing.

Singapore is certainly an impressive place; tiny in size but huge in its ambition to compete strongly in the global economy. Attracting regional and global investment in the creative industries is a big part of its national plan. Widespread copyright theft hinders the continued development of legitimate online distribution platforms. Spotify says piracy remains the greatest challenge it faces in Asia. And in a 2015 letter to shareholders, Netflix identified piracy as a major threat to its business.

Stakeholders in Singapore, and particularly the government representatives with whom I met, understand the issues and the risks of overbroad fair use/fair dealing exceptions. I await the outcome of the ongoing copyright review and hope that strong intellectual property rights remain a central focus of Singapore’s international reputation.

George Ford is the Chief Economist at the Phoenix Center for Advanced Legal & Economic Public Policy Studies and also teaches at Samford University in Birmingham, Alabama. Dr. Ford has written or contributed to more than eighty treatises, research studies, book reviews and policy papers involving Network Neutrality, Competition and Investment in Telecommunications, and Price, Quality and Consumer Welfare in the Cable Television industry among a host of other topics. He testifies regularly on economic matters in forums such as the U.S. Congress, the Canadian Royalty Board, and numerous regulatory agencies. Dr. Ford received his PhD in Economics from Auburn University.

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Search Engines and Piracy: Lessons from the United Kingdom

By Mike Weatherly, posted on 26 February 2017

William Langland observed in the 14th century that patience is a virtue. Thomas Fuller noted some 400 years later that all things are difficult before they are easy.

From 2010 to 2015, I was an elected Member of Parliament in the United Kingdom, and during that time I was honored to serve as the Intellectual Property Advisor to Prime Minister David Cameron – the first (and only) MP to ever hold such an appointment. In that capacity I delivered a series of reports for the Secretary of State about tackling IP-related infringement, the first of which was entitled ‘Search Engines and Piracy’. That report contained a total of ten recommendations that search engines – and Google in particular, given their prominence in the search capacity – could take to reduce the incidence of online piracy, which was estimated to cost the UK £ 400 million in lost annual revenues as a result of film and music piracy. Given that the UK is only one of three states which are net exporters of music worldwide, I viewed the creative industries as an essential part of the UK’s economy, providing approximately one in every eleven jobs in the country, and I remain committed to doing whatever I can to promote them.

In preparing that first report, I spent a lot of time speaking with rights owners’ organizations and search engines on voluntary measures that could be taken to reduce the incidence of online infringement. One measure, in particular, that I proposed was for search engines (which are, after all governed by human operators and algorithms) to demote search results for sites that substantially infringe or are structured to infringe intellectual property. I would stress that I recognize that search engines are far from the ‘bad boys’ everyone tries to portray them to be – they do not create the illegal content nor do they consume it – if we are serious about stopping piracy we must address the root cause (and in particular those who make money from pirate sites) as well as the end users. But the role of introducing the two ends does need to be looked at and resolved as part of the solution.

Evidence pointed to the fact that search engines are often a source driver of piracy[1] and I suggested that pirate sites should be demoted from pages of Google’s and others search results depending on the number of infringement notices they receive. I was convinced that solution along those lines could (and should) be implemented and urged search engines and rights holders to discuss what might be practical and reasonable.

It is particularly gratifying, therefore, that some three years later following a government-chaired series of roundtable discussions (which was another one of my recommendations, by the way) a new voluntary code of practice will be in place by June 1st in the UK by Google and Microsoft to ensure that links to infringing content are de-ranked, so as to not appear prominently in search results. The code, announced only a few days ago, also involves ongoing technical consultation, collaboration, and information sharing between the parties to continually define the process and adopt new practices where needed.

Having just met with officials from Singapore’s Ministry of Law and the Intellectual Property Office of Singapore during a visit to Asia last week, I query whether a similar initiative might be feasible there as well.  Singapore is a regional leader in IP protection, building upon aspirations for an Intellectual Property (IP) Hub Master Plan released in 2012, and has taken a number of important initiatives to promote and protect creators’ rights. Such initiatives notably include amendments to Singapore’s Copyright Act enacted in 2014 enabling a procedure whereby rights owners can obtain court orders requiring the republic’s network service providers to block access to ‘flagrantly infringing online locations’ as defined by the relevant statute.

However, there doesn’t yet seem to be a corresponding obligation for search engines to demote or delist those sites from their results in Singapore, and based on discussions with copyright industry representatives there seems to be no legal basis that rights holders could undertake to demote (or delist altogether) them. Search engines operating in Singapore have voluntary programs to delist offensive imagery including child abuse material, personal information, or sexual content shared without consent. The Info-Communications Media Development Authority can also require search engines to remove content that infringes against prohibited content law.   Given that Singapore often looks to the UK for ways to help assist the fight against piracy, I am hopeful that this measure will follow soon in Singapore as well in the context of its current Copyright review. I would urge the Ministry and IPOS to have a look at my reports and see what other recommendations might also be applicable to Singapore.

The UK Government was instrumental in securing the voluntary agreement in the United Kingdom. Given the Singapore Government’s leadership role in promoting ongoing reform within its jurisdiction, perhaps a corresponding role could be undertaken by them there. I would always advocate a good constructive dialogue between interested parties and bringing people together to talk to one another.

Other jurisdictions throughout Asia, most of whom don’t yet measure up to Singapore’s levels of IP protection, might then be similarly inspired to bring parties together in a spirit of cooperation to promote their own creative industries by taking steps to reduce online infringement. It is not the ‘silver bullet’ solution to stop online infringement – my ‘Follow The Money’ recommendations for taking away financial incentives from the pirates would be a much bigger hit and win – but a simple solution of sparking dialogue amongst affected parties and promoting voluntary cooperation, such as that just done in the UK, can only be a good thing.

[1] A 2013 report by the Motion Picture Association concluded that 74% of consumers cited using a search engine to navigate them to a site with infringing content the first time they visited that site, while another report by the Recording Industry Association of America showed that approximately 94% of users do not go beyond the first page of results.

Mike Weatherley is currently the Vice Chairman of the Motion Picture Licensing Company, a worldwide leader in motion picture copyright compliance supporting legal access to movies and television programs across five continents and more than 30 countries. He previously served as the Member of Parliament for Hove in East Sussex.

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SECONDARY LIABILITY FOR ONLINE COPYRIGHT INFRINGEMENT: THE COX DECISION

By Frank Rittman, posted on 25 January 2017

Secondary liability for copyright infringement has been a hotly contested issue in a number of international jurisdictions. Most countries act in some way to limit the liability of internet service providers (ISPs) for their customers’ infringing activities. In some instances, this might require ISPs to forward notices of infringement received from rights owners on to their customers as a means to raise awareness, or take additional steps to deter infringement. In return for acting reasonably, and as prescribed by statute, ISPs get the benefit of so-called ‘safe harbor’ protections that limit their liability considerably.

An ongoing case in the United States, analyzed during a CCP lecture on January 10th, took a close look at the safe harbor provisions there, and more specifically what ISPs have to do to benefit from them, resulting in a decision that startled the legal community. The case, BMG Rights Management (US) v. Cox Communications, Inc., involves secondary liability for copyright infringement, which happens when a party materially contributes to, facilitates, induces, or is otherwise responsible for directly infringing acts carried out by another party.

Many jurisdictions, including Singapore, recognize secondary liability explicitly within their copyright laws and provide specific conditions under which one party can be held responsible for the infringing acts of another. But in the United States, secondary liability for copyright infringement is a creature of case law. So the courts, rather than Congress, are primarily responsible for its development. And historically the courts have recognized two kinds of secondary liability.

The first is vicarious liability, which emanates from the agency doctrine and the notion of some supervisory capacity. Here, courts have held that employers should be responsible for the infringing acts of their employees under traditional master-servant principles. Contributory liability, on the other hand, holds third parties liable for the primary act of infringement based on their relationship with the actual harm, either by enabling it or by benefiting from it.

These doctrines have been recognized in U.S. cases involving music copyrights dating back more than 90 years. More recently, case law concerning music infringement has migrated over to the internet. Some of these cases have focused on the liability of website or network operators who create platforms used by others to commit infringement. A third doctrine, known as inducement liability, was recognized by the Supreme Court in the Grokster case. It accrues when someone distributes a device with the objective of promoting its use to infringe, as shown by clear expression or other affirmative steps.

The latest question is whether internet service providers should be held liable for the infringing acts of their network subscribers. Although there are certainly circumstances under which ISPs can be held directly, or primarily liable for infringement, the Digital Millennium Copyright Act sets out conditions under which ISPs can limit their liability for secondary infringement with respect to certain activities. These limitations extend to transitory network communications, system caching, information storage, and information location tools. These last three categories of activity have notice-and-takedown rules providing specific mechanisms for infringement notices, counter-notices and put-back, and liability provisions if false notice has been given. In order to be eligible for the safe harbor protections, ISPs in the United States have to abide by certain conditions. These include maintaining the foregoing notice and takedown provisions, as well as not interfering with technical measures used by copyright owners to protect their works. Most importantly, ISPs have to adopt and reasonably implement a policy to terminate the accounts of repeat infringers under certain circumstances.

In this case, BMG Music employed the services of an investigative company, Rightscorp, to detect and trace unauthorized copies of their musical compositions distributed illegally on peer-to-peer networks. Once an unauthorized distribution was identified, Rightscorp was able to obtain the date, time, and IP address of the peers between whom the files were shared. Beginning in 2011 they started sending infringement notices on BMG’s behalf to Cox, asking that they be forwarded to their customers. Many of those notices related to repeat infringer subscriber accounts.

A unique aspect of the Rightscorp notices was the inclusion of a settlement offer providing an opportunity to forego legal escalation by spaying a spot fine of roughly $20 to $30 per song. This proved to be the first point of contention between the parties. Cox took the view that such offers were inappropriate in the context of a DMCA notice and asked Rightscorp to take that language out of their letters. Rightscorp refused to do so, prompting Cox to blacklist them, meaning that they configured their system to automatically delete messages received from Rightscorp’s e-mail address. The information contained in those notices was never retrieved, reviewed, or acted upon.

Rightscorp then ramped things up, sending as many as 24,000 infringement notices per day and prompting Cox to ultimately block Rightscorp altogether. When a complainant is simply blacklisted, Cox still has a record of the emails’ receipt and deletion. But when a complainant is blocked at the server level, there is no record at all of any message having ever been received. BMG thereafter filed a complaint against Cox in November 2014 in the United States District Court for the Eastern District of Virginia alleging contributory and vicarious liability for copyright infringement of their musical compositions. The complaint sought statutory damages, injunctive relief, fees, and costs. Cox claimed in its defense that, as an ISP, its liability was limited by virtue of the DMCA’s safe harbor provisions, since it was a mere conduit for transitory digital networking communications, and that it did nothing more than transmit, route, or provide connections for copyrighted material.’

Before the trial, both parties filed cross-summary judgment motions. BMG sought summary judgment regarding its ownership of the subject copyrights, and also sought a ruling that Cox wasn’t entitled to protection under the DMCA’s safe harbor provisions. Cox, of course, asked the court to deny BMG’s motion, or alternatively to enter summary judgment in its favor on both issues. With slight exception, BMG prevailed on its ownership claims and proved that they did in fact have standing to bring the action. BMG also prevailed on its claim that Cox couldn’t meet the DMCA’s threshold requirement for adopting and reasonably implementing a repeat infringer policy.

Under the DMCA, a service provider has to demonstrate that it has ‘adopted and reasonably implemented, and informed its subscribers and account holders of its policy providing for the termination in appropriate circumstances of subscribers and account holders who are repeat infringers.’ This required the court to take a closer look at things, and dispute fell upon what it meant for a service provider to reasonably implement its policy.

Cox did, in fact, have an ‘Acceptable Use Policy’ that prohibits account holders from using its internet service to post, copy, transmit, or disseminate any content that infringes the patents, copyrights, trade secrets, trademark, moral rights, or proprietary rights of any party. It further specifies that violation may result in the immediate suspension or termination of access to the service, or the entire account.

But BMG said there were three reasons why Cox didn’t reasonably implement that repeat infringer policy. First, they said Cox can’t refuse to accept infringement notices just because they contain settlement offers, or ignore the specific information contained in those notices. Second, BMG complained that Cox had an unreasonable ‘hard limit’ policy restricting the number of notices it would process in a 24-hour period, that went not only to the claims against individual subscribers, but also to the aggregate claims sent by rights owners in any given day. Third, BMG argued that Cox simply didn’t terminate access or repeat infringers under appropriate circumstances. The court agreed with them on the last count, so it didn’t bother concerning itself with the first two.

It came out in evidence that Cox had a graduated response policy requiring no less than 14 notices before any consideration would be made about termination. The testimony on record revealed that on receipt of a first infringement notice sent to any given subscriber, Cox took no action whatsoever. It claimed this is because a substantial percentage of accounts never receive a second complaint. When a second complaint did arrive, Cox sent an email to the account holder that included a letter explaining the alleged infringement, along with the complete text of the notice received from the copyright owner.

The process of sending an email warning was repeated on the third, fourth, fifth, sixth, and seventh complaints Cox received for an account within a six-month period. When Cox received an eighth notice, it placed the subscriber into a ‘soft-walled garden’ limited to a single webpage and a warning message. But the account holder could exit and reactivate service by clicking a link on the webpage. The same thing happened on Cox’s receipt of a ninth notice. The tenth complaint placed the subscriber into a ‘hard-walled garden’ instructing the subscriber to call Cox Customer Service to request reactivation. That same procedure was followed upon receipt of the eleventh complaint. The twelfth and thirteenth complaints placed account holders back into the walled garden, but now they had to speak to a higher-level customer service representative in order to get reactivated. When Cox got a fourteenth notice during an abuse cycle, they then reviewed the full account history to consider termination. However, Cox claimed that in the vast majority of cases it never had to resort to termination.

The court also took note of internal emails amongst Cox’s employees showing that although the ISP recognized termination as a legal DMCA requirement, they felt perfectly within their rights tore-activate the customer immediately following the termination, at which point the customer would start over again with a clean slate. The court didn’t buy this approach, citing Black’s Law Dictionary definition of ‘terminate’ as meaning “to put an end to; to bring an end” and holding that service providers cannot skirt the termination requirement by imposing something short of complete termination.

Certain aspects of Cox’s policy were unwritten altogether. For example, Cox limited the number of notices it would process in a day. Any notices beyond the limit were closed, and not counted in the graduated response escalation. And Cox only counted one notice per subscriber per day. In other words, if a subscriber received ten notices in a day they were rolled up into a single ticket.

U.S. District Court Judge Liam O’Grady held that no reasonable jury could find that Cox had implemented a repeat infringer policy under these circumstances, and during the particular period of time in question. Cox later added two additional steps to its graduated response procedure that both strengthened the policy but reduced the likelihood that it might actually implement it. BMG successfully established that although Cox had at some point developed a termination procedure and had knowledge of its customers’ infringements, it simply chose to do nothing about it.

Justice O’Grady ruled for BMG that Cox could not avail itself to a safe harbor defense against any liability that a jury might find at trial. By contrast, he rejected Cox’s motion for summary judgment and held that there remained sufficient issues of material fact for the jury to decide. Following a two-week trial, in December 2015 a jury found Cox liable for willful contributory copyright infringement and awarded BMG $25 million in statutory damages. The jury found that Cox knew, or had reason to know, about its’ users infringements but was willfully blind to it and materially contributed to it. In short, the jury found that Cox was aware of the infringing activity and responded to it recklessly or with deliberate disregard. However, the court refused BMG’s claim for vicarious liability, as well as their request for a permanent injunction. Vicarious liability would have required a showing of Cox’s right and ability to supervise the infringing activity, and an obvious and direct financial interest in it. But here the jury found no such interest.

The parties then brought post-trial motions back to Justice O’Grady in 2016, with Cox moving for judgment as a matter of law, or alternatively for a new trial, and BMG seeking judgment as a matter of law on its failed claim of vicarious liability as well as permanent injunctive relief. Cox argued that its internet service was capable of substantially non-infringing use and was therefore immunized from liability by virtue of the Sony Betamax decision. And it argued that even if it wasn’t immunized by Betamax, it hadn’t engaged in any acts of inducement with respect to its customers.

Unsurprisingly, the judge denied both parties’ motions and effectively preserved his earlier rulings. Cox thereafter filed notice in the fourth circuit Court of Appeals in November, and BMG responded in December. Various amici briefs have by now been filed. For now, though, the judgment stands and represents the first time an ISP has been held responsible for its subscribers’ music piracy. The question becomes what does it mean looking ahead? Justice O’Grady himself noted that “in reaching this conclusion, the court acknowledges that the application of traditional contributory infringement to large intermediaries like Cox magnifies the uncertainties in this area of law and raises the specter of undesirable consequences that may follow.”

In fact there seems to be little in the way of new or innovative jurisprudence having been introduced. Yes, the DMCA says that ISPs can’t be held liable when customers user their net access or server space to infringe copyright if they have a decent system in place for stopping the infringement once they’re made aware of it. But in this instance, BMG argued and convinced the court that Cox simply operated a shoddy system, and weren’t entitled to the protections that might have otherwise been available to them had they acted more responsibly. Many observers feel the decision simply reflects good facts set against good law

But aside from the specific circumstances of this particular case, the decision raises for consideration a number of larger policy issues, such as whether the notice-and-takedown system in the United States codified 19 years ago is still functioning effectively. Rights owners spend a tremendous amount of time and money chasing down infringing URLs, only to see them pop up again after being taken down. It seems to them at times that ISPs simply play a game of cat and mouse with respect to takedown notices. So does notice and takedown provide meaningful redress, in 2017, against unchecked acts of infringement? Are there newer, better alternatives (such as site blocking) out there worth considering?

And what are the implications for other jurisdictions? The DMCA account termination provisions have been hard-fought points of concern in bilateral and multilateral trade negotiations and the United States has sought at every opportunity to replicate them in the various free trade agreements it negotiates around the world, including Singapore. In some instances they were successful while in others they were not. The language didn’t survive the final text of the Trans Pacific Partnership agreement, for example.

But several jurisdictions, including Singapore, have also enacted so-called ‘no fault’ provisions into their laws allowing rights owners to obtain blocking orders serviceable upon ISPs requiring them to block access to infringing websites and peer to peer networks without regard to any liability to the ISP for the underlying infringements. Research has shown that blocking access to infringing sites reduces local traffic to such sites by roughly 80% on average, suggesting it’s a more effective remedy to deter ongoing infringement than notice and takedown.

Meanwhile, the appeal will be closely watched by legal and legislative observers around the world. For the time being the district court decision represents one of the most significant developments in secondary liability for online infringement to have come along so far. Looking ahead, it may well prove to a catalyst for policy reform and a more supportive environment for copyright owners.


By Frank Rittman
Posted on 25 January 2017

Frank Rittman is the Founding Director and Counsel for the Centre for Content Promotion. He previously served for more than a decade as the Senior Vice President, Deputy Managing Director, and Regional Policy Officer for the Motion Picture Association.

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FAIR USE AND DIGITAL TECHNOLOGY: A MUSICIAN’S PERSPECTIVE

By Alex Oh, posted on 2 December 2016

As a musician, digital technology can be both a boon and a bane. On the one hand, it helps me create my work and gives me a bigger platform for its exposure, but on the other hand it also facilitates its infringement. It’s bad enough when digital technology provides the means for people to take my music or offer it to others without my permission or knowledge. That’s outright theft as I see it. But when digital technology is combined with excessive fair use exceptions under copyright law, the taking becomes legitimized as a matter of policy.   That’s economically unfeasible for creators, and governments around the world need to remember this when they contemplate rights reform if they value our contributions to society and its store of wealth.

I’m both a composer and a recording artist. I’m lucky enough to make music for movies, in my case usually involving full orchestras as part of the process, and I’ve had the good fortune to score 18 feature films produced in Singapore, Australia, Taiwan, and the United States. It’s a labor of love, and one that’s intensely satisfying. When I was first starting out, it was considerably harder and more expensive to produce a soundtrack. Analog technology was limiting, and allowed me to do only so much on my own. I had to compose and demo my music one instrument at a time, and in real time. I had to involve other people in the trial and error that led up to the recording session where it all came together. That slowed things down and increased my costs.

Nowadays though, there’s almost as much technology and instrumentation available to me in my computer as there used to be in the studio. This allows me to compose and experiment with a variety of sounds and instrumentation all on my own before involving anyone else. I can get things pretty much just the way I want them before calling in the orchestra. Digital technology facilitates the process and enables me to create more efficiently and cost-effectively. That’s important because at the end of the day the music business is just that: a business. And as a businessman, I’m happy whenever my revenues exceed my costs.

Digital technology also helps me to promote and expose my music to a wider audience than just the movie-goers in the cinema. Through the wonders of the internet I can, and do, make my music available to the public whenever and wherever I want. It helps me to promote myself and my creativity in ways that I never imagined, and this is true for most musicians. We crave the exposure because we want as many people as possible to legally enjoy the music we create. Legitimate consumption is the essence of how we (are supposed to) get paid for the work that we do.

As creators, we should be able to determine how, when, and on what terms our music is made available and this is where copyright laws come in. Copyright protects us in this respect by according composers and musicians exclusive rights to the communication, public performance, and reproduction of their works. So when someone enjoys our music, these rights help us monetize that enjoyment so that we can all earn a living. That’s how the industry works, and it provides the incentive for me and my colleagues to stay involved. Digital technology can also facilitate that process by allowing better identification of my music around the world and a more precise determination of the royalties due to me from its sale or performance. Theoretically, at least, the combination of digital technology and the copyright law should be a good thing for composers and musicians in economic terms.

Unfortunately, digital technology also makes it a lot easier for people to take and use our music without our consent. Some people think that music, and movies, and book, and software are theirs for the taking just because they can find it on the internet. Political parties have been formed on this premise, and emotions can run high when it’s discussed publicly. People that would never think of stealing a television set from a store, or a car from the street, sometimes don’t think twice about stealing other people’s music, and they zealously rationalize taking it as their ‘right.’

The music industry has devoted significant time and resources combatting digital piracy, while at the same time appealing to consumers to value creativity by accessing music legally. For more than 15 years now, music creators and performers have been devastated by unauthorized downloading and streaming sites that allow the theft of our music with just a click of the mouse, and without any loss of quality to the product in the process. Needless to say creators don’t get paid when that happens. This is bad enough when the behavior is patently illegal. But when copyright protection is purposefully relaxed as a matter of policy through excessive limitations and exceptions to those exclusive rights, it becomes even worse. That’s where fair use and fair dealing can present an even bigger problem.

The fair use doctrine essentially amounts to a permissible defense typically determined by the courts, to behavior that would otherwise be infringing if done for purposes deemed beneficial to society, such as criticism, commentary, news reporting, teaching, or research. Fair dealing, by comparison, explicitly permits a certain degree of non-consensual use of copyrighted works under prescribed and limited circumstances. But regardless of what it’s called or its underlying intention, the practical effect of these limitations, exceptions, and defenses is that creators don’t get paid for certain uses of their works. It amounts to a policy determination that my rights to my property fall short of society’s right to use it without paying me. It’s a concept that I don’t think has a corollary in many/any other industries.

Fair use and fair dealing were already detrimental to creators during the old analog days when the world was a smaller place and when copyrighted works weren’t as widely distributed or made available as they are today. Serial reproduction and secondary use of music typically resulted in a degradation of its quality. But in a digital world every reproduction is as good as the master, and every performance is as crisp as the original. Much like copyright theft, excessive ‘fair use’ of copyrighted works facilitated by digital technology can thus disrupt the market for those works and threatens the continued health of the creative economy.

Singapore recently initiated a public consultation on proposed amendments to the Copyright Act. Unfortunately, most of the 16 specific proposals contemplate even further exceptions and limitations to creators’ rights than the 28 already provided under the Act. Australia is in the midst of a similar process. The discussion in both territories has been framed by some on the premise that fair use and fair dealing actually helps foster innovation and creative output. The policy implications signal a further message that copyright gets in the way of economic development and societal progression.

But most creators, including me, don’t see it that way. Comprehensive research published in September by Dr. George Ford and his colleagues at the Phoenix Center for Advanced Economic and Legal Studies in Washington, DC entitled Fair Use in the Digital Age observed that while fair use will in some cases serve societal interests which creators cannot be reasonably expected to further, the purpose of copyright itself is to provide adequate incentive for the creation of new works, and that courts and society must evaluate fair use with a close eye on its effect on creators’ incentives. I’d recommend that policy makers here in Singapore take a close look at his reasoning before making any decisions.

Dr. Ford’s subsequent article Fair Use Does Not Mean a Fair Market opines that in order to truly stimulate creativity policymakers should instead focus their attention on reducing copyright theft. He argues that any discussion of expanding or altering provisions related to copyrights exceptions and limitations must be accompanied by better enforcement of copyright than presently exists. More specifically, Dr. Ford observes that “Intellectual property laws support substantial economic activity and rouse the creative energies of humankind. Stakeholders seeking to modify them are within their rights to advocate for their favored outcomes. Emotional positions are certainly influential, but if net improvements in society’s well-being are the desired discourse on policy must eventually turn to rigorous, analytical, and credible research. Intellectual property laws deserve nothing less.”

In my view, so do Singapore’s creators. If we want to encourage a new generation of composers and recording artists to hone their crafts here, we need to value and respect their contributions and output. The way to do that is to enhance the levels of protection and give them a better opportunity for a fair return on their output. Further exceptions and limitations to creators’ rights in the name of technological innovation are not the way to promote and protect the creative industries in 2016.

Alex Oh is a prolific Singapore-based film composer, music producer and pianist. In a career spanning over a decade, he has scored many award-winning feature films in Australia, Singapore, Taiwan, and the United States, along with more than twenty television series.

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ASEAN Trade and Creativity

By Mike Michalek
The following remarks were during the CCP’s November 15th Insight and Analysis lecture on Regional Trade and the Creative Economy

Ladies and Gentlemen,

Thank you and good afternoon! It give me great pleasure to be here to comment on the remarks you just heard from Ambassador Kirk Wagar, US Ambassador to Singapore, on regional trade and the creative economy .

I am extra pleased to be able to talk about things I really like to talk about — Innovation Creativity diversity, and Fun. I haven’t had much chance to talk about these things — especially the fun part — since the US election so this is a great opportunity for me.

Actually, I have another reason for loving this topic —I am a closet geek. I started out my professional career as a research physicist for NASA. I designed a holographic camera, perhaps the first of its kind in the world, and would have made the prototype if NASA had the funds. They wanted to use their money for a moon shot or something like that so my design remains on the shelf in a box along with several old physics books.

As usual, Ambassador Wagar hit all the right notes. Intellectual Property protection and a sophisticated IP incentive and nurturing ecosystem are vital prerequisites for a robust innovative economy and Singapore has all those requirements.

Furthermore I agree with Ambassador Wagar on the welcoming atmosphere for foreign direct investment here and the result that American companies have come here by the hundreds and found the forward looking policy environment an excellent incubator for business that have been here since before Singapore became a city state!

The atmosphere, geography and demography combined and headed by leaders of the caliber of Lee Kuan Yew and institutions like the Economic Development Board, the Committee for a Future Society, and the like have combined to make Singapore South East Asia’s hub for big tech companies.

The US ASEAN Business Council has over 150 companies as its members and just about every one of them has an office, if not its regional headquarters, here in Singapore.

I also liked the way in which the Ambassador noted the tradition of philanthropy within American Business. Giving back is a key part of the DNA of American firms and this often takes the shape of projects to support clean water, education, scholarships, and other fields which not only give back to the community, but help those communities to thrive and develop their own creative elements.

The Ambassador noted the large and growing trade relationship between Singapore and the US and I would be remiss if I did not also note the growing trade relationship between ASEAN and the US — my particular business.

ASEAN is America’s 4th largest export market and the largest destination for US FDI in Asia! Of course, a great deal of that investment is right here in Singapore as the Ambassador pointed out. And Last year ASEAN inaugurated the ASEAN Economic Community to give a boost to integration in this vital region of the world. ASEAN is also home to four of the TPP members, which may or may not mean anything over the next few years but we can talk about that later.

Within ASEAN, Singapore is, of course, the most advanced economy in many ways and innovation is perhaps the brightest star in a constellation of advanced institutions and Ambassador Wagar has described many of the policies that have brought Singapore to this situation today.

Coming from the US, however, and representing the Private sector, I would like to say a few words about the contribution of business to innovation, creativity, diversity and fun!

Ever since Samuel B. Morse made a grant of a few thousand dollars to a university to further develop his invention — the telegraph, business has been playing a significant role in the development of innovation in the United States. Elon Musk and his concept of a private sector Mars mission, hypersonic vacuum trains criss- crossing the globe and, of course the Tesla, now that the private sector can also be a source of innovation.

Not only does the private sector come up with its own innovative ideas, but it also works very closely with the Government to jointly develop technologies and bring them to market. The private sector is great at commercializing ideas and putting the on your breakfast table. Remember Tang — the orange juice astronauts drink, or Teflon — great for re-entry heat shields AND non-stick fry pans!

But over the years we have come to realize that the real importance of Government lies in funding what I think is called these days curiosity research — those topics which are more blue sky and which have no known application yet. Even Bill Gates has said that h Private sector is wonderful at marketing and engineering devices for consumers, but hasn’t a clue about blue sky research!

In the US there has been a close relationship among Academia, business and government for many years. When I was studying Physics in undergraduate school we had several professors in our engineering school who were not only teaching us but also working on government and private sector (in this case automobile industry) contracts. Good for the Professor, good for the school and great for the government!

In South East Asia this is an underdeveloped function. I recall that about ten years ago right there in Singapore, there was a conference of government Research and development agencies from ASEAN to look at best practices for these institutions in developing innovative ecosystems. They didn’t call them that of course, can’t recall exactly the title of the conference, but the results were clear. First, Singapore had demonstrated leadership in calling together these institutions and has continues that leadership ever since. Second, while innovation and strategies like incubators, best practices, sandboxes and the like were concepts that were not unfamiliar to the participants, it was clear that the varied levels of development and resource constraints of the participants meant that innovation policies and regulatory frameworks were more a theoretical discussion than a practical one.

Now fast forward almost ten years and there have been two new phenomena which have had a significant influence on the situation: the mobile phone has been a game changer terms of a platform that is easily handled by entrepreneurs, low capital investment and limitless ideas than can be played with; the second is crowd funding and other alternative ways off financing innovation. With these two things in play there is scope for an uprising of new companies, ideas and business plans. Perhaps the best known here in SEA is Go-Jek which now rivals UBER and is into delivery off passengers, packages and Pizzas!

Well I do not want to make a whole new speech out of comments on Ambassador Wagar’s excellent remarks, but I will end up with a suggestion, or two. First look at storm of the American Colonies in innovation space like University of Arizona’s LEEAP program in Vietnam where they are developing engineering departments and accrediting them in Vietnamese universities and LEEAP a similar program about to get underway in Indonesia. Also Look at GE’s center of excellence in HCMC for solving problems in Petroleum engineering not only in Vietnam but around the region and, indeed, the world, Also Microsoft entrepreneurial projects in Bandar Seri Begawan…yes Brunei, where their program after two years has already graduated about twenty new entrepreneurs.

In short, as Ambassador Wagar said America wants to partner with South East Asia — whoever is President — and the US Government and Private Sector are going to be here for the long haul so let’s start a conversation and see where it might take us.

Thank You

Mike Michalek is the Senior Vice President and Regional Managing Director of the US-ASEAN Business Council and served previously as the United States Ambassador to the Republic of Vietnam from 2007 to 2011

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Regional Trade and the Creative Economy

By The Honorable Kirk Wagar
The following remarks were during the CCP’s November 15th Insight and Analysis lecture on Regional Trade and the Creative Economy

Ladies and gentlemen, good afternoon, and happy Global Entrepreneurship Week! It is my honor and great privilege to meet with you this evening during this week that celebrates entrepreneurship to share some thoughts on innovation, the creative economy and U.S. economic engagement in the region. I would like to thank the Motion Picture Association, the Centre for Content Promotion (CCP) and Singapore Management University for sponsoring this event.

U.S. Embrace of Innovation

Meaningful innovation comes from all levels of society and business – from startups to Fortune 500 companies. Many of the American businesses operating here in Singapore started in a garage, laboratory or storefront with no more than a handful of employees and a good idea. Some of these businesses grew too big for a garage and are now among the most successful in the world today. Countless U.S. businesses here in Singapore and the region are expanding the foundation on which startups such as these can take off and make their impact in the business world.

A strong IP regime—one that includes robust, solid, intellectual property laws and enforcement mechanisms—are fundamental to fostering innovation and a creative economy. According to the U.S. Department of Commerce, U.S. IP laws are the strongest in the world and have empowered innovative businesses to contribute more than $6.6 trillion of U.S. GDP and produce IP goods and services accounting for 52% of U.S. exports. IP-intensive industries in the United States directly and indirectly also supported 45.5 million American jobs, or approximately 30 percent of total U.S. employment.

A healthy, robust legal IP framework is just one factor contributing to the United States’ role as a top center for innovation. Other fundamental characteristics of what makes the United States and our businesses global leaders – which I like to highlight whenever I can – is our commitment to diversity, creativity, innovation, and fun.
On occasion, people ask me about how the United States will react to the supposed inevitability of a decline in U.S. influence in the world. I love this question because I can so easily refute that premise. The United States is by no means in decline and I can prove it by just asking a coupleof simple questions.

Where do most of the global trends and innovations in business, entertainment, defense, and science originate? In which country do a large percentage of the world’s leading researchers choose to study, publish and patent? We all know the answer to those questions. But why is it the United States? It can’t just be a question of money or trendiness. No. The United States continues to lead the world in innovation because our culture has always rewarded people who try and fail and try again and also because the United States embraces and rewards new contributors from diverse backgrounds and origins from all over the world.

Now, a word about the importance of diversity as an essential component of innovation and a creative economy. Harnessing diversity to achieve prosperity, innovation, entrepreneurship and success does not stem from the struggles or concerns of just one group or the other. It comes from people of different races or ethnicities reaching out to each other, from Muslims and Christians breaking bread together, to businesses now hiring types of people who they had never hired before into positions destined for leadership.

The United States embrace of diversity is well known. As the world’s largest immigrant nation, valuing diversity and different cultures is part of our national DNA. Perhaps lesser known is Singapore’s story of how it has “Prospered through Diversity,” enabling it to become a modernsuccess story. In just 50 years Singapore, a tiny country with scarce natural resources, has become a modern world economic leader and model for successful development.

Singapore did this by being smart, hardworking and practical. But they also did it by including all of its citizens in the process. I know of no better example of any nation that, in such a short time, has been more successful at integrating its people in common cause for mutual economic success.

Singapore has one of the most harmonious religious and racial climates among all the nations of the Earth. And it is no mere coincidence that Singapore’s commitment to healthy diversity has produced extraordinary prosperity and a growing innovation center and the entrepreneur capital of Southeast Asia.

I would like to publically commend the Singapore government for its great ambition and efforts to promote innovation, open markets and investment. Singapore aspires to become an innovation hub and, in its never ending search for high quality foreign investors, has made it a national priority to establish itself as a regional IP hub. Supporting and aligning with numerous international treaties and conventions, Singapore has developed a globally leading Intellectual Property Rights regime. It ranks first in Asia and second in the world for IP protection, ahead of the United States, according to the World Economic Forum’s Global Competitiveness Report 2015-2016 – the fifth consecutive year that Singapore has retained its ranking.

A growing network of venture capitalists has established a base in Singapore, recognizing the positive investment climate and the ease of doing business. Singapore’s transparent legal system, top universities with robust S&T programs, and its global business center with opportunities for collaboration all promote its entrepreneurial ecosystem.

U.S.-Singapore Engagement

In our mutual commitment to IP protection, innovation, diversity, and promoting a creative economy, the United States and Singapore share many common values and stories. This year is the 50th anniversary of formal diplomatic relations between the United States and Singapore. We have celebrated this year how far we have come together as the United States and Singapore continue to strengthen mutual ties – economically, security, militarily, and culturally.

The United States recognizes Singapore as a place we want to do business. The United States is the largest investor in Singapore and over 3700 U.S. companies are headquartered here. Ourcompanies shaped Singapore early on, from its very earliest days, and they continue to positively impact Singapore in ways that many might take for granted. Consider our record of employment, investment, and community service in Singapore.

Our companies bring jobs to Singapore, and have done so for as long as Singapore has been a country. We employ more Singaporeans than any other. The ten largest U.S. companies alone here employ the equivalent of nearly half of Singapore’s entire civil service. One of our 3,700companies here – Citibank – alone employs 10,000 people.

Our firms are some of the most sought after in desirable employment. Whether its engineering the latest chip technology, operating the complex network of petrochemical processors, managing financial accounts for Wall Street’s biggest banks, animating the latest blockbuster film, or marketing quintessential American brands like Harley Davidson, Johnson & Johnson, Facebook, and Apple, we’re very proud that a host of Singaporeans and other local nationals in the region are part of our companies families in Asia.

The United States is by far the largest foreign direct investor in Singapore, exceeding the FDI from Japan, Korea and China into Singapore combined. At latest count, our cumulative FDI reached $180 billion. Our investments in hardware – everything from landmarks such as the Marina Bay Sands to the most modern research and high tech production centers in the world –are readily apparent.

Less noticeable, but perhaps more meaningful, are the investments our companies have made in the Singaporeans who are part of them. Our companies sink millions of dollars every year, giving their employees skills and experiences – investments in people that help them realize their full potential – including, we hope – tapping into and encouraging individual creativity and innovation – demonstrating how greatly our companies value their employees.

Every day, our companies are investing in the communities in which they operate. One IT company gives its employees here a couple of workdays a year to dedicate to volunteer work. Another U.S. firm contributed over $10 million in equipment and over 20 years of staff time to upgrade the IT skills and resources of Singapore, through education, research, and technology transfers. Thousands of the trees in Singapore came about from tree planting programs by our companies. Another program from one of our companies gives primary and secondary school children from under-served families the opportunity to gain knowledge and new skills that will benefit their education. The list goes on, but in short, although our companies are modest about it, they have played a huge role in Singapore’s development, and continue to do so now.

Innovation and the State Visit

You may know that in August, President Obama hosted Prime Minister Lee for a State Visit – the first such visit for a Singaporean leader in over 30 years, and the only State Visit for an ASEAN member the President has hosted in his two terms. The State visit, celebrating our 50 years of diplomatic relations, underscored not only how much we value our relationship with Singapore, but also the confidence we have in how our two countries can positively shape this region.

During the visit, President Obama and Prime Minister Lee spoke about many strategic facets of our relationship – one of which that got a lot of attention is our increasing collaborations in innovation, entrepreneurship and advancing technology to tackle many of society’s complex problems and needs. At the center of that effort are top global brands, leaders at the forefront of innovation, many of which have chosen Singapore as their regional headquarters.

An increasing trend among U.S. companies in Singapore is the establishment of innovation labs–which provide resources and space to foster innovation, incubate the next wave of start-ups, and enhance productivity and quality of life. The value and benefits that this type of innovation promotion brings to communities here in Asia and globally are huge. Critical to the success of these endeavors are the collective vision and effort from diverse actors –government, industry, academic, and venture capital funders. Supported by strong IP protections, free and open markets, and business friendly laws and regulations, the innovations hatched out of these labs and others can have far reaching benefits – from individual consumers, to entrepreneurs, to SMEs, and all the way up to research institutions and governments searching for next generation Smart City solutions – one of the new priority areas of strategic cooperation we identified at the State Visit.

We are proud that our companies promote and advance the principles and conditions that foster innovation and creativity. Supported by the United States and innovative companies, Singapore is investing in its future, embracing an entrepreneurial spirit, encouraging a flourishing and vibrant interest in the arts and humanities, launching environmentally sound initiatives and strengthening its commitment to peace, stability and prosperity in the region.

Conclusion

In conclusion, I am confident that our engagement in the region, with visionary partners including Singapore promoting prosperity and diversity, will help further boost creativity and innovation in the region. U.S. engagement in Singapore and Southeast Asia over the decades demonstrates without equivocation how greatly we value the region. Further promotion of creativity, diversity, and innovation is critical to the future prosperity of this region, and we are committed to further expanding these values to help Southeast Asia further excel.

The Honorable Kirk Wagar served as the United States Ambassador to the Republic of Singapore from September 2013 to January 2017

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Tackling Piracy in Australia: Village Roadshow’s New and Innovative Strategy

By Hugh Stephens, posted on 13 November 2016

In a blockbuster speech delivered on October 10 to the Australian International Movie Convention meeting in Gold Coast, Queensland, Graham Burke, Co-Executive Chairman and Co-CEO of Australia’s largest entertainment company, Village Roadshow, took aim at the high rate of film piracy among Australian consumers and declared war on illegal downloading and streaming. Burke outlined a five point strategy to combat what he called a “piracy plague” in Australia. Pointing out that surveys show that over 30% of young Australians aged 12-17 pirate movies and TV series, Burke’s action plan includes making more effective use of Australia’s site blocking legislation, cooperating with online search engines like Google to delist infringing material, increasing the timely availability of legitimate product at competitive price points, taking legal action against repeat infringers and increasing community support.

Piracy Rampant in Australia

As an example of the attraction that Australian consumers seem to have for pirated content, Burke reminded his audience that Australia, (with a population of just 24 million compared to 300 million in the US), accounted for fully 12.5% of the illegal torrents of the season 6 premiere episode of Game of Thrones whereas the US total was considerably lower at 8.5%. According to the Guardian, Australians led the world in illegal downloads of the episode, even though it was available on a day and date basis on Australian pay-TV provider Foxtel, where it set a new record of 727,000 paid viewers, surpassing the previous record for a broadcast of (what else?) the Australia-New Zealand rugby world cup final in 2015. (Australia lost). The excuse often offered is that the programming is not available in Australia, but if lack of access to popular content in a timely manner was a problem in the past, this is no longer the case according to Burke. However, as the Game of Thrones case clearly shows, just providing access is not enough on its own to deter piracy.

Site Blocking Effective

Another element of Burke’s strategy is to fully exploit the new site blocking legislation introduced in Australia last year. Foxtel and Roadshow have already brought court action to block Pirate Bay and Solar Movie under the new legislation and Burke stated that as soon as the rules of engagement are set for blocking websites, Roadshow will go after another hundred or so “criminal sites”. Studies in the UK have shown that site blocking can be an effective tool in changing consumer behaviour, even among hardcore users of infringing material, as I have reported in an earlier blog. Not only has site blocking been shown to be an effective disincentive against streaming of pirated content, resulting in an increased take-up of legitimate streaming services, it can also be implemented without damaging the smooth functioning of the Internet (notwithstanding the alarmist claims of some critics). If illegal content in other areas of content, such as child pornography, illegal online gambling or malicious spreading of viruses can be blocked without disrupting the effective operation of the web, there is no reason why the same protocols cannot be adapted to block other forms of illegal content, such as copyright-infringing material.

Legal Action—with Education in Mind

Perhaps the most innovative of Burke’s proposed 5 step strategy is his plan to take legal action against persistent downloaders, suing repeat infringers to seek court-ordered fines of $300. Taking legal action against consumers can be an expensive and risky course of action opening the industry to sensationalized media charges of “beggaring the innocent” by picking on uninformed children, elderly grandparents, innocent room-mates or whatever. However Burke’s plan is to make the fines sting but not cause major financial hardship.

The intent is not to seek punitive damages so as to set an example, a strategy that has back-fired in the past, but to educate consumers much in the same way that stiff traffic fines are used to warn drivers and correct poor driving habits.

The goal is to encourage positive behaviour through heightened awareness and education. To this end, the proceeds would be directed through Creative Content Australia toward educating consumers on the reasons for copyright protection, including highlighting the economic benefits the creative industries bring to Australia, as well as underlining the fact that pirating content is theft. Many young people—the primary although not exclusive users of illegal downloads—are generally aware that there is something “wrong” with illegal downloading but don’t equate it with stealing, as they would if they were caught pinching DVDs at Best Buy. A $300 fine will bring home to them, and to most parents, that this is an illegal and unacceptable activity.

Community Support is Vital

The concept of investing the proceeds from legal action against illegal downloading or streaming into consumer education is a good one. At the end of the day, without community support, the other elements of the strategy will not work and so community awareness is vital. A culture of tolerating piracy, and turning a blind eye to its negative effects, seems to have taken root in Australia (and other countries, for that matter). To counter this, a comprehensive strategy involving a mix of carrot (better and more available content) and stick (site-blocking, fines) is needed, fully-funded and delivered consistently and in a sustained fashion. Results will not come overnight but if Village Roadshow and Graham Burke stick to their plan, and execute well, hopefully Australia will start to turn the corner on its piracy addiction. Australian creators deserve no less.

Hugh Stephens has more than 35 years of government and business experience in the Asia-Pacific region. Based in Victoria, BC, Canada, he is currently Vice Chair of the Canadian Committee on Pacific Economic Cooperation (CANCPEC), Senior Fellow at the Asia Pacific Foundation of Canada, Executive Fellow at the School of Public Policy at the University of Calgary, and an associate faculty member in the School of Business at Royal Roads University, Victoria, BC. Before returning to Canada in December 2009, he was Senior Vice President (Public Policy) for Asia-Pacific for Time Warner for almost a decade, based in Hong Kong, where he managed Time Warner’s public policy program in Asia Pacific for Turner Broadcasting, HBO, Warner Bros, Time Inc. and AOL.

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My Tokyo Weekend With Japan’s Next Generation Of Filmmakers

By John Polson, posted on 7 November 2016

My trip to Tokyo as a guest speaker for the MPA had been arranged many months ago. It was an exciting opportunity and one that I’d been looking forward for some time. Still, stepping off the long flight from New York, I found myself juggling the many demands of executive producing the television show I’d been working on for more than the last four years of my life. My body had most certainly landed in Tokyo; but my mind was still very much on set in New York.

The problem solving continued into the next day, but bright and early Sunday morning I was due on stage for the MPA-DHU Film Workshop, so I shifted focus and hauled my mental state half way round the world to reposition itself back within my body.

The film workshop, part of the Tokyo International Film Festival, was held with the MPA’s partners Digital Hollywood University – where over a thousand young creative Japanese take courses on various screen media subjects. Entering the building on that Sunday morning I passed room after room of filmmakers in front of screens. No down time for these guys.

I joined my colleagues and around 80 film students in the lecture theatre, hearing first from Sugiyama-san, the arty and cool President of DHU, camera in hand to snap his own shots of proceedings. My old friend MPA’s Mike Ellis spoke longer than his usual welcome to put the latest piracy research on everyone’s radar. 31% of Japanese pirated screen content in some form or another in 2015, it seems. People seemed shocked. I would be if I was trying to make and distribute films and TV here.

Patrick Donaldson, from .film shared his very clever, perfect-for-filmmakers domain name model with the audience. I can see how having a “.film” website for your independent film is ideal for promoting your project and gives you the added benefit of their anti-piracy protection strategy. It appears to be catching on pretty fast with filmmakers keen to both promote and protect their latest film.

I took the stage for a Q&A with MPA’s Stephen Jenner, whom I’ve known now for more than 20 years, our paths having crossed in the Australian film industry over time, and through the MPA’s most appreciated sponsorship of Tropfest, the world’s largest film festival I founded nearly 25 years ago.

We got into a deep discussion of my work on Elementary, which I executive produce and direct, talking often about how we solve challenges creatively to get an hour-long episode shot in eight days. Having worked with many of the cast and crew for many years, we now have a terrifically close team able to meet the biggest hurdles one way or another. You could say our lead characters solve crimes while we solve creative problems.

Our conversation took us back through my career, covering the time I spent on feature films (‘What’s it like to work with Robert De Niro?’ ‘He’s generous, professional, wants to be part of the creative team’), my first feature in Australia, and my work with so many, many talented filmmakers all over the world through Tropfest.

Local Japanese screenwriter Takaya Okamoto and Producer Toshihiko Yamamoto had great things to say about how best to pitch your film in our panel moderated by local (another Aussie) producer Lucas Oliver-Frost. We shared all the tips we thought the filmmakers might find useful. Given they were up to pitch their films after lunch, I guess it would have been hard to take much in.

But, one hour later, they pitched. And it seems they either had taken all our advice to heart or they knew it beforehand. In any case, I was super impressed. Pitching I learned, does not come naturally to Japanese filmmakers, and there’s certainly no history of pitching as we do in the U.S., but these guys and girls knocked it out of the ballpark. The ideas were for the most part well-formed. They came across knowing their projects well. We judges found the decision a tough one, particularly given that projects that might play well internationally may not resonate that well in Japan.

In any case, we reached a decision. Hello Baby!, by filmmaker Daisuke Yamaoka, was the film which really grabbed our attention, and came out on top. In this thriller/horror film, an App designed for pregnant women starts to behave in strange and macabre ways, to a point where the app appears to take on the persona of the child in the womb. Mr. Yamaoka impressed us with his short teaser for the film, revealing his filmmaking talent. Yamaoka wins a priceless opportunity to attend a 5-day film immersion course in LA, thanks to the MPA.

Another film, Minato (The Port), a tale of a musician’s struggle to come to terms with his son’s deafness, appeared to strike a chord especially with the Japanese judges. Mike Ellis stepped in to award the filmmaker Ms. Kanon Murakami the President’s Special Recognition Award, involving a trip to the Asia Pacific Screen Awards in Brisbane. To say she was surprised and excited would be an understatement!

We emerged from the film workshop as darkness was falling over Tokyo. Declining a ride back to the hotel I told my hosts I’d prefer to take a stroll through the neighbourhood, take in the sights and get some fresh air. ‘Are you sure you won’t get lost?’ Don’t worry, I said, putting their minds at rest. I have Google maps.

John Polson is an award-winning actor, director and producer, as well as the founder and director of Tropfest, the world’s largest short film festival (www.tropfest.com). He is currently the Executive Producer / Director on the popular CBS crime drama Elementary (Jonny Lee Miller, Lucy Liu).