Seán Sherlock (Cork East, Labour)

Let me start by repeating that I fully subscribe to the freedoms, the opportunities and the access to information that the Internet provides us with. Ireland is home to some of the world's most innovative Internet companies and we are determined to grow our reputation as a location where smart people and these smart companies can continue to innovate in this fast moving arena.

The last thing innovators need is a culture where the outputs of their creative endeavours have to be locked away or kept secret for the fear of theft. Ireland is very proud of the fact that we have a modern suite of intellectual property laws that by their very nature balance a range of competing interests and rights in a manner that is seen right across the globe as reasonable and proportionate. I intend that this will continue.

In regard to the proposed statutory instrument, it may be useful to explain the background against which the requirement for an amendment to the Copyright and Related Rights Act 2000 has arisen. In the EMI and others v. UPC High Court judgment of 11 October 2010, Mr. Justice Charleton decided that he was constrained by the wording of the Copyright and Related Rights Act 2000 and thus could not grant an injunction to prevent infringement of copyright against an information service provider, ISP, in the circumstances of "mere conduit" transient communications. In doing so, he stated that Ireland had not fully transposed the relevant EU directives.

The "mere conduit" principle provides that if an ISP does not initiate a transmission, or modify the material contained in a transmission and does not select the receiver of the transmission, it is granted a "safe harbour" against liability by virtue of the e-Commerce Directive 2000/31/EC. However, according to the same directive, this freedom from liability does not affect the power of the courts to require service providers to terminate or prevent copyright infringements.

I point out that two EU directives, namely, the Copyright Directive 2001 and the Enforcement Directive 2004 require that the holders of copyright - authors, music composers, lyricists, record producers, etc. - are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right. What is an intermediary? In a nutshell, an intermediary is an ISP which provides mere conduit, caching or hosting services on the Internet.

My Department had considered that injunctions were available under section 40(4) of the Copyright Act and the inherent power of the courts to grant injunctions, which are equitable and discretionary remedies, granted according to settled principles, developed by the courts. However, this was not Mr. Justice Charleton's view.

In regard to the legal advice, the Office of the Attorney General was asked by my Department and that of the Minister, Deputy Bruton, and the Department of Communications, Energy and Natural Resources for its advice as to the implications of the High Court judgment. The office has advised that the obligation contained in the directive is clear and unambiguous. Rightholders must have a mechanism available to them to apply for an injunction against intermediaries where their intellectual property rights are being breached. Separately the office advised that the prudent course was to introduce a regulation to ensure compliance.

I fully acknowledge that this is a very sensitive issue. We seek to strike a balance between creators and users and intermediaries in regard to online services and businesses, which are of great importance to Ireland's economy. Considering this, and in the context of the obligations due under the EU directives, discussions took place with the Office of the Attorney General and the legal adviser in our Department in order to frame a draft regulation and put it into the public domain for consultation. The regulation follows the wording of the copyright directive so that we are in compliance and includes a very important proviso that the courts shall have due regard to the rights of any person likely to be affected and this includes, where appropriate, a direction requiring a person to be notified of the application. This latter provision respects the European Convention on Human Rights.

After consultations with the Attorney General's office and the Department of Communications, Energy and Natural Resources, my Department launched a public consultation on the text of the proposed statutory instrument on 17 June 2011. In addition to liaising with the Department of Communications, Energy and Natural Resources, the consultation document was forwarded to bodies such as the Association of Trademark and Patent Attorneys, BT Communications Ireland Limited, the Consumers Association of Ireland, Digital Rights Ireland, Eircom, EMI Music Ireland Limited, Enterprise Ireland, Google, Hinkson Solicitors, IBEC, the IDA, IMIR, the International Software Federation of Europe, Internet Service Providers Association of Ireland, Irish Copyright Licensing Agency, IRMA, Law Society of Ireland, Microsoft Ireland, O2, UPC, Vodafone and Xtra-vision.

Following the consultation, I had meetings with representatives from many of the above bodies including, ISPs, rightsholders and consumers. The consultation attracted over 50 submissions from interested parties. Several of these submissions contained legal arguments in regard to the issue, as well as comments in respect of the draft statutory instrument which was published as part of the consultation process. These comments were forwarded by my Department to the Office of the Attorney General for further consideration.

Following this, and after meetings with interested parties, it is clearly necessary to proceed with the statutory instrument which will restate the law in relation to injunctions against intermediaries which was considered to pertain prior to the judgment. This will make compliance with the copyright directive manifestly clear. The wording of the statutory instrument has been formally drafted and the text was published last Thursday, 26 January.

There is no change of policy being put forward in the proposed legislative measure. It is merely a restatement of the position that was considered to be in place before a High Court judgment of Mr. Justice Charleton in October 2010. I would like people to note the timeline, which was in October 2010. Ireland is obliged to provide that rightsholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right.

It should also be noted that legal proceedings against the State have been issued by the plaintiffs in the UPC case and damages arising from a successful challenge could be substantial. The European Commission also requested information, on 22 December 2011, on Ireland's compliance with the copyright directive.

While the copyright directive requires that rights holders must be able to seek an injunction against intermediaries to prevent or terminate an infringement, the Court of Justice of the European Union has held that this must be interpreted in a way which allows a fair balance to be struck between the various fundamental rights protected by the Community legal order and the principle of proportionality. EU law has held that copyright is not an absolute right but must be balanced with other rights protected by the European Union Charter of Fundamental Rights - such as the right to freedom of expression and information, data protection, and the right to conduct a business - and that any remedy must be proportionate.

No national authority or court can require an ISP to carry out general monitoring of the information that it transmits on its network. This means an ISP cannot be asked to monitor all the data of each of its customers in order to prevent any future infringement of intellectual property rights. National courts must strike a fair balance between the protection of copyright and the protection of the fundamental rights of individuals who are affected by such measures.

As regards relevant case law, I refer to the recent Court of Justice of the European Union, CJEU, case, Scarlet v. Sabam, C-70/10, which enunciated the general principles in relation to the balances required to be taken into account. In this case on 24 November 2011, the CJEU clearly laid out the aforementioned principles that will guide all national courts in future.

I beg your indulgence on this, Acting Chairperson, because there are some pertinent points.

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