Parts of French “iPod Law” found unconstitutional

In a new ruling by the French Constitutional Council, much of its controversial “iPod Law” has been declared unconstitutional. American content owners and providers are watching the case closely.

Although the Constitutional Council emphasized the need for compensation, which would bring Apple a huge revenue stream, it was not all good news for Apple and other online music companies. That's because the law still includes a stipulation that would force interoperability between subscription services like iTunes.

“Apple's lawyers might want to drink a glass of French Champagne today, but not a whole bottle,” Dominique Ménard, a partner at the Lovells law firm and a specialist in intellectual property, told the International Herald Tribune. “The Constitutional Council has highlighted fundamental protections for intellectual property in such a way as to put iTunes a little further from risk of the French law.”

If it holds up, the ruling would eliminate reduced fines for file sharing, making the offense once again punishable by stiff fines and possible prison time. It also found that companies could not be forced, without compensation, to make music sold online compatible with any music device.

“It is good news for Apple because they receive monetary compensation, but much bigger bad news if it forces them to license iTunes,” he said. “We might see the first test case of this by the end of the year.”

Prior to the ruling, the law had reduced the penalty for file sharing at the consumer level to the equivalent of little more than a parking fine. Now fines are up to €300,000, or $382,500, and as much as three years in prison. No individual user, however, has ever been jailed for file sharing in France.