The report comments, with respect to New Zealand's passing of the Copyright (Infringing File Sharing) Amendment Act: 

Ipsos MediaCT research from August 2011, on the eve of the law coming into force, found that seven in 10 P2P users said they would stop infringing on receipt of a notice backed by sanctions as part of the country’s graduated response programme. According to IFPI, usage of P2P networks fell 16 per cent in the first three months of the law being in force, accompanied by increasing online sales

Of course a drop in usage of P2P networks says nothing about copyright infringement and increasing sales could well be a result of the leadup to Christmas and slightly better economic conditions. But, what this does mean, is there is now no need for the internet account termination provisions of the Act (which have been held in abeyance pending assessment of the Act's efficacy). That is a good thing.

The bad thing is, as far as I know, the research referred to has not been published so we have no way of knowing what methodology was used and how robust the conclusions are. As I've said before, this lack of transparent evidence is no longer best practice (if it ever was).

The deadline for submissions on the structure for the NZ Cloud Code of Practice is 2 days away (27 January 2012).

Given the fears - some misplaced, others not - generated by the Megaupload site takedown, best practice for cloud providers is a critical issue. Courts consistently take note of compliance or otherwise with industry practice in deciding if actions or omissions are reasonable. Some statutes even specifically refer to it.

For example, s92E of the Copyright Act provides ISPs with a safe harbour from liability for cached material. The defintion of  ISP would cover many cloud providers. But, the safe harbour is only available if certain conditions are satisfied, including that the provider:

... updates the [material] in accordance with reasonable industry practice

Australian copyright safe harbour provisions are similarly conditioned on an industry code.

So, an industry generated code that clearly sets out best practice is not just a "nice to have".

Not much time, but even a brief submission on the code (like mine below) would no doubt be welcomed.

Click here to download:

Cloud_submission.pdf (12 KB)

(download)

Click here to download:

Cloud_submission.pdf (12 KB)

These clauses are not new and I think traditionally no-one has given them much credence. A foreign company suing New Zealand?  Yeah Right.

Be not so sanguine.

Increasingly this is the modus operandi of larger corporations - another string to the lobbying bow when the law does not fit their (often outdated) business plans and alternative lobbying methods seem to be failing. We're seeing it particularly in the intellectual property sphere where, for example:

• Philip Morris has issued an investor state claim against Uruguay alleging that the change to its tobacco laws will damage its intellectual property investments in that country.
• British American Tobacco has sued the Australian Government over the new Australian plain tobacco packaging law, again on the basis that its IP interests will be damaged.
• Philip Morris has threatened to do the same but has also launched action under the investor state provisions of Australia's trade agreement with Hong Kong in a move analogous to that it has already taken in Uruguay.
• Just this week, the music industry got in on that act by suing Ireland because its laws don't allow termination of internet accounts for infringement of copyright.
• In its submission to the USTR on TPPA, after referring to Australian and Singaporean plain packaging laws as "excessive legislative proposals", Philip Morris argues for even stronger investor state provisions (and intellectual property protections) based on those in the US Korea trade agreement.

The pattern doesn't bode well for small countries like New Zealand.

But it is good to see Australia waking up to this (not surprisingly) with Prime Minister Gillard now rejecting such provisions (at p14 of 19 page pdf):

The Gillard Government supports the principle of national treatment – that foreign and domestic businesses are treated equally under the law. However, the Government does not support provisions that would confer greater legal rights on foreign businesses than those available to domestic businesses.

Cases like those above should be a clear warning to our negotiators also to reject such provisions. It is highly unlikely they would ever provide a level playing field for New Zealand companies.

To persaude the Court of that, you need evidence. Evidence is not your opinion. Evidence is actual facts supported by documents or witnesses provided to the Court and to the other side so that they can be challenged and tested. You might call experts to analyse the other side's evidence and present their own analysis of the problem and what has caused it. Your own evidence may also be subject to similar challenge so it needs to be robust and defensible, particularly since you are the one seeking a remedy. You are the one who has the burden of proving your case.

The same should go for legislation. If you want to persaude policy makers and politicians that there is a problem that needs a legislative fix - a kind of injunction forcing all of us to change our ways - then you should provide evidence; evidence of the problem, how it is caused and why your proposed change is suitable. That evidence will then be able to be tested and challenged by others.  If your evidence stands up to scrutiny and your proposed remedy is suitable (proportionate and appropriate), legislation should follow.

Unfortunately, in the copyright debates, this is not the way things have been done. Both in terms of the prevalence and cause of online copyright infringement and in terms of how any proposals might cure any problem, robust evidence has been sorely lacking. Surveys and reports, if they are published at all, do not fully disclose assumptions and methodologies. Submissions made by rightsholder organisations are provided confidentially to policy makers. Press releases by rightsholder organisations are reported without question by media outlets and those reports then trumpeted as evidence in themselves. International treaties, such as the Anti Counterfeiting Trade Agreement (ACTA) and Trans Pacific Partnmership Agreement (TPPA), are negotiated in private.  All of which means that the evidence is questionable and cannot be tested or challenged. In a Court, it would be thrown out.

However, policymakers are starting to question these tactics.  For example:

• The US Government Accountability Office stated in its 2010 report:

Three widely cited U.S. government estimates of economic losses resulting from counterfeiting cannot be substantiated due to the absence of underlying studies.

• In New Zealand, our TPPA negotiators issued a strong call for evidence based decisions in a leaked paper:

These developments are underpinned by an increasing pressure from rights holders to internationalise a larger array of issues and find international solutions to issues that have only had limited consideration at the national level. This is particularly true for the area of copyright, where rights holders have been seeking the adoption of more intrusive international rules with respect to a range of copyright issues at an early stage of norm development.
While there may be good arguments for an early and more rapid development of international solutions, such approach bears the risk of being premature, lacking evidence at the national level that would suggest a desirable international norm.[emphasis added]

• At a Conference on Commercialising IP a few months ago, Kim Connolly-Stone, chief IP advisor at New Zealand's Ministry of Economic Development, reiterated their policy that copyright law changes must be "evidence based".

And it is now good to see the UK Government supporting this push for better evidence with the release of a best practice guideline (pdf). At 5 pages it is a very accessible document and will provide a benchmark against which submissions to policy makers will be able to be judged.

We are reviewing aspects of our graduated response law, the Copyright (Infringing File Sharing) Amendment Act, in 2012 and, in 2013, the whole copyright law regime is slated for review. If those seeking change can abide by proper evidence rules, then they will have truly proved their case.

Click here to download:

consult-2011-copyright-evidence.UK_IPO_paper_on_copyright_evidence_standards.pdf (1.95 MB)

(download)

Click here to download:

consult-2011-copyright-evidence.UK_IPO_paper_on_copyright_evidence_standards.pdf (1.95 MB)

You see, back in the days when the web was pretty new - days of the Alta Vista seach engine (pre Google) and when Netscape Navigator was the new browser on the block - I did a Masters degree dissertation on how New Zealand copyright law treated linking and framing.

At the time it was a hot topic, with cases like Shetland Times, Total News and Ticketmaster all in train.

So, with linking now back in the headlines, I thought I'd amuse myself by blowing the dust off my dissertation.  In a cunning ploy (to prevent piracy of course ;-)), the only digital copy I had was stored on an old 3.5inch floppy.  Luckily I know some rightsholders whose business models dictate that they need such equipment so I was able to dredge a copy of the disk.  Which was indeed lucky, because when I asked one of my GenY staff whether they'd noticed a floppy drive carrying PC hanging around the office, they just looked at me blankly, then laughed when I showed them the disk.  Young whippersnapper!

Anyway, for want of a better place to put it and on the off chance that it might be of interest to others, here it is.

Click here to download:

Final.pdf (527 KB)

(download)

Click here to download:

Final.pdf (527 KB)

New Zealand has just announced that it is to sign the Anti Counterfeiting Trade Agreement (ACTA).

I'm not so fussed about that now because it will make only minor tweaks to our IP laws. That was not how ACTA started out though. Thankfully, informed international scrutiny of leaked texts made Governments, including our own, realise that many of the provisions were a bridge too far. The Wellington Declaration (pdf) in April 2010 was a significant part of that.

What we are reminded of by the ACTA announcement though is how the treaty process works.

1. Cabinet decides that we should enter into negotiations and sets some parameters within which our negotiators should operate.
2. Those parameters are not revealed publicly.
3. Negotiations commence.
4. The positions the New Zealand negotiators take are not revealed publicly.
5. The agreement is gradually finalised over a period of time with draft proposed text, counter-proposals and amendments being exchanged by the negotiating parties.
6. None of the work product of those exchanges is revealed publicly.
7. Cabinet approves the final draft of the agreement based on reports from the negotiators.
8. The reports from the negotiators are not revealed publicly.
9. The agreement is signed.
10. The agreement is revealed publicly. (With ACTA, leaks effectively forced the negotiating parties to release the official text somewhat earlier but we will not know until we see the actual agreement whether there have been any subsequent changes).
11. A Bill is drafted to implement the agreement by making any necessary changes to existing laws (in the ACTA case to our Copyright Act and Trademarks Act).
12. The Bill goes to select committee for public input.
13. The Act is passed.

Step 13 is in theory not a foregone conclusion but I think we can see from the above that by the time we get to step 12, it would be very difficult to do anything more than nibble at the edges. It is pretty much an all or nothing exercise at that stage - either ratify the agreement by making these changes to our law or don't ratify and we scrap the agreement altogether. To get to that stage, the process has been through Cabinet a couple of times at least, so I think scrapping it is highly unlikely.

As I said, for ACTA, not such a big deal, but only because we effectively were able to consult on the proposals during step 5. I'm sure our officials would admit, if allowed, much of that public input was useful to them. After all, IP law changes impact at various levels so it is always useful to have those impacts explained by those who will feel them (for better or worse).

But, how does this translate to the Trans Pacific Partnership Agreement (TPP), the so called "son of ACTA"?

Not very well I'm afraid. 

First off we know that the US in particular is starting TPP where it wanted to finish with ACTA but couldn't because of all that international scrutiny. That means, if accepted, the US position would take an axe to NZ IP law and result in more dramatic changes than any we have seen in the last 20 years.

Secondly, the EU is not involved in TPP. That means we don't have a large co-negotiating party with whom we can potentially share positions opposed to the (primarily) US demands for TRIPs plus IP laws (and remembering that Australia has already agreed to some of the proposals in TPP in its own free trade agreement so its interests are not necessarily aligned with ours). 

But, more importantly in terms of the above process, many of the most informative leaks which enabled public scrutiny of ACTA as it progressed came out of the EU. Without it, what we are seeing with TPP is the US strategy of private negotiation holding sway and very little information being made available.

I'm not one who thinks that each step of the negotiation should be conducted in public. That only discourages free and frank negotiation or worse still sends the negotiation into informal and far less transparent channels (if that were possible).  However, equally, I think what we can see from the above process is that it makes a mockery of consultation, the select committee process and of Parliament.

There is a middle ground. When a consensus between the negotiating parties is building, but well before any agreement is reached in form or principle, the text and negotiating positions should be revealed and public input sought by the Minister and our negotiators. Given the urgency with which this negotiation now seems to be being conducted, we must be at that stage now.

The catch cry seems to be that we want a high quality, 21st Century, future proof, agreement. If we are going to have one at all, public disclosure now is the only way to achieve it.

A copy of my slides below.

Click here to download:

Rick_Shera_-_ADLS_Workshop_8_August_2011.pdf (368 KB)

(download)

Click here to download:

Rick_Shera_-_ADLS_Workshop_8_August_2011.pdf (368 KB)

The release of the final report in the Law Commission's long running privacy law review foreshadows the Privacy Commissioner being given enhanced powers.

The ability to issue compliance notices, require audits and to issue binding rulings would bring the Privacy Commissioner's Office into line with other statutory regulators such as the Financial Markets Authority, the Commerce Commission and the Takeovers Panel. Combine this with a more streamlined jurisdiction, mandatory privacy breach reporting and the ability for broad class representative actions and we've got a much more proactive regime.

With the increased reach and penetration of social media and other online activities, adequate privacy protection must now be front and centre rather than the afterthought it has perhaps been in the past. Combining the "velvet glove" of the Privacy Commissioner's call for privacy by design with a regulatory "iron fist" reserved for those who might continue to flout good privacy practice, recognises this new balance.

I also like the proposals to add a new impersonation offence and to narrow the domestic affairs exemption, both sorely needed in situations where, for example, a jilted partner posts previously private photos or offensive and harmful material. As chair of NetSafe, I know that the team gets a significant number of calls in these situations and, without a statutory provision to point to, it can be difficult to persuade a social media platform host to take the material down (especially if the host is overseas).

On the other side, I think strengthened protection against unlawful surveillance is a good thing and legal protection of anonymity/pseudonymity is worth considering at least. Whilst a right to be anonymous/pseudonymous sounds good in theory, I suspect the days when no-one "knew you were a dog on the internet" are almost past now. Still, there are important free speech reasons for anonymous/pseudonymous discourse so it is worth discussing in my view.

There is a huge amount of detail to digest and any new law will need to be framed and considered carefully to ensure it is proportionate, flexible and does not give rise to unintended consequences. But, I like what I see so far.

I've been consulting to the Telecommunications Carriers' Forum on copyright issues since the ill-fated introduction of section 92A of the Copyright Act a few years ago.

Now that the replacement Copyright (Infringing File Sharing) Amendment Act and the regulations to go with it have been put in place and we can see the final shape of the regime, the TCF has completed process diagrams and has kindly agreed to make these publicly available.  It's a pretty complex system when it takes 3 separate diagrams to explain it!

Click here to download:

TCF_-_Copyright_Infringing_File_Sharing_-_Process_Maps_29_July_2011.pdf (185 KB)

(download)

Click here to download:

TCF_-_Copyright_Infringing_File_Sharing_-_Process_Maps_29_July_2011.pdf (185 KB)

The injunction reads:

“1. The Respondent [BT] shall adopt the following technology directed to the website known as Newzbin or Newzbin2 currently accessible at www.newzbin.com and its domains and sub domains. The technology to be adopted is:

(i) IP address blocking in respect of each and every IP address from which the said website operates or is available and which is notified in writing to the Respondent by the Applicants or their agents.

(ii) DPI based blocking utilising at least summary analysis in respect of each and every URL available at the said website and its domains and sub domains and which is notified in writing to the Respondent by the Applicants or their agents.

2. For the avoidance of doubt paragraph 1(i) and (ii) is complied with if the Respondent uses the system known as Cleanfeed and does not require the Respondent to adopt DPI based blocking utilising detailed analysis.

3. Liberty to the parties to apply on notice in the event of any material change of circumstances (including, for the avoidance of doubt, in respect of the costs, consequences for the parties, and effectiveness of the implementation of the above measures as time progresses).”

Justice Arnold is pretty dismissive of all the usual arguments as to proportionality, efficacy, cost, floodgates etc that BT raised. Then again, the evidence quite clearly showed that around 98% or more of the material made available via the Newzbin site was infringing so BT wasn't in a strong position with respect to the underlying harm. As Justice Arnold said:

"It appears to be quite hard to find any content on Newzbin2 that is not [infringing]"

The Injunction is granted under section 97A of the UK Copyright, Designs and Patents Act 1988, which reads:

97A  Injunctions against service providers

(1)The High Court (in Scotland, the Court of Session) shall have power to grant an injunction against a service provider, where that service provider has actual knowledge of another person using their service to infringe copyright.

(2)In determining whether a service provider has actual knowledge for the purpose of this section, a court shall take into account all matters which appear to it in the particular circumstances to be relevant and, amongst other things, shall have regard to—

(a) whether a service provider has received a notice through a means of contact made available in accordance with regulation 6(1)(c) of the Electronic Commerce (EC Directive) Regulations 2002 (SI 2002/2013); and

(b) the extent to which any notice includes—

(i) the full name and address of the sender of the notice;

(ii) details of the infringement in question.

We don't have an equivalent provision in New Zealand and the Newzbin2 decision is very much based on an analysis of European Union Directives, from which s97A is derived. The decision is also clearly limited to its facts and His Honour is at pains to rebut the floodgates argument that BT raised (although how successful that will be remains to be seen since it is acknowledged that this was a test case and that all ISPs would be faced with the same requirement, at least with respect to the Newzbin site). 

We do of course have the now standard DMCA style notice and takedown/ISP safe harbour regime in sections 92B-E of the Copyright Act 1994, and the right to obtain injunctions is specifically reserved in those sections. However, as I read them, those injunctions must be targeted at a specific instance of infringement or on-going infringement by a specific infringer, of a known work, not the broad injunction against anyone in respect of any works owned by any copyright owner now or in the future, as granted in the Newzbin case. So, at first glance, I don't think the Newzbin case has much direct application in New Zealand at present.

However, three factors need to be borne in mind:

1. New Zealand ISPs do already operate a filtering system based on a list of sites that our Department of Internal Affairs has determined contain objectionable material under the Films, Videos, and Publications Classification Act 1993.  So, we could as easily slip down the slope which starts with ISP filtering for criminal content and has now lead in the UK to filtering for civil infringement.
2. The US position (PDF) put forward for the Trans Pacific Partnership Agreement would expand the scope of injunctions able to be granted against New Zealand ISPs, enabling a Newzbin type injunction to be granted here.
3. Our Copyright Act is up for general review in 2013.

Given those three factors, I expect that movie studios will be pushing for the same regime to be implemented here over the coming years.