2009.01.20
I am about to run a presentation at Linux.conf.au 2009 in Hobart. I want to particularly talk about Section 47D of the Copyright Act 1968 (Cth). Section 47D was a great affirmation of the right to reverse engineer computer programs for interoperability. One especially important feature is that 47D, thanks to s 47H, is not excludable by contract. In the United States, we have seen numerous examples of developers inadvertently waiving their fair use and statutory rights to reverse engineer software products by 'agreeing' to the EULA.1)
The really big problem with s 47D, however, is that it only applies to computer programs. This is a really big problem for those who are interested in reverse engineering media rich applications – like computer games. Because games are not only computer programs but are also cinematograph films,2) sound recordings, artistic works, musical works, etc, then the right to reverse engineer (and to backup) completely disappears.
If we believe that we really ought to have a right to reverse engineer computer programs, including games, the wording of s 47D has to be changed to immunise copying of works and other subject matter intertwined with software programs.
The inflexibility in s 47D also raises problems for the exceptions in anti-circumvention law. The definition of both Access Control Technological Protection Measures (ACTPMs) and the broader category of Technological Protection Measures (TPMs) in s 10(1) of the Copyright Act excludes devices to the extent that they ”[restrict] the use of goods […] or services in relation to the machine or device.” Now, this carve-out is quite important, as it effectively excludes restrictions like the anti-competitive encoded garage door opener device3) from protection as TPMs. However, because these devices are built often to have more than one function, especially in gaming consoles, this carve-out will not always be effective. This means that developers interested in making products for locked-down devices will have to rely on the exceptions to anti-circumvention law itself, rather than the definitional carve-out.
Liability for actual circumvention (ACTPMs) or for making or distributing a circumvention device (all TPMs) does not apply where the device will be used to do an act that does not infringe copyright in the computer program and is
“done for the sole purpose of achieving interoperability of an independently created computer program with the original program or any other program.”4)
As you can see in that wording, the ability to rely on the exception is limited by what exactly will infringe the underlying copyright interests. So without a fix to s 47D, we generally can't feel comfortable relying on the exceptions to anti-circumvention.
This also raises an important point – manufacturers and distributors of modchips need to meet the purposive test to ensure that they fit within the exception. That is, they must be able to show that the modchip will be used for non-infringing reverse engineering purposes.
My slides are available here: 200901-lca-games.pdf
2008.11.22
Not really pirates. Pirates of the Caribbean: At World's End is one of Disney's films at the centre of the law suit. Image © Disney.
As you may have heard, the movie industry has sued iiNet for copyright infringement. iiNet have responded that they will 'vigourously defend' the case. EFA released a press release here. Kim Weatherall has a detailed post on the case here.
AFACT allege that they have evidence that iiNet users have downloaded copyright films without permission. Lets assume that they do, no big surprise here. Implicit in the BitTorrent protocol is that users are sharing as they download the film. It AFACT used DtecNet to download video files, and logged the IP addresses in the pool that belonged to iiNet users. On this basis, AFACT alleges that iiNet users 'made available' and 'electronically transmitted' the films to other persons. As part of this, AFACT has to show that even if it received some data from iiNet IP addresses, that data formed a 'substantial part' of the film. Because torrents typically have hundreds of peers, it would be possible to believe that each peer generally does not, by itself, transmit a 'substantial part' of the film. I imagine, however, that each peer would be liable as a joint tortfeasor. Still, it's an important question of fact.
AFACT also alleges that users made physical copies of the films onto DVDs to watch, although it's not clear how they obtained this evidence.
Edit: APC Mag have made the full statement of claim available.
AFACT allege that iiNet is liable for copyright infringement on two alternative theories. The first is based on the inducement test that we saw in Kazaa. AFACT allege that iiNet
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knew or should have known that iiNet users engaged in filesharing of infringing material
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took no action in response to emails sent by AFACT alleging infringement
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'offered encouragement' to iiNet users to engage in illicit filesharing
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failed to enforce iiNet's terms and conditions which prohibit using iiNet to infringe copyright
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continued to offer internet access to customers who AFACT alleged engaged in filesharing; and
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'through its own inactivity and indifference permitted a situation to develop and continue where iiNet Users engaged in, or continued to engage in' illicit filesharing.
In Australia, authorisation liability requires that the person 'sanction, approve, or countenance' (UNSW v Moorhouse. Section 101(1A) of the Copyright Act 1968 (Cth) provides a non-exhaustive list of factors to be taken into consideration when determining authorisation:
(a) the extent (if any) of the person's power to prevent the doing of the act concerned;
(b) the nature of any relationship existing between the person and the person who did the act concerned;
(c) whether the person took any other reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice.
AFACT argue that iiNet, by failing to terminate users accounts in response to allegations of infringement made by AFACT, 'sanctioned, authorised or countenanced' those infringements. This is where it gets interesting. AFACT allege knowledge, but since iiNet is only given notice of allegations of infringement – infringement was never proven in court – this may be enough to negate knowledge. So the question is whether iiNet 'through its own inactivity and indifference' effectively passively encouraged infringing acts, or, alternatively, actively encouraged infringement by offering support to filesharers.
Section 112E means that a person who merely provides the facilities for infringement does not 'authorise' that infringement. This means that iiNet has to do something more than merely providing internet access. In Kazaa, this was established by exhortations to 'join the revolution' and at least partly premised on the fact that there were few non-infringing uses of Kazaa in evidence. [404-5].
In the case of iiNet, this is a bit harder to see. I don't think that anyone can make out that “a major, even the predominant” use of internet connections is to infringe copyright. AFACT allege that iiNet, by failing to take any steps to discourage copyright infringement, passively encourage any infringements which do occur. AFACT also allege that iiNet actively encouraged its users to infringe 'by not suspending or terminating' their internet service, and by not shaping or restricting P2P downloads. This seems to be a pretty far stretch from the Kazaa advertisements that were decisive in that case. Primarily, both internet use in general and BitTorrent use in particular have substantial non-infringing uses, so it is hard to see that a decision not to restrict all BitTorrent use could 'authorise' infringement. So the real question here is whether, by not suspending or terminating accounts based upon allegations of infringement provided by AFACT, iiNet were 'encouraging' any illicit filesharing that was, in fact, carried out. This is a question of fact, but it also imports significant issues of public policy. If the court finds that not terminating subscriber accounts upon allegations of infringement is 'encouraging' (meaning 'sanctioning', 'authorising', or 'countenancing') that infringement, it will mean that ISPs will effectively be under a positive duty to investigate and police allegations of infringement.
The second grounds for liability alleged by AFACT is US-style vicarious infringement, as developed in Cooper. AFACT allege that iiNet:
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had to power to prevent the infringements of its users;
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had a direct and commercial relationship with iiNet customers that allowed it to 'take action' against those customers who engaged in illicit filesharing; and
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did not take adequate steps to prevent or avoid the infringements.
AFACT allege that iiNet have the power to prevent infringement by terminating or suspending internet accounts. The problem with this allegation is that iiNet itself may be liable to its users if it begins terminating accounts based upon unsubstantiated allegations from copyright owners. It would have to undertake significant investigation on its own initiative, and there again it may face liability or at least significant pressure for invading the privacy of its users. Finally, AFACT allege that iiNet could have taken 'other reasonable steps', including sending a notice to iiNet customers that AFACT had identified their accounts as potentially infringing and 'requesting that [they] cease such conduct'. Given that the copyright industry has not had the best track record of accurately identifying infringers, and in fact, has no real incentive to do so, iiNet may not be acting unreasonably by refusing to issue such notices. If appropriately construed, this type of behaviour could also conceivably come dangerously close to prohibited groundless threats of legal proceedings.
Finally, as with the other allegation of liability, any claim is limited by s 112E, which goes some way to immunising ISPs if they do nothing more than provide the network link. We have to reconcile the alleged grounds for authorisation liability above – that the ISP did not take 'adequate steps' – with the statutory provision that an ISP will not be liable “merely because another person uses the facilities so provided to do something the right to do which is included in the copyright.”1) Section 112E, on its face, appears to justify the position that an ISP which is doing absolutely nothing to either encourage or discourage copyright infringement will not be liable. It is not really clear how AFACT intend to make out that, even if the ISP has a 'power to prevent' and a 'direct commercial relationship', it would be positively required to act in oversight, despite s 112E.
These are all interesting questions of fact – to be determined by a judge at first instance – that will have to be proved by AFACT. Their resolution will depend largely upon what actions would be deemed 'reasonable' to prevent alleged infringements. This is really a public policy argument – to what extent do we want internet service providers to be responsible for identifying and terminating the accounts of alleged infringers, outside of the scope of proper judicial oversight?
Something we haven't spoken about yet are the safe harbours introduced in 2004 as a result of the Australia – US Free Trade Agreement (commenced 01 January 2005). Section 116AG, read with 116AC, provides that courts may not award monetary remedies against ISPs that are only “providing facilities or services for transmitting, routing or providing connections for copyright material”. Remedies are limited to “an order requiring the carriage service provider to take reasonable steps to disable access to an online location outside Australia” and “an order requiring the carriage service provider to terminate a specified account.”2)
Interestingly, it does not appear that AFACT have yet dealt with the conditions of the safe harbours. Assumedly they are waiting for iiNet to raise the safe harbours in defence, at which time they may decide to argue that iiNet are not eligible on the basis that iiNet has failed to “adopt and reasonably implement a policy that provides for termination, in appropriate circumstances, of the accounts of repeat infringers.”3) If AFACT is able to show that iiNet's policy is either not appropriate or not reasonably implemented, then the claims of authorisation liability may go ahead. How exactly, however, AFACT plan to do this, is anyone's guess.
Assumedly, iiNet will claim that it has an reasonable and enforced policy to deal with repeat infringers, in that once ordered to do so by a court, it will terminate access. AFACT is likely to counter that iiNet's policy is neither reasonable nor enforced, and that iiNet should instead be investigating allegations of infringement proactively, rather than waiting for either the AFP or the copyright owner to bring (and prove) an action for infringement. The resolution will likely come down to whether the text of s 116AH ('repeat infringers') requires proof of infringement or merely a reasonable suspicion (or some other test?).
This case raises some pretty important public policy questions. As I highlighted in EFA's press release, “ISPs are not in a position to monitor and terminate internet access to users based upon unsubstantiated threats from copyright owners, and should not be asked to do so.” I think that basic principles of procedural fairness and due process would in fact prevent iiNet from suspending and terminating accounts based upon allegations made by AFACT. iiNet has said that it will terminate in response to a court order, and I think that this is reasonable. Copyright infringement is not infringement until proved, and the courts are able to exercise judicial oversight and care in their binding findings of fact. These safeguards do not exist when private corporations are making the decisions. A system which required termination of internet access based upon untested allegations would be likely to result in substantial hardship to internet users. If ISPs are liable for not terminating user accounts, the power imbalance between individual users and ISPs and copyright owners would generally mean that rational, risk averse ISPs are more likely to terminate access based upon unsubstantiated allegations, and innocent individuals are more likely to be adversely affected.
Kim very aptly summarises the dangers of forcing disconnection without trial:
[I]f individuals were sued, rather than disconnected, (a) the cost of enforcement would lie on the copyright owners, and (b) consumers, and media, and everyone else, would be clear on what was happening, who it was initiated by, and, in fact, that it was happening. And in the case of Australia, unlike the US, damages are linked to the harm suffered by the copyright owner, so the threat of exorbitant fines of the Jammie Thomas variety would not be there. The advantage of the lawsuit option is that it is public and that everyone takes responsibility for their action. That is not necessarily a bad thing, on all sides. In other words, if MIPI decides to sue individuals, it will, in so doing, at least have to articulate its reasons, justify them to the Australian population at large, and to politicians. Politicians, too, would need to observe the effects of copyright laws and to justify them to the Australian people. I think that’s only appropriate, rather than going through the back door of managing it all second hand through the ISPs.
To this, I would just add that although copyright suits brought against end users may be better in aggregate than 'back door' enforcement through ISPs, they are likely to bring significant hardship to individuals. We have seen the extraordinary pressure that the copyright industry is able to bring to bear on individuals accused of copyright infringement, essentially forcing a settlement for several thousand dollars rather than the high risk and extreme expense of a drawn out legal process. We have to realise that this is not a dichotomy between enforcement at the ISP level and mass individual suits. If they are our only two choices, I would suggest that there is something fundamentally flawed about the way our copyright system is organised. There are certainly other ways in which we can compensate (or incentivise) investment in the creation of copyright expression that do not involve either making examples of individuals or forcing ISPs to police subscriber accounts. We are always able (at least in theory) to redraw the boundaries here, as to what, exactly, will constitute infringement, and how incentives can be distributed – a tax on internet usage being the apparent current best option,4) with an exclusion of liability for non-commercial or private use running a close second.5)
This case also raises important questions as to the appropriate penalty for copyright infringement. Personal small scale infringement is not a crime in Australia. As such, the proper remedy is damages, not punitive. Disconnecting an entire household's internet access, even if it is able to be proved that a member of the household downloaded copyright material, is a punitive measure that will in many cases greatly outweigh any harm done to the copyright owner. It will prevent children from researching school assignments, or video calling their grandparents. It could prevent others from telecommuting or working remotely. It would indeed prevent all forms of internet mediated communication – something upon which we have become increasingly reliant. It would in most cases involve a significant financial burden for reconnection fees.
Remember that claims for damages in copyright cases are generally hyper-inflated. We have seen the music industry calculate damages per song by taking the album price and dividing by the average number of tracks on an album, and then multiplying that number by a punitive factor. The introduction of statutory damages (proposed for ACTA: beware) is designed to do just that, and has resulted in absurdities like a US jury award of $222,000 in damages for infringing copyright in 24 songs.
If AFACT succeeds in this case, the result is likely to be disastrous for internet users in Australia. ISPs will be terrified of being sued, and will likely disconnect individual users without taking the care to determine the merits of allegations of copyright holders. There will be no court processes, so individual users will have no ability to contest the allegations, short of suing their service providers. There will be no court processes, so the media will not fully report on the issues, and a lot of the injustices will go unnoticed. Copyright owners will have extra judicial justification for their flawed tracking processes, resulting in a likely increase in the number of spurious and oppressive claims.6) And, importantly, thousands of individuals are likely to be severely punished for small-scale copyright infringement in an environment where the copyright industry shows an almost complete lack of respect for its legitimate customers. In short, not good news.
2008.03.31
I recently had the good fortune to review a paper by Judge Ung-gi Yoon on RMT.
You can find the paper at SSRN: Real Money Trading in MMORPG items from a Legal and Policy Perspective.
I really enjoyed this paper, and recommend that you take a look if you’re interested in the topic. The analogy to goodwill is really interesting, and there are some great critical insights about the choices that game developers make, which inevitably encourage RMT, and the benefits they receive from RMT. These recognitions set the stage for an interesting debate about the extent to which developers and publishers can then purport to rely on contractual terms which prohibit RMT.
In this article, Judge Ung-gi Yoon considers the legal status of Real Money Trading (RMT) in Massively Multiplayer Online Role-Playing Games (MMORPGs). Judge Yoon notes that in-game items are virtually treated as personal property, but are only legally recognised as information goods. The right of ownership of these goods belongs to the developers, and players have a right to use, as conferred by the terms of service. In contrast, players own the rights in content they create themselves within the game. Transfers of in-game items, as a manifestation of real human will, can accordingly be seen to be transfers intended to have real legal effect in the form of a transfer of a portion of the right to use over the game service held by a user in the real world.
Judge Yoon argues that declarations of intent by players within a game environment cannot be unilaterally ignored by the legal system, and must instead be individually judged to determine whether they were intended to be legally binding. In this conception, internal rules which are consistent with game play should be given precedence over external real-world rules. However, real-world rules should be applied in cases where the intent is unrelated to the game’s proper context, for example in cases of in-game defamation.
Through this framework, Judge Yoon considers RMT, noting that most discussions of RMT in South Korea and elsewhere characterise the objects of real-world transactions as the in-game items. This characterisation, however, is flawed because in-game items are not capable of being treated as personal property. An alternate suggestion is that the transaction is characterised as a sale of a right to use, but this characterisation fails to adequately explain the disparity in values of right to use versus the fees charged by the MMORPG operators, and presents a large liability problem for the operators with regards to the valuable rights to use of their users.
Judge Yoon argues that neither of these models are satisfactory – the object of RMT is neither the item itself nor the right to use the item, but rather something entirely distinct. Instead, the objects of RMT are better recognised as ‘play values’, and the monetary compensation is a ‘gwonri-geum’ (lease goodwill) payment. This analysis makes an analogy between the transfer of goodwill and RMT, where the transfer is not a purchase of an item or the right to use, but rather a payment for the effort the other party has invested in obtaining the item. On this analysis, RMT does not concern the operator any more than sales of goodwill concern the lessor of a business property.
It follows that if RMT is not the transfer of an item or the right to use an item, but rather a transfer of goodwill, then it must fall within the domain of private autonomy of players, and developers and publishers have no legal standing to interfere with the transfer. However, because the value in RMT transactions is the goodwill associated with the item and not the item itself, RMT does not impose liability on the publishers for protection of the items. A publisher’s liability will be limited to the original value of the item (related to the subscription fee), and not for the amounts in which associated goodwill is traded.
Judge Yoon argues that developers and publishers need to face the reality that market pressures have transformed play into real economic activity, a transformation which resulted from the game design choices made by the developers.
The fact that goodwill transfers are outside the scope of regulation by the publisher does not mean that the publisher has no right to regulate related activities. For example, prohibiting in-game advertising of RMT may be prohibited because it interferes with gameplay. Judge Yoon suggests that publishers ought to disclaim any involvement and liability with regard to monetary transactions between players, but reserve the right to regulate the in-game behaviour of players. Judge Yoon argues further that there is no real legal basis for justifying the imposition of restrictions on RMT transactions, and such bans are unfair insofar as they heavily infringe upon players’ rights to the intangible value they have created.
Judge Yoon points out that many publishers and operators do not care to correct structural issues in their games which lead to RMT, as RMT indirectly increases their revenue. However, by including an unenforceable ban on RMT in their terms of service which is of questionable validity, publishers are hypocritically covering themselves in cases where the negative social effects of RMT, particularly on the welfare of youth, are brought into question. Judge Yoon concludes that doing away with bans on RMT can alleviate some of the problems which have been recognised in South Korea, by respecting the personal autonomy of players, allowing trade to occur in a more stable environment and making it easier to deal with fraudulent traders.
2008.02.06
Image: Jefferson Memorial by kjd (CC BY-NC-ND).
While the discussion of liability rules and property rules (below) may be adequate for fungible interests, it may not be appropriate in cases of interests which more closely touch the personality of the participant. For these latter interests, inalienability, or partial inalienability may be the best method for protecting the personhood of the participant.
In a 1987 article (Radin, Market Inalienability (1987) 100 Harv. L. Rev. 1849), Margaret Jane Radin suggested that there are three main arguments to justify market-inalienability based on personality interests. Lets take the example of the term in the contract which states that a participant can be removed at any time for any or no reason, and consider the arguments for inalienability of the corresponding entitlement not to be removed from a virtual environment without due process. The analogous real-world right, as against the government, is (increasingly, somewhat) inalienable. Against private actors, it is a property entitlement held by the owner of the land. Absent strong arguments to the contrary, the presumption in a virtual environment will be that participants remain in the environment by the consent of the owners of the environment which, while subject to agreement, is revocable.
The first ground canvassed by Radin is a prophylactic argument – where the risk of harm to personhood of giving up the interest is so great that we are willing to constrain the choices available to those who would willingly give it up. In this case, we would be saying that we are willing to presume that all instances where a person gives up the right to due process to be coerced (see Radin at 1909 using slavery as an example). I am reminded here of Bartle's warning that there are any number of reasons that a person may wish to play a game with entirely arbitrary rules. The assumption that all such agreements are coerced simply cannot stand, and the question of consent must accordingly be reduced to a question of fact. However, if we remove the Bartle-world case, we begin to get an idea of the risk faced by participants – this is not simply an issue of losing access to a gaming platform, but of being cut off from one's social network, of having one's property forcibly removed, and of losing touch with the avatar – in the most extreme cases, of being forcibly alienated from a part of oneself. The danger posed can be evaluated quite strongly, and, particularly as the purported agreement is made before access is granted and before any attachment has formed, it may be fair to say that in all but the borderline Bartle-world cases, we are prepared to presume that the decision was coerced or otherwise not freely made.
A second justification given by Radin is that of prohibiting the commodified version of the 'good'. In this case, we may be able to say that there is a moral requirement that participation in the environment should not be commodified. The argument here is that allowing market forces to dictate whether we can associate with our friends and family or our avatars “creates and encourages an inferior conception of human flourishing”.1) In a world which encourages rich and diverse social relationships, to have those relationships subject to arbitrary severance by the platform owner may be damaging in itself. The counter argument is that we often allow rich and diverse human relationships to be governed by markets – although, in an idealised form, we may prefer that they were not. Radin's pragmatism deals with the non-ideal scenarios, and accepts that there can be a continuum of degrees of commodification, and that partial market-inalienability may “sometimes substitute for a complete noncommodification that might accord with our ideals but cause too much harm in our nonideal world”.2)
The third justification Radin gives is a domino theory; where commodification changes the nature of the 'good', such that non-commodified and commodified versions cannot co-exist, and there is a moral requirement that the non-commodified version is available, then a prohibition on the commodified version can be desirable. Radin explains that this “can be conceived of as the opposite of a prohibition: there is assumed to exist some moral requirement that a certain “good” be socially available”.3) In this instance, an argument may be that if we allow platform owners the ability to commodify and sever social relationships and avatar connections at will, we are unlikely to see the emergence of non-commodified systems. This suggestion is borne out, to a degree, by Andrew Jankowich's study showing that three quarters of virtual world agreements surveyed “allowed the proprietor to delete a player account at the proprietor's discretion.”4) If we believe that non-commodifiable versions of social relationships in virtual worlds *should* exist, and we also believe that while we allow commodifiable versions they will not emerge satisfactorily, then we may prefer a prohibition on the commodified version.
While there are many flaws in my under-developed reasoning, a model of partial market-inalienability may sometimes be suitable. While it would be folly to suggest that participants have an inalienable right not to be ejected from a private space, it may make sense to suggest that participants have an inalienable right not to be removed from a private space which very closely mimics public space without due process. This qualified market-inalienability may also be sufficient to allay the concerns raised by Bartle, in that participants and proprietors of virtual worlds which do not closely resemble public spaces will not be unduly burdened in their liberty to choose arbitrary rules. Similar to the way in which labour is partially commodified, where we allow the overall sale of one's productive force but impose limits in the form of minimum wages and unfair dismissal rules, we can envisage that participant rights in virtual worlds can be productively made partially market-inalienable. The difficulty, as always, will lie in establishing the boundaries.
Overall, I think that Radin's theory provides a fascinating way of approaching the topic of 'avatar rights' which could be very useful in determining which interests can be modified by Terms of Service, by code, and by internal norms in virtual worlds.
Comments, thoughts, or suggestions?
2008.01.11
Photo by Scott Beale / Laughing Squid.
This is going to be a really interesting event, and we hope to have some very robust discussion. Fred von Lohmann from the EFF is keynote speaker on the first day and will be looking at machinima and issues relating to copyright, trademark and contracts. He'll also be participating in panel sessions on player participation in design and community management. Terry Cutler is the other keynote speaker and he'll be talking on the relations between government and industry.
There will be panel sessions on everything from regulation through design and code, through co-creation scenarios where players and developers negotiate the tricky territory between professionals and amateurs, to classification and regulation through government bodies. We're hoping that by approaching the subject of control and regulation in computer games from the micro level through to the macro level we can achieve a more complex understanding of how control in this medium works and what kinds of interventions – at a legal or government level – are appropriate or inappropriate.
Official website for programme and registration.
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