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UK fines for IP infringement to rocket

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The British government plans a tenfold increase in the penalties for criminal breaches of intellectual property law. Infringement of IP laws will be punishable by fines of up to £50,000 rather than the current £5,000, according to Government plans.

The measures, though, do not involve increasing the possible jail sentences for online infringement as proposed by 2006's Gowers Review of Intellectual Property.

The Intellectual Property Office (IPO) has consulted with the public and industry on possible changes to sentencing and has received support for the increase in the penalties for copyright and other IP law infringement.

"Government will therefore work to identify the suitable legislative options for taking this forward," said its report on the consultation process.

The Gowers Review of Intellectual Property recommended that the punishments for IP law infringement be the same regardless of whether the offence was on the internet or to do with physical goods.

Someone engaged in the piracy of physical goods for commercial gain can face 10 years in jail. The Gowers Review proposed making that true for online infringement as well. Though the Government accepted all Gowers' recommendations, it rejected this one when it came to formulating its consultation.

"It is Government policy that prison should be used mainly for serious and dangerous offenders and that sentences should only be as long as necessary for punishment and public protection," said the consultation, which rejected even asking whether jail sentences should be increased. "It is worth noting that the Crown Courts already deal with the more serious IP cases under general law such as the Fraud Act 2006."

Instead, the Government decided to consult on increasing the maximum fines available in all copyright or IP cases to £50,000.

It offered industry and the public the choice of keeping the law unchanged, where fines are capped at £5,000 in England and Wales and £10,000 in Scotland; increasing fines to £50,000 for copyright infringement; and increasing fines to £50,000 for all IP infringement.

The majority of respondents backed the third option, and the Government said it would create legislation to implement that idea.

"On the introduction of an exceptional statutory maxima [higher fine caps], responses were generally positive, believing it would serve as a deterrent for would-be offenders," said the IPO's report on the consultation.

Responses were largely from industry bodies representing copyright holders, such as the UK Film Council, publishers' associations and game developers' representatives. Though the increase in fines was welcomed, people responding to the consultation warned against their indiscriminate use.

"There was concern that this level of penalty should be used with care and only when the case required it," said the IPO's report. "A few responses thought that exceptional statutory maxima should be set in accordance with the seriousness of the offence and the profit gained. Several noted that the courts would need to set a fine appropriate to the circumstances for each case."

All of the respondents who agreed with the need for an increase in the fines said that the increase should apply not just to copyright infringement but to all IP-related offences.

See: The report on the consultation (8-page/261KB pdf)

Copyright © 2009, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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