Written evidence from the City of London Police (TDE 97)

 

 

 

 

Introduction

  1. The internet has revolutionised society, and provided communities and business with great opportunities, and usage is set for a further prodigious increase over the next few years. The internet has encouraged and assisted new businesses by promoting innovation and the sharing of ideas, which has also boosted both the economy and job growth. It has allowed businesses to lower their costs, promote their brand and increase efficiency, and gives customers wider choice and access to better, cheaper and more convenient services. The UK economy is very dependent on the Internet as a basis for business and communications, as exemplified in a report by the Office of National Statistics in 2014, which showed 74% of UK consumers shopped online, while 53% of all UK adults bank online. 

 

  1. These benefits, however, also provide opportunities for criminals. It allows them to exploit new ideas for fraud, identity theft, intellectual property theft and other forms of crime on an unprecedented scale through access to victims, data and commodities. They have done this by using a variety of cyber tools, techniques and online services. Criminals also utilise international boundaries to develop inventive and complex infrastructures that enable them to commit cyber crime and are also adopting new technology to enhance their operational security or improve the efficiency of their operations.

 

  1. As a result of the Fraud Review in 2006, the National Fraud Intelligence Bureau (NFIB) was created along with Action Fraud (the brand name of the National Fraud Reporting Centre launched and run by the National Fraud Authority) to help UK law enforcement agencies and their partners catch and disrupt criminals and to alert communities to fraud threats.  The NFIB gathers a large volume of information on suspected fraud from both public and private sector sources, much of which is not reported, or made routinely accessible, to the police.  This is analysed and turned into intelligence such as the identification of the scale of fraudsters’ criminal activities.  The intelligence is used to support law enforcement operations and also provide prevention advice to industry.

 

  1. The City of London Police (CoLP) have led the implementation of the NFIB since 2010.  Prior to this, due to its unique relationships with the financial community in the City and the specialist fraud investigations skills and experience of its detectives, the City Police was designated the “National Lead (Police) Force (NLF)” for fraud in 2003.  The force receives additional funding from the Home Office to investigate serious and complex fraud and also to run the National Fraud Intelligence Bureau. These fraud functions come together as the Force’s Economic Crime Directorate (ECD) and are match funded by the City of London Corporation.  Within policing, the force leads the National Police Chiefs' Council (NPCC) Economic Crime Portfolio and has been working with Chief Constables across the country to define a new model for recording and investigating fraud. 

 

  1. The Police Intellectual Property Crime Unit (PIPCU) is a specialist, operationally independent national police unit based within the Economic Crime Directorate of the City of London Police. It is dedicated to protecting UK industries that produce legitimate, high quality, physical goods and online and digital content from intellectual property crime. The unit was launched in September 2013 with the aim of tackling serious and organised intellectual property crime (counterfeit and piracy) affecting physical and digital goods (with the exception of pharmaceutical goods) with a focus on offences committed using an online platform.

 

  1. While the City of London Police are unable to answer all the questions posed by the Committee in its call for evidence, there are a number of key overarching points relating to intellectual property in the UK, and by implication, to the digital economy as a whole on which the City Police are well placed to comment.

 

Protection of Intellectual Property (IP)

  1. The value of IP is obvious, with many thousands of people employed in this industry in the UK, and a significant amount of wealth created as a result. This industry is being attacked at a national and international level, with the subsequent harm manifested by damage to consumers and communities and economic loss to rights holders and associated businesses. It is also attracting the involvement of serious and organised crime.

 

  1. The abuse of online platforms can create a negative impact on the IP sector as a whole. This issue has the potential to restrict innovation and growth and stifle the contribution made to the economy and the UK’s cultural heritage.

 

  1. This has long been recognised, and has led to the criminalisation of certain infringing conduct, commonly centred on the unauthorised commercial use of trademarks, copyright material and, more recently, designs. However, the scale and breadth of IP crime is very difficult to quantify, due to its complexity and diverse nature, but it is clear that both counterfeiting and piracy occur on a large scale, and present direct threats to the UK and its well-being.

 

  1. Changes in technology have created significant opportunities for creativity, economic growth and access to IP, whilst exponentially extending the reach to and from consumers. At the same time, criminals worldwide have abused this to undermine legitimate business and benefit illegally from others’ intellectual property, exposing consumers to goods which are often of a sub-standard or dangerous condition.

 

  1. The digital age means that perfect copies of protected material can be made and instantly made available across geographical boundaries. The City of London Police has taken a lead in dealing with this level of criminality through the formation of the PIPCU in partnership with the Intellectual Property Office (IPO).

 

Scale and scope of IP crime

  1. In a complex law enforcement landscape, IP crime falls outside of the current system for recording crime. Whilst there are no easy solutions to this problem, there does need to be a better system that engages stakeholders, Trading Standards, the Police, Border Force and HMRC, and consumers, to record and assess the problem more effectively. The City of London Police are recommending that a specific offence code is required for IP Crime, and that Action Fraud, the national fraud recording service, be extended to include IP crime. This will be taken forward by the Head of PIPCU in dialogue with other IP Crime stakeholders and the Home Office.

 

  1. With one exception, IP crime offences and fraud offences attract a maximum 10 year prison sentence. However, online copyright infringement is only set at 2 years. There is currently a consultation taking place to examine if this should be aligned. The City Police are of the view that the sentence should be aligned to the 10 year maximum, as the current situation provides an unjustified lower degree of protection against one particular aspect of IP crime.

 

  1. The City of London Police’s experience at PIPCU is that online IP infringement invariably involves foreign jurisdictions, where there are differences in criminal offences, attitudes, capabilities and resources. While there are structures for some level of co-operation and co-ordination, the pace at which they work is not commensurate with the ease with which criminals abuse the law and profit from authorities’ inability to manage cross border investigations. The Police believe there should be continued effort to improve the capability of investigations to move across national jurisdictions, especially in the aspect of asset confiscation.

 

Online Platforms

  1. The ability of IP developers to choose how they present and disseminate their work is paramount and a robust, enforceable, copyright framework is central to this. It allows developers to be recognised and rewarded for their work while incentivising those that invest in them and gives them the means to support new talent. By draining revenues from this eco-system, copyright infringement is a significant threat to the creative industry. There are two main online sources for infringing content: websites specifically created to facilitate access to infringing material and those sites, many of

them online platforms, which are legal, legitimate businesses yet are the means by which illegal material can be promoted, identified and accessed.

 

  1. Both can be tackled through existing legislation which requires site operators, where they have knowledge of infringement, to remove the content, and the ability of users to link to it. This is generally known as the “notice and takedown” process. An example of this is that since 1st March 2015, the Publishers Association, via its bespoke Copyright Infringement Portal, has sent on behalf of its member companies and other users, over 300,000 notices to infringing websites requesting them to take down material which infringes the rights of its members – over three million since the portal was launched in 2009. This same period has seen over one and half million requests to Google to delist infringing material.

 

  1. The City of London Police initiative – Operation Creative – is ground-breaking and designed to disrupt and prevent websites from providing unauthorised access to copyrighted content, led by the PIPCU in partnership with the creative and advertising industries. Since PIPCU launched Operation Creative and the Infringing Website List (IWL) in 2013, there has been a 73% decrease in advertising by the UK’s top ad spending companies on copyright infringing websites. Reducing advertising on illegal sites is one of the key aims of the Operation as it is one of the main generators of criminal profits.
  2. Online platforms could do more to protect users and creators from copyright infringement, and the problem is made worse by the fact that legitimate businesses have to compete with a "free" alternative, which is monetised by advertising, and which invests little back into the industry.  This creates an unfair market and stifles further investment.

 

  1. Despite the UK being one of the world leaders in providing legitimate on line distribution platforms, it is still difficult to compete with the free alternative, and this is further amplified by the proliferation of illegal sites in search results. The current situation is motivating individuals, who may well be looking for legitimate sources to obtain material, to consider illegal sites instead.  While Google has taken some action in demoting sites which receive large quantities of notices, much more can be done. For example, at present, 5 of the top 7 results for a currently popular song are to infringing content sites. This will only change if Search Engines start giving legal sites preference over infringing sites and/or notice and takedown becomes notice and stay down.

 

  1. Regarding Domain Removal, any contract between the registrar and the subscriber relies upon a term to the effect that a domain will not be permitted to be used for criminality. The City of London Police would support the requirement for domain registrars to have significantly more robust customer information, and to introduce a system of denial of registration for persistent offenders to prevent the system of simply transferring the criminality to another site.

 

Strengthening the law enforcement and industry response

  1. It is only through engagement between Government, law enforcement and the private sector that the UK will become more resilient from attack, shaping an open and stable environment and developing our skills base.

 

  1. As criminals will target a range of industries, it will be vital for all sectors to come together to share experiences and develop common strategies for addressing threats. The Government has expressed the need for partnership with the private sector and academia to combat crime across all areas of economic and organised crime, and this is especially pertinent to IP. There may be merit in an initial “mapping” exercise to identify the optimal mechanisms for engagement. The City of London Police, in partnership with the IPO, could utilise its strong relationships with Government, City organisations and other IP businesses to facilitate such engagement.

 

  1. There are a number of initiatives that could be explored to support the digital economy and protect the IP of innovators and industry. They include a greater consumer education campaign relating to online fraud and the sale and distribution of counterfeit goods. The Intellectual Property Office has conducted a number of surveys of the public to assess the behaviour of IP infringers, and this should be incorporated into the content and application of any education initiative.

 

  1. Social networks could also be far more transparent as to their policies regarding the promotion of illegal content via their services and far more robust in the enforcement of these policies. The industry issues numerous take down requests to Facebook in relation to infringing material being offered on the site. Individual infringing posts are removed but any sanctions against the wider group, which can be focused solely on making infringing content available, are rarely used.

 

  1. In addition, as discussed above, search engines remain the first port of call for a significant number of people when looking for content online, and while not directly responsible for piracy, have the potential to play a significant role in reducing online copyright infringement. Research commissioned by the Motion Picture Association found that 74% of people accessing pirate sites for the first time did so via a search engine. Similarly, the increase of social networks as a means to discover and access content is creating further challenges for the IP industry in its attempts to protect its developers’ works.

 

Submitted by the Office of the City Remembrancer

 

November 2015