In this edition #12…

July 29, 2010

Owen Morgan reports on New Zealand’s Bill on Orphan Works. In most jurisdictions, the default length of copyright is the life of the author plus either 50 or 70 years. It can often be the case that many works exist in archives and the identity of the copyright owner is lost. These works are known as “orphan works”. Orphan works are problematic as only copyright owners can authorise activities such as reproduction of the work and communication of the work to the public. When an institution wants to use an orphan work it must engage in an expensive search for the rights holder in order to seek a license. Many jurisdictions are trying to address this problem. The UK’s “non-attempt” to deal with orphan works was discussed in an earlier article by Jake Goldenfein (click here). As discussed by Dr Morgan, New Zealand has recently taken submissions on a new Bill that seeks to address the orphan works problem.

Karen Abidi looks at the Wandjini sculpture scandal. She explores the balance between an individual’s freedom of artistic expression with Indigenous people’s collective right to their sacred imagery.

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New Zealand Broadcasters and Orphan Works

July 29, 2010

by Dr Owen Morgan

A Bill currently before the Commerce Select Committee of the New Zealand parliament addresses the problem of orphan works held by broadcasters in their archives.  Submissions have recently closed in respect of the Television New Zealand Limited Amendment Bill (Television New Zealand is the primary public broadcaster in New Zealand.)

There are two main parts to the Bill which amends the Television New Zealand Limited Act 2003.  The first part provides for amendments to the principal Act relating to the functions of Television New Zealand Limited (TVNZ).  In particular, ‘it replaces the TVNZ Charter in section 12 of the Act with a briefer, and less prescriptive, statement of functions’.  The other part, which is the subject of this note, enables TVNZ to rescreen certain programmes held in its archives. The purpose is to overcome the problem that some rights holders cannot be located, therefore TVNZ cannot negotiate terms for rescreening and the programmes languish in the archives.

Clause 10 of the Bill inserts a new Part 4A into the principal Act comprising sections 29A to 29S.  Other provisions add a new Schedule and amend the Copyright Act 1994.  In brief, the effect of these provisions is to permit TVNZ to screen archived works ‘free of charge’ on certain specified ‘delivery platforms’.  Persons with an interest in an archived work lose ‘any rights and privileges’ they may have under contract or under the Copyright Act in relation to the screening of the work.

The actual wording of the Bill states that those rights and privileges ‘cease’. The Bill also sets out a scheme to compensate interested persons including a fund from which compensatory payments may be made to them. The reality is that persons are deprived of their rights, whether they are able to be located or not, in return for a legislatively determined handful of silver.

The Scope of Clause 10

The scope of Clause 10 is determined by the age of the works.  Although the Minister of Broadcasting stated (See Hon Dr Jonathan Coleman in Hansard 23 March 2010), while moving the introduction of the Bill, that, ‘Television New Zealand’s archive is a unique and valuable record of New Zealand’s historical, social and cultural life’; the ‘archived works’ covered by the Bill are restricted to works made before 27 May 1989 (section 29A).  If the Bill is really concerned with ‘New Zealand’s historical, social and cultural life’, then the works covered by the Bill should be determined by two factors: (i) their ‘historical, social and cultural’ value not their age; and, (ii) whether rights holders can be located. Where the works are held should not be a determining factor – in other words, I argued in my submission to the Select Committee that the works should include orphan works held by all broadcasters who screen publicly funded programmes.

Rescreening Free of Charge

Section 29C provides that if TVNZ complies with certain requirements, it may screen archived works on various ‘delivery platforms’ as well as permitting Māori Television Service (MTS – New Zealand’s national indigenous broadcaster) to screen works.  The key requirement is that TVNZ must screen the works ‘free of charge’.  The latter term is not defined.  It is not clear whether the Bill intends that the screening should be free of charge to an intermediate delivery platform such as TV3, or free to MTS or free to the public.  A comment by one of the Members of Parliament who spoke when the Bill was introduced suggests that the term is intended to mean ‘free to air’. (See Jonathan Young in Hansard 23 March 2010).  If that indeed is the meaning of the term, then the way the Bill is drafted may have defeated its purpose.  In practice, it may be impossible for TVNZ and MTS to comply. Their channels are free to air, but they are also screened on pay for view platforms such as Sky Television. Screening an archived work by TVNZ or MTS through Sky Television would appear to be a breach of section 29C (2).

A Dangerous Precedent

Section 29D (1) provides that the ‘rights and privileges’ of persons with an interest in an archived work cease and are replaced by rights provided in the Bill (Rights to Compensatory Payment.).

There is some logic in permitting works to be rescreened where none of the rights holders can be located. However, this provision deprives all rights holders of their rights under both copyright and contract whether those rights holders can be located or not.

Copyright is an exclusive right that enables a right holder to determine the use of a work; and contractual rights and obligations are the subject of negotiations.  This provision sets a dangerous precedent that strikes at the heart of intellectual property law by depriving the right holder of rights without any opportunity to negotiate or to appeal.

It also ignores the reality that money may not be a proper form of compensation.  For whatever reason, a right holder may wish to prevent the screening of a programme.  An example of the lack of thought that has gone into this provision is that it deprives a right holder of moral rights and compensates him/her with money– surely, a unique solution given the nature of moral rights.

Section 29D (2) does provide that a person’s rights and privileges continue to the extent that TVNZ does not screen the work free of charge – however, that would, presumably, be a matter for the interested party to establish.

Severing Clause 10

In my submission to the Select Committee I argued that Clause 10 and related provisions should be severed from this Bill for three main reasons:

  1. Section 3 of the Television New Zealand Act 2003 states that the purpose of that Act is to ‘(a) provide for the existing State enterprise Television New Zealand Limited to be split into a Crown entity conducting a television business and a State enterprise conducting a transmission business’.  The Act is concerned with matters such as ‘Structure and shareholding’, ‘Reporting’, and ‘Ministers and editorial independence’. Detail relating to a scheme to deprive rights holders of their rights in order to allow TVNZ to screen archived works simply does not fit with the Television New Zealand Act 2003.
  2. Clauses 13 and 14 provide for amendment to the Copyright Act 1994.  The subject matter of Clause 10 is the rights provided for under the Copyright Act and under contract.  If the current scheme is to proceed, it should be as part of the Copyright Act where it can be properly assessed against other provisions in that statute.
  3. If the scheme is to proceed, the relevant works should be available to all broadcasters, no matter whose archive they are held in.  This would ensure the widest possible communication of works of interest to the public. The distinguishing feature of orphan, archived works is not that they were first screened by TVNZ. That is just an accident of timing. The works in question are distinctive because they provide a ‘valuable record of New Zealand’s historical, social and cultural life’. TVNZ is no longer the sole broadcaster in New Zealand nor is it the sole free to air broadcaster. TV3 and MTS both have access to public funds and screen programmes of historical, social and cultural value. It is in the public interest that the scheme should be broadened to include all broadcasters.

Dr Owen Morgan is a Senior Lecturer at the University of Auckland

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Non-Indigenous Artists Producing Indigenous Art – the Wandjina Sculpture Scandal

July 29, 2010

By Karen Abidi

The Wandjinas belonged to people long before our time. They created our laws.  We still have to obey these laws… In the old days, only very special men could paint the Wandjina but now we are the only ones left to paint him to keep his spirit alive…”. Donny Woolagoodja, Traditional Custodian of Wandjina spirits*

Earlier this year, Vesna Tenodi (a non-Indigenous gallery owner) commissioned a 2 metre 8.5 tonne sculpture which she installed outside her Blue Mountain’s art centre.  (Click here for images)  Tenodi had asked Sydney artist Ben Osvath to create the sculpture using Indigenous Wandjina imagery.  However, local Indigenous groups protested on the grounds that under Indigenous customary law only Indigenous people are allowed to create Wandjinas and, even so, depicting a Wandjina is a right earned after years of initiation.  The commission and erection of the sculpture caused huge controversy and was vandalised with an axe the day before it’s unveiling.

The situation highlights the issue of protection of Indigenous intellectual property under Australian law. How should the law balance an individual’s freedom of artistic expression with Indigenous people’s collective right to their sacred imagery?

In this case, Wandjina are known to be sacred to the Wowara, Ngarinyin and Wunumbul people of the Kimberly as ancient and supreme spirit ancestors. Wandjina imagery is well known.  It is depicted in ancient rock art and contemporary Indigenous paintings, and featured in the opening ceremony for the Sydney Olympic Games.  Wandjina are anthropomorphic forms, their faces having eyes and a nose but no mouth, with an arc around their heads that looks like a headdress or helmet.

In 2007 a Senate Inquiry recommended the introduction of law to protect Indigenous Cultural and Intellectual Property Rights.  The Government rejected this recommendation.

Indigenous Cultural and Intellectual Property Rights are the rights of indigenous people to own, control and manage their cultural and intellectual property, to be the custodians and interpreters of their culture, and to authorise (or not) the use of their imagery and iconography according to their customary law.

Vesna Tenodi has described the intention of the sculpture as to recognise, celebrate and “reinterpret” Indigenous spirituality.  She feels spiritually connected to the Wandjina and sees herself as having a right, and even spiritual permission and direction, to use the imagery.  She said recently on ABC’s The Law Report that artists should have the right to “explore and express the divine” and queries how anyone can “claim ownership over god, and wandjina are gods.”  Her view is that “any artist has the right to be inspired and influenced by any imagery and any idea they find important and can resonate with”.

On the other hand, her use of the Wandjina has been met with strong criticism from the Indigenous community, who say that non-indigenous people should not use this sacred imagery without permission from the traditional owners.  A Kimberly traditional elder, Donny Woolagoodja, said on The Law Report that it is wrong of Vesna Tenodi to use the Wandjina- “… it’s not her Dreaming.  It belongs to us.”

A few years ago, Wandjina graffiti art in Perth created similar controversy and raised similar issues as to who has the right to represent the Wandjina in their art.

Western and indigenous notions of intellectual property are very different. Existing intellectual property legislation is not a good fit to accommodate Indigenous cultural and intellectual property.  The Senate Inquiry recommended that it be protected by way of specific tailored legislation, rather than amending existing IP statutes such as the Copyright Act.

The basis for Western intellectual property rights is economic, whereas for indigenous cultural and intellectual property rights it is cultural.  Australian copyright law does not protect artistic style or a genre of imagery. Whilst it prevents the direct copying of a particular Indigenous artwork, it does not prevent the general use of sacred Indigenous imagery.  In contrast, Indigenous customs recognise rights to particular indigenous images and styles.  Also, while Western intellectual property law protects individual rights, and these rights are transferable, under Indigenous customary law imagery is owned collectively and transmission is qualified.

At the International level, Australia has endorsed Article 31 of the Declaration on the Rights of Indigenous Peoples, which provides that indigenous people have the right to maintain, protect and develop their cultural heritage and cultural expression, as well as the manifestations of their visual arts.

Also, Australia is a participant in the World Intellectual Property Organisation’s (WIPO) Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore, which is in the process of negotiating an international legal instrument that includes that protection of traditional cultural expressions.

The Senate Inquiry recognised the importance of Australian Indigenous art, both economically and culturally and spiritually – “Indigenous artists express their culture, identity and connection to the land and their community through their art.”  Australian law should protect Indigenous culture and art.  Even if our law doesn’t offer protection, it is appropriate for non-indigenous Australians to seek permission to use sacred indigenous images.  Art using Indigenous imagery should be made and exhibited with sensitivity and respect.

*  The Wandjina Spirit from Rock to Wall by Glen Pilkington 2006 (click here)

Karen Abidi is a lawyer, and a tutor at Monash University

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In this Edition #11…

July 15, 2010

Kim Weatherall analyses last night’s leaked copy of the Anti-Counterfeiting Trade Agreement. Weatherall discusses the controversial issues raised by this critical trade agreement which promises to be a comprehensive rewrite of IP enforcement obligations at an international level.

Dr Melissa de Zwart provides an in-depth analysis of the recent US YouTube decision. In this landmark case, the judge held that general knowledge of “ubiquitous” infringement does not impose a duty on Internet service providers to monitor or search its service for copyright infringement. Dr de Zwart comments on the commonalities of this case with the recent Australian decision of Roadshow v iiNet.

Karin Clarke discusses the concurrent Inquiries into privacy protection in Australia. Major reviews of privacy legislation are on hand that will affect consumer credit and health information. These reviews will also tackle on-line privacy protection in light of social networking sites and data collection activities.

Economists Assoc Profs Beth Webster and Paul Jensen discuss copyright damages. They argue why Larrikin (the owners of the copyright to “Kookaburra”) should not have been awarded damages from Men at Work for use of an infringing flute riff in “Down Under”.

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ACTA: new (leaked) text, new issues…

July 15, 2010

By Kim Weatherall

What a surprise! Despite the best efforts of at least one negotiating party, the ACTA (Anti-Counterfeiting Trade Agreement) text has leaked, again.  This post looks at last night’s leak, and at the negotiations.  In short, though: the text is an improvement that continues to have significant problems.  The negotiations face some significant obstacles right now – but continue at break-neck speed, and I have this sinking feeling that ACTA could be spawning at least one evil little mini-me already…

Background

For those of you who haven’t been following this particular obsession of mine (see my April 9 and April 23 posts), ACTA is the Anti-Counterfeiting Trade Agreement – a plurilateral agreement being negotiated between Australia, Canada, the EU (represented by the European Commission, and the EU President), Japan, the Republic of Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland and the United States.  The DFAT website on the agreement with background is here.  In theory, ACTA is meant to be targeted at establishing “a new standard of intellectual property (IP) enforcement to combat the high levels of commercial scale trade in counterfeit and pirated goods worldwide”.  In reality, it’s a comprehensive re-write of IP enforcement obligations at an international level, with something close to a rightsholders’ wishlist and little protection for end users or the rest of us.

The ninth round of ACTA negotiations took place in Lucerne, Switzerland on 28 June to 1 July 2010. You can basically ignore the press release: the latest one is here.  In April, the parties decided to release a draft text, which has been comprehensively analysed (and criticised).  If you’re interested, there’s a very long section-by-section analysis of the last draft text available online.

At the latest round, the parties decided not to release a text – but, surprise surprise, one has leaked already, this one dated 1 July.  This post analyses some of the changes.

So, what’s changed?

There are basically 4 big ticket, big controversy issues in ACTA that have been getting attention in international circles, and where we need to see whether anything has changed.

  1. Expansion of criminal liability in IP;
  2. statutory damages (that is, ‘fixed’ amounts for damages that in some cases have led to very significant awards, like the US$200,000+ award against one US woman for file-sharing around 25 songs;
  3. ISP liability and what ISPs have to do to get protection from liability (three strikes; notice and takedown; etc etc); and
  4. The possible impact on access to medicines and the trade in generic drugs

Internationally, ‘anti-circumvention’ (digital lock) provisions are also controversial, but I won’t go in to them because Australia already has (and, through AUSFTA, is committed to) very strong provisions in that area.

Criminal Liability (leaked text page 15)

The criminal provisions are quite different to what we saw in the last text.  The last text looked like the AUSFTA provisions – and would extend criminal liability to non-commercial acts of sufficient scale (read, file-sharing) and single acts of infringement for commercial gain.  These provisions are gone, replaced with a requirement that parties apply criminal liability to “acts carried out in the context of commercial activity for direct or indirect economic or commercial advantage”, with a provision that would allow countries to exclude end consumers from criminal liability. The exclusion is a notable improvement on the previous draft which would have required criminalising lots of end users (although it wouldn’t help in Australia, because of AUSFTA).

Liability under the new text is still very broad. The reference to ‘commercial activity for direct or indirect economic or commercial advantage’ could be interpreted as covering single acts (eg, a business is found using one unlicensed copy of software), and has plenty of scope to catch legitimate businesses acting in good faith, who might have published a book believing they have a fair use or fair dealing defences, but who are certainly engaging in ‘commercial activity’.

As Daniel Gervais notes in the third edition of his book on the TRIPS Agreement, the references in TRIPS Article 61 to ‘wilful’ acts ‘on a commercial scale’ is “not synonymous with commercial activity.  It requires that the activity have a demonstrable, significant commercial impact” (emphasis added).  In a footnote, Gervais also notes that the TRIPS expression “corresponds to what have been referred to as ‘professional infringers’”.  In my view, TRIPS is perfectly adequate; it should be left as is.

Statutory Damages (leaked text page 7)

The provision on damages has changed too.  The April ACTA draft seemed to have moved away from requiring countries to adopt statutory damages, and, in particular, it seemed to allow Australia to retain its system of ‘additional’ (effectively punitive) damages. There’s some flexibility there still. Statutory damages are not required, but a country is left with a choice: statutory damages or other ‘presumptions’, or additional damages (to what end is entirely unclear; there’s no requirement that the damages be punitive for example or deterrent).

ACTA will still restrict what a country can do to protect end-users (ie teenagers, grandparents and anyone else with an internet connection) from excessive damages awards should they be caught infringing and have the misfortune to be sued.  There is nothing in the text that limits the rules to exclude damages for ‘innocent infringers’. I’m a little unsure whether this means Australian law would have to change (it depends on whether the current Australian limit of additional damages to ‘flagrant’ infringement is ‘implicit’ in the reference to ‘additional’ damages).  In short, I can see the provision is pretty vague, but I don’t like it. I think it achieves very little if you’re serious about increasing enforcement, but it does restrict policy freedom in the cases that ACTA isn’t meant to be targeted at – end users and consumers.

ISP Liability, Safe Harbours, Three Strikes

ACTA has a strong focus on intermediary/secondary liability.  This is the big factor distinguishing ACTA from previous multilateral agreements that don’t touch on this at all. There seems to have been quite a bit of progress on ISP liability.  Not all of it good.

For one thing, third party liability is still in the text (Article 2.18.2 page 19).  This is bad, and takes ACTA well beyond its remit, which is supposed to be enforcement, not substantive law.  Not just that, but I think the provision (at least, if it includes the proposed footnote) is inconsistent with Australia’s present law of authorisation, certainly in copyright and probably in patent and trade mark too. A few thoughts:

  • Interestingly, the majority of countries (excluding Japan, EU and Switzerland) seem to want to confine the provision to copyright, excluding the question of third party liability for trade mark, patent, designs etc.  This is good.  At least in Australia, authorisation in IP outside the direct area of copyright is a less settled and almost certainly different;
  • The US and Mexico want a footnote that seeks to define third party liability. Define it, not just give examples of what might be covered. And define it in a way that doesn’t match Australian law. The footnote seems to require liability for ‘knowingly and materially aiding any act of copyright infringement’.  Under Australian law, you can ‘aid’ infringement and even know about it, but if you don’t have the power to actually prevent it, or if you’ve taken reasonable steps, say, to reduce infringement you won’t be liable;
  • Still, as before, the footnote also says that “the application of third party liability may include consideration of exceptions or limitations to exclusive rights that are confined to certain special cases…” (etc etc). I have no idea what this meaningless language is trying to say; and
  • There seems to be no requirement on the face of the text that the direct infringement occur. Australian law generally requires proof of actual direct infringement before there is third party liability (see eg WEA v Hanimex)

In addition, provisions on granting injunctions against intermediaries whose services are used for infringement are still in there. I’ve argued at some length this is a bad idea in a treaty.

Regarding safe harbours for ISPs, it looks like the EU has proposed a compromise position, and it has some improvements from last time (for a detailed consideration of the previous version, see Margot Kaminski on Balkinization).  Importantly, there is no longer any language anything akin to ‘three strikes’ language that might require ISPs to start sending letters followed by termination of internet service. There is no requirement, as was found in the previous draft, that the ISP have a policy “to address the unauthorized storage or transmission of materials protected by copyright or related rights”; no requirement to terminate repeat infringers or the like.

This of course won’t stop individual countries introducing three-strikes type laws – but it will mean ACTA doesn’t require it.  The closest the proposal comes to having such a requirement is the provision saying that Parties “shall endeavour to promote the development of mutually supportive relationships between online service providers and right holders to deal effectively with patent, industrial design, trademark and copyright or related rights infringement which takes place by means of the Internet…”. This is a Japanese proposal, and doesn’t look like much of an obligation, although no doubt it will be used rhetorically sometime. I don’t think it should be there, but I don’t think it goes near 3 strikes either.

Access to Medicines

The final ‘big ticket item is the question of the impact of ACTA on access to medicines and the trade in legitimate generic pharmaceuticals. This is something of a ‘hot button’ issue at the moment in international IP owing to Europe’s practice of halting shipments ‘in transit’ (ie going from one developing country to another) on the basis of infringement of EU IP rights (even though the goods never enter the EU market and even where there’s no infringement of rights in the exporting or importing country).  Brazil and India have initiated a dispute in the WTO about this practice.  Since earlier drafts of ACTA included provisions on applying border measures, to goods in-transit, to protect patents, and no reference to things like the WTO Declaration on Public Health, there have been legitimate concerns that access to medicines was going to be hindered by ACTA.

Where are we at now? Well, there is now reference to parties taking measures ‘necessary to protect public health and nutrition’ upfront in the text, so that’s an improvement.  And according to the press release the border measures will not be required to be applied to cases of suspected patent infringement.  On the other hand, several countries still want the provisions applied to ‘in transit goods’, and the text still allows a country to stop goods in-transit, on the basis that the goods infringe IP in the transit country, even where they do not infringe rights in either the exporting or importing country.  And several of the seized shipments in Europe were stopped on trade mark, not patent issues. So I don’t think the concerns have entirely gone away by any means.

In addition to these ‘big ticket’ areas, the other issue that’s been troubling critics has been the lack of balance in the earlier ACTA drafts and the agreement’s potential impact on fundamental rights and liberties.  To put it bluntly, there were all kinds of rights for right holders, and almost no acknowledgment that IP is about a balance of interests; that consumers and other users have rights too, and that right holders sometimes abuse their rights and that needs to be controlled. It was said in the last draft that there would be more provisions on the other side of the balance.

The new leaked text does have more detailed general principles upfront, including ‘public interest’ principles in draft.  The provision on protecting privacy has been expanded. ACTA raises a lot of privacy issues because it anticipates the release of information about individuals to right holders to facilitate enforcement: in litigation evidence-gathering, by ISPs, by police to their colleagues overseas.  Some of this information would be considered private: names, addresses…activities online… . So privacy is important. The text itself is pretty much what you’d expect: that is, it leaves it to individual countries to work out how they want to protect privacy. As I’ve said in my ACTA megapaper analysing the last public draft, this won’t help Australians all that much because our protection for private information isn’t all that strong and is based only in legislation (we have no higher constitutional or human rights principles to appeal to).  But it’s good to have it in there.

Finally, too, there is some text:

  • On the importance of ‘a balance of rights and obligations’, and to allow parties to adopt measures to protect public interests in health, nutrition, and socio-economic and technological development (Art 1.X.1-1.X.2 p3); and
  • Acknowledging that “appropriate measures … may be needed <strong>to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade</strong> or adversely affect the international transfer of technology” (Art 1.X.3 p3).

Bizarrely, this provision seems to be controversial: proposed by Australia, NZ, Singapore and Canada, there’s another bloc wanting it removed: Japan, Mexico, Korea and the US. Again, why? If ACTA is, as the negotiators keep saying, meant to be consistent with TRIPS and consistent with the WTO Declaration on TRIPS and Public Health, and will allow countries to respect fundamental rights and liberties, why protest these principles? Why even, as the EU wants to do, demote them to the level of ‘preambular statements’? (I will say though I’m pleased that Australia is on the side of the forces for good here – you go AG’s!). All I can say is that if this language, or something like it, isn’t included in the final agreement, it’s going to be embarrassing – and confirm a lot of suspicions about what the agreement is all about…

Where to from here? Hypocrisy, Red Lines, Racing Negotiations and the potential for ACTA-Spawn

So where to from here? The parties are still talking about concluding negotiations by the end of the year.  According to IP Watch, some of the negotiators have seen “a real acceleration” in the more recent rounds of negotiations, and Prof Geist has opined that we could in fact see conclusion of the negotiations this year. Perhaps this is why the tension between some of the negotiating parties is bursting out a little in public.

US negotiator Stan McCoy has said that “there was some progress on ACTA in Lucerne, but not as much the U.S. had hoped”, and the EU negotiators have been accusing the US of ‘hypocrisy’ and drawing ‘red lines’.  To an outsider, it looks like they’re getting to crunch time: and the question of exactly how far they’re willing to compromise has to be faced – but they will be faced, because everyone involved wants to move on after over 2.5 fairly intense negotiating years and more rounds in 2010 than one would care to count. Me? I think they’ll reach agreement, and soon, and they’ve all committed too much to see it fall over.

But regardless of what happens in the ACTA negotiations, I have a feeling that we’ll be seeing something very close to these provisions again real soon.  Because there is another set of negotiations going on at the moment: the Trans-Pacific Partnership negotiations. The TPP is supposed to be “a high-quality, comprehensive 21st century Free Trade Agreement (FTA) that increases economic integration in the Asia-Pacific region”.  That is trade-diplomat-code-speak for “it’s an FTA with everything, like the AUSFTA”. And that means IP will be in it.

The TPP involves Australia, Brunei, Chile, New Zealand, Singapore, Peru, the United States and Vietnam.  So looking at that, you have Australia, NZ, Singapore, and the US who are all in both.  Peru and Chile are already party to an FTA with the US, which means that it’s likely they can sign up to quite a lot of what you’d find in ACTA.  That leaves Brunei, and Vietnam… who I don’t imagine will be focusing strong efforts on the IP aspects.  And you can bet that at least some significant portion of the people doing the negotiating on behalf of the ACTA countries on IP issues is also in the TPP IP negotiations.  Sheer practicality I suspect means they’ll be starting with some bastardised evil-spawn combination of the US FTAs and ACTA. The mega-long IP chapter from hell, I’m predicting. I can feel that strange combination of glazed eyes and boiling blood starting already. Grrr.

Kimberlee Weatherall is a Senior Lecturer at the University of Queensland

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The Safe Harbour UGC Business Model: judicial endorsement in Viacom v YouTube

July 15, 2010

By Dr Melissa de Zwart

From the time that the Internet was opened up to widespread general use, service providers were concerned regarding their potential vicarious liability for end-user copyright infringement, where the service provider had played no active role in the choice of that content.  This was due to the decision in MAI Systems Corporation v Peak Computer 991 F. 2d 511 (1993) in which the United States Court of Appeals, Ninth Circuit, held that when a computer was switched on, causing the operating system to run, the reproduction of that program on the RAM was an act of reproduction within the rights of the copyright owner.

This generated concern within the US Government, then espousing the principles and visions of the Clinton/Gore sponsored A Framework for Global Electronic Commerce, that such potential for liability would act as a roadblock to the uptake of electronic commerce by making business too risky for new ISPs to enter the market. This was despite the decision in Religious Technology Center v Netcom 907 F. Supp. 1361 (N.D. Cal. 1995) where the US District Court held that ISP Netcom should not be liable for the infringing activities of its end user, concluding (at 23) that:

‘The Court is not persuaded by plaintiff’s argument that Netcom is directly liable for the copies that are made and stored on its computer. Where the infringing subscriber is clearly directly liable for the same act, it does not make sense to adopt a rule that could lead to liability of countless parties whose role in the infringement is nothing more than setting up and operating a system that is necessary for the functioning of the Internet. Such a result is unnecessary as there is already a party directly liable for causing the copies to be made.’

(A sentiment echoed fifteen years later by Cowdroy J in the Federal Court in the recent Roadshow Films v iiNet decision ) Click here for our earlier coverage of that case.

The Safe Harbo(u)r Solution

The US took these concerns to the negotiations that resulted in the WIPO Copyright Treaty (WCT) but only succeeded in having the matter of intermediary liability dealt with in the Agreed Statement to Article 8 of the WCT:

‘It is understood that the mere provision of physical facilities for enabling or making a communication does not in itself amount to communication within the meaning of this Treaty or the Berne Convention. It is further understood that nothing in Article 8 precludes a Contracting Party from applying Article 11bis(2).’

In Australia, this resulted in the insertion of Section 39B in the Copyright Act 1968 (Cth).  However in the US it resulted in the introduction of the ‘safe harbor’ provisions in s 512 of the Copyright Act (US) by the Digital Millennium Copyright Act 1998.  That section provides that a service provider’s liability with respect to infringing material hosted on its system or network is limited where:

  • the service provider does not have actual knowledge of infringement and is not aware of facts or circumstances from which the infringement is apparent, and upon receiving such knowledge ‘acts expeditiously to remove, or disable access to, the material’;
  • ‘does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity’; and
  • Upon notification of infringement ‘responds expeditiously to remove, or disable access to’ that material.

As was observed by the US Senate Committee in 1998: ‘by limiting the liability of service providers, the DMCA ensures that the efficiency of the Internet will continue to improve and that the variety and quality of services on the Internet will continue to expand.’

Australia was obliged to introduce a safe harbour regime as a consequence of its entry into the Australia-United States Free Trade Agreement.  This was achieved through the introduction of Division 2AA of Part V of the Copyright Act 1968 (Cth) by the US Free Trade Implementation Act 2004 (Cth) and the Copyright Legislation Amendment Act 2004 (Cth).

The existence of ‘safe harbour’ protection, limiting liability to an obligation to remove infringing content upon receiving appropriate notification of infringement, created the opportunity for the evolution of websites such as YouTube and Flickr, which host content uploaded by end users (the ubiquitous user generated content (UGC)).

Content is uploaded in such quantities that individual scrutiny of the content is impossible (according to the YouTube judgment content is currently being uploaded to YouTube at the rate of over 24 hours of video every minute).  The end user licence agreements that the contributors to such sites agree to with the service provider require users to declare that such content is not infringing.  The service provider will remove infringing content only upon specific notification from the copyright owner, under the provisions of the DMCA safe harbor provisions. Thus the proliferation of user-generated content directly owes its success to the introduction of the safe harbor provisions which legitimise this ‘infringe now, ask questions later’ approach.

The YouTube case is therefore important because it tested the legality of the business model created and facilitated by the safe harbor regime.

Viacom versus UGC (again) –

Viacom International, Inc., v. YouTube, Inc., 2010 WL 2532404 (SDNY June 23, 2010).

Viacom commenced proceedings against YouTube in March 2007 alleging that You Tube (and its parent company Google) were liable for both primary and secondary infringement of copyright.  (As an aside, the involvement of Viacom in this case is interesting as Viacom, owner of several major production houses including Walt Disney, Dream Works, Comedy Central and Nickelodeon, to name but a few, was one of the earliest content owners to take on the first fan created web sites, namely Star Trek, and in doing so, created very bad publicity amongst its fan base.)

YouTube made an application for summary judgment on the basis of the safe harbor provisions, claiming that under the relevant provisions of the DMCA they had insufficient notice of the relevant infringements.  Thus much of the judgment is concerned with what constitutes knowledge or awareness of infringement.

In his judgment, Judge Stanton avoids most of the vicious allegations and abuses which had been aired by the parties in their Memoranda in Support of Summary Judgment in March 2010, particularly those regarding alleged admissions by Google about how much YouTube content was likely to be infringing.  Rather he focuses upon a straightforward interpretation of the notice and take down provisions, in particular, whether the statutory requirement of ‘actual knowledge that the material or an activity using the material on the system or network is infringing’ and ‘facts or circumstances from which infringing activity is apparent’ are satisfied by a general awareness of infringements or whether it requires ‘actual or constructive knowledge of specific and identifiable infringements of individual items’.

Judge Stanton undertakes an extensive consideration of the legislative history of the provisions and concludes that the provisions require ‘knowledge of specific and identifiable infringements of particular individual items. Mere knowledge of prevalence of such activity in general is not enough.’

Out of the millions of works that may be posted on the platform, the service provider cannot be expected to know which works are infringing, nor indeed which are subject to fair use or a licence arrangement.  The Judge declined to shift the burden to the service provider to monitor such content and indeed he observed that each of the video clips in suit had been removed from YouTube, most in response to a DMCA takedown notice, usually within a 24 hour period. He further supports his conclusion with reference to a number of cases, including Perfect 10 Inc v CC Bill LLC 488 F. 3d 1102 (9th Cir 2007) and Tiffany (NJ) Inc v eBay 600 F. 3d 93 (2nd Cir 2010) (which concerns trade mark law and therefore does not involve DMCA considerations) and distinguishing the circumstance of peer to peer file sharing in Grokster , concluding that : ‘General knowledge that infringement is “ubiquitous” does not impose a duty on the service provider to monitor or search its service for infringements.’

Finally, the Judge dealt with a number of other points including the matter of whether the service provider receives a financial benefit directly attributable to the infringing activity, in a case where the service provider has the right and ability to control the activity.  The Judge concludes that the provider must know of the particular case before it can control it.

The decision emphasises the need for the service provider to know of and respond to a specific infringement.  General knowledge of infringements at large is not enough to constitute knowledge for the purposes of the section. It is not clear at this time whether the judgment will be appealed.

Outcomes: Actual Knowledge Required

This outcome is consistent with the approach taken by Cowdroy J in the iiNet decision Click here for our earlier coverage of that case.

Considering the application of the Australian safe harbour provisions, Cowdroy J concluded that iiNet did have a repeat infringer policy which would have entitled it to rely upon the safe harbour limitations had infringement been established.

Consistent with the passive approach to copyright enforcement endorsed by the YouTube decision, Cowdroy J imposed the burden of identifying and establishing infringement clearly on the copyright owners.

Relevance of US Cases?

Importantly, Cowdroy J also observed that US authorities on the safe harbour provisions ‘can provide significant assistance’ in the interpretation of the corresponding Australian provisions.  It should be noted that these observations are obiter, the Court having found that there was no authorisation of copyright infringement by iiNet.

The outcomes of the YouTube case represent an endorsement of the UGC model that has been adopted so enthusiastically by web users and which now represents a vital component of Web 2.0.

Dr Melissa de Zwart is an Associate Professor in Law at the University of South Australia.

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Two Senate Enquiries into the Protection of Privacy in Australia

July 15, 2010

By Karin Clark

Two Senate Committees are conducting concurrent Inquiries into the protection of privacy in Australia.

Inquiry into the Exposure Draft of the Australian Privacy Principles

The Commonwealth government has recently released an Exposure Draft of the Australian Privacy Principles that are proposed to replace the National Privacy Principles and the Information Privacy Principles in the Privacy Act 1988. The draft legislation is now being considered by an Inquiry conducted by the Senate Finance and Public Administration Committee.  Information about the Inquiry and copies of the Exposure Draft and an accompanying Companion Guide are available for download from the Senate Finance and Public Administration Committee’s webpage (click here.)

The closing date for submissions is 27 July 2010 and the Committee is due to report in September this year.

The new Australian Privacy Principles are intended to form the basis of a new Privacy Act, as well as further reforms that have been recommended by the Australian Law Reform Commission’s Report 108 (click here).

The Commonwealth has announced that, as part of its first stage response to the ALRC, it will also release in the coming months draft provisions regarding the reform of consumer credit privacy (including more comprehensive credit reporting), the protection of health information, and concerning the Privacy Commissioner’s powers to conduct investigations, resolve complaints and promote compliance with the Privacy Act.

The Government has foreshadowed that once these first stage reforms have been progressed, it will consider other ALRC proposals such as removal of the employee records and small business exemptions from the Privacy Act, introducing a statutory cause of action for serious invasion of privacy, and making serious data breach notifications compulsory.

Inquiry into the Online Privacy of Australians

The Senate Standing Committee on Environment, Communications and the Arts is conducting an Inquiry into the adequacy of protections for the privacy of Australians online, with regard to privacy protection and data collection on social networking sites, as well as the data collection activities of private companies and collection activities of government agencies.  Submissions should be received by 23 July 2010. The reporting date is 20 October 2010 and more information can be found here.

Karin Clark is a Senior Fellow / Law Lecturer in the Melbourne University Law Masters and is Special Counsel at Allens Arthur Robinson.

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Newsflash: Kookaburra damages award case sounds like bad economics

July 6, 2010

By Assoc. Profs. Beth Webster and Paul Jensen

Yesterday’s decision of Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Ltd (No. 2) – [2010] FCA 698 to grant damages to Larrikin Music heralds a new chapter in bad economics.  To understand why, consider the economic rationale for the existence of IP rights.  As a matter of economic principle, IP rights only exist to stimulate investment in creation of new technology, music or books.  IP rights achieve this by protecting against imitation, thereby enabling their owner to sell their works for a higher price than would otherwise be the case.  So, decisions to award damages for breach of IP rights should depend solely on the loss of profit sustained by the IP owner.

In February’s judgment, (click here for a summary) Justice Jacobson ruled that Men at Work’s song ‘Down Under’ had indeed infringed Larrikin’s copyright in the tune ‘Kookaburra Sits in the Old Gum Tree’.  Yesterday’s ruling dealt with the issue of the damages that this infringement caused.  Using our simple economic framework, it is obvious that damages should only be paid if it can be shown that Larrikin suffered an economic loss as a result of the infringement.  The relevant question is the following: if ‘Down Under’ had not been recorded and sold, would Larrikin’s profits from ‘Kookaburra’ be higher?  The answer is clearly “no”.

So, what did Justice Jacobson rule with regard to damages?  Well, he awarded Larrikin damages equal to 5% of profits since 2002.  Given the success of the song, this will probably amount to several hundred thousand dollars.  Justice Jacobson makes it clear in his judgment that these are not damages for copyright infringement.  So far, so good.  Instead, they are damages payable under s82 of the Trade Practices Act 1974 as a result of misrepresentations made by the composers (and recording companies) of ‘Down Under’ to musical royalty collection agencies APRA and AMCOS.

Say that again?  You mean the damages are due because the composers of ‘Down Under’ falsely filled out their APRA form when identifying who wrote the song (and therefore who was entitled to the royalty revenue stream)?  In other words, they failed to recognise the contribution of the composer of ‘Kookaburra’.  But that’s absurd.  The sales of ‘Kookaburra’ were not affected in any way shape or form by the success of ‘Down Under’.  Quite simply, Larrikin should not be due any damages at all.

However, upon a finding of infringement, the parties agreed that damages be determined by taking a percentage of Men at Work’s royalties.  The parties agreed that the percentage be based on the hypothetical bargain that would have been struck between a willing licensor and a willing licensee of the copyright in Kookaburra.  The judge stated that “this approach is in accordance with the principles commonly applied in assessing damages for the infringement of the rights of the owner of an item of intellectual property.”

Once again, this approach illustrates how IP law and IP practitioners operate under a veil of ignorance with regard to the economic rationale of IP rights.  The problem is quite simple: the law typically assumes that IP rights are based in ‘natural rights’.  Viewed through this lens, Larrikin is entitled to capture some of the value created by ‘Down Under’ because it relied on a tune owned by Larrikin.  But this is clearly flawed logic: the only reason copyright exists is to provide sufficient incentive for artists to create new works.

We don’t use ‘natural rights’ logic to determine the rewards for doctors who save lives, civil engineers who bring us clean drinking water, or teachers who teach our children to read and write, so why should we use this rule for the creators of music?  Hopefully, the outrage over this decision will force a major re-think about the way in which we view IP infringement cases.

Beth Webster and Paul Jensen, IPRIA, University of Melbourne

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In this edition #10…

July 1, 2010

Dr Owen Morgan reports on the World Cup where two Dutch women were arrested for wearing “Bavaria beer” dresses in breach of South Africa’s ambush marketing laws. 

If you ain’t Dutch you ain’t much.

Also in this edition, Katy Barnett provides an update on cyber-bullying and reports on new amendments to the Sex Discrimination Act to capture this new phenomenon.  She also reports on how South African and UK courts are dealing with these difficult cases.

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Girls in Miniskirts follow the Men in Leeuwenhosen

July 1, 2010

By Dr Owen Morgan

A story recently came out of the FIFA World Cup in South Africa with an IP flavour to it. It involved the arrest of two young Dutch women for allegedly breaching South Africa’s strict ambush marketing laws by wearing dresses produced by a Dutch brewing company, Bavaria, to a World Cup match.  The dresses had been launched in April and, according to one report, some 5,000 had already been sold over the Internet.

The young women’s alleged offence was to provide another 30+ young women (South African locals), who were not charged, with short orange dresses. The group wore the dresses to the game between Denmark and the Netherlands.  Orange is the national colour of the Netherlands and is well recognised as such.  The inevitable YouTube video of the event has already surfaced under the name ‘Nederland Denemarken Bavarian Babes’  It shows the young women arriving in red outfits that seem to be in the Danish colours; then stripping off those outfits to reveal the orange dresses underneath and then dancing as a group. (There is another YouTube video entitled ‘Greatest Threat to the World Cup So Far’.) In the second half, the young women were removed from the stadium, questioned by FIFA and then by the police before being released.

This is an example of classic ambush marketing.  The official beer of the World Cup is Budweiser which is brewed by Anheuser-Busch and FIFA is seeking to protect Anheuser-Busch’s interests.  FIFA regards such promotional activity as a means of using fans to advertise products that compete with official sponsors’ products.  Preventing the use of fans as ‘walking advertisements’ is one of the primary objectives of FIFA’s rights protection programme.

The ambush replicates a similar ambush which Bavaria staged at the 2006 FIFA World Cup. At that event, Bavaria distributed orange Leeuwenhosen (Lion pants in the style of lederhosen) to hundreds of fans.  At the match between the Netherlands and the Ivory Coast, fans wearing the Bavaria-branded Leeuwenhosen were ordered to take them off and many of them watched the game in their underpants.  This option was not offered to the young women in the most recent ambush.

The two women have apparently been charged with an offence under section 15A of the Merchandise Marks Act 17 of 1941 and associated regulations.  Section 15A enables the Minister of Trade and Industry to designate an event as a protected event.  Subsection (2) provides that: ‘no person may use a trade mark in relation to such event in a manner which is calculated to achieve publicity for that trade mark and thereby to derive special promotional benefit from the event, without the prior authority of the organiser of such event.’ Contravention of subsection (2) means that a person is guilty of an offence (see subsection (4)).  The penalty for conviction of a first offence is liability to a fine not exceeding R5,000 (AU$ 778, NZ$ 954) for each article to which the offence relates, or imprisonment for up to three years or both.

If the prosecution proceeds under these provisions, it will be interesting to see how it establishes that the orange dresses which bear a small purple logo and/or the colour orange is a trade mark and that the young women ‘used’ the trade mark in a manner calculated to achieve publicity and promotional benefit.  A quick review of the Bavaria beer website (http://www.bavaria.com/ ) didn’t reveal any particular use of the colour orange in association with Bavaria beer or its corporate personality.

Over-reaction?

The swift reaction of the South African authorities and the draconian penalties to which the two young Dutch women could be subject led the Dutch Foreign Minister Maxime Verhagen to phone the South African ambassador in The Hague, Peter Goosen. ‘He indicated to the ambassador that the charges and the arrest of these two woman were disproportionate and not correct,’ said the spokesman for the Netherlands embassy to South Africa, Christoph Prommersberger.

One wonders whether the whole issue will be quietly shelved once the World Cup is over.

The New Zealand connection

The Rugby World Cup to be staged in New Zealand in 2011 is a major event that will involve a truly global audience.  New Zealand has had ambush marketing legislation in place since 2007 and it includes a provision that is designed to cover what occurred in South Africa.

Section 18 of the Major Events Management Act 2007 provides that: ‘No person may advertise in a clean zone during a clean period without the written authorisation of the major event organiser.’ (In brief, a clean zone defines the venue for a major event and the area around it; a clean period covers the time period of a major event.)  In the Act, advertising is defined as including ‘any form of communication (including selling or giving away goods)’. Section 22(b)(i) provides a gloss in that section 18 does not apply to clothing worn by ‘a member of the public, unless that item is being worn, carried, or used in co-ordination with other persons with the intention that the advertising intrude on a major event activity or the attention of the associated audience;’.

If the ambush had occurred in New Zealand, and if the two young Dutch women had sold or given away the orange dresses, they and Bavaria would be in breach of section 18 of the Major Events Management Act 2007.  However, if the dresses were lent to the other women, there might well be a defence.

It seems likely that a hard-nose attitude will be adopted in New Zealand. The general manager of Rugby World Cup Ltd in New Zealand was recently quoted as saying, ‘Be aware we’ve got specific rights protection teams.’

Perhaps it’s just as well that the Netherlands haven’t qualified to compete in the Rugby World Cup in New Zealand – or maybe it’s a pity that they haven’t! We could do with a bit of fun!

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