The statutory licence for cover versions and Creative Commons licensing

2009.02.18

Section 55 of the Copyright Act provides a statutory licence that allows 'manufacturers' to record musical works for retail sale, or for making other records for retail sale. The scheme is remarkably convoluted, and there are a number of restrictions – most importantly, a licensed recording of the work must have already been available for at least one month.1)

The statutory licence extends to copyright in the lyrics (literary or dramatic works) that have also been recorded with the music and released in Australia.2) In compliance with the statutory licence, the manufacturer must give notice to the owner of the copyright in the musical work and pay a royalty to the owner.

The first thing to note about the statutory licence is that it only applies to musical works and the associated lyrics. It will not apply to recordings at all. This means that it might be possible to record a new cover version, but the licence provides no latitude for remixing an already recorded track.

So, today's question is – under the statutory licence, can I record a cover version and release it under a Creative Commons or other open licence?

Creative Commons licensing of cover recordings


The statutory licence provides no clear guidance as to what licence can be applied to a cover version. However, several restrictions apply to widespread distribution under the licence.

The first is the requirement that the record be made for 'retail sale'. This requirement is further limited to exclude sale for “a consideration not consisting wholly of money” and sale by anyone “not ordinarily carrying on the business of making or selling records”3) So, people distributing their own recordings on the internet for no fee are out of luck. Licensing to Apple for sale on iTunes is presumably allowable, but selling on your own website for a nominal fee is probably not, unless you are ordinarily in 'the business'. But here we run into another problem – the statutory licence covers 'records', not 'recordings'.4) It refers to physical records, and is certainly not technologically neutral. So electronic distribution appears to be right out.
A certain amount of 'gratuitous disposal' is permissible – that is, you can give away records at your gig or elsewhere, as long as you're planning on selling a substantial proportion of the records, and you pay royalties on each of the records you give away.5)

The next question is whether, if you do manage to satisfy the requirement that you sell the records, what licence can you apply? Well, to the extent that you own the copyright in the recording and any new music and lyrics, you can apply whatever licence you like. However, the statutory licence provides no rights for downstream users. So while you could technically stick a CC sticker on your cover record that you're selling (or giving away), you would have to specifically exclude any claim over the original music and lyrics.

Practically, what does this mean? Simply put, downstream users will have no right to copy or remix the record unless they can separate out your new material (that is not based on the original material in any substantial way) from the original, which is unlikely. So, in terms of electronic distribution and downstream licensing, the statutory licence is fairly underwhelming.

Can you change the lyrics?


APRA/AMCOS maintain that “Lyric changes and parodies of works must have been cleared directly with the copyright owner.”

This conclusion appears to be supported by the wording of s 59, which allows lyrics to be recorded in conjunction with the musical work only if “those words, or words substantially the same as those words, were sung, or were spoken incidentally to or in association with the music” on an existing (licensed) recording.

There is also a conspicuous absence of a provision for literary or dramatic works in similar terms to that in s 54(1)(a), which states that

a reference to a musical work shall be read as a reference to the work in its original form or to an adaptation of the work.


So, under the statutory licence, it appears that modifying and interpreting the music is permissible under the statutory licence, but modifying or interpreting the lyrics is not.

Restrictions on style – the moral right of integrity


Under the previous law, s 55(2) provided a requirement that the recording artist not 'debase' the musical work, but this condition was removed with the introduction of moral rights into the Copyright Act.6) Now, the style of the cover is governed by the moral right of integrity. Interestingly, because we still do not have much guidance on the meaning of the moral right of integrity, a case under s 55(2) still provides the best assistance for determining when the moral right will be infringed.

The Federal Court and the Full Federal Court on appeal considered the meaning of 'debase' in the Carmina Burana case.7) The question in that case was whether four techno remixes of the chorus of Carmina Burana 'debased' the original work. The Full Federal Court found that the techno remixes did not 'debase' the original. Importantly, Wilcox J held that the qualitative analysis need not be technical – because the term 'debase' is a strong one, for it to be applicable, “the adaptation must be so lacking in integrity or quality that it can properly be said to have degraded the original work.”8) His Honour concluded that the requisite level of quality is quite low, noting that “[i]t is difficult to think an adaptation that has its own integrity could be so characterised, even if it is musically inferior and however radical or distasteful (to some) it may be.”9) Justice Lindgren agreed with Wilcox J, noting that

an arrangement will be less likely to be a debasement where, as here, it is an arrangement which 'makes available' the original musical work to the musical tastes of a different period of time or of a different subculture, or (as here) of both, and which thereby acquires its own integrity.10)


It is likely that in future, courts interpreting the concept of 'derogatory treatment' in the moral right of integrity with relation to cover versions will follow a similar approach – meaning that a cover version will have to be extraordinarily bad in order to infringe on the original author's moral rights.

Conclusion: the future for the statutory licence?


This analysis shows some flaws in the statutory licence for the digital age. Primarily, it does not apply to electronic distribution at all. Additionally, by focusing on sales, it fails to take into account other methods of licensing music and other business models.

The argument can be made that the licence compensates musicians by providing royalties on sales, and that adequate compensation would not be payable if the cover version were made available under the open terms of a CC licence that allows unlimited distribution and remixing. Perhaps this is a valid argument, but it needs to be examined in detail. Is there some acceptable form of statutory licence that would allow for open licensing of cover recordings? How would we go about compensating the original author in such a situation?

4)
Section 54(1A) provides that “'record' means a disc, tape, paper or other device in which sounds are embodied.”
6)
Copyright Amendment (Moral Rights) Act 2000 (Cth).
7)
Schott Musik International GmbH v Colossal Records of Australia (1997) 75 FCR 321.
8)
Ibid, 324.
9)
Ibid.
10)
Ibid, 338.
Categories : Uncategorized

Obama poster in Australia: we still don’t have a transformative exception

2009.02.12

Poster of Obama and the AP original on which it is based

The original Associated Press photograph of Barack Obama and Shepard Fairey’s “Hope” poster (compilation from NYT blog story).

(I originally wrote some of this content for EFA's submission (PDF) to the Department of Broadband, Communication and Digital Economy’s Future Directions review.)

In a major review of Australia's copyright law in 2005, the Attorney-General's Department determined not to introduce an open ended copyright exception like the US fair use defence. This decision resulted in Australia adopting some of the harsher measures from US copyright law without the corresponding flexibility that provides a balance for users and rights holders. This balance directly affects free speech and innovation – it is the balance between providing the incentive to create and reducing the barriers to create new works. If this balance is not achieved in either direction, both innovation and speech are likely to be greatly restricted in Australia.

As you may be aware, Shepard Fairey, the artist responsible for the powerful 'Hope' poster, has sued for a declaratory judgment that it does not infringe copyright in the original AP photograph that he used for inspiration. The Stanford Fair Use project is supporting the suit, and claim that:

There should be no doubt about the legality of Fairey's work, […] He used the photograph for a purpose entirely different than the original, and transformed it dramatically. The original photograph is a literal depiction of Obama, whereas Fairey's poster creates powerful new meaning and conveys a radically different message that has no analogue in the original photograph. Nor has Fairey done any harm to the value of the original photograph. Quite the opposite; Fairey has made the photograph immeasurably more valuable.


A major flaw in Australia's copyright regime, as compared to the United States, is that we lack an exception to infringement for transformative reuse of copyright material. In the US, transformative use is a factor in the four-factor fair use defence, and allows some latitude for innovative repurposing of existing expression. In Australia, our fair dealing exceptions limit unlicensed reuses of copyright material to a small number of allowed purposes. Innovative acts of reuse that are not able to be pushed into one of these categories generally require a negotiated licence, which is often not forthcoming or prohibitively expensive. Because the fair dealing provisions are so narrowly interpreted, a large proportion of new creative expression is inhibited by our copyright law.

So it would appear that Australian copyright law would essentially prohibit the unlicensed creation of this type of poster. It is hard to see the justification for this result. We see time and time again that copyright owners often refuse to license their material on reasonable terms. It is probable that this sort of poster has no adverse effect on the market for the original – it is certainly not directly substitutable. It does however, have a very positive effect on public discourse – this icon has proved to be one of the most powerful of the recent campaign.

We introduced a parody and satire exception to copyright infringement to create a space for some transformative works, but this is a clear example of important speech that simply can't fit within one of our purposive exceptions. It shows that there is something fundamentally skewed within our copyright policy if this type of speech – speech that engages individuals in a public political discourse – is not permissible.

I argued in my masters paper that we ought to introduce a transformative use exception into Australian copyright law. If we tried hard enough, I'm convinced we could come to agreement on a balanced exception that would prohibit mere repackaging but allow unlicensed repurposing of copyright material that is not directly substitutable for the original. As we argued again in the EFA submission to the DBCDE consultation paper, such an exception could introduce much needed flexibility in Australian copyright law and provide some additional scope for innovation without compromising the incentives to create original expression.

Categories : Uncategorized

EFA Submission to DBCDE Future Directions paper

2009.02.11

Today I finished EFA's submission (PDF) to the Department of Broadband, Communication and Digital Economy’s Future Directions review.

The submission tackles a number of important issues for the digital economy, including open access to public sector information, electronic accessibility of printed material to people with a print disability, broad-based ICT training, and copyright policy.

We conclude the submission with a reminder that our policy framework ought to empower Australians to access and build upon information in the digital economy:

As Australia transforms into a knowledge based economy, the policies we choose to adopt for the creation and dissemination of information become crucially important. It is becoming increasingly clear that greater access to information and greater technical and legal abilities to remix, build upon and improve that information are fundamental drivers of innovation. EFA believes that the single most important issue in an innovation policy is ensuring that Australians are empowered to innovate, and that the barriers we impose to innovation are justified with reference to our social goals.


I would like to express my thanks to all those who helped to write the submission. As far as I know, this was the first open collaborative submission produced by EFA. A number of people were involved in contributing to its development on our public wiki, which helped me immensely. I'm very grateful to the mostly anonymous editors. This process gives me high hopes for the future development of EFA as an inclusive volunteer based organisation.

LCA2009 Reverse engineering, anti-circumvention, and other broken laws

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

AFACT v iiNet copyright infringement suit

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.

Inducement liability

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

  • knew or should have known that iiNet users engaged in filesharing of infringing material
  • took no action in response to emails sent by AFACT alleging infringement
  • 'offered encouragement' to iiNet users to engage in illicit filesharing
  • failed to enforce iiNet's terms and conditions which prohibit using iiNet to infringe copyright
  • continued to offer internet access to customers who AFACT alleged engaged in filesharing; and
  • '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.

Vicarious liability

The second grounds for liability alleged by AFACT is US-style vicarious infringement, as developed in Cooper. AFACT allege that iiNet:

  • had to power to prevent the infringements of its users;
  • had a direct and commercial relationship with iiNet customers that allowed it to 'take action' against those customers who engaged in illicit filesharing; and
  • 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?

What about the safe harbours?


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?).

Conclusion


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.

2)
s 116AG(3).
4)
see proposals by Prof Terry Fisher and Peter Eckersley, amongst others
5)
For a detailed examination of the scope of copyright in Australia, see Ben Atkinson, The True History of Copyright.
6)
See, for example, the 'Dancing baby' suit, where a 29 second home movie clip of a baby dancing to a song on the radio was removed from YouTube: http://www.eff.org/cases/lenz-v-universal

DFAT briefing on the current state of ACTA

2008.10.25

Today I attended a briefing session on ACTA hosted by the Australian Department of Foreign Affairs and Trade (DFAT). I felt it was a good meeting, and I really got the sense that DFAT were interested in public participation. There was a good deal of frustration on both sides of the fence – participants expressed serious concerns about the lack of transparency in the negotiating process, and DFAT consistently repeated that they were bound by confidentiality agreements and could not divulge details of the draft text of the agreement. Participants in the Tokyo round of negotiations agreed that the full text of the agreement will only be made available after negotiations have been concluded and the text finalised. Understandably, there were a number of members of the audience who were hesitant to accept any of DFAT's assurances as to the content of the agreement without access to the negotiation documents.

Overall, whilst I think that the process is far too secretive, DFAT appear to have gone a long way to make available what they can, and they seem genuinely interested in hearing from interested parties in Australia. Unfortunately, input will be limited (blind) until negotiations are complete and the text finalised, but DFAT assures us that they are considering the issues thoroughly and there will be genuine opportunity to debate whether or not to sign at the end of the process.

The big points I would take away from the meeting are:

  • Negotiations will go 'well into 2009';
  • The Commonwealth Government is not seeking to drive domestic changes through ACTA. Overall, there do not appear to be any great changes to Australia's enforcement regime – it appears to be more focused on affecting other states;
  • The Government intends to limit the effect of any treaty to trademark infringement and commercial scale copyright infringement;
  • However, statutory damages for copyright infringement are on the table;
  • Next meeting, in December, will consider internet distribution;
  • Camcording is likely to be criminalised;
  • There's still time to make relevant submissions to DFAT – indeed, they release a substantial amount of information once they receive the draft proposals before every negotiation round;
  • DFAT has a copy of the Cutler report.


When pressed about the secretive process, Dr Nicholas Rodgers from DFAT noted that “the procedure is not an unusual one in trade negotiations, although it is more generally applied to free trade agreements and sub-multilateral groups.” I asked Dr Rodgers what the justifications could be for keeping the negotiations confidential in an intellectual property agreement, as opposed to a trade agreement. Dr Rodgers responded that Australia was not an original proponent of the process, and did not support the secretive manner in which negotiations are taking place. However, Dr Rodgers noted that in order for Australia to 'be in the tent' – to be involved in the negotiations – we had to abide by the ground rules set down for initial participation. The rules allow for a limited consultative group to be established, but DFAT do not like to make text available to some interest groups and not the wider Australian population. This, at least, we can be thankful for, given that rights owners typically dominate these smaller focus groups in other countries.

It seems that DFAT are genuinely interested in hearing submissions from the public, and have tried, within the bounds of the confidentiality agreement, to seek input from the public about the negotiations. Dr Rodgers repeatedly stressed that, without disclosing the draft text, we could ascertain the boundaries of the agreement by 'reading between the lines' of the calls for comments posted on the DFAT website in preparation of each round. Proposed draft text is circulated to DFAT several weeks before the negotiation rounds, and DFAT appear to make a thorough effort to extract the contentious issues in their calls for submissions. It seems, then, that the list of issues so far released by DFAT would appear to cover the main points of the agreement.

Dr Rodgers told us that he expected negotiations to continue 'well into 2009', although he did expect that each of the draft proposals would have been tabled and discussed at least once by the end of 2008. There are still proposals that DFAT has not seen. Once the text is finalised, DFAT will hold comprehensive public discussions, giving opportunity for public and parliamentary comment on the text of the agreement before Australia signs. It was repeatedly stressed that Australia was not bound to sign – we negotiate 'without prejudice' – and that the decision whether to sign or not will not be made until after the text has been released. It was noted from the floor, however, that it is sometimes extremely difficult for parties who have been heavily involved in the negotiation process to refrain from signing after negotiations have been concluded, which implies that public consultation after negotiation will be too late to be effective.

This brings us to a consideration of the substance of the agreement. Peter Treyde, from the Attorney-General's Department, insisted that Australia was “not seeking to drive domestic changes” through the ACTA process. Dr Rodgers insisted that it was not the intent of the government to include copyright infringement which is not on a commercial scale – explicitly saying that there will be no ipod searches at the border. The treaty is geared to be 'TRIPS Plus', and as Australia is already 'TRIPS Plus', DFAT and AGD are not considering many substantial changes to our domestic law. The point of the treaty, from Australia's perspective, would be to seek adoption by our neighbours of the same type of enforcement regime that we have. Representatives from Customs and the Australian Federal Police agreed that Australia's enforcement and border protection measures are effective, and that there was no real need to change; rather, they would influence the discussions in order to endorse the measures we already have. There was some mention of increased data sharing between enforcement agencies.

Dr Rodgers outlined the three rounds of negotiation that have already taken place. The first round considered extending customs application for suspension scheme beyond that required by TRIPS, and DFAT considered that TRIPS is 'broadly appropriate' in this regard. Ex officio customs searches – without notification from the rights holder – have been raised, and the point was made that Customs already has such a right in certain circumstances. There was a particular focus on targeting materials exported from Australia, or in-transit. TRIPS requires focus on the prevention of imports, but Australian Customs has some powers that go beyond TRIPS. The aim of the first round appeared to be strengthening border measures to reduce international trade in infringing material, and DFAT seemed to suggest that Australian Customs currently already does a good job in this regard ('Customs currently intercepts hundreds of thousands of pirated items each year').

The second round, in Washington, considered pre-established or statutory damages for infringement. Proponents are seeking a statutory formula or presumption for both the calculation of damages and for an account of profits. There was significant discussion on this point, as Australia does not currently prescribe statutory damages for copyright infringement. Dr Rodgers noted that statutory damages “are indeed controversial measures in the United States”, and that despite the fact that Australia is a small country, we may have allies in other countries and have more influence than we could expect in negotiations with the US. Mr Treyde noted that the practice in the US has led US copyright owners to threaten 'housewives' with highly inflated statutory damages in order to force settlements, and noted that the “US has that in its legislation, but as far as that issue has been discussed, there is certainly no agreement as to whether or not that is the way to go. For Australia, it would cause problems at a fundamental level as to the powers of the judiciary to assess and award damages, and it would be difficult to carve out IP” from the general scheme for damages.

When pressed on whether statutory damages would be in the final text of the agreement, we were told, rather ominously, that “given that the main countries that do the drafting are the US and Japan, it would be informative to look at the legislation from those countries.”

Dr Rodgers said that the issue of statutory damages is one of the key issues that DFAT are interested in hearing submissions on. He noted that DFAT considered that Australia's proceeds of crime provisions are an important tool of deterrence “and quite an apt one”. This is hopefully an indication that Australia will oppose the inclusions of statutory damages in the negotiation process.

This is probably the most significant piece of information to come out of the meeting today. It appears likely that the US will seek to have other countries adopt statutory damages regimes. We have seen these used in the US to provide extremely inflated damage awards against routine copyright infringement. The idea is obviously to discourage infringement, but it hasn't been effective at doing this, and merely results in manifestly unjust damage awards against those individuals copyright owners decide to target. DFAT appear yet to make up their mind whether they will oppose such measures in ACTA, and this would seem to be an important point on which submissions should be lodged.

The third round, held earlier this month in Tokyo, discussed criminal measures applied to copyright 'piracy' and trademark counterfeiting. Dr Rodgers informed us that DFAT considers Australia's criminal measures to be sufficient, and that there is not likely to be substantial change to these. He did note, however, that there is pressure to introduce criminal sanctions for recording of performances at public events, and in particular, the recording of films – 'camcording'. Any such criminalisation would be limited to profit making or commercial scale infringement.

Peter Coroneos, from the Internet Industry Association, asked whether there would be an effort to redefine the meaning of the notoriously loose 'commercial scale' provision in Australia's Copyright Act – specifically, whether we would be criminalising file-sharing. Peter Treyde responded that “there isn't a proposed draft text on these provisions. But I think that the main drafters seem to be that the agreement should be TRIPS plus. Australia's legislation is pretty much TRIPS plus already (as a result of AUSFTA). There is not really any suggestion that we should change this.” The Attorney-General's Department seed 'largely comfortable' with the negotiations so far on this point, as 'Australia already has those standards'. As for whether ACTA would be used to drive change in local laws, Mr Treyde noted that the Australian Government's position is that it is “not keen to adopt any measures which require substantial change” to our existing laws.

The representative from the Australian Federal Police noted that confiscation of proceeds of crimes was an important disincentive for commercial scale infringement, and that existing legislation is just about adequate. Where proceedings under the Australian Copyright Act are started by indictment, proceeds of crime can be confiscated, but not where proceedings are commenced summarily. He also noted that the Trade Mark Act was currently being reviewed to see whether offences could be brought up to the standard required for proceeds of crimes legislation to have effect.

The next negotiation round is scheduled for the first week of December in Brussels, and will address internet distribution and IT issues, enforcement best practice, international cooperation, institutional issues and opening provisions (including, importantly, the definition of 'counterfeiting'). DFAT noted that they will again seek comment on relevant issues once they have access to the proposals being put forward.

I asked whether in the next round, when internet distribution is addressed, Australia is considering making any changes to intermediary liability, or requirements for ISPs to implement graduated responses, filtering, or mandatory disclosure of subscriber information? Dr Rodgers responded that the text has not yet been released, and that we won't know until it is. We were to be “guided by our general approach to negotiations in considering our current regimes being broadly suitable.” Apparently, this is an indication that we won't be seeing wholesale changes, but it remains a very vague commitment. Mr Treyde added that Australian measures were currently approximately appropriate, and that it would be 'interesting' to see what draft text will be presented, but we'll have to wait and see.

Finally, on a personal note, a representative from the Australian Copyright Council pointedly reminded me why I continue to volunteer for Electronic Frontiers Australia. She raised the point that consumer and users are extremely under-represented at public discussions such as this one. We looked around the room, and when participants were asked to raise their hands if they claimed to represent individual users or consumers, to the best that I could see, I was suddenly alone in the room. These international trade agreements have a great potential to alter the copyright balance, affecting the way that individuals engage with copyright expression in all their activities – not just consuming, but learning, researching, remixing, sharing, critiquing and reshaping. It is extremely important that we continue to work to ensure that users and reusers of copyright expression have a voice at the international level.

Edit: I didn't mention that there was a lot of discussion about the scope of the ACTA as it applies to patents. DFAT attempted to reassure audience members that ACTA would be limited to trademark and copyright infringement, and that the border control and criminal measures discussed so far contained no reference to patent infringement. With regards to pharmaceuticals, DFAT and the AGD noted that the purpose of the border control measures were to catch 'counterfeit' pharmaceuticals – used, in this sense, to mean infringing trademarks – and not generics or patent infringing drugs. There was also significant concern from the agricultural lobby that ACTA would have spillover effects on importers of patented seed crops, and DFAT stressed that they had not seen and did not expect to see any patent issues in the negotiation. At the next meeting the preliminary provisions will be discussed, and it is expected that they will limit 'counterfeiting' to trademark and copyright infringement.

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IceTV: Day one of the High Court hearing

2008.10.17

Yesterday was the first day of the IceTV v Channel Nine appeal. Here's some links to follow:


A very interesting case. Stay tuned.

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Mr Modchips – criminal circumvention charges reversed in the UK

2008.09.19


In late June a decision came down (which I appear to have missed) in the England and Wales Court of Appeal quashing the conviction of Mr Modchips (aka Neil Higgs) for providing modchips in contravention of the UK anti-circumvention provisions in s.296ZB of the Copyright, Designs and Patents Act 1988 (UK).

The case, Higgs v R [2008] EWCA Crim 1324 (24 June 2008), makes for interesting reading.

The Court of Appeal held that the wording in the UK act: “prevention or restriction of acts that are not authorised by the copyright owner of that work and are restricted by copyright.” is to be read similarly to the provision in the Australian act: “to prevent or inhibit the infringement of copyright”. Accordingly, the reasoning of the High Court of Australia in Stevens v Sony [2005] HCA 58 has some application in the UK.1)

The Court of Appeal concluded that a technological measure must actually prevent the infringement of copyright:

In the end, therefore, one comes back to the UK Act. Is it enough if the technological measure is a discouragement or general commercial hindrance to copyright infringement or must it be a measure which physically prevents it? To our minds the position is clear – it is the latter. Neither the Directive nor the Act would have been drafted in the way that they are if such a general form of hindrance was enough.2)


This all sounds like good news. Especially for Mr Modchips himself. However, the court warned that future defendants may not be so lucky, especially given that reproduction into RAM is an infringing act:

It is for those reasons we quashed the convictions. Mr Higgs is a fortunate man in that it may well be that if the legislation had been less complex and/or the Crown had had greater opportunity to consider the details of copyright law the case would have been proved on the basis that merely playing a pirated game involves making a copy in the console and thus involves infringement. He may also be fortunate that, at least this far, he has not been sued in the civil courts. There the procedure is apt to be much faster, technical slip-ups in evidence can generally be readily cured before final judgment and the remedies of damages, an account of profits, injunction and legal costs are readily obtainable. Breach of an injunction, if serious, can of course itself lead to imprisonment.3)


This decision places the UK law in a very similar position to the Australian law after Stevens v Sony. There is still considerable doubt as to whether modchips are legal under Australian law after the changes to the definition of 'material form'. After the changes introduced by the AUSFTA, 'Material Form' now “includes any form (whether visible or not) of storage of the work or adaptation, or a substantial part of the work or adaptation, (whether or not the work or adaptation, or a substantial part of the work or adaptation, can be reproduced).”4) This means that a device which prevents the playing of an unauthorised game can now be argued to prevent an infringement, rather than merely render an already infringing copy less useful. This means that the devices in the current batch of consoles may be technological protection measures, and this in turn means that modchips may now be circumvention devices, despite their usefulness for other, non-infringing, purposes.

1)
at [21].
2)
at [35].
3)
[36].
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IceTV: the idea / expression dichotomy in the Full Federal Court

2008.09.17

Copyright applies to expression. The ideas which underlie the expression are not protected by copyright.
In a literary work, the idea of the protagonist being awoken by a knock is not protectible, but the expression of that idea is: “While I nodded, nearly napping, suddenly there came a tapping, As of some one gently rapping, rapping at my chamber door.”1) Nobody can prevent subsequent authors from using the idea, but copying the way in which it is expressed is the exclusive right of the author for a limited time.

This becomes a little more difficult when we are dealing with facts. The Bureau of Meteorology may collate weather forecasts for a town, and present them to citizens:

>Thursday Fine Min 15 Max 24
>Friday Fine Min 16 Max 26
>Saturday Mostly fine, possible shower or storm Min 15 Max 29
>Sunday Mostly fine, possible shower or storm Min 18 Max 28
>Monday Mostly fine, afternoon shower or storm Min 17 Max 27
>Tuesday Mostly fine Min 17 Max 28

This table is a protectible copyright work. It is a compilation of information which originates from the BoM. The individual facts, on the other hand, are not copyright. It is not an infringement for me to tell you that on Saturday, it is likely to be fine, with a maximum of 29 degrees Celsius and a possibility of a shower or a storm. So what is left for the copyright to protect? It protects the way those facts are expressed. In this case, copyright protects the table and the layout. If the language were more expressive or flowery, it would protect the original expression in the forecasts. As it is not, there is little other way in which those facts could be expressed, and copyright will not grant a monopoly on the only reasonable way in which those facts can be expressed.

At least, this is the way I believe copyright ought to work. There are sensible reasons for protecting expression, and there are sensible reasons for refusing to protect mere information. But since Desktop Marketing Systems v Telstra, the Federal Court of Australia has eroded the distinction between ideas and expression and has instead protected the labour and skill that goes into generating the underlying ideas and facts. On this reasoning, because it requires significant effort to check the names, addresses, and phone numbers of many individuals and businesses, Telstra is granted a monopoly on the telephone directories it produces. In that case, Desktop Marketing was prevented from copying the information from the directories and presenting it in a different way.

In Channel Nine v IceTV, the same Full Federal Court determined that because it requires significant effort to determine which television shows will be broadcast in which timeslots, Channel Nine would be granted a monopoly on the television schedules it produces. Ice would accordingly be prevented from taking the facts within those schedules ('Days of Our Lives will be broadcast on Monday at 2pm') and displaying them in a different manner.

In our first example, this would mean that the Bureau of Meteorology ought to be granted a monopoly on the laborious predictions it makes, such that I would not be able to write here that Monday should be mostly fine with an afternoon shower or storm (or at least, I would not be able to enter that information into a weekly weather forecast).

I believe that there has been a fundamental misstep in the reasoning of the Full Federal Court in not differentiating between the labour which is exerted in generating information and the labour which is exerted in generating expression. It may well be the case that the BoM needs excludability or public funding in order to generate the forecasts it produces. It may well be the case that Telstra needs excludability or public funding in order to maintain an accurate list of names, addresses and phone numbers. It may well be the case that Channel Nine needs excludability or public funding to go through all the effort that is required in order to determine which programs it should broadcast in which timeslot. These are not, however, copyright interests. Copyright comes later, when each of these parties chooses to express the information is has gathered or created in a tangible form. It does not matter whether the information was created or gathered by the same person who is expressing it; there is still a fundamental difference between an idea and the expression of an idea.

The Full Federal Court in Desktop Marketing and IceTV has largely removed this distinction. The result is fairly gloomy for independent innovators. It is now very difficult in Australia to take information that has been publicly released and present it in another form. This is compounded by another lowering of the test for substantiality. Desktop Marketing involved wholesale copying, but IceTV only involved copying a small amount of information. The approach taken by the Full Federal Court in IceTV looks at the importance of the information to the whole work, and not the importance of the expression. A small taking of a few pieces of important information accordingly amounts to a substantial reproduction, even if the majority of information was collected through non-infringing means. The Full Federal Court in IceTV did not look at the way in which the information was presented, merely that it was taken. Because there are very few ways in which one can say that 'Days of Our Lives will be broadcast on Monday at 2pm', this effectively means that Nine gains control of all such expression.

This is an unfortunate state of affairs and really limits the ability of innovators to compete and even the ability of individuals to express themselves. Technically, this means that I can't post here to tell you when the next episode of Chuck is going to air, assuming that I gathered the information from a licensed source and the judges felt it was 'important' enough to form a substantial part of the weekly schedule. It also means that we can't use free software PVRs, because the licensed sources don't make the information available in the format that we need (presumably to cut off competition).

[ Edit: Ok, it's unlikely that me telling you what time Chuck will be airing will be substantial enough. But there are certainly still speech implications. Can I tell you the times for the four most important programs for each day? Can I tell you what time a particular program will be playing each week for a season? If I can, why can't IceTV? ]

The High Court has agreed to hear the appeal from IceTV. We can only hope that the High Court is willing to examine the effect that such a low standard for originality and substantiality has on the ability of everyday Australians to express themselves, to innovate, and to compete in the digital economy.

More information and commentary:
* House of Commons: http://www.cyberlawcentre.org/unlocking-ip/blog/2008/08/icetv-granted-special-leave-to-appeal.html
* Kim Weatherall: http://www.lawfont.com/2008/05/09/all-our-program-guides-are-belongs-to-us/ and http://www.lawfont.com/2008/05/12/more-on-the-icetv-judgment/
* Slides from David Linsday: http://www.copyright.asn.au/events/past_events/f08n03.htm
* Peter Black: http://www.freedomtodiffer.com/freedom_to_differ/2008/05/nine-network-au.html
* William Patry: http://williampatry.blogspot.com/2008/05/icetv-iced-kangaroos-hopping-mad.html
* Peter Vogel: http://vogelross.com.au/vrblog/?p=32
* Warwick Rothnie: http://ipwars.com/2008/09/02/icetv-transcript-is-up and http://iblog.ipwars.com/C688984015/E20080518104141/index.html and http://ipwars.com/2008/08/27/icetv-in-the-high-court/ (noting the adage 'what is worth copying is worth protecting')

1)
Edgar Allan Poe, The Raven, 1845.
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Article: Where the bloody hell does parody fit in Australian Copyright Law?

2008.08.07

(Image from Downwind Media.)


My article on parody has recently been published by the Media & Arts Law Review.

You can get it here: Nicolas Suzor, 'Where the bloody hell does parody fit in Australian copyright law?' (2008) 13(2) MALR 218. With many thanks to the MALR and Lexis Nexis publishing, it is available under a CC BY-NC-SA 2.5 (AU) licence. If you republish, please attribute both MALR and Lexis Nexis as first publishers.


Abstract:

This article examines the role of the recently introduced fair dealing
exception for the purposes of parody and satire in Australian copyright law.
Parody and satire, while central to Australian expression, pose a substantial
challenge for copyright policy. The law is asked to strike a delicate balance
between an author’s right to exploit their work, the interests of the public in
stimulating free speech and critical discussion, the rights of artists who rely
on existing material in creating their own expression, and the rights of all
artists in their reputation and the integrity of their works. This article
highlights the difficulty parodists and satirists have historically faced in
Australia and examines the potential of the new fair dealing exceptions to
relieve this difficulty. This article concludes that the new exceptions have the
potential, if read broadly, not only to bridge the gap between humorous and
non-humorous criticism, but also to allow for the use of copyright material to
critique figures other than the copyright owner or author, extending to society
generally. This article will argue that the new exceptions should be read
broadly to further this important policy goal while also being limited in their
application so as to prevent mere substitutable uses of copyright material. To
achieve these twin goals, I suggest that the primary indication of fairness of
an unlicensed parody should be whether or not it adds significant new
expression so as not to be substitutable for the original work.

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