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1. Background

This mainly depends on the following considerations, leading some commentators to conclude that the powers granted to the AGcom by the Regulation (see the following paragraph two) are not compliant with Italian Constitution

a) no specific law provision expressly grants the AGcom both with (i) the power to issue a Regulation on online copyright protection and enforcement; and (ii) to self-determine a (very) broad range of powers in this field of law;

b) there is an actual risk that the judicial authority, expressly recognised under the Italian Constitution, might be de facto spoiled of its decision-making powers on on-line copyright protection.

2. The Regulation: Contents

The Regulation (taking into account the possible notice and take down procedures self-promoted by the ISP/content provider) grants the owner/ licensee of a copyrighted work which is unlawfully exploited online with a right to start a proceeding before the AGcom, unless a judicial proceeding is already pending on the same matter.

The "standard" proceeding is really short (to be completed normally within 35 days) and simple. It can be summarised as follows:

A. within seven days starting from the relevant filing, AGcom informs the content provider and (if possible) the uploader and the persons/ entities in charge with the management of the website that an (administrative) proceeding has been started against them for an alleged copyright infringement;

B. during the following five days, the subjects mentioned in letter a) above are allowed to exercise their right of defense or to "spontaneously" remove the contents unlawfully exploited (so called "adeguamento spontaneo"). In the latter case, the proceeding is ended up by AGcom;

C. if the proceeding is not ended as per letter b) above and there is an actual copyright infringement, then AGcom may act as follows:

a) if the website is hosted on an Italian-based server, the content/ hosting provider is normally required to operate a selection of the works unlawfully uploaded and remove them from the website. However, if the infringement is "massive", AGcom may impose to the content/ hosting provider to disable the access to the webpages hosting the relevant works.

In this respect, AGcom detects the "massive" nature of an infringement taking into account, inter alia: (i) the amount of works unlawfully uploaded; and (ii) the brand-new release of the same (e.g., the work is a movie which is still theatrically distributed at the time of uploading). AGcom case law, however, leads commentators to recognise a "massive" infringement (almost) any time a work is exploited online;

b) if the website is hosted on a server located outside the Italian territory, then AGcom may impose to the ISP (in this context, the Internet Access Provider) to disable access to the entire website.

D. In case of non-compliance with AGcom orders, the content/ hosting provider and the ISP are sanctioned with a fine ranging between EUR 10,587.37 and EUR 258,228.45 and the acts pertaining to the proceeding are sent to the judiciary police ("polizia giudiziaria") officials, because the infringement may lead to the issuance of criminal sanctions pursuant to the Italian Copyright Law.

The duration of the proceeding may be lowered to 12 days from the filing if AGcom, based on a summary cognition of the facts, deems that there is (i) a serious infringement of the rights owned/ licensed on a digital work; or (ii) a "massive" infringement of such rights.

3. The Judicial Review of the Regulation

The Regulation is so disruptive that it has been challenged before the competent Administrative Court of First Instance ("Court") with two different judicial proceedings and (even) before its entering into force, mainly on the grounds mentioned above in paragraph one.

The Court, which was in principle entitled to declare null and void the Regulation, with two "twin" orders, basically (and surprisingly):

A. preliminarily states that AGcom is fully empowered by several applicable laws to issue and enforce the Regulation. The reference is, in particular, to:

a) the E-Commerce Decree, implementing in Italy the E-Commerce Directive no. 2000/31/EC, which allows the judicial authority or the administrative authority with monitoring functions to impose orders and sanctions to the ISPs in case of unlawful exploitation of information/ contents;

b) the Electronic Communications Code, implementing in Italy the 2002 (as amended) EU Framework on the Provision of Electronic Communication Network and Services, which allows AGcom to take all the necessary measures in order to ensure the protection of the users of an electronic communication network or service (including internet and services therein provided);

c) the Italian Copyright Law, which expressly empowers AGcom together with the most relevant Italian Collecting Society ("SIAE") with monitoring functions in order to prevent and ascertain copyright infringements;

d) the Audiovisual Media Services Code, implementing in Italy the AVMS Directive no. 2010/13/EU, which enables AGcom to adopt measures regarding copyright protection and enforcement for audio-visual media services (both online and via traditional means of transmission).

B. That said, the Court did not reject the complaint, but issued the above mentioned orders in order to obtain an opinion from the Italian Constitutional Court on the compliance of the law provisions on which the Regulation is based with certain fundamental principles of the Italian Constitution, i.e. freedom of speech and fundamental rights protection, which would be jeopardised by the introduction of a two-tiered system of copyright enforcement (both administrative and judicial).

On 09 December 2015, as we forecasted, the Constitutional Court declared the Court's orders not admissible, as the question concerning the compliance with the Constitution of the mentioned provisions has been formulated in a way merely potential and (literally) "unclear".

Therefore, the Constitutional Court did not issue a decision stating that the challenged law provisions are valid or not and, therefore, no specific decision on the (indirect) lawfulness of the Regulation has been taken. However, the decision, which in this respect is not binding in nature, seems to adhere to the position according to which the Regulation is (fully) legally grounded.

4. Conclusions: Why the Regulation is Valid and Enforceable

It is quite easy to predict that the Regulation will be soon (and again) challenged before the relevant administrative Courts. The end of the saga is obviously up to the judicial authority and the Constitutional Court.

However, we deem there are grounds to argue that the Regulation (i) is compliant with the Italian regulatory framework on online copyright protection; and that (ii) such regulatory framework is compliant with the Italian Constitution.

The above conclusions are based (mainly) on the following considerations:

a) the E-Commerce Decree, which establishes the main law provisions challenged before the Court, represents a (very) loyal reproduction of the provisions of the Directive 2000/31/CE. This means that the Constitutional Court would be entitled to declare invalid such provisions only if there is a substantial risk for the protection of fundamental rights and/ or for the public constitutional order, as the EU Regulations and Directives (as well as the European Court of Justice decisions) prevail on the internal law provisions. It is really difficult that such approach would be followed; and

b) the Regulation expressly establishes that AGcom (i) is not entitled to start the proceeding if there is a pending judicial proceeding on the same matter and (ii) shall stop the administrative proceeding if, after the filing, one of the parties makes a complaint before the judicial authority. Based on the above, it is hard to say that no judicial protection is given to the ISP involved and that there is a breach of the asset of powers depicted in the Italian Constitution.

We will keep you posted on the new developments on the Italian legal framework on online (and audio-visual) copyright enforcement.

Biographies

ITALY

Communication Authority Powers for Copyright Protection and Enforcement: Are They Compliant With the Italian Constitution?

Written by Giangiacomo Olivi and Saverio Cavalcanti,

DLA Piper

Saverio Cavalcanti

The issuance by the Italian Communications Authority ("AGcom") on 12 December 2013 of regulation no. 680/13/CONS on the protection and enforcement of copyright on public communication networks ("Regulation") has been an extremely hard labour.

Giangiacomo Olivi

Giangiacomo Olivi is the partner of DLA Piper Italy who heads the Italian Intellectual Property and Technology Department and the Media Sports and Entertainment Group. He is also the Global Co-Chair of the Firm's Retail Group. He is based in the Milan office. Since 2006, Chambers & Partners Europe, The Legal 500 EMEAa and a number of other client surveys have identified Mr Olivi as a leading individual in the telecoms, media and technology field. Since 2008, the group led Mr Olivi has been awarded as leading team in the field. In 2015, he was awarded "Layer of the Year" in the media sector by Legalcommunity and ILO - Client Choice Awards and in the TMT sector by Corporate LiveWire.

Saverio Cavalcanti is an associate in the Intellectual Property and Technology Department of DLA Piper Italy and he is based in the Rome office. Mr Cavalcanti i focuses on a number of issues in the field of technology and media. He advises clients on audio-visual media services-related issues (including copyright), data protection, telecommunications and unfair commercial practices. Mr Cavalcanti also advises on the negotiation and drafting of commercial contracts, outsourcing contracts for IT services and licensing of intellectual property rights. On 2014 he achieved an LL.M. in Competition and Media Law at Queen Mary, University of London and is a member of the Licensing Executives Society (LES).