Keeping Secrets in Times of Weak Law

December 12, 2011

By Tiffany Wong, Oscar O’Bryan and Jake Goldenfein

Keeping anything secret seems like a challenge in today’s radically altered media landscape. Digitisation has abolished the cost of reproduction and networked environments expose information to actors with the capacity to leak, steal or vandalise for whatever purpose motivating them. Law hardly seems to have a role in a space where technological know-how trumps not only the regulation of secrets but also the digital architectures that protect them. But does that mean that law should retreat from regulating information, or rather, is it a time for redoubled analysis of law’s relationship to information and perhaps an open mind when looking at options for reform. Rather than harsher penalties and more vigorous enforcement, do we need more transformative approaches for dealing with the reality of our age of communicative abundance?

This year’s CMCL conference, ‘Keeping Secrets in Times of Weak Law’ answers the call for a critique of law’s role in keeping secrets and the institutions that determine when secrets should remain so.

Jake Goldenfein presented on the different forms of WikiLeaks and how its latest iteration of publishing uncensored and unredacted documents without institutional (mainstream media) oversight may be the only mode of transgression that can fulfil its ideological mission. Dan Hunter, Julian Thomas and Alana Maurushat constituted the Cybersecurity Panel, discussing the relationship between states, secrets and law. The session was chaired by David Lindsey. Philip Williams, David Brennan and Susan McMaster made up the Trade and Commercial Secrecy Panel, chaired by Beth Webster, discussing the economic arguments in the trade off between incentives to produce and incentives to enjoy information. And the Privacy Panel, chaired by Jason Bosland, included Megan Richardson, Michael Rivette, Michael Gawenda and the Honourable Michael Kirby, who discussed Lenah Game Meats – 10 years on, and the possibility of a statutory cause of action for privacy in Australia.

Cybersecurity

Dan Hunter, director of the Institute for Information Law and Policy at New York Law School, gave the Cybersecurity keynote, asking some pertinent questions about secrecy and security in the age of the Internet. In particular, why WikiLeaks was such a lightening rod for criticism and whether ‘control’ is the correct paradigm to inform the policies behind regulating secrecy.

The debate over WikiLeaks set the context for Hunter’s presentation. In asking why WikiLeaks, especially its release of unredacted cables was so derided by the institutions related to the rule of law (journalists, lawyers etc) Hunter critiqued those institutions for being unable to see the reality of today’s communications infrastructure and practices. Instead, Hunter claimed, those institutions rely on an ethic of control that propelled the ratcheting up of copyright laws since the Internet became publicly available 20 years ago, as well as informed the news media’s derision of WikiLeaks publishing without their oversight.

Hunter suggested that WikiLeaks may be a precursor for a change in policy regarding government secrecy and disclosure and asked what modern day information policies and practices should look like given the Internet and technologies like WikiLeaks. Regarding copyright, Hunter claimed control was not what creators sought and regarding secrets, Hunter alluded to substantial evidence suggesting administrators over-protect information in ways that are profoundly undemocratic. Now that we live with the idea of radical transparency as something we cannot really do anything about, Hunter claims we have to craft a policy that gives up on our misguided concerns about control despite the new dangers that may provoke.

Respondent, Julian Thomas, director of The Swinburne Institute for Social Research, discussed the extent to which the Internet has decentralised, diffused or democratised secrecy– and where WikiLeaks fits into this new equilibrium. Thomas claimed that the Internet has made states both less and more able to control information, where networks of freedom and networks of control lay alongside each other. WikiLeaks operates in this new networked society, claims Thomas, according to the model described by William Dutton as the 5th estate emerging from the network of networks. While sharing some features of the traditional press, the 4th estate, Thomas claimed this 5th estate is more than simply a supplemental ‘new’ media but operates in a space, where institutional and amateur expression are side by side, as are networks of freedom and networks of control exist within what Manuel Castells describes as the space of flows (not a space of places) where people find knowledge outside of institutional sources.

Alana Maurashat, director of UNSWS’s Cyberlaw and Policy Centre, discussed the regulation of hacking worldwide, noting her consultancy to the Canadian government to assist in crafting a reasonable policy in the field of ethical hacking. She saw WikiLeaks’ legacy as going beyond subsequent movements like Anonymous and Occupy, but rather depicted WikiLeaks as the leader, or image, of a whole system of e-government and e-revolutions, often coordinated by groups that have been considerably empowered by today’s technological conditions.

Trade and Commercial Secrecy

Beth Webster opened the panel by contextualising the importance of trade secrecy to Australian innovators, referring to the Australian Bureau of Statistics’ most recent innovation survey. This survey highlighted that 40 per cent of Australian businesses were innovation-active during the 12-month reference period and the most popular method of intellectual property (‘IP’) protection by these businesses was a secrecy or confidentiality agreement.

Keynote, Philip Williams (Chairman of Frontier Economics) offered an economist’s perspective on trade secrecy by posing the key economic problem arising from the protection of trade secrets: the trade-off between two incentives — the optimal incentives to produce information and the optimal incentives to enjoy information.  Economics has been able to articulate this problem, but has struggled to offer guidance for its resolution.

To illustrate this problem, Williams presented a simple economic model: a person spends a year of pain (‘Period 1’) to enjoy a year of gain (‘Period 2’).  The person may justify the pain by producing an asset, such as information, at the end of Period 1.  Enjoyment of that information in Period 2 constitutes the gain.  The person will only bear the pain in Period 1 if they believe that they will likely enjoy the information in Period 2.  Thus the person will likely seek legal or extra-legal protection of the information from appropriation.

Williams noted, however, that the trade secrecy context raised three complications to this model.  First, the creation of an asset does not draw a clear distinction between the two periods of activity — investment and enjoyment — since the asset will likely grow in value during Period 1.  Secondly, the asset may generate benefits for its creator through trade, whether or not the creation process has completed.  Thirdly, if the asset is information (a classic public good) difficulties arise with respect to trade.  In particular, a purchaser must know the information to determine its value — a problem also known as Arrow’s fundamental paradox of information.

Williams applied this model to the facts of Maggbury v Hafele (2001) 210 CLR 181 (‘Maggbury’), a High Court case in which the law dealt with the trade-off between the incentives to produce and enjoy an asset. Williams noted the economic inefficiency of restraining the use of information after that information had entered the public domain.  He suggested that restitutionary damages would have been a more efficient remedy by allowing Maggbury to recover the benefit of its investment and by allowing the use of publicly available information.  The key challenge in calculating the quantum, however, would be to determine the duration of Hafele’s head start, which Hafele gained by first access to the information.

 

The first commentator, David Brennan, engaged in a fuller discussion of remedies for breach of confidence. He highlighted the remedial uncertainties arising from the equitable jurisdiction of breach of confidence — remedies were at the court’s discretion, and equity provided weak guidance on the assessment of quantum.

In noting these problems with equitable remedies, Brennan argued injunctive relief would serve little purpose, given the defendant’s destruction of confidentiality; an account of profits could involve accounting problems since the significant intermingling of the defendant’s resources with the information; and equitable compensation, calculated on a counterfactual basis, might be dismissed by courts as too imprecise a measure of damages.

Brennan concluded by making suggestions for law reform.  To strengthen legal protection of confidential information and to deter the wrongful disclosure of such information, he submitted that an all-proceeds remedy would be preferable to injunctive relief where there was a breach of confidence which was: (a) in bad faith; (b) the wrongdoer benefited from the breach in an ascertainable and proximate manner; (c) the secrecy of the information has been destroyed by the breach; and (d) there was no market-based objective measure of harm.  Depending on the nature of the party’s breach and benefit, the appropriate remedy should be a constructive trust, and/or an account of profits without allowance for the wrongdoer’s contributions.

The second commentator, Susan McMaster (Senior Legal Counsel with CSIRO), provided the practical perspective of IP creators, including those who received and commercialised confidential information.  Drawing from her experience with CSIRO, McMaster acknowledged both the importance of trade secrecy in the private sector and the effectiveness of sharing knowledge to achieve impact from research results.

Secrecy, McMaster claimed, is crucial to the patent application process since patent registration hinges on the first-to-file system and the development of patentable subject matter through research and experimentation takes a long time. Further, secrecy is required for the commercialisation of public scientific research as investors are incentivised by the exclusive rights created by patent registration.

McMaster raised three key issues concerning the management of confidentiality agreements.  First, it may be unclear whether certain information is confidential.  Secondly, non-disclosure agreements must be drafted and used to enforce confidentiality, rather than to constitute a mere formality before commercial engagement.  Thirdly, a research organisation and its employees must refrain from receiving confidential information from third parties or entering into third-party confidentiality agreements if doing so would place the organisation at a commercial disadvantage.

 

Privacy

 

The final panel of the day, chaired by the CMCL’s Jason Bosland, considered the past, present and future of privacy protection under Australian law. The four speakers brought a wealth of academic, professional, industry and personal experience to panel, making for a discussion that was informative, candid and enjoyable.

The first speaker, Professor Megan Richardson framed the panel discussion around the future direction of privacy law in Australia – does Australia need a statutory cause of action for invasion of privacy, or should the common law protecting privacy interests (breach of confidence, defamation) be left to develop on its own? She noted the ‘careful silence’ of the federal government on the issue, only recently broken by the publication in September 2011 of an issues paper recommending the introduction of a statutory cause of action – a reaction, perhaps, to the resurgence of interest in the ever-expanding News of the World phone-hacking scandal.

Richardson dealt at length with the judicial reasoning in ABC v Lenah Game Meats as to whether the common law alone can protect (individual) privacy interests sufficiently, referring to Gleeson CJ’s discussion and approval of Hellewell v Chief Constable of Derbyshire as an example of the successful utilisation of the doctrine of breach of confidence to protect privacy. On the other hand however, Richardson noted the imperfections of the common law process, requiring plaintiffs to endure the ‘agonising’ process of adversarial litigation to have their interests recognised. She cited the Campbell, Mosley and Giller cases as pertinent examples of this. Richardson suggested that a statutory cause of action could make a positive difference if it were well-framed.

The second speaker was Michael Rivette, barrister at Chancery Chambers, who along with having successfully argued the privacy issues in the Giller v Procopets appeal, also maintains numerous professional and commercial interests in the media and communications sector. Rivette spoke of the continuing influence of the ABC v Lenah Game Meats case upon the development of the law of privacy, both in Australia and overseas. He suggested that the Victorian authority of Giller actually afforded greater privacy protection through breach of confidence than exists under the common law in both the UK and New Zealand. While he acknowledged the potential benefit of a statutory cause of action, Rivette highlighted the drawn-out nature of the law reform process, and said that in the mean time, ‘we have to do what we can with what we have’.

The third speaker was Michael Gawenda, whose perspective on the issues was coloured by his extensive experience as a career journalist and author. Gawenda noted that ‘journalists are in the business of invading people’s privacy’ on the basis of public interest, however he was clear that this end did not always justify the means (this can be contrasted with recent remarks by former News of the World journalist Paul McMullen). In particular he was critical of the idea that the apparent consent of a journalist’s subject to an invasion of privacy might legitimise or validate that invasion. In concluding, Gawenda was sceptical about the ability of the legal system to deal comprehensively with privacy issues, suggesting that perhaps the regulation (formal and informal) and culture of the media industries needed to change as well.

The final speaker was the Honourable Michael Kirby AC CMG. Kirby suggested that a consideration of privacy law should begin with the question: ‘Why do we want privacy?’ – framing the answer in terms of the ability to have control over our personal lives, arguing that personal privacy is important to our ‘fullness’ and ‘flourishing’ as human beings. In this sense, Kirby was of the European perspective that personal privacy is a human right which should be protected by the law. After highlighting the imperfections of the various options canvassed in the recent issues paper – do nothing, expand the role of the Press Council, rely upon the courts to develop the common law, et cetera – he came to the conclusion that the best way forward for privacy protection in Australia is the creation of a statutory cause of action for invasion of privacy.

The session highlighted the numerous stake-holders in the ongoing development of privacy law – the media, the legal profession, celebrities, ‘normal’ people – each with their own perspectives, concerns, and objectives. The task for the Australian law is to consider and balance all of these things in continuing to move towards a more coherent law of privacy.

Tiffany Wong is an LLB/BMus candidate at the University of Melbourne.

Oscar O’Bryan is holds an LLB from the Melbourne Law School.

Jake Goldenfein is a PhD candidate at the Melbourne Law School.

2 Comments | breach of confidence, Copyright, damages, defamation, Intellectual Property, Internet Law, Media law, piracy, Uncategorized, wikileaks | Tagged: , , , , , , , , , , | Permalink
Posted by clarissaterry

The UK Government on its Digital Opportunity

August 26, 2011

By Sarah Lux 

Earlier this year, the Fortnightly Review reported on the Hargreaves Review and its recommendations for the reform of UK intellectual property law. The UK Government has now released its official response, announcing that it accepts all of the Review’s recommendations and aims to implement measures by the end of this Parliament to ‘realise the Review’s vision and deliver real value to the UK economy, and to the creators and users of Intellectual Property’.

Importance of Evidence

The Review emphasised the need for IP policy to be grounded in clear economic evidence of the impact of regulatory mechanisms on competition and innovation. Professor Hargreaves identified two main areas of concern: the lack of high-quality evidence to support some intellectual property measures and an overabundance of lobbying by private interest groups.

The Response begins with a set of promises geared towards ensuring that UK IP policy is informed by better evidence. In relation to the first concern, the Response notes that the Government has ‘begun an ambitious programme of economic research with partners’, referring readers to an outline of its proposed research. The outline includes plans to:

  • assess possible economic effects of congestion in the trade mark register;
  • study the economic value of public domain works;
  • develop an approach for measuring IP enforcement costs against the effects on rights owners, consumers and the wider economy;
  • link all IP rights to business performance measures;
  • assess the economic cost of invalid patents;
  • assess the volume of orphan works and their impact on creators and users; and
  • develop a methodology for research into economic and social impacts of copyright exceptions.

In relation to the second concern, the Response states that the Government will give limited weight in IP policy-making to evidence that is insufficiently open and transparent, and will make it clear when it is doing so.

However, the Response also states that perfect evidence is an ideal, and that in making IP policy it is sometimes necessary to ‘guess and get on with it’. Accordingly, while the Government will aim to be guided by ‘emerging evidence’, it will continue to prioritise ‘rapid progress’ towards an improved IP system.

Digital Copyright Exchange

The response to Professor Hargreaves’ proposed Digital Copyright Exchange (DCE) is that a DCE ‘has the potential to offer a more efficient marketplace for owners and purchasers of rights’ and that it could contribute up to £2.2 billion per year to the UK economy by 2020. The Government will therefore commission a ‘champion’ of the DCE to undertake preliminary steps towards its creation.  The DCE champion will report back on progress at the end of 2011.

However, the Response implies that the Government will give less weight to the DCE than was envisaged by Professor Hargreaves. Hargreaves recommended that a work which cannot be found after a diligent search of the DCE should be regarded as an orphan work and automatically licensed for use. The Government, on the other hand, regards DCE searches as only ‘a valuable first step’ in searching for the owner of a work, and notes the need for other diligent searches before a work can properly be treated as an orphan. The Government takes the view that compulsory participation in the DCE would be contrary to the Berne Convention.

Orphan Works

The Government intends to make proposals at the end of the year for an orphan works scheme incorporating the safeguards discussed above.

Copyright Exceptions

The Response agrees that greater exceptions to copyright are required in theUK. The Government intends to make proposals at the end of the year for ‘a substantial opening up of theUK’s copyright exceptions regime’.  This will include proposals for:

  • a limited private copying exception;
  • a widened non-commercial research exception (which should cover text and data-mining to the extent permissible under EU law);
  • a widened library archiving exception; and
  • a new exception for parody.

The Response adds that there is a need for wider exceptions at the EU level, since theUK’s scope for action on exceptions is limited. The Government will therefore ‘aim to secure further flexibilities’ at EU level.

Enforcement

Among other measures to improve enforcement, the Government intends to introduce a small claims track in the Patents County Court for cases with £5,000 or less at issue, for use in copyright, design and possibly trade mark cases, to increase access to enforcement by small and medium enterprises.

Patents, Designs and Trade Marks

These areas of intellectual property law received little focus in the Review, which dealt mainly with theUKcopyright regime. However, the Review did make some recommendations on patents and designs.

On patents, the Government undertakes to:

  • resist extensions of patents into sectors which are currently excluded, in the absence of clear evidence that this is necessary;
  • provide for work-sharing with other patent offices in order to address backlogs; and
  • investigate the scale and prevalence of issues with patent thickets as well as potential solutions.

On designs, the Response notes that the IPO has commissioned research on the relative levels of design registration in theUKcompared toFranceandGermanyand on whether theUK’s lower level of registration has impacts on the competitiveness of theUK. It also noted that designs might be included in the DCE or its equivalent.

International Policy and Crime Strategy

Alongside the Response, the Government has released The UK’s International Strategy for Intellectual Property, which outlines the role the UK envisages for itself in working towards an efficient, well-functioning international IP system, and The UK IP Crime Strategy 2011, which discusses the ways in which the UK will continue to enforce IP law domestically.

Conclusion

The Government’s response to the Hargreaves Review was one of resounding acceptance, at least at the level of principle. Despite the long road towards implementation that no doubt lies ahead of these Recommendations, the Government’s positive response increases the likelihood that the principles underpinning the Review, and its key findings, will be considered closely in the upcoming review of Australian copyright.

Sarah Lux is an intellectual property lawyer at Allens Arthur Robinson and an Adjunct Lecturer at the University of New South Wales.

(return to the top of this edition)

Comments Off | Copyright, Intellectual Property, Internet, piracy, Uncategorized | Tagged: , , , , , , , | Permalink
Posted by clarissaterry

Update on the Federal Government’s Convergence Review

August 26, 2011

By Elisabeth K. Cooke

The Department of Broadband, Communications and the Digital Economy is in the process of completing a convergence review of the media and communications laws and regulatory frameworks that apply withinAustralia. The convergence review has stimulated a tremendous debate across the industry.

As older media and communications technologies converge on the Internet, the Convergence Review was formed to examine the changes effected on consumers, business and government and propose new regulations for the digital landscape.

Upon release of the Framing Paper in June 2011, the Convergence review received 72 submissions addressing the eight principles and policy concerns raised by the Convergence Review Framing Paper. The submissions detailed overwhelming support for the review and in depth discussion and feedback on the eight principles and corresponding policy issues addressed in the Framing Paper. Many submissions included other principles and issues that should be considered by the Review Committee.

The eight principles listed in the framing paper broadly addresses: diversity and competition, local and Australian content, community standards, consumer and citizens rights and spectrum allocation. While these principles read like a wish list in a newly converged environment, they raise significant challenges and difficulties. For instance, Principle 5 states that:

‘Communications and media services available to Australians should reflect community standards and the views and expectations of the Australian public’.

However, within such a diverse nation, the fundamental step of defining whose ‘community standard’ is to be the measuring stick in assessing the ‘Australian public’ is absent.

Lawmakers will likely face significant challenges when drafting regulations to fit across all platforms in a converged environment. Complicating the review process even more, these new regulations must be able to anticipate future technological advancements within an industry that has the potential to change dramatically overnight. Social networking raises its head once again, blurring the line between the consumer and creator, further complicating a new regulatory scheme.

However, the difficulties with the convergence review do not stop with technological challenges. The review itself will not address copyright law, classification law, competition issues regarding the National Broadband Network, comparative international approaches orAustralia’s international obligations.

While the Convergence Review is a welcome opportunity to update media and communications law to reflect current technologies and strengthen an industry, the results may not be quite so simple.

The Convergence Review can be followed on the Department of Broadband, Communications and the Digital Economy website, and on twitter.

Elisabeth Cooke recently received a JD from the Melbourne Law School and works for the Centre for Media and Communications Law

(return to the top of this edition)

Comments Off | Copyright, Internet Law, Media law, Trade Mark | Tagged: , , , , , , | Permalink
Posted by clarissaterry

A reply to the sentiment that copyright infringement not resulting in lost sales is benign

June 16, 2011

By Assoc. Prof. David Brennan

A view is held (in both expert and non-expert circles) that unless an infringement of copyright causes proven lost sales, that infringement should not be actionable. Under the logic of this view, to award damages for infringements that do not cause proven lost sales would be vindicating intellectual property rights without triggering incentive effects.

In relation to the damages award in the now famous Larrikin v EMI litigation (comprising a notional usage price of 5% of APRA׀AMCOS royalties paid to the infringers) two of our economists Beth Webster and Paul Jensen have supplied this critique of the law – emphasis in the original:

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.

It is worthwhile to think more about (in law and economics) the creation of property rights – including those rights’ remedial scope – for copyright subject matter. A fine vehicle to do this is infringing file-sharing.

Research undertaken at the University of Ballarat in April 2010 reveals something of the global extent of infringing file-sharing. The University’s Internet Commerce Security Laboratory (ICSL) – which is funded by the State Government of Victoria, IBM, Westpac, the Australian Federal Police and the University – was commissioned by Village Roadshow to measure the volume and nature of BitTorrent file-sharing global traffic. It estimated that 97.9% of files made available encoding non-pornographic content were clearly not authorised by the copyright owner. Under the BitTorrent system the term ‘seeders’ refers to people who have completed their download and then make the file available for others to download. That is to say, a seeder is a person who is making that content available online to the public. The ICSL produced a list of what was estimated to be the top 100 seeded files as at April 2010. The top 10 in that list were:

1. The Incredible Hulk[2008]DvDrip-aXXo97065494792.4447: 1,112,628

2. Indiana Jones And The Kingdom Of The Crystal Skull[2008]-aXXo: 1,029,695

3. College[2008]DvDrip-aXXo339166021846.017: 509,576

4. Sherlock Holmes (2009) DVDSCR XviD-MAX: 479,655

5. Avatar (2009) PROPER TS XviD-MAX889790305026.795: 332,665

6. Meet Dave[2008]DvDrip-aXXo: 311,894

7. Lady GaGa – The Fame Monster 2CDRip 2009 [Cov+2CD][Bubanee]: 308,117

8. The Andromeda Strain[2008]DvDrip-aXXo: 284,221

9. Shutter Island (2010) R5 DVDRip XviD-MAX851029283088.936: 282,628

10. 2012 (2009) R5 DVDRip XviD-MAX883775626338.402: 277,043

With this list it should be pointed out that a title like Avatar reappeared twice again in the top 100 list under different file names – i.e. Avatar 2009 DVDScr H264 AAC-SecretMyth (Kingdom-Release) 94,781 seeders and Avatar TS XviD-IMAGiNE(No Rars) 82,977 seeders.

It is commonly considered that unless an infringing file-sharer, but for infringing, would have paid for the relevant content then there is no harm to the copyright owner arising from the infringement. Consider these three published readers’ comments to Asher Moses’s essay-style article ‘Piracy – are we being conned?’ (Fairfax Media, 22 March 2011)

  • Why would they assume that an unpaid download is a lost sale? Kale – Sydney
  • The figures are obviously predicated on the presumption that each illegal download would convert into a legitimate purchase, which is a palpably fatuous assumption to make. The ghost of common sense - My bedroom
  • So are they counting every movie i have downlaoded then as lost revenue? cos i have a surpirse for you, you never were gong to get the money in the first place! [sic] Danny – Melbourne

The commonality of this sentiment is so pervasive that a survey-based analysis of direct loss to the film industry conducted in Australia by IPSOS Media CT and Oxford Economics for the Australian Federation Against Copyright Theft (AFACT) made explicit allowance for it. Deducted from ranks of loss-causing Australian infringers were those who would never have paid to watch the film. That is someone like Danny above. Danny might have unlawfully downloaded Avatar using BitTorrent, but never would have paid to obtain a copy. The AFACT-commissioned survey estimated that 23% of Australian infringers were in Danny’s boat, and so a 23% deduction was made in arriving at the final figure of $575m direct loss to the film industry for the 12 months Nov 2009-Sept 2010.

Is it correct, as our economists Beth and Paul say, that infringement not causing proven lost sales should yield zero damages? Or is it correct, as the Fairfax readers imply, that an infringing download not substituting for an actual purchase should be removed in the calculation of owner harm? And is it therefore correct to make that 23% deduction?  Or, to put it another way, is infringement not resulting in a proven material loss benign?

In economic analysis of copyright law as it applies to (say) the film industry, copyright is justifiable to the extent that it provides an effective promise to film producers and creators that if investment and risk is undertaken to make a film, some of the value that film generates is capable of market appropriation through the conferral of property rights. Avatar is a good case-in-point.  Would it have been created without the promise of copyright? It is difficult to imagine this type of content being produced through non-market means such as philanthropy or public funding. Market demand stimulates such content’s creation. In copyright, property rights in creative expression are deployed as an instrumental device to permit that market demand to induce productive endeavour. This is the incentive effect of intellectual property. It does not mean that those property rights per se generate economic value – the film could be an unmitigated box-office flop. Rather, the rights simply provide a way for a film copyright owner to capture some of the market demand for its film.

Given that copyright in economic theory is a promise of appropriability what, in private law, does that promise mean by taking the form of a property right?  Property as an owner’s right to exclude forges a special norm which governs relations between the owner of the property and users of the property. When relations are governed by a property norm violation by a user means that the owner receives less than the owner deserves, and that the user obtains more than the user deserves. Restitution scholarship regards this as an ‘expense’ to the owner mirroring a ‘gain’ to the user. The expense and the gain are de jure rather than de facto concepts. This restitutionary idea has been applied in intellectual property cases since as long ago as the 1867 patents decision of Penn v Jack where Page Wood VC assessed damages by asking: ‘What would have been the condition of the Plaintiff if the Defendants had acted properly, instead of acting improperly. That condition, if it can be ascertained, will, I apprehend, be the proper measure.’ Here, ‘acted properly’ meant to have paid a reasonable usage price for the use of the intellectual property.

Subsequent UK, US and Australian authority has assessed the lower-end quantum of monetary relief in copyright and patent cases to be the reasonable price for the use of the IP regardless of whether the particular defendant user would have agreed to pay. Indeed this approach is seen in the Larrikin v EMI case itself, where evidence was before the court that a lead member of Men at Work would have resisted paying anything for use of the Kookaburra copyright. But why should at least usage price damages be paid in the Larrikin v EMI litigation, and indeed by people such as Danny in the unlikely event that they are sued for downloading Avatar? For instrumental reasons society has promised the conferral of copyright property. That promise is one of appropriability which entails a particular norm governing relations between owners and users. Failure to at least award usage price damages (or recognise a legal entitlement to such a usage price) represents breach of that promise. It does so by creating the perverse situation of rewarding users who infringe rather than act lawfully. Moreover, why should anyone pay for the enjoyment of Avatar if the law accepts as benign the consumption of ‘you never were gong to get the money in the first place’ Danny?

Stripped away, the point made by the above economists and the Fairfax readers seems to resolve to a more fundamental matter of property delineation. The infringements of the 23% of users identified in the AFACT-commissioned survey should be removed from the copyright promise. That is, removed from the definition of property rights in copyright. Arguably, it presents us with this stunning new conception: copyright is the legal entitlement to exclude the whole world from the exercise of certain defined rights – except those people who would never have paid for the exercise of those rights.

David Brennan is an Associate Professor at the Melbourne Law School

(return to the top of this edition)

1 Comment | Uncategorized, Copyright, Internet, Men at Work, damages, iiNet, piracy, Intellectual Property | Tagged: , , , , , , | Permalink
Posted by clarissaterry

Digital Opportunity: the Hargreaves Review of UK Intellectual Property and Growth

June 16, 2011

By Sarah Lux

Last month, Professor Ian Hargreaves of Cardiff University released the much-anticipated Hargreaves Review, officially entitled Digital Opportunity, A Review of Intellectual Property and Growth. This independent report on the state of the UK’s intellectual property regime and its impact on economic development was commissioned in November 2010 by Prime Minister David Cameron. It was a response to the perceived risk that the UK intellectual property framework may not be succeeding in promoting innovation and growth in the national economy. Professor Hargreaves was tasked with answering what he calls the “exam question” set by the Prime Minister: “Could it be true that laws designed more than three centuries ago with the express purpose of creating economic incentives for innovation by protecting creators’ rights are today obstructing innovation and economic growth?” The short answer, Hargreaves says, is resoundingly yes.

Copyright to adapt to the digital environment

UK copyright law does not fare especially well in the report card given by Professor Hargreaves. The Review finds that the copyright framework in the UK is failing to keep up with the emergence of digital communications technologies that involve routine copying of text, images and data. In particular, Hargreaves is concerned by the possibility that copyright law hurts the growing online services economy. He warns that legal rules designed to deal with the needs and rights of artists and authors should not be allowed to unduly restrict emerging business sectors completely removed from the creative industries.

Hargreaves’ predominant suggestion for bringing UK copyright law into the 21st century is the creation of the world’s first Digital Copyright Exchange (DCE), a central platform for copyright licensing. Participation in this national clearinghouse should, according to Hargreaves, be “genuinely voluntary”, but motivated by “a range of incentives and disincentives” provided by the government. The Review does not suggest that the UK government should itself create the DCE, due to Hargreaves’ view that this would cause “a nightmare of IT procurement followed by the birth of a white elephant.” Rather, Hargreaves’ recommendation is that government put its weight behind assisting parties interested in creating the exchange, and strongly encouraging rightsholder participation. The Review suggests that a central platform for automatic licensing is inevitable even if the issue is left entirely to the market to resolve, and recommends that the UK government take the opportunity to get involved in a leadership capacity rather than waiting for a strong market player or group of players to “impose their own rules.”

Orphan works

The Review describes the problem of orphan works as “the starkest failure of the copyright framework.” Under Hargreaves’ recommended model for dealing with the issue, works would be automatically licensed for use if no author was found after a ”diligent search” of the DCE (prompting some scepticism as to the “genuinely voluntary” nature of participation). Any fees paid would be held by the relevant collecting society until the owner was identified or a reasonable period of time passed, at which point the money would be used “for social or cultural purposes, or perhaps as a contribution to the running costs of the Digital Copyright Exchange.”

Exceptions to copyright infringement

In his announcement of the Review in 2010, Prime Minister Cameron stated that the founders of Google felt they could never have started their company in Britain because the copyright laws are “not as friendly” to innovation. In particular, Google praised the “breathing space” provided by the fair use provisions in the US and suggested that this facilitated their entrepreneurial activity. The Review notes that most submissions from UK business were “implacably hostile” to the idea of adopting a fair use exception in the UK on the basis that this would cause disruptive legal uncertainty, cause increases in costly litigation and create confusion for buyers and sellers of copyright goods. The Review rejects the idea of a wholesale adoption of US-style fair use doctrines, arguing this would not be legally viable. However, Hargreaves takes the view that the UK can enjoy many of the benefits of the American exception by adopting other exceptions already permitted under EU law (such as those for format-shifting, parody, non-commercial research and library archiving).  In addition, the Review recommends that the UK government should lobby at EU level for a new exception for “non-consumptive” use, being use enabled by technology that does not directly trade on the creative and expressive purpose of the work in question (for example certain uses in data mining and search engine indexing).

Importance of evidence

A recurring motif throughout the report is the need for IP policy to be grounded in economic evidence of the impact of regulatory mechanisms on competition and innovation. Hargreaves notes that to date, empirical data on the impact of IP (particularly with regard to the relationship between copyright and creative innovation) has come predominantly from private parties and lobbyists, and has not been subjected to independent analysis. The Review emphasises at several points the importance of grounding law and policy in fact rather than spin.  Hargreaves does, however, note the practical difficulties associated with collecting such empirical data. This is especially the case in the context of unregistered copyright and designs and in areas such as biosciences and computing, which involve new markets and technologies with characteristics that can be hard to measure.

Clarification of copyright law

Another theme in the Review is the need to clarify copyright law for those affected by it, particularly small companies.  Recommended measures include provision of greater access to low cost legal and commercial IP advice and the empowerment of the UK Intellectual Property Office to publish formal opinions clarifying copyright law.

Enforcement

The Review notes the importance of enforcement but warns against reliance on ever-tougher enforcement mechanisms to solve the problem of copyright infringement. Rather, Hargreaves recommends a multi-faceted approach to infringement, which involves the modernisation of copyright law, better education about copyright issues and the creation of open and competitive markets in licensed digital content.

Patents, designs and trade marks

Although the Review focuses heavily on copyright law, Hargreaves strongly recommends, as a matter of ”highest immediate priority,” that the UK should increase its focus on its international IP interests by pressing for a unified EU patent court and EU patent system. The Review identifies patent office backlogs and the emergence of patent thickets as potential barriers to innovation, particularly for small enterprises. To clear and prevent backlogs, the review recommends increased international collaboration between patent offices. To deal with the problem of thickets, Hargreaves recommends the UK work with its international partners to create disincentives for the maintenance of lower value patents.

Designs were not included in the Terms of Reference for the Review, a fact about which Hargreaves expresses surprise. The Review states that designs are an important branch of the creative economy that have been neglected in the UK, recommending an evidence-based assessment of the relationship between designs and innovation. No specific recommendations are made in respect of trade marks, which are largely absent from the Review.

Relevance to Australia

The Review is, in essence, an exposition of principle rather than a detailed roadmap for reform. Professor Hargreaves acknowledges from the outset that he has “focused upon the main issues, at the risk of ignoring important points of detail.” Major recommendations, such as the creation of the DCE, will require substantial legal, governmental and commercial analysis and consideration before they have a real shot at faring better than those Gowers recommendations that have remained in the “too hard” basket since 2006.

However, the Review provides a useful high-level analysis of IP law, policy and industry attitudes in the UK, particularly in the copyright context.  It emphasises decisions that need to be made by governments as to how intellectual property frameworks might be utilised to promote economic development in an increasingly networked world. The increasing necessity for international cooperation, while not a new concept, is nicely underlined in the Review and is as relevant in Australia as it is in the UK. And Hargreaves’ emphasis on the importance of economic evidence comes at a time when Australian consumers, like their overseas counterparts, are feeling restless under the restrictions of copyright law and are demanding better evidence of the economic impacts of music and film piracy, among other types of infringement.

This report on the UK intellectual property landscape does not directly touch on Australian law or policy. However, at the level of principle, there can be no doubt that Hargreaves’ findings will be considered closely by those charged with the review of Australian copyright.

Sarah Lux is a lawyer at Allens Arthur Robinson and a sessional lecturer at the University of New South Wales.

(return to the top of this edition)

Comments Off | Copyright, economics, Intellectual Property, Uncategorized | Tagged: , , , , , , , , | Permalink
Posted by clarissaterry

Fordham IP Conference 2011, New York City

June 2, 2011

By Vicki Huang

The Fordham IP conference – “Learn, Debate, Have Fun” – was held on 28 – 29th April 2011 in New York City.  The conference attracted many academics, practitioners, government officials, and members of the judiciary from Europe, the USA and of course Australasia.  This combination triggered a lot of informed debate and it was refreshing to hear input from all sides of contentious issues including views from the bench.

Many of the sessions have been covered by our friends at IPKAT here, here, here, here, here and here.  In addition to those sessions, the Fortnightly Review was lucky to attend several specific sessions on copyright and trade mark law and highlights are outlined below.

In a session on “US Copyright Developments”, Thomas Kjellberg updated the audience on copyright cases against “suburban” downloaders where damages peaked at over $1 million dollars. These cases such as Capital Records v Thomas Rassett have sparked a debate as to whether such awards violate due process.  Kjellberg also discussed the case of Penguin v American Buddha. In that case, American Buddha (a religious not-for-profit), posted ebooks on its website. One of the issues for the court was locating the site of the injury. Was it in New York (home of the plaintiff), or Arizona (the site of the uploader) or Texas (the site of the server)?  The court held that because the location of the infringer may be remote, it would not be fair to use the infringer’s location as the locus of harm. Therefore, even though there was no downloading evidence in New York, that was not to say there was “no injury” in New York.  Rather the test should assess the intent of the infringer.

In a session on “EU and US Initial Interest Confusion in Trade Mark Law”, The Hon. Mr Justice Arnold discussed the development of the doctrine and its actionability under Article 9(1)(b).  He went on to discuss several cases including the recent case of Och-Ziff Management Europe Ltd.  Daniel Glazer discussed US developments with a focus on the expansion of the doctrine to the internet, where trademarks are used in domain names or in meta tags or keywords.  The panel discussed the fine line between confusion and diversion and the fact that US courts are really trying to protect senior mark good will and against unfair competition.  The panel debated what was permissible and indeed healthy free riding.  They also debated the merits of using the initial interest confusion doctrine to police domain names.  The panel agreed that in the current era, consumers are used to deceitful metatags and more wary of commercialised hyperlinks so confusion is a lot less likely. Professor Anne Bartow argued that one can no longer assume that consumers are unsophisticated.  She went on to query whether the law should remedy a situation where there is confusion that is cured before the point of sale.

In a session discussing dilution Law in the European Union & the United States, Trevor Cook (Bird and Bird) began with a discussion of the EU’s approach.  He noted the over-intellectualisation of simple legal tests which was a common complaint in several other panels.  Professor Marshall Leaffer discussed US developments in dilution and the case of Visa v JSL Corp.  In that case, Professor Leafer argued that the question of likelihood of confusion – which is a question of fact – was approached in a fast and loose manner. He also said that the case highlighted that the evidence required to prove a dilution case was very unclear. A European speaker helpfully reminded the audience that reconciling EU and US policy and legal approaches was not simple as there is no unfair competition law in the UK and some other EU states.

The well-attended sunrise seminar on “Rule of Law on the Internet: Feasible or Fantasy”, started with views from Richard Cotton of NBC Universal Media.  He stated that the question was not “whether” we should have a rule of law on the internet, but rather “when” and “how”.  He discussed a fundamental problem being one of attitude, with many downloaders thinking that “if it’s so easy to pirate, it can’t be wrong”.  Piracy is moving from being treated as a nuisance, to a problem that the FBI and homeland security are now enforcing against.

In terms of legitimizing tools, he discussed the development of ancillary markets and goods such as Netflix, and Xbox live which are robust and legitimate markets that rely on internet streaming technologies.  In his view, encouragement of these delivery models will give illegal downloaders a legitimate alternative.  However, he emphasised that the challenge will be to create a culture that will accept copyright piracy as a wrong and likened this to being a parent training a recalcitrant child.

Justice Peter Charleton commented that the EU has compulsory anonymity on internet. And that a cultural problem was that anti-globalism is a big movement so that theft from “anonymous capitalist” was thought to be ok. The panel agreed that IP theft was like drug addiction where demand generates supply.

In the session, “Enforcement Issues Including New Government Initiatives”, Stevan Mitchell (the ESA) and Peter Fowler (USPTO Enforcement) discussed the extent of the enforcement problem.  Twenty five per cent of all internet traffic globally involves unauthorized distribution of copyright files.  One assessment had 43 illegal downloading websites register 146 million hits per day.  Bottom line is that there is a huge appetite for TV and film downloading.  Peter Fowler emphasised the need for cultural change akin to the shift that led to seatbelt wearing.  He also discussed the US “Operation in our Sites” which had been seizing domain names of illegal download sites.  He emphasized that the academic debate over whether creative adaptations should be free was moot as copyright infringement is illegal and a crime.  For enforcement officers there was no debate.  He also highlighted a shift in counterfeiting.  Counterfeiters are now trying to make higher profits by making goods as close as possible to the real luxury item and selling goods on deceptive websites at matching prices (as opposed to a severely discounted price that would indicate a “fake”) in order the maximise profits.

Other paths of enforcement include cooperative agreements between registries to seize domain names.  Importantly it is also to target 3rd party providers eg agents for service and paypal.  If money supply can be cut off, then enforcement agencies will try to do so.

In the session “Trademark Law: Smell and Look-a-likes: a Comparative Analysis” Anna Carboni presented an update on smell and look alike cases including the controversial L’Oreal v Bellure case.  Carboni highlighted the fact that the British Brands study showed the customers can be easily confused by look alike packaging. The panel including Robert Burrell pointed out that surveys used in the British Brands study and other surveys used to support a senior mark owner are flawed due to the prevalence of leading questions.  On another point, Jane Ginsburg re-emphasised that “lured” does not mean confused.  Consumers learn for example, that supermarket shelves are stocked with similar looking house brands.  The Hon. Justice Robin Jacobs agreed saying that judges shop and are also aware of brand generics.  The question should be whether reasonable customers are likely to be confused and whether the company intended to confuse consumers.  Justice Jacobs observed that brand owners are now scared to sue “home brands” which are put out by supermarkets because supermarkets may retaliate and not stock the senior brand.

In the session “Adwords: a Comparative Analysis” Professor Marshall Leaffer discussed the proposition that after the case of Rescue.com, selling trademarks as keywords is “use in commerce” and subject to the Lanham Act.  Professor Barton Beebe discussed the increase in consumer sophistication and that the legal question had moved on from “use” to “likelihood of confusion” and in the future will be preoccupied with predicting levels of consumer sophistication.

Prof. Dr. Peter Ruess presented a convincing case for protection of well-known brands.  Interestingly calling it naïve to use the phrase “comparative advertising” in cases that were clearly “bait and switch”.  The panel seemed divided on the line between “genuine” comparative advertising and the misappropriation of goodwill.  Ruess argued that using the goodwill of a senior mark to lure a customer is not comparative advertising and is not in the public interest.  Professor Beebe argued that encouraging free competition is in the public interest.  The panel seemed divided between recognising the property rights of high investing brand owners and free competition.

Overall this was a fascinating and informative conference.  The program and list of speakers can be found here.  Proceedings of the conference will also be published in an upcoming volume.

Vicki Huang is a Research Associate with IPRIA and a Lecturer at Deakin Law School

(return to the top of this edition)

Comments Off | Copyright, counterfeit, Intellectual Property, Internet Law, piracy, Trade Mark, Uncategorized | Tagged: , , , , , | Permalink
Posted by clarissaterry

The Trans-Pacific Partnership Agreement (TPPA) IP Chapter

May 6, 2011

By Melissa de Zwart

Nine countries are currently negotiating the Trans Pacific Partnership Agreement: US, Australia, New Zealand, Singapore, Chile, Malaysia, Brunei Darussalam, Vietnam and Peru. Under the terms of this agreement, signatories will be required to amend their domestic intellectual property laws to comply with the terms of the TPPA. The US draft of the intellectual property chapter of the trade agreement was leaked in February 2011 generating significant controversy regarding its draconian terms. The leaked chapter is available here at Michael Geist’s blog.

Some key aspects of the draft are as follows:

Geographical Indications

A party must provide that geographical indications (GIs) are eligible for protection as trademarks. For this purpose geographical indications are defined as ‘indications that identify a good as originating in the territory of a Party, or a region or locality in that territory, where a given quality, reputation, or other characteristic of the good is essentially attributable to its geographical origin. Any sign or combination of signs (such as words, including geographical and personal names, as well as letters, numerals, figurative elements, and colors, including single colors), in any form whatsoever’.

The TPPA provides for a registration of GIs if recognized by a member party. Of course, in Australia, GI protection currently extends only to wine and spirits, under the Wine Australia Corporation Act 1980 (Cth). This scheme was introduced to give effect to Australia’s obligations under TRIPS and, more specifically, the Australia-European Community Agreement on Trade in Wine 2008 (and it is predecessor signed in 1994). It is precisely this sort of agreement (reached in order to secure access to the European market for Australian winemakers) which would be prohibited by the TPPA.

Article 2 (which deals with trademarks and GIs) provides that no party shall (whether pursuant to an agreement with another government or otherwise):

  • Prohibit third parties from using translated versions of the geographical indications for goods other than wines or spirits;
  • Prohibit third parties from using a term that is ‘evoked by’ the geographical indication;
  • Prohibit third party uses of any component of a multi-component geographical indication protected by virtue of the agreement, even if such components are generic or use would not give rise to confusion (Clause 17).

For the purposes of the Agreement, a term is generic if it is customary in common language as the common name for the goods or services associated with the term or GI (Clause 18).

Clause 19 sets out a range of factors which may be taken into account in determining whether the terms is generic, such as whether:

  • persons other than the person claiming the rights use that term as the name for the product; and
  • the product is imported into the relevant country, in significant quantities, from outside the proposed protected region using the same name.

This is contrary to the current Australian regime, and particularly the Australia-EC Wine Agreement, which prohibits the use of certain traditional expressions and required the phasing out of local uses of specific GIs, despite their long-term use in Australia.

Clause 22 provides for the non-misleading use and/or registration of signs or indications that reference a geographical area that is not the true place of origin of the product of the product or services other than for wines or spirits, provided that:

a)     the sign or indication is used in a manner that does not mislead the public as to the geographical origin of the goods or services;

b)     the use does not constitute an act of unfair competition;

c)      use would not cause a likelihood of confusion with an earlier trade mark or GI; and

d)     the request for registration does not relate to a generic term.
This reflects the two tier system for GI protection provided for in Articles 22 and 23 of TRIPS, which recognize a higher level of protection for wine and spirits, extending to non-misleading and translated uses of GIs.

Copyright

Article 4 extends the rights granted to authors, performers and producers of phonograms to all forms of reproduction of their works/ performances including temporary storage in electronic form.  The temporary reproduction right proved particularly controversial during the negotiations that resulted in the WIPO Copyright Treaty (WCT) and ultimately could not be resolved at that meeting. Rather, it was dealt with by way of the Agreed Statement to Article 8. (‘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)’). The inclusion of the temporary reproduction right here in the TPPA without further fanfare or disclosure is particularly tricksy on the part of the US and is likely to cause significant debate!

Other notable expansions of copyright include:

  • Prohibition on parallel importation, even of goods manufactured with authorization of the copyright owner outside of the relevant territory.
  • Copyright terms are extended to life plus 70 years for individuals (already the case in Australia) and between 95 and 120 years for corporate works.

The relevant exceptions and limitations are left blank with only a ‘placeholder’ marking their potential inclusion (an ominous lack of attention to detail, given the foreshadowed expansion of rights) although it is noted with respect to the above, one of the possible exceptions would relate to internet retransmission.

Technological protection measures

Technological protection measures are yet again the focus of strengthening efforts. Parties are required to provide that any act of circumvention or dealing in circumvention devices or services shall be subject to civil and criminal penalties. Criminal penalties apply to anyone other than a non-profit library, archive, educational institution or public noncommercial broadcasting entity, who engages in circumvention ‘for purposes of commercial advantage or private financial gain’. Circumvention gives rise to liability independent from any infringement of copyright.

Exceptions and limitations to the anti-circumvention provisions must be confined to the purposes defined in paragraphs (d) and (e).

The narrowness of these exceptions will require amendment of Australia’s TPM provisions which currently require that a TPM be an ‘access control technological protection measure’ which effectively excludes protection of TPMs which protect region coding and TPMs embodied in machines or devices, not directed primarily to protecting copyright.

ISP liability

Article 16 provides for ‘Special Measures Relating to Enforcement in the Digital Environment’. Notably, Clause 3(a) requires parties to provide ‘legal incentives for service providers to cooperate with copyright owners in deterring the unauthorized storage and transmission of copyrighted materials.’ Given the current global climate regarding ISP liability and the decision of the Full Federal Court in the iiNet decision, this would impose significant pressure on the Australian government to reform the law. This is subject to compliance with the US DMCA safe-harbor provisions.

Conclusions

As expressed in this leaked US draft, the provisions of the TPPA, particularly those relating to copyright, appear to be more restrictive than ACTA. Some commentators have hypothesized that the ambit claims made in the leaked document are so extreme that the US is playing a negotiating tactic that allows them to significantly back down from this position and still come out ahead in terms of outcomes. Whilst this remains to be seen, it has reminded us that the parameters of intellectual property rights remain contested and vulnerable to being traded away in the international trade environment.

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

(return to the top of this edition)

1 Comment | ACTA, Copyright, economics, iiNet, Intellectual Property, Internet Law | Tagged: , , , , , , , , , , , | Permalink
Posted by clarissaterry

The Kookaburra laughs again….

April 21, 2011

By Dr Melissa de Zwart

In EMI Songs Australia Pty Limited v Larrikin Music Publishing Pty Limited [2011] FCAFC 47 (31 March 2011) the Full Federal Court, comprising Emmett, Jagot and Nicholas JJ, upheld the first instance decision of Jacobson J in Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Limited [2010] FCA 29 (4 February 2010). Each judge gave a separate judgment, Emmett J taking the lead on the approach to the test of infringement, Jagot J focusing upon authorisation liability and the scope of the orders to be made by the Court, and Nicholas J making some observations on the approach of an appellate court to the findings of the primary judge and the nature of ‘substantial part’.

EMI had appealed the decision on the grounds that the primary judge erred in determining that the recording in question involved a reproduction of a substantial part of the ‘Kookaburra’ song, in particular the manner in which the primary judge came to a determination of aural similarity and substantial part. Larrikin also cross-appealed on the basis that the trial judge erred in the finding that two Qantas advertisements did not reproduce a substantial part of Kookaburra, and in the question of EMI’s liability for authorisation of acts of infringement with respect to the reproduction of ‘Down Under’ in Qantas advertisements and other works.

In the unlikely event that the reader requires a refresher on the facts (this being one of the most widely reported copyright cases of the past few years, and one on which everyone has an opinion), the question before the Court was whether the recordings of the ‘iconic Australian musical work’, the Men At Work song ‘Down Under’ involved the reproduction of a substantial part of ‘another iconic Australian musical work’, the campfire classic loved by the Scouting/Guiding movement worldwide, ‘Kookaburra’, originally composed by music teacher, Marion Sinclair. Sinclair composed the little song, to be sung as a round, in response to a competition run by the Girl Guides in 1934. Ownership of the copyright had been acquired by Larrikin Music Publishing with effect from 21 March 1990. (See Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Limited [2009] FCA 799 (30 July 2009).

At first instance, Jacobson J held that the 1979 and the 1981 recordings of ‘Down Under’ (‘the recordings’) infringed copyright in ‘Kookaburra’. However, Larrikin also claimed that EMI had authorised acts of infringement in relation to the reproduction of ‘Down Under’ in other works, including two Qantas advertisements in which ‘Down Under’ was featured. The trial judge held that the Qantas advertisements did not involve the infringement of copyright in ‘Kookaburra’. An order relating to damages was made on 6 July 2010 and discussed in Fortnightly Review.

The Full Court dismissed EMI’s appeal and allowed in part Larrikin’s cross-appeal. In particular, it remanded back to the trial judge the task of determining the matter of authorisation, other than in respect of the Qantas advertisements.

The judgment of Emmett J contains a lengthy discussion of the development of copyright law, not an unusual thing in itself in recent Federal Court decisions, but unusual in this instance due to the fact it begins with a discussion of Roman Law. He observes: ‘The Romans disliked monopolies just as much as common lawyers’ (para. 30) and recognised ‘no exception for copyright’. Rather, questions of ownership with respect to creative outputs were dealt with according to concepts such as ‘accessio’ and ‘specificatio’. However, the invention of printing and other technologies facilitating multiple reproduction necessitated the intervention of the state, and hence the evolution of the modern copyright statutes. After this general discussion, Emmett J considered the relevant test to be applied to the infringement of a musical work, concluding that it involves an objective stage, where ‘the inquiry is whether the alleged infringing work is similar to the copyright work’, and the subjective stage, ie the question whether the copyright work was copied.

Emmett J was prepared to conclude that the primary judge had erred in principle in some respects and that the Full Court should consider de novo the question of infringement. He based this assessment on five key arguments made on behalf of EMI and Hay: first, the primary judge had placed too much reliance on Hay’s performance of ‘Kookaburra’ in conjunction with ‘Down Under’ at certain live performances; second, that he overlooked the importance of ‘Kookaburra’ being a round; third, that the primary judge misapplied the concept of originality; fourth, that ‘the finding of objective similarity was based on a consideration of certain elements of Kookaburra, namely, melody, key, tempo, harmony and structure’, that Jacobson J considered in isolation from each other, and that his Honour ‘appeared to give melody greater weight than the other elements without explaining the basis for that approach’ – this approach being ‘overly mechanistic’; and finally, that Jacobson J had erred with respect to assessing the relative parts of the two works in considering the concept of ‘substantial part.’ Emmet J accepted that the primary judge had only been ‘able to detect the resemblance between the relevant bars of Kookaburra and the Impugned Recordings with the assistance of the experts and of Mr Hay, and that there was force in the submission that the primary judge had become sensitised to the similarities’. In particular, this related to Hay’s admission that for a period of about 2- 3 years from 2002, when he performed Down Under at live concerts, he would sing the words of Kookaburra in place of the flute riff, thus leading Jacobson J to conclude that the ‘short answer’ to the qualitative test requirement was to be found in Hay’s own performance of both works together.

Whilst Emmett J agreed that the ‘short answer’ was not to be found in this way, and on this point the trial judge had erred, his Honour observed (at para. 86):

‘A similarity between part of Kookaburra and the flute phrase is clearly perceptible. True it is that that similarity went largely unnoticed for in excess of 20 years, notwithstanding that each work is said to be an iconic Australian work. Nevertheless, the question is one of objective similarity. The aural resemblance need not be resounding or obvious. The relevant test is not the effect upon a casual listener of the whole of the versions of Down Under in the Impugned Recordings. Sensitised though the primary judge may have been to the similarity, it is not erroneous to direct oneself to the relevant parts of the works, to listen to the works a number of times, and to accept the assistance of the views of experts, in determining the question of objective similarity. In those respects, I do not consider that the primary judge erred.’

With respect to the argument regarding lack of aural similarity, Emmett J noted that there was no similarity between the works in terms of their genres, styles, objects or purposes, but the quotation from Kookaburra was intended to be perceived by listeners as ‘a quotation, or a reproduction, of part of Kookaburra, and the musical genres or styles associated with Kookaburra.’ However, he continued, neither ‘the existence of the quotation or reproduction, nor its capacity to be discerned, is affected by casting it as a tribute or reference to an Australian cliché or iconic melody. The flute phrases in the Impugned Recordings are a clear departure from the genre of a rock anthem, and therefore distinguish the part taken from Kookaburra from the other parts and musical elements of Down Under.’ Ultimately, therefore, what the listener hears is ‘a reproduction of part of Kookaburra’. (para 92).

Emmett J rejected any need to establish animus furandi in order to make out infringement, concluding rather that ‘the quotation or reproduction of the melody of Kookaburra appears by way of tribute to the iconicity of Kookaburra, and as one of a number of references made in Down Under to Australian icons.’ (para. 99) However, the fact that Kookaburra is used in this way is no defence to the infringement action.

Perhaps the most surprising part of Emmett J’s judgment is his lament regarding the state of modern copyright law. He concludes his discussion of the question of infringement with the following:

If, as I have concluded, the relevant versions of Down Under involve an infringement of copyright, many years after the death of Ms Sinclair, and enforceable at the behest of an assignee, then some of the underlying concepts of modern copyright may require rethinking. While there are good policy reasons for encouraging the intellectual and artistic effort that produces literary, artistic and musical works, by rewarding the author or composer with some form of monopoly in relation to his or her work (see Ice TV at [24]), it may be that the extent of that monopoly, both in terms of time and extent of restriction, ought not necessarily be the same for every work. For example, it is arguably anomalous that the extent of the monopoly granted in respect of inventions under the Patents Act 1990 (Cth), being a limited period following disclosure, is significantly less than the monopoly granted in respect of artistic, literary or musical works, being a fixed period following the death of the author or composer, irrespective of the age of the author or composer at the time of publication.

Of course, the significance of the anomalous operation of the Copyright Act can be addressed in terms of the remedies and relief granted in respect of infringement. Nevertheless, one may wonder whether the framers of the Statute of Anne and its descendants would have regarded the taking of the melody of Kookaburra in the Impugned Recordings as infringement, rather than as a fair use that did not in any way detract from the benefit given to Ms Sinclair for her intellectual effort in producing Kookaburra. (paras. 100-101.)

It remains to be seen how this general regret may be taken up in later Federal Court decisions.

Jagot J also considered the argument that the trial judge’s approach to the aural comparison was ‘overly mechanistic’ and ‘fragmented’ but rejected this on the basis that although Jacobson J made use of expert evidence and made reference himself to the fact that he had become sensitised to the similarities during the course of the hearing, the trial judge was entitled to have regard to expert evidence on the question of objective similarity and also to have regard to Hay’s own evidence regarding the playing of the two songs together:

The fact that Mr Hay’s performances are not the infringement sued upon, in this context, is immaterial. As the trial judge put it, the capacity to sing the Kookaburra melody directly over the relevant parts of the Down Under flute riff “graphically” illustrates that the fourth bar of Example D and the second and fourth bars of Example E are unmistakably the melody of Kookaburra. The trial judge was entitled to use that evidence as he did. (para. 218)

Jagot J delivered the leading judgment with respect to the question of authorisation. The trial judge’s findings regarding the Qantas advertisements stands, but the authorisation case, other than in respect of the Qantas ads is to be remitted to the trial judge. The Qantas ads were found by the primary judge not to infringe copyright in Kookaburra and no error in that conclusion had been established. Larrikin’s argument was that by granting licences to reproduce Down Under to third parties EMI and Hay authorised the infringement of copyright in Kookaburra by those uses. EMI and Hay argued that any individual reproduction of Down Under may not involve an infringement of Kookaburra, as Down Under appears in many forms which do not involve Kookaburra, as it did not form part of the original composition, but was added later by Mr Greg Ham.

As the other matters raised by Larrikin in the cross appeal, ie liability of EMI under ss 36 and 115 of the Copyright Act with respect to damages, account of profits, and the ordering of injunctions against EMI, depend upon the determination of the authorisation case, these issues are left to be dealt with by the trial judge.

Nicholas J agreed with the reasoning used and orders made by Jagot J.

The outcome of the appeal reflects the difficulties of applying the test of infringement to musical works, as well as the general frustration that many have had with the outcome ie the finding that a much loved Australian song infringes a tune that many people considered to be a ‘folk song’, and therefore long since out of copyright term. It is likely that musicians will still continue to struggle with the concepts of originality and substantial part. Ultimately, the case reflects nothing new or novel in the approach to the interpretation and application of copyright law, although it will inevitably continue to generate bad press for the doctrine of musical copyright for some time to come.

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

(return to the top of this edition)

1 Comment | Copyright, damages, Intellectual Property, Men at Work | Tagged: , , , , , , | Permalink
Posted by clarissaterry

A few thoughts on iiNet FFC decision

March 17, 2011

On 24 February the iiNet decision generated significant buzz in the media, academy and anyone with an interest in cyber-regulation or copyright. Kimberlee Weatherall first posted the article below on her blog LawFont, and we are reposting it here to provide our audience with her expert exposition. As mentioned in Kimberlee’s article, Fortnightly Review author David Brennan also wrote a piece for The Age, and hopefully the conversation between these analyses will generate some excellent discussion and commentary within our community of readers and authors.

A few thoughts on iiNet FFC decision

By Kimberlee Weatherall

By now, all the copyright nerds in the world know the headlines: the Full Federal Court has handed down its decision in the iiNet case; that the appeal was dismissed in a 2:1 decision (Emmett and Nicholas JJ; Jagot J dissenting). Most people also will know that the reasoning is very, very different from the Trial Judge’s decision, and certainly contemplates, in a way that the Trial Judge didn’t, that in different factual circumstances an ISP could be liable for authorising infringement by its BitTorrenting users. The various major law firms have issued their summaries, I refer you there for an overview. Assoc Prof David Brennan from Melbourne Uni has expressed his succinct, and compelling view.

The decision is really long: it half looks like all three judges wrote as if theirs was to be the main decision (with others concurring or dissenting more briefly). A close reading reveals why. Although it is fair to say that the majority judges reach broadly the same conclusion on broadly similar grounds (namely, that the AFACT notices did not contain enough information to require action on the part of iiNet), they conceptualise the facts quite differently, and demonstrate important differences of approach. My early thoughts are below the fold. This one’s for people generally familiar with the case and Australian copyright law though – beginners need to start, at least, with the law firm case notes.

Conceptualising the facts

Emmett J’s judgment reads like a borderline one to me: it’s almost like he came within a hair trigger of finding authorisation. He emphasises iiNet’s ‘contumelious disregard’ for the rights of the copyright owners, suggests that iiNet ‘tacitly approved’ of the infringements, and highlights the facts that appear to have come quite close to constituting authorisation. Ultimately, Emmett J is not satisfied that sufficient information was provided by AFACT to trigger authorisation. Emmett J also seems concerned that iiNet ought not be required to bear the whole cost of any system.

Nicholas J seems to view iiNet’s behaviour as far less egregious: it is Nicholas J, for example, who emphasises that iiNet’s apparent ‘indifference’ could not simply be characterised as wrongful, based as it apparently was on a belief that iiNet was not legally obliged to act. One has the sense, however, that insofar as Nicholas J was concerned that iiNet not be held liable for taking a position on the law that was not entirely judicially unsupported, his Honour would be less sympathetic in a future case, where an ISP would no longer be able to take that attitude in light of the decisions in iiNet. It is Nicholas J who seems most concerned with the possibility that ISPs will be incentivized to suspend or terminate users all too readily to avoid future litigation.

Jagot J, the dissenting judge, roundly condemns iiNet’s attitude. Her Honour emphasises iiNet’s refusals to cooperate, in effect holding iiNet responsible for any results of its failure to cooperate – including the fact that it had insufficient information to be, perhaps, fully confident that infringement was occurring. ‘Be it on iiNet’s head’, as Jagot J would have it.

Authorisation: Reaffirming the existing case law

The three judges affirm a more traditional conception of authorisation in copyright than that we saw in the Trial Judgment. They confirm that Moorhouse’s phrase, stating that to authorise is to ‘sanction, countenance or approve’ infringement is to be read disjunctively – one is sufficient. The Judges also reject the apparent attempt by the Trial Judge to revive the Justice Jacob reasoning in Moorhouse from the first instance decision: rejecting the idea that there needed to be some ‘sense of official approval or favour’ in order to show authorisation.

On the meaning of authorisation, Emmett J’s judgment is the most wide-ranging, in that it adopts, perhaps affirms, much of the language from cases like Cooper in a series of phrases drawn from earlier cases. I really wish judges would not repeat a series of phrases about the law in this decontextualised way. It seems practically designed to give comfort to the prospective plaintiff in an authorisation case: you can always find a phrase that suits.

On the meaning of authorisation, I recommend the judgment of Justice Nicholas, which is I think, the easier judgment to read and understand, having ‘synthesised’ the precedent more.

‘Means of Infringement’
The three judges – implicitly or explicitly – reject Justice Cowdroy’s threshold test. Under Justice Cowdroy’s approach at trial, iiNet did not provide the ‘means of infringement, in the relevant sense used in Moorhouse, in that it did not extend an invitation to the iiNet users to use its facilities to do acts comprised in the copyright of the Copyright Owners’ and consequently did not authorise infringement. In other words, this question of whether the party provided the ‘means of infringement’ operates as a threshold test, without which authorisation will not be found.

Justice Emmett almost seems determined to politely pass over this approach by the Trial Judge like a polite host ignoring the uncouth table manners of an ill-assorted guest. Emmett J notes the reasoning of the Trial Judge, using the mild epithet of ‘unconventional’ to describe the structure of the reasons. But once Emmett J has described the primary judge’s approach, this phrase never appears again in the judgment. Both Justice Nicholas and Justice Jagot more explicitly reject the Trial Judge’s approach: Jagot J more fulsomely.

The crux of the case: knowledge
Both Emmett J and Nicholas J were dissatisfied with the information provided in AFACT’s notices: this finding lies at the heart of their rejection of AFACT’s case on authorisation. More or less, the notices provided by AFACT gave rise to ‘reason to suspect’ infringements on the part of iiNet’s users, but not knowledge of specific acts of infringement sufficient to warrant iiNet acting to suspend or terminate internet accounts.

Emmett J thought that AFACT’s notices would have to have included:

  1. Information in writing of particulars of specific primary acts of infringement of copyright of the Copyright Owners, by use of particular IP Addresses of iiNet customers; and
  2. Unequivocal and cogent evidence of the alleged primary acts of infringement by use of the iiNet service in question; at least information as to the way in which the material supporting the allegations was derived, that was adequate to enable iiNet to verify the accuracy of the allegations.

Justice Jagot takes a very different view here: stating that the AFACT notices ‘contained prima facie credible evidence of widespread and repeated infringements of the appellant’s copyright by iiNet customers and users’, rising above the level of ‘mere unsubstantiated or unreliable allegations’. What is more, if iiNet did not have sufficient information to judge the accuracy of the notices, that was iiNet’s own fault: having refused to engage with AFACT, it could not then plead its own ignorance.

Did iiNet have the ‘power to prevent’ the infringements?
All three judges consider that iiNet had the technical and contractual power to terminate or suspend its services to subscribers on the basis of copyright infringement; this was relevant, albeit not determinative (cf the Trial Judge who seemed to say that a power to suspend or terminate could not be reasonable and so wasn’t really relevant). On this question, again I think Justice Nicholas’ judgment is the more interesting one: his Honour talks about the difference between ‘direct’ powers to prevent infringement (ie, to stop that particular act) and indirect powers (like taking away internet access so they can’t do anything, let alone infringe, online).

The judges also talk about another statutory factor, the ‘relationship with the infringer’, but it’s not that interesting. I never really know what to make of this factor anyway. There was a contractual relationship – so? Really, most of the action is in the next of the statutory factors in authorisation: whether iiNet took reasonable steps to prevent the infringement.

Reasonable steps

All three judges accept that sending warnings to users ought to be considered a reasonable step. None of the judges was wiling to accept that people when notified of copyright infringement would simply ignore the notice: not all would be aware that such activities infringe copyright; not all would be aware they can be detected.

Worryingly for many, I suspect, is the fact that all three judges also contemplate that suspension or termination of internet service is also a reasonable step. In this respect, a really important consideration that the various judges point to is the Safe Harbours: specifically, the provision that requires parties wanting to take advantage of the Safe Harbours to have, and reasonably implement, a policy for the termination of the accounts of repeat infringers in appropriate circumstances. This is evidence, to the judges, that termination is contemplated as a reasonable step.

iiNet’s protestations concerning the expense, difficulty, and complication of having a system for sending warnings and following up with suspension or termination fell on deaf ears of two judges. Justice Emmett, of the three judges, seems the most ready to count this as an issue, noting the ‘difficult judgments’ involved, the number of notices received, the many, many issues of design choice in such a system (see paragraphs 206-207). Perhaps for this reason, Justice Emmett is the most explicit in practically setting out his own version of a graduated response system. The key paragraph here is paragraph 210. It’s kind of too long to quote here, but go have a look. In summary, it says that ‘before it would be reasonable for iiNet to take steps to suspend or terminate a customer’s account’, AFACT would need to send notices providing ‘unequivocal and cogent evidence’, and undertake to reimburse iiNet for its reasonable costs. But most extraordinary is the way that the Judges say that AFACT’s notices should set out a series of specific steps that it requests. According to the Judge, AFACT should request the following steps:

  1. iiNet should inform its customer of the particulars of the allegations of primary infringement involving the use of that customer’s iiNet account
  2. iiNet should invite the customer to indicate whether the service has been used for acts of infringement as alleged;
  3. iiNet should request the customer either to refute the allegations or to give appropriate assurances that there will be no repetition of the acts of infringement;
  4. iiNet should warn the customer that, if no satisfactory response is received within a reasonable time, perhaps 7 days, the iiNet service will be suspended until such time as a reasonable response is received;
  5. iiNet should warn the customer that if there are continued acts of infringement by use of the service, the service will be terminated;
  6. iiNet should terminate the service in the event of further infringements.

OK, strictly, Justice Emmett is not saying that iiNet would have to follow this procedure: it’s what AFACT should request. But the suggestion is strong that this is what Emmett J thinks a reasonable set of steps looks like.

Um, judicial legislation anyone?

It’s kind of extraordinary that his Honour would set out a system in such detail. These weren’t, after all, the facts before the court. It’s also kind of extraordinary that this is his version of reasonable steps, when this set of conditions doesn’t look anything like what has been legislated in other countries, like France, the UK, South Korea, or New Zealand. Justice Emmett’s ‘reasonable steps’, if that is what these are (and as I said, it’s not entirely clear) have none of the procedural protections found in other places – and specifically contemplate termination of Internet service – something the UK wouldn’t even do without a further order from Parliament and which requires independent decision-makers in France, South Korea, and New Zealand. So, like, wow.

Justice Nicholas, on the other hand, is only prepared to say that ‘an ISP should be given considerable latitude when working out the detail of such a system. It is always possible to argue that a system for the issue of warnings and termination could be tougher than it is. But it would be difficult to criticise an ISP on that account if it acted in good faith to devise and implement a system that involved taking such steps against subscribers who the ISP was satisfied had used (or permitted others to use) its facilities for the purpose of committing flagrant acts of copyright infringement’ (at para 750).

Other interesting stuff

There’s so much more, but this post is already too long. Look out for:

  1. The various judges’ views on whether iiNet ‘encouraged’ infringement, and Justice Nicholas’ discussion of iiNet’s alleged ‘indifference’;
  2. The discussion of the Safe Harbours (no judge thought iiNet could use it);
  3. The judges’ struggles to give s 112E some meaning;
  4. The issue of who bears the cost. Emmett J is explicit: AFACT should offer to reimburse. Justice Jagot thinks that this could have been part of a conversation that should have occurred. I didn’t really see much from Nicholas J on this question (but the judgment is long, maybe I’ve missed something).

Oh, and here’s something interesting. You will look in vain for references to much overseas case law or any of the mound of academic writing on the issues involved. If anything, this suggests to me the continuing isolation of the Australian law of authorisation from the law in other jurisdictions. Too close an examination of overseas case law might reveal the differences too starkly? Of course, it would also have made the judgment even longer than it already is. I suppose we should be grateful for small mercies.

Where to from here?

Interesting question. We’ll have to see if there’s going to be an appeal to the High Court (or rather, application for special leave). Failing that, it’s back to the negotiations. Questions of cost (who bears it) are unresolved. It’s not clear to me whether there is enough guidance here to lead to a ready deal, despite Emmett J’s attempts to write a Code of Conduct for the industry. Termination of service is something I can’t imagine the internet industry is all that keen on, but AFACT’s hand to demand more than the mere passing on of warnings may have been strengthened by the frequent references to the reasonableness of termination as a response. So, much to think about. I suppose I should be pleased…

Kimberlee Weatherall is a senior lecturer at the University of Queensland

This article was cross-posted here at LawFont

(return to the top of this edition)

2 Comments | censorship, Copyright, economics, iiNet, Internet, law, piracy | Tagged: , , , , , , , , , , , | Permalink
Posted by clarissaterry

Weapons in the Piracy Wars: COICA and Domain Name Seizures

March 17, 2011

By Jake Goldenfein

You may have encountered this image if you recently tried to stream a sporting event online. Domain name seizures in the US occur under civil forfeiture and seizure provisions in the Crimes and Criminal Procedure title of the United States Code. Being territorially restricted, those provisions allow the US Immigration and Customs Enforcement agency (ICE) to distrain websites with a .com, .net or .org suffix.

Recent seizures of websites linking streamed sporting events (conveniently 10 days before the Super Bowl) were the directive of phase 3 of ICE’s Operation ‘In Our Sites,’ which began in June 2010. The mandate of ‘In Our Sites’ goes beyond sporting events however, and has targeted websites connected to counterfeit goods, child pornography and first-run movies. Although the process and propriety of those seizures have been questioned, presently working its way through the US political system is the Combating Online Infringement and Counterfeits Act (COICA) that will provide an expedited process to block domains and extend ICE’s reach to content hosted outside the US.

COICA (S. 3804) would authorise the Attorney General to obtain injunctions in rem against websites ‘dedicated to infringing activities.’ Sites are defined as dedicated to infringing activities if ‘primarily designed’, have ‘no demonstrable commercially significant purpose or use other than,’ or are ‘marketed by its operator,’ as offering copyright infringing goods.

Effectively, COICA creates an internet blacklist with ‘offending’ websites added by Court order. Originally there was a second blacklist controlled by the Attorney General without judicial oversight, however that was jettisoned in the bill’s latest iteration. By obtaining a Federal Court injunction, the Attorney General orders U.S. domain name registrars to stop resolving blacklisted domains, leading users instead to an error message.

For infringing domains outside of the U.S, the bill demands internet service providers block offending foreign addresses. This does not prevent access outside of U.S territory, but rather is aimed at preventing the importation into the US (censoring) of goods and services offered by websites deemed ‘dedicated’ to infringing activities.

Introduced by Democratic Senator Patrick Leahy in September, the bill received unanimous approval by the Senate Judiciary Committee in November 2010 under Leahy’s chair. Not surprisingly three of Leahy’s top five campaign contributors are large media organisations. Yet substantial opposition from various groups including Internet Engineers, Human Rights Groups, the Net Coalition, some Senators, and law professors has been successful in preventing the bill passing a full vote on the Senate floor, leading to another Judiciary Committee hearing on 16 February, which led to discussion of substantial modification, and likely a follow-up hearing.

Arguments against the bill include:

  • Blacklisting of websites by Justice Department officials without sufficient judicial oversight offends due process and threatens legitimate political speech.
  • Definitions within the bill, including ‘facilitating infringement’ and ‘dedicated to infringing activities’ are very broad.
  • Blacklisting for copyright infringement purposes may undermine U.S. secondary liability law as well as existing copyright exceptions, limitations and defences.
  • The censorship process causes entire domains to vanish, not just infringing pages or files.
  • The bill creates precedent for internet censorship, and congress should consider the effect for countries less protective of citizens’ rights of free expression.
  • The extraterritorial reach of the court prevents a full and fair trial with all interested parties present.
  • The bill may affect legitimate digital services such as cyberlockers if the Department of Justice decides that piracy is ‘central’ to their businesses.
  • Blacklisting may apply to sites that discuss and advocate for P2P technology or piracy because they sometimes link tools and information intended for file sharing, despite the otherwise political nature of their speech.
  • Censorship may undermine the stability of the internet by encouraging the use of circumvention measures and rerouting internet traffic away from the U.S.

But perhaps the most compelling arguments are found in the joint letter from 49 legal academics in the U.S. Citing jurisprudence, they contend ‘the bill amounts to a constitutional abridgment of freedom of speech because it directs courts to impose “prior restraints” on speech, which are the most serious and least tolerable infringement of First Amendment rights.’ They argue such cases ‘require a court, before the material is completely removed from circulation to make a final determination that material is unlawful after an adversary hearing.’

Contrary to that requirement, the professors claim ‘the Act permits the issuance of speech-suppressing injunctions without any meaningful opportunity for any party to contest the Attorney General’s allegations of unlawful content’ because of inadequate notice provisions and the capacity to enter injunctions ex parte. Requiring the shut down of entire domains rather than blocking specific content is described in the letter as ‘burning down the house to roast the pig.’

More profound however, is the academics’ claim that the bill’s ‘egregious Constitutional infirmities… will not survive judicial scrutiny’ suggesting its significance ‘is entirely symbolic.’ This would be the first time the US would require internet service providers to block speech because of its content. Enjoining ISPs to police users’ activities is an issue of growing judicial significance, not simply in circumstances like the iiNet case in Australia, but also for a range of future measures, including filtering, censorship and levying, that may require ISP cooperation.

Content industries have sought this law for years, and view the new capabilities as a magic bullet for copyright enforcement, with the MPAA and RIAA extensively lobbying for its passage. Lauding the legislation, the bill’s proponents emphasize the derisory economic consequences affected by infringing rogue sites. Previous MPAA interim boss Bob Pisano defended the bill, claiming targeted sites ‘exist for one purpose only – to make a profit using the internet to distribute the stolen and counterfeited goods and ideas of others,’ and that the ‘economic impact of these activities – millions of lost jobs and dollars – is profound.’ Pisano argues the First Amendment was not intended as a shield for those who steal, irrespective of the means. ‘Theft is theft, whether it occurs in a dark alley or in the ether, and to attempt to distinguish the two is to undermine the most basic tenets of our criminal laws.’

Clearly rhetoric laden, such speech reverts back to the questionable conflation of tangible and intellectual goods, and co-opts morality for its justification without acknowledging the concomitant censorship issues. However, other Hollywood groups have claimed that concerns of unlawful censorship are an ‘absurd misrepresentation of civic rights’.

For organisations like MPAA and RIAA who maintain a controversial program of prosecuting online copyright infringement, the new law would amount to another weapon in the arsenal of content protection. But beyond copyright, the bill highlights emerging issues in digital censorship and jurisdiction by entrenching in U.S law filtering of international content that offends local laws – a dangerous precedent that may expand to other types of speech. Passage of this bill would mark a substantial shift in lawmakers’ willingness to regulate cyberspace and a fortiori against the principle of the Single Global Internet.

Jake Goldenfein is a PhD candidate at the Melbourne Law School

(return to the top of this edition)

Comments Off | censorship, Copyright, counterfeit, iiNet, Internet, Internet Law, legal, piracy | Tagged: , , , , , , , , , , , , , | Permalink
Posted by clarissaterry

« Previous Entries
Follow

Get every new post delivered to your Inbox.

Join 662 other followers