Digital Technology Law Journal
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Digital Technology Law Journal |
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Elouise Dellit* & Dr Christopher N Kendall **
Introduction: The Challenges and Possibilities of the Digital
Environment – Can Copyright Cope? …the Digital Agenda Act, despite the stated intention of the drafters, has tilted the balance in favour of copyright owners. It is no exaggeration to say that as more and more information is available in electronic form only , the shift brought about by the Digital Agenda Act has the potential to dramatically affect access to information by rendering the fair dealing and other exceptions to copyright effectively meaningless… A failure to strike an appropriate balance between the rights of copyright owners and the rights of users will have far more dire consequences in the digital age than it would have ever had in the age of print.[1]
1. The digital environment is made up of computers, Digital Video Disk (“DVD”) players, Compact Disc (“CD”) players, handheld devices, video game consoles[2] and the Internet -- the global network that connects computers throughout the world. “Digital” describes electronic technology that generates, stores and processes data as a string of 0s and 1s.[3] Previously, electronic transmission was limited to analog technology which conveys data as electronic signals of varying frequency or amplitude that are added to carrier waves of a given frequency.[4] Analog technology is now being replaced by digital technology because digital is faster, more versatile and of a much higher quality.
2.
The digital world is vastly different to the
print world within which our copyright laws originated. Some of its
features
are:
3. For these reasons, the Internet is one of the most effective forms of production and distribution of creative works.[9] However, it is not without its drawbacks. Once works are published on the World Wide Web they become highly susceptible to copyright infringement.[10] Due to the nature of the Internet, it is very difficult to detect copyright infringement and identify the person responsible for the infringement.[11]
4. Information that is produced on a CD or DVD is similarly susceptible to copyright infringement. The technology that enables users to make perfect reproductions of CDs or DVDs is now widely available and relatively inexpensive. The fact that millions of individuals and businesses have access to this technology puts those works at greater risk of infringement that is difficult to trace.
5. A fear of widespread copyright infringement has led to the development of technological protection measures (“TPMs”). According to the legal definition in the Copyright Act 1968 (Cth) (“Copyright Act (Cth)”), TPMs are devices or products that prevent or inhibit the infringement of copyright in a work by either ensuring that access to the work is only available by use of an access code or process, or by controlling copying of the work. [12] Some examples of TPMs include password protection, encryption, the “read-only” technology used in websites and in eBooks, and the copy control technology used in CDs.
6. Copyright users have developed ways of getting around these “digital fences” in order to access and make use of the works locked away behind them. For example, in 1999 a Norwegian teenager developed a method of circumventing the access control measure in DVDs (called CSS) in order to create a DVD player for Linux machines.[13] Although this might seem a legitimate reason to circumvent the access control measure, once it has been circumvented, the content of the DVDs may be freely copied. Hence, copyright owners are concerned that their works will be susceptible to infringement if the TPMs are able to be circumvented.
7. Circumvention of technological protection measures is a global problem. Hence, a global solution is needed. In 1996, the World Intellectual Property Organisation (“WIPO”) rose to the challenge and introduced the WIPO Copyright Treaty.[14] This Treaty requires member States to provide adequate legal protection against the circumvention of TPMs that are used by copyright owners to protect their works.[15]
8. In this regard, the United States introduced anti-circumvention provisions by way of the Digital Millennium Copyright Act (“DMCA”). The DMCA is thought to go far beyond what is required by the WIPO Copyright Treaty.[16] Shortly thereafter, Australia, although not a signatory to the WIPO Copyright Treaty, enacted its own anti-circumvention provisions. The Australian provisions are slightly weaker than the US provisions in that they do not cover the act of circumvention itself, whereas the US provisions do (in relation to access control measures). However, both the US and Australian laws prohibit dealings with circumvention devices and services.
9. For many, prohibiting circumvention devices and services seems to be an appropriate solution to the problem of widespread copyright infringement in the digital environment. Copyright owners can at least seek redress against those producing circumvention devices on a commercial scale and thereby aiding others in copying works.
10. However, not everyone who copies a work infringes copyright. Some copying of works is permitted by the fair dealing provisions in the Copyright Act (Cth). These provisions were introduced into the Copyright Act (Cth) in order to provide a fair balance between the rights of copyright owners and the rights of copyright users.
11. When the anti-circumvention provisions were introduced into both the US and Australian Copyright Acts the respective legislatures were concerned with carrying forward this bala nce to the digital environment. This paper will argue that this has not been achieved in a way that is risk-free. In the digital environment, in which technological protection measures have been put in place to prevent copyright infringement, it is now arguably impossible to make fair dealing of some works and, if recent efforts by the music and entertainment industries to influence legislative change and judicial approaches to piracy are a sign of things to come, the question needs to be asked: have we reached the stage where fair use is a thing of the past?
12. One reason for the demise of fair use (and other reasons will be examined throughout this paper) is that TPMs cannot discriminate between infringing and non-infringing uses of the works. This is best illustrated by way of an example. Chris, a law professor at Murdoch University, wishes to read an article in the Digital Intellectual Property Law Journal (“DIPLJ”) which is only available online. He visits the DIPLJ website but finds that a login and password is required to access the article, and he can only obtain a login by subscribing to the journal for $50 a year. Chris does not think it is worth subscribing to the journal because he only wants to read one article and that article may not even be relevant. Although Chris only intends to use the article for fair dealing purposes he is prevented from accessing it because there is a technological protection measure in place (ie. the use of the login and password).
13. The Copyright Act (Cth) does not in fact make it illegal for Chris to circumvent the password protection because the act of circumvention itself is not prohibited. Rather, the Copyright Act (Cth) prohibits dealings with circumvention devices and services. However, unless Chris is also a computer programmer and a “hacker” (and he can somehow hack into the system to obtain a password or develop some software that will guess the password) he has no way of circumventing the TPM. In fact, even if a computer programmer writes software that circumvents the password protection, Chris is unable to purchase the software because dealings in circumvention services are prohibited. The fact that circumvention is permitted does not help Chris at all.
14. Previously the Copyright Act (Cth) was only concerned with copyright infringement. Now, the Act covers activities that do not themselves constitute infringement but may assist people in infringing copyright. It is irrelevant that the person was carrying out one of these prohibited activities for a legitimate purpose such as fair dealing.
15. In this new copyright regime the balance has arguably tipped in favour of the copyright owners. In this paper, we will be considering the rationale for copyright and the fair dealing provisions in the Copyright Act (Cth). This will be followed by an analysis of the anti-circumvention provisions in both the US and Australia and the types of technological protection measures they aim to protect. We will consider the effect that the use of TPMs has on the activities of researchers, academics, journalists, students and other people who use copyrighted works for fair dealing purposes. This requires an analysis of some of the emerging case law, the types of people that are being prosecuted under the Copyright Act (Cth) and the message these prosecutions send to the public at large about their right to access information in the digital age. We will also question whether anti-circumvention laws are necessary to prevent copyright infringement given that this is in fact the purpose of the infringement provisions found in the Act.
16. We will also consider whether it is appropriate for the circumvention of TPMs to be dealt with in the Copyright Act (Cth) given that TPMs afford copyright owners much more power than copyright laws and risk overriding important user rights such as fair dealing. Finally, we will argue that increased surveillance of Internet use and access to copyright materials, while understandable as a means of addressing piracy in some circumstances, does risk leading to a situation where legitimate use is curtailed and fair dealing undermined.[17] While aware of the need to tackle piracy, this paper calls for a more cooperative legal and social approach to the problem that does not stifle creativity and intellectual development.
The Nature of Copyright
17. In Australia, copyright constitutes a bundle of exclusive rights which vary according to the subject matter of the right. Of necessity, the scope of copyright is continually being expanded. As Stewart points out: “Both the categories of works protected by copyright and the number of specific rights which form the bundle known as the ‘scope’ of copyright have been gradually extended over the years as technology has advanced.” [18]
18. The introduction of the Copyright Amendment (Digital Agenda) Act 2000 (Cth) has seen copyright law extended so that works that are in digital format are also afforded copyright protection. In this regard, the exclusive right to “broadcast” the work has been replaced by the right to “communicate the work to the public” so that it encompasses communication over the Internet and any other type of electronic transmission.[19]
19. More importantly, the Copyright Act 1968 (Cth) (“Copyright Act (Cth)”) now covers activities which do not themselves constitute infringement in copyright, but may assist people in infringing copyright. Specifically, copyright owners have now been given rights with respect to technological protection measures (“TPMs”) which protect copyright works, and the circumvention devices which compromise those TPMs.[20]
20. In considering whether the introduction of these anti-circumvention provisions has upset the delicate balance between the rights of copyright owners and copyright users, it is useful to briefly consider the nature of copyright and the justifications for copyright protection.
21. In many ways, copyright is a property right, even though the subject matter is intangible and incorporeal. [21] However, unlike property rights, which last as long as the subject matter of the rights, copyright is limited in duration. After a certain period of time [22] the work passes into the public domain and can be freely used by anyone.[23]
22. As an exclusive right, the copyright owner should arguably be able to prevent others from copying her or his work. [24] Indeed, copyright is often referred to as a monopoly right because it gives the owner exclusive control over the market for the work. [25] However, it does not prevent other people from competing in the market by creating their own works. [26] Monopolies tend to arise when large companies intentionally engage in anti-competitive practices, for example by taking over competing companies or producing works that are only compatible with other works sold by that company. Microsoft, which has been taken to court many times over its alleged monopolistic and anti-competitive practices, arguably has a monopoly over certain software products because it bundles them together and makes them incompatible with software produced by other companies.[27] It is claimed that it is Microsoft’s anti-competitive practices which cause the monopoly to arise, not the fact that Microsoft has certain exclusive rights in relation to its software products.
23. As noted above, the exclusive rights vary according to the subject matter of the rights. The Copyright Act (Cth) classifies the subject matter into “works” and “subject matter other than works”. [28] “Work” is defined as a literary, dramatic, musical or artistic work. [29] The “subject matter other than works” that are afforded copyright protection are sound recordings, cinematograph films, television and sound broadcasts and published editions of works.[30] As a result of the amendments introduced in 1999 and 2000, it is clear that the Copyright Act (Cth) now encompasses works in digital format.[31] For simplicity, we have referred to all of these types of works and subject matter, whether digital or otherwise, as “works” throughout this paper.
24. The one ‘right’ that is common to all types of works is the right to make a copy of the work (or the right to “reproduce the work in a material form” in the case of literary, dramatic and musical works). Another right common to all works except published editions is the right to communicate the work to the public. Some of the other rights applicable to certain types of works include the right to make a translation, perform the work, publish the work and cause the work to be heard or seen in public. Effectively, the Copyright Act (Cth) grants to copyright owners all the exclusive rights that are perceived to be necessary to provide an incentive to create and exploit new works.
Rationales for Copyright Protection
25. Broadly, there are two types of arguments for copyright protection – moral and economic. Moral justifications include the need to reward labour, the author’s right to control what she or he has created and the need to discourage theft of property. Economic justifications include the need to provide an incentive to create new works and the need to remunerate for the cost of creating them.
Moral Justifications
26. One of the main purposes of copyright law is to give authors the reward due to them for their contribution to society.[32] It is long established that authors should be entitled to the fruit of their labours. [33] Similarly, authors should be entitled to control the use of their works. This is consistent with the notion of copyright as property. Just as owners of physical property are able to sell it or grant a license over it, so should owners of intellectual property be able to do so.
27. Sterling suggests that another reason why authors should be able to control use is because the author’s own creations are associated with the author’s personality.[34] This idea has significantly influenced the copyright laws of civil law countries.[35] It is also the foundation of moral rights laws[36] , which are a fundamental aspect of the copyright law in civil law countries, but were introduced into common law countries at a much later stage. [37] Moral rights protect the author’s right to be known as the author of the work, [38] not to have any work falsely attributed to her or him, [39] and not to have the work subject to derogatory treatment.[40]
28. The concept of authors being entitled to protect their works is entrenched in international law doctrine. Article 27(2) of the Universal Declaration of Human Rights (1948-78), for example, states: “Everyone has the right to the protection of the moral and material interests resulting from scientific, literary or artistic production of which he is the author.”
29. Irrespective of whether or not we believe that the author has property in her or his creation, Sterling suggests that common principles of fairness support the idea that the unauthorised use of something produced by another person should not be socially condoned. [41] In that regard, he talks of the “condemnation of theft” as being one of the important justifications of copyright.[42]
30. Not surprisingly, this idea has the support of the US dominated recording and film industries, which equate piracy with theft. For example, Jack Valenti, the Chief Executive of the Motion Picture Association of America and a well-known lobbyist and spokesperson for the film industry, has argued that: “Brooding over the global reach of the American movie and its persistent success in attracting consumers of every creed, culture and country is thievery, the theft of our movies in both the analog and digital formats.”[43]
31. For Valenti, and others, piracy is stealing. In his opinion, the industry has been “ambushed”, even “terrorised” by people downloading and c opying movies over the Internet.[44]
32. Others have used similar descriptives in discussing music piracy, particularly in reference to peer to peer file swapping technologies, discussed later in this paper. Arguably, Valenti, and others, are not concerned about piracy because it is morally wrong or because authors should be entitled to protect what they create. Rather, they are concerned about the economic consequences of piracy and the fact that it causes the industry to suffer significant revenue losses.[45] These industry leaders, all strong advocates of increased government intervention into the use of Internet technology, claim that the anti- circumvention provisions are necessary to protect their investment. Unfortunately, their claims seem to ignore, or at least diminish, the concerns of those for whom fair use is an issue worth protecting.
Economic Justifications
33. The main economic justification for copyright protection is that which is referred to as the “incentive argument”, explained by Sterling as follows: “Creation of works involves investment of time, patience, skills, creative endeavour and money. Such investment should be protected. If it is not protected, the author loses the incentive to undertake the project. Production of works benefits society. Consequently it is necessary to give authors the incentive to carry on their work by providing, through copyright, the means to ensure their livelihood.”[46]
34. Clearly, if there were no copyright laws, authors would be unable to recoup their costs bec ause anyone would be able to freely copy their work without having to remunerate the author.[47] For example, the first purchaser of a book could produce multiple copies of the book and sell them at a lower price than the author because they would only need to cover the cost of printing the book. The author would then be discouraged from investing their time and resources in the production of works. [48] As Ricketson explains, “copyright is a defence against large-scale free-riders who wish to benefit from the creation and distribution of intellectual works of authorship without bearing a share of the underlying cost of authorship.”[49]
35. Now that copying technology has reached the stage where it is impossible in many cases to distinguish between an authorised and unauthorised reproduction, it is even more important that authors be provided with sufficient incentive to create new works. Copying technology is becoming increasingly more available and has substantially dropped in price. In that regard, copyright law is necessary to prevent “free-riders” from copying music CDs, for example, and selling them cheaply so that they cut into the profits of those who own copyright in the music (presumably the recording companies and artists).
36. One could even argue that Australia’s new anti-circumvention provisions are necessary to enable the copyright owners to prevent ‘free-riders’ from overcoming any copy protection that recording companies insert in their CDs in order to prevent copyright infringement. This is in fact one of the reasons why recording companies feel that strong copyright protection is necessary. Of course, this does not take into account the fact that not all copying constitutes infringement of copyright. Copying for fair dealing purposes certainly does not.
The Public Interest
37. In some ways, copyright laws may be seen to be in the public interest. Indeed, one of the important aims of copyright law is the encouragement of learning and the promotion of culture.[50] Copyright encourages authors to create works and release them to the public. This further allows us to build upon the ideas and information available to the public and contributes to the development of culture.[51] Copyright laws also promote the economy by providing economic incentives and benefits to copyright owners.[52] Obviously the public benefits from a society with more information, a more intellectually vibrant culture and a stronger economy.
38. However, as users of copyright works, copyright laws can also be seen to impact negatively upon the general public. Copyright can, for example, restrict access to information which should be freely available to the public.[53] Since the copyright owner has the exclusive right to copy and distribute the work, anyone else who wishes to have a copy of that work must pay for it. Although others may produce works in competition with the copyright owner, only the copyright owner can produce that particular work, so they are free to charge how ever much they choose. The copyright owner can (and often does) charge much more than is necessary for them to recoup their costs and have a sufficient incentive to produce further works. This is evident from the fact that technology companies can reduce the price of their products substantially over time and still make a healthy profit.
39. The doctrine of fair dealing, which is explained in detail below, was introduced in order to redress the apparent inequality between the rights of copyright owners and copyright users. The fair dealing provisions in the Copyright Act (Cth) enable use of copyright works for certain purposes, namely, research or study, criticism or review, reporting news and the provision of professional advice. The purpose of the fair dealing defence is to ensure that certain people are able to make use of copyrighted works without needing to remunerate the copyright owner. In this way, the fair dealing doctrine attempts to maintain a fair balance between the rights of copyright owners and copyright users.
Fair Dealing
40. As noted above, the encouragement of learning and the sharing of information, knowledge and ideas is an important aim of copyright law. This is partly achieved by way of the fair dealing provisions found in the Copyright Act 1968 (Cth). Fair dealing allows for works to be copied for certain purposes without the copyright owner’s permission provided the dealing with that material is “fair”.[54] The activities of researchers, students, academics, critics, reviewers, journalists and reporters would be greatly hampered if they were not able to copy a reasonable portion of works for inclusion in new works or simply for their own reference.
41. An increasing number of works are being produced in digital format and distributed over the Internet. Many of these works are protected by technological protection measures (“TPMs”) which prevent access to and copying of the works, whether that access or copying would constitute an infringement or not. Arguably, fair dealing is in danger of being overridden by the push for TPMs, calls for stronger anti-circumvention provisions that provide legal protection for TPMs and more legislative and judicial restrictions on who can access what, how they can access it and when.
42. The Copyright Act (Cth) contains fair dealing provisions which apply to all categories of copyright materials.[55] To be considered a “fair dealing” under the Act, the dealing must be for the purposes of research or study,[56] criticism or review,[57] reporting the news, [58] or judicial proceedings or professional advice.[59] The scope of the exception is confined to these four purposes.
43. The Act does not contain a definition of the term “fair dealing” because, whether or not a use is “fair” is something that needs to be determined on a case by case basis.[60] This allows for a considerable degree of flexibility in the application of the defences.[61] If the use is for the purpose of criticism or review, reporting news, or giving professional advice, the court must use its discretion in determining whether the use of copyright material is “fair”.[62]
Fair Dealing for Research or Study
44. Despite this, the Act does provide some guidance to the courts in determining whether a use for the purpose of research or study is fair. Specifically, the courts must consider a number of factors, namely, the nature of the work or adaptation, the possibility of obtaining the work or adaptation within a reasonable time at an ordinary commercial price, the effect of the dealing upon the potential market for, or value of, the work or adaptation, and the amount and substantiality of the part copied in relation to the whole work or adaptation.[63] In the case of copying a work or a periodical publication for the purpose of research or study the Act provides a degree of certainty. Copying an article from a periodical publication or a “reasonable portion” of a literary, dramatic or musical work for the purpose of research or study is deemed to be fair. [64] The Act does not contain a definition of “reasonable portion”, except for works contained in a published edition that is 10 pages or longer, in which case a reasonable portion is 10% of the number of pages of the edition or one chapter.[65]
45. “Research or study” is not defined in the Act but the meaning of this phrase has been judicially considered. In the Federal Court decision of De Garis v Neville Jeffress Pidler Pty Ltd, [66] Beaumont J adopted the Macquarie Dictionary definition of “research”: “diligent and systematic enquiry or investigation into a subject in order to discover facts or principles.”
46. Regarding “study”, the Court highlighted the need for: “(1) application of the mind to the acquisition of knowledge, as by reading, investigation or reflection; (2) the cultivation of a particular branch of learning, science, or art... (3) a particular course of effort to acquire knowledge... (5) a thorough examination and analysis of a particular subject…”
47. In De Garis, the court held that the defendant’s photocopying of newspaper articles for sale to clients of its news clipping service was not research or study. It did not matter that the clients ma y have used the photocopies for research purposes because it is the purpose of the person making the dealing that is relevant.[67]
48. From this decision it would appear that where the copying is for a commercial purpose, it is not a fair dealing.[68] This was the conclusion reached in the New Zealand decision of Television New Zealand Ltd v Newsmonitor Services Ltd.[69] In this case, Justice Blanchard found that copying material and passing it onto others for the commercial profit of the copier did not constitute fair dealing.[70]
49. The position is less clear in relation to copying by a commercial organisation for the research and development purposes of the organisation itself.[71] In the 1993 Television New Zealand case, for example, Justice Blanchard suggested that this would constitute a fair dealing: “Although I am inclined to think that a corporation can engage in private study, as when its personnel endeavour to place themselves in a position to be better able to perform their functions in or related to the corporation, “research” is even more clearly something of which a business organisation is capable… It is ultimately intended to enable commercial exploitation or is perhaps defensive in character – to improve a product, for example, and thus avoid loss of sales or even product liability litigation. Ultimately, the product of the research is likely in some form to be made public. So I conclude that a fair dealing for the purposes of research within s 19(1) can be something done with a commercial end in view.[72] ”
50. Although this issue has not yet come before an Australian court, Justice Blanchard’s comments would seem to be equally applicable to the Australian legislation. [73]
Fair Dealing for Criticism or Review
51. Section 41 permits fair dealing with a literary, dramatic, musical or artistic work for the purpose of criticism or review of that work or another work, provided that sufficient acknowledgment of the work is made. This section enables critics and commentators to review the work of others and include examples of that work. [74] The fact that the review is for a commercial purpose does not prohibit the application of this section, provided that the use is fair.[75]
52. In the De Garis case, the defendant also tried to argue that their conduct constituted fair dealing for the purpose of criticism and review. The court again deferred to the Macquarie Dictionary, which offered the following definition of “criticism”: “...(1) the act or art of analysing and judging the quality of the literary or artistic work, etc... (2) the act of passing judgment as to the merits of something... (4) a critical comment, article or essay; a critique;”
53. and the following definition of “review”: “(1) a critical article or report, as in a periodical on some literary work, commonly some work of recent appearance; a critique...”
54. The court held that the defendant’s conduct did not constitute a fair dealing for the purpose of criticism and review because the defendant merely located and supplied the material without evaluating it.[76] From this decision it is apparent that mere copying of material will not be considered a fair dealing for the purpose of criticism and review. Some degree of skill or effort on the part of the defendant is also required.[77]
Fair Dealing for Reporting News
55. A fair dealing with a literary, dramatic, musical or artistic work is not an infringement of the copyright in the work if it is for the purpose of reporting the news in a newspaper, magazine or similar periodical, or by means of a communication or in a film. [78] The High Court, in Commonwealth of Australia v John Fairfax & Sons Ltd,[79] considered the meaning of “news” and concluded that it was not limited to current events.
The Rationale Behind Fair Dealing
56. Fair dealing is one of the ways in which copyright law places limitations on the copyright owner’s ability to control their works.[80] In attempting to achieve the optimal balance between the rights of copyright owners and users, it is essential that users be left to exercise their fair dealing rights.[81] Some of the justifications for fair dealing are that it enables the public to access information, it encourages the creation of new works and it limits copyright protection to that which is necessary to protect the copyright owner’s market.
The Public Interest Justifications
57. Copyright has the potential to impede the public’s right to access and use the ideas of others.[82] Fair dealing is necessary because it is in the public interest for people to be able to access works and the information and ideas contained within them. [83] By enabling access to and use of the ideas of others, people are encouraged to create new works which incorporate or which draw upon previous works.[84]
58. The fair dealing provisions are of particular significance to educational institutions. These institutions are principally concerned with the development and maintenance of the store of knowledge and the free flow of ideas and information.[85] The fair dealing provisions enable academics, students, librarians and researchers to make copies of works when they are engaging in research or study. According to the Australian Vice-Chancellor’s Committee: “It is essential to have available in appropriate and convenient ways the actual texts and forms of knowledge with which scholarship engages. It is the nature of scholarly endeavour that, in order to examine ideas, researchers and students be able to authenticate the exact words of works and subject matter other than works. Fair dealing is basic to scholarly activity. It is at the very nub of the sharing, extension, and development of ideas.”[86]
59. News reporters, journalists, critics and reviewers also rely on the fair dealing provisions to copy works in order to be able to present information to the public and inform them of current events.
60. The activities of these copyright users would be greatly hampered if the fair dealing provisions were not in place. Academics, students, librarians and researchers would have to purchase a copy of every work they intended to use. Hence, they would be limited to the amount of material they could afford to buy. If they wished to incorporate any of that work into their work they would have to seek the permission of the author, which would be extremely burdensome. As the Australian Vice-Chancellor’s Committee states, it is important that educational institutions are not encumbered with complex regulatory requirements or unaffordable tariffs for the remuneration of copyright owners.[87]
61. Technological protection measures pose a particular problem for people who wish to access or copy works because they do not explicitly recognise fair dealing rights.[88] In particular, some TPMs prevent access to the works except by authorised users who have paid a fee. Other TPMs do not allow the material to be copied by anyone. Neither type of TPM is able to distinguish between ordinary users and users that are legally entitled to use the work for fair dealing purposes.
Economic Justifications
62. One of the justifications of copyright law is that it provides an incentive to create new works. Copyright should therefore be limited to that which is necessary to create an incentive for further acts of creativity.[89] It should not prevent other people from creating new works that incorporate or draw upon that work. Fair dealing limits copyright protection so that the copyright owner does not acquire a monopoly over the work. [90] On the other hand, the second work should not supplant the market for the first work. If the dealing is for research or study the court must take into account the effect of the dealing upon the potential market for, or value of, the work. [91] This is consistent with the idea that fair dealing should not be for commercial gain. The digital environment has the potential to greatly impact on the markets of works. [92] The ability to make an infinite number of high-quality reproductions of works in a way that cannot be detected is of great concern to copyright owners. However, copyright owners have recognised that those who use works for fair dealing purposes do not harm the market for those works. It is the manufacturers and distributors of circumvention devices and services that pose the greatest threat to the copyright industry. Hence, they lobbied parliament to outlaw dealings in circumvention devices.
63. Unfortunately, in doing so they have arguably weakened the fair dealing provisions in the digital environment because copyright users are not able to circumvent technological protection measures without circumvention devices. Although the anti-circumvention provisions are only intended to protect the market for works they also risk preventing fair dealing of the works. This is of particular concern at a time when the music and entertainment industries are advocating stronger restrictions on the ability of Internet users to access materials now available on line. This is discussed later in this paper. First, however, it is worth examining how governments are dealing with the concept of fair use and whether, given the now evident push to limit access via TPMs, anti-circumvention legislatio n and other legal means, “fair” use is, in fact, still “fair”.
Reform of the Fair Dealing Provisions in the Copyright Act (Cth)
64. In recent years, the government has looked at possible ways to reform copyright law with respect to fair dealing in order to adapt it to the digital environment. To date none of the suggested amendments have been implemented. Nonetheless, it is useful to look at the effect these amendments would have on the ability of users to carry out fair dealing activities in the digital environment. Whilst they would simplify the law significantly, the amendments would not appear to provide much assistance to copyright users.
65. In 1997, the Copyright Law Review Committee (“CLRC”) released five issues papers and invited submissions on how the copyright law could be simplified.[93] One of these was entitled “Simplification of the Fair Dealing Provisions of the Copyright Act 1968”. After considering the submissions, the CLRC put together a report entitled “Simplification of the Copyright Act 1968”. [94]
66. The report contains numerous recommendations in relation to fair dealing, the principal one being that we should adopt an open-ended model similar to the US model (by consolidating the existing seven fair dealing provisions into a single provision).[95] The CLRC also recommended that the factors that are currently considered in relation to dealing with a work for the purpose of research or study be applied generally to all fair dealings. [96] Obviously this would automatically be achieved if the fair dealing provisions were consolidated into a single section. This recommendation is not particularly controversial given that, in practice, courts tend to apply the factors to the other categories of fair dealing anyway.[97] The “open-ended model” recommendation, however, has received mixed reactions.
67. The US seems to be the only country with an open-ended provision.[98] Under US copyright law, there are no separate categories of fair use purposes and no different rules for different purposes. [99] There is only one provision relating to fair use, section 107, which provides that: “...the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching..., scholarship, or research, is not an infringement of copyright...”
68. The US legislation also lists a number of factors that should be considered in determining whether the use of a particular work is a fair use. [100] These factors are similar to the factors in s 40(2) of the Copyright Act (Cth) except that they apply to all types of fair use, not just fair use for the purpose of research or study.
69. The practical difference between the US and Australian law is that the US law permits fair use that does not fall within one of the four categories. Arguably, the advantage of this approach is that the legislation is more flexible and can adapt to changing circumstances and new technologies. [101] It also enables the court to use discretion in determining whether a defendant should be entitled to rely on the fair dealing defence.[102]
70. On the other hand, critics of the open-ended model feel that it has the potential to broaden the scope of exceptions, shifting the balance in favour of users, and that this is not appropriate in the digital environment.[103] They argue that digital technology, which enables reproduction and dissemination of works, has the potential to erode the market for copyright material. [104] They claim that the presumption that fair dealing has only a minimal impact on the market for copyright work is untrue in the digital environment because minor infringements, when multiplied many times, may present a major problem for copyright owners. [105] It is submitted that adopting an open-ended model would in fact have little effect on the markets for copyright material and would not assist users in making fair dealings with works in the digital environment. This is evidenced by the fact that academics, researchers, students and other fair users in the US are just as concerned about the effect of the anti-circumvention provisions on fair use as their Australian counterparts.[106] Broadening the exceptions would not shift the balance in favour of users because they would still have to satisfy the “qualitative” test of fairness. As Dower points out, “although digitisation has radically redefined the way copyright works are stored and transmitted, it is unlikely to significantly alter the purposes for which such material is used.”[107]
71. The problem that copyright users face is not that their activities do not fall within the fair dealing provisions because they are too narrow. Rather, it is that more and more works are being locked away behind technological protection measures. Suggested amendments to the fair dealing provisions would not assist users attempting to access and copy works in the digital environment. Technological protection measures prevent users from accessing or copying works regardless of whether they wish to infringe copyright in the work or use the work for fair dealing purposes. The different types of technological protection measures are explained in detail below.
Technological Protection Measures
72. The term “technological protection measure” (“TPM”) has been adopted to refer to the various technologies that have been developed by copyright owners to prevent piracy of their works. Some examples of TPMs include encryption, password protection, “read-only” technology and the copy protection present in some CDs. Some TPMs prevent users from accessing the works (unless they have paid a fee) while others enable users to view the works but do not enable them to copy them. One feature common to all TPMs is that they cannot distinguish between legitimate and non-legitimate uses of the works they protect. Hence, they prevent users accessing works for fair dealing purposes.
Using Technology to Protect Digital Works
73. Digital technology enables information to be transmitted across the Internet at high speeds and at high quality. Music, films and video games in digital format are of a much higher quality than those in analogue format and can be reproduced with very little degradation of quality. For this reason, digital format has now replaced analogue – CDs have replaced cassettes, DVDs have replaced video cassettes and the Internet has become the preferred method for distributing information.
74. It is this ability to make high quality reproductions that has rendered these copyrighted works highly susceptible to infringement, or “piracy” as it is popularly known. This type of infringement is almost impossible to trace due to the nature of the Internet and the increasingly widespread use of copying devices such as CD writers and DVD writers in personal computers. The copyright law, or at least the copyright infringement provisions, has not been able to provide much assistance to copyright owners.
75. Copyright owners have been forced to resort to using technology to protect their works in what Forsyth refers to as the “encryption arms race”.[108] This outcome was predicted as early as 1995 in a report by the US Department of Commerce’s Information Infrastructure Taskforce. The report says that “[t]he ease of infringement and the difficulty of detection and enforcement will cause copyright owners to loo k to technology, as well as the law, for protection of their works.”[109] Hence, copyright owners started to develop technological protection measures to protect their works.
The Definition of “Technological Protection Measure”
76. After much debate, the Austra lian legislature settled on the following definition of technological protection measure for inclusion in the Copyright Act (Cth):[110] “a device or product, or a component incorporated into a process, that is designed, in the ordinary course of its operation, to prevent or inhibit the infringement of copyright in a work or other subject-matter by either or both of the following means: (a) by ensuring that access to the work or other subject matter is available solely by use of an access code or process (inc luding decryption, unscrambling or other transformation of the work or other subject-matter) with the authority of the owner or licensee of the copyright; (b) through a copy control mechanism.”[111]
77. TPMs may be categorised according to whether they control access to the copyright works or control copying of the copyright works. The former are referred to as access control methods and the latter as copy control methods. Both types come within this definition of a technological protection measure – subsectio n (a) refers to access control methods and (b) refers to copy control methods. No distinction is made between access control methods and copy control methods in the Copyright Act (Cth), and all the anti-circumvention provisions apply to both types.
78. In contrast, the US Copyright Act 1976 does distinguish between technological measures that effectively control access to a work and those that effectively protect a right of a copyright owner in a work. [112] The reason for this distinction is that different anti-c ircumvention provisions apply to these two types of TPMs (this is explained later in this paper). However, “TPM” seems to have the same meaning in the US as it has in Australia. Although the US Copyright Act does not contain a definition of “technological measure” it is clear from the definition of “circumvent a technological measure” that the Act encompasses the same types of technologies as the Australian Copyright Act.[113]
Examples of Technological Protection Measures
Access Control Methods
79. As the na me suggests, access control methods prevent unauthorised users from accessing protected content. The most obvious access control method is the use of password protection to ensure that only authorised users access the content. Another common method is encryption or scrambling the content, which restricts access to authorised users who have the “key” that will decrypt or unscramble the content.[114]
80. On its own, access control is a relatively weak method of protection because once a user obtains access to the content, the technology does not prevent them from copying or redistributing it.[115] Therefore, if an unauthorised user (or “hacker”) illegally obtains a password or decrypts or unscrambles the work, the protected content becomes freely available.[116] If that content contains copyrighted works then those works become susceptible to infringement.
81. Another type of technology that is often referred to as a technological protection measure is the use of watermarks and digital signatures.[117] This involves marking digital works in a way that persistently identifies them. [118] Presently, this type of technology would not appear to fall within the definition of a TPM because it does not prevent or inhibit the infringement of copyright by controlling access to the work or preventing copying of the work. Further, it does not prevent fair dealings with the work because it does not restrict access to the work or copying of the work. Rather, it merely identifies the author of the work.
Copy Control Methods
82. The other type of TPM that is increasingly being used to prevent copying of digital works is the copy control method. Provided they are not able to be circumvented, copy control methods can prevent copying of the content that they protect, whether the copying would constitute copyright infringement or not. These types of methods allow content owners to decide what rights users will be given.
83. One type of copy control method that users of the Internet may frequently encounter is the “read only” display technology that does not allow users to copy and distribute the material that is displayed on a website.[119] For example, the copy and paste functions and the printing functions may be disabled so that users can not cut and paste the material into another application or print it off.
84. This kind of technology was used by Adobe in their Acrobat eBook Reader[120] , the software at the centre of the Russian computer programmer case, discussed .[121] This software is designed to protect the content of an electronic book (“eBook”) and allow readers to view the eBook’s content on the reader’s computer. [122] Not only are users of this software disabled from copying or printing the books, they are not able to read the eBook on any computer other than the one it was first downloaded on. This effectively means that users cannot loan eBooks to other people and cannot continue to use the eBook if they upgrade the operating system on their computer or purchase a new computer. [123]
85. Another controversial copy control method is the technology that prevents the c opying of CDs. This technology is controversial because it was secretly introduced into the market (by recording companies) and because initially it caused a lot of problems for users. [124] One of the early techniques involved inserting digital distortion into the music that is inaudible when the CD is played on a CD player but not when played on a computer. [125] This technology is highly problematic because the CDs that use this technology do not play on certain CD players and various other devices on which consumers expect to be able to play their CDs. [126] Another type of technology had the inadvertent side-effect of causing PC computers to crash and iMac computers to lock up and not be able to reboot, thus requiring a trip to the dealer for repairs.[127] More recent technology has overcome these problems but it still prevents users from copying the content of CDs, even for fair dealing purposes.
86. Interestingly, it was discovered early last year that some of the copy protection could be circumvented by simply covering the outer track of the CD using either a marker pen or electrical tape.[128] This begs the question, if this copy protection constitutes a TPM, do the marker pens and electrical tape constitute a circumvention device? If so, can we be criminally prosecuted for selling or distributing marker pens and electrical tape? The copy protection would seem to be a TPM but the requirement that the person must have known, or ought reasonably to have known, that the device would be used to circumvent, or facilitate the circumvention of, the TPM would cause problems for anyone attempting to prosecute an innocent newsagent or hardware store owner. [129] In fact, although the issue of using copy protection in CDs has come before the courts in relation to claims of misleading an d deceptive conduct, no anti- circumvention actions have been brought.
CSS and Regional Coding – TPM or not?
87. A type of technology that has come before the courts in relation to the anti- circumvention provisions is the copy protection that is used in Sony PlayStations. However, until recently, the Australian and UK courts have diverged on the issue of whether this type of technology constitutes a TPM. Sony alleged that the access code which is contained within a track on each of the CD-ROMs on which the computer programs are contained constitutes a TPM. The High Court of the UK found that the technology did constitute a TPM,[130] whereas the Federal Court of Australia found that it did not.[131] This was recently overturned by the Full Court of the Federal Court of Australia, with the Court finding that Sony’s copy protection did indeed constitute a TPM.[132]
88. The reason the Federal Court at first hearing did not agree that the technology is a TPM is because Sony PlayStations employ a technique known as regional coding or regional playback control which does not directly prevent copyright infringement. Rather, it prevents pirated CDs from being able to play on certain PlayStations in order to deter users from purchasing pirated CDs. It effectively divides the world into six regions and prevents CDs purchased in one region from being played on PlayStation consoles purchased in another. [133] It is basically directed at preventing users from purchasing pirated DVDs from countries in which piracy is widespread. For examp le, if an Australian was to purchase a pirated copy of a PlayStation game in Indonesia they would not be able to play that game on their Australian PlayStation.
89. This technology prevents users from playing legitimate copies of games purchased overseas and also prevents users from copying them for fair dealing purposes. There are unlikely to be many “fair dealings” of computer games (other than fair dealing for the purposes of criticism or review), however, regional coding is also used in DVDs which contain films. Movie studios claim that it is necessary because they often enter into complicated cross-licensing deals for international distribution which give different studios the right to release movies in different countries and at different times.[134] However, it is clearly also directed at preventing copyright piracy.
90. The copying technology used in DVDs is known as content scrambling system (“CSS”). CSS prevents users from viewing DVDs on devices not authorized by the copyright holder. [135] It does this by encrypting the contents of the DVD so that only licensed hardware devices can decrypt them. [136] To be licensed, a hardware device must not allow copying of the content of DVDs. [137] Licensed devices include stand-alone DVD players and DVD players for Microsoft Windows. Like the copying technology in PlayStations, it is arguable that CSS does not directly prevent copyright infringement. Rather, it deters users from purchasing infringing copies.
91. Applying the Sony v Stevens case, discussed later in this paper, however, it would now seem that the technology in DVDs does indeed constitute a technological protection measure, thereby expanding the definition of TPMs and the legality of those devices designed to circumvent this technology. As will be discussed, the court’s analysis in this regard has also raised concerns about increased access controls and the ability of copyright law to deal with the digital environment.
Technological Protection Measures and Users’ Rights
92. One of the principal grounds of objection to the legal enforcement of technological protection measures is that they protect all content, whether that content would be entitled to copyright protection under the Copyright Act (Cth) or not. Indeed, they prevent access to, and in some cases copying of, all the information they protect. They do not discriminate between content that is copyrightable and that which is not copyrightable. [138]
93. Similarly, they do not discriminate between a permitted use of a copyrighted work and a non-permitted use. [139] They do not simply protect the copyright owner’s exclusive rights. They protect whichever rights the copyright owners choose to give themselves, and allow copyright owners to restrict access in ways not possible in the print world.[140] For example, the Adobe eBook Reader enables the publisher of the eBook to disable or enable various functions such as copying, printing and loaning. [141] In doing so they are preventing users from using the work for fair dealing purposes.
94. Effectively, the only way for users to exerc ise their fair dealing rights and copy works protected by TPMS is to circumvent those TPMs. However, the new anti- circumvention provisions outlaw dealings in circumvention devices and services with the result that circumvention is now extremely difficult, if not impossible. The anti-circumvention provisions are explained below. An overview of these provisions is required in order to determine if the appropriate balance between copyright users and copyright owners has been achieved.
Anti-Circumvention Provisions
95. Technological protection measures (“TPMs”) have been introduced by copyright owners in order to prevent infringement of copyrighted works that are in digital format and are thus able to be easily reproduced and distributed. However, many of them have the side effect of preventing permitted uses of the works, including fair dealing. In order to enforce these rights, copyright users have had to resort to various acts of circumvention. For example, the only way for users to copy a work that is contained on a CD with copy protection is to develop some method of circumventing the copy protection.
96. It would, of course, be naive to think that circumvention is only carried out for the purpose of exercising fair dealing rights. TPMs are also, and far too frequently, circumvented by people who wish to perform acts which constitute copyright infringement of the works that the TPMs seek to protect. Hence, a conflict has arisen between copyright owners who want to protect their works from such copyright infringement, and copyright users who want to access those works for fair dealing purposes. This conflict was partially resolved with the introduction of the World Intellectual Property Organisation’s Copyright Treaty (“WIPO Copyright Treaty”) in 1996 which introduced the concept of “anti-circumvention laws”.[142]
The WIPO Copyright Treaty[143]
Circumvention of Technological Measures
97. During the negotiations leading up to the WIPO Copyright Treaty’s introduction, copyright owners sought to outlaw technologies that enabled circumvention of TPMs.[144] That is, they wanted to make the circumvention devices illegal, rather than the act of circumvention. [145] The initial proposed text prohibited the importation, manufacture and distribution of protection-defeating devices or services the primary purpose or effect of which was to circumvent any TPM.[146]
98. As expected, the consumer electrics industry strongly objected to this legislation. [147] Although the prohibition was only meant to cover “black boxes” that had no legitimate purposes, they argued that it was so broad it would encompass many devices that could be used for legitimate purposes. [148] They were concerned that the provision would impede lawful uses of works in the public domain and prevent users making fair use of protected works.[149]
99. Copyright users objected to the proposed text for the same reason. They too were concerned that it would enable copyright owners to prevent any access to a work, including access to material that has passed into the public domain, and access for fair use purposes.[150]
100. The resulting clause in the WIPO Copyright Treaty is very broad and does not specifically address any of these concerns. Article 11 provides as follows: “Contracting parties shall provide adequate legal protection and effective legal redress against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne Convention and that restrict acts, in respect of their works, which are not authorised by the authors concerned or permitted by law.”[151]
101. This clause effectively leaves it to the member states to decide how they wish to protect TPMs.[152] It simply requires states to afford legal protection to TPMs. It does not give any guidance as to how this should be achieved. As a result, in giving effect to this clause member states have diverged in the type and degree of protection they afford TPMs.[153] Although other countries have generally followed the example set by the US, there are slight differences in their implementation of the WIPO Copyright Treaty.
Limitations and Exceptions
102. The WIPO Copyright Treaty also contains a clause concerning the application of the limitations and exceptions to the digital environment. Specifically, Article 10 provides as follows: “(1) Contracting Parties may, in their national legislation, provide for limitations of or exceptions to the rights granted to authors of literary and artistic works under this Treaty in certain special cases that do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the author. “(2) Contracting Parties shall, when applying the Berne Convention, confine any limitations of or exceptions to rights provided for therein to certain special cases that do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the author.”[154]
103. The Agreed Statement Concerning Article 10 clarifies this by saying that Article 10 permits contracting parties to carry forward and appropriately extend into the digital environment limitations and exceptions in their national laws, and devise new exceptions and limitations that are appropriate in the digital networked environment.[155]
104. According to Fitzpatrick, these statements “entrench the role of doctrines of fair use and fair dealing, in addition to other measures which allow public use of copyrighted materials.”[156] Arguably, “entrench” is not the appropriate word here given that Article 10 is not mandatory and Article 11 is. Article 10 says that contracting parties may provide for limitations or exceptions while Article 11 says that contracting parties shall provide adequate legal protection against the circumvention of TPMs. All this seems to entrench is the idea that copyright owners’ rights prevail over copyright users’ rights.
The US Implementation – DMCA
105. In October 1998 the United States gave effect to the WIPO Copyright Treaty directives by introducing the Digital Millennium Copyright Act (“DMCA”). A new chapter was added to the Copyright Act of 1976 (“Copyright Act (US)”) (Chapter 12) in order to introduce what the Copyright Office referred to as “technological adjuncts to the exclusive rights granted by copyright law.” [157] These provisions have extended copyright owners’ rights far beyond the traditional exclusive rights, arguably at the expenses of users’ rights.
Circumvention of Copyright Protection Systems
106. The first section in Chapter 12 of the Copyright Act (US) and the section that deals with circumvention of copyright protection systems (another name for TPMs) is section 1201. Section 1201 implements the obligation to provide adequate and effective protection against circumvention of technological measures used by copyright owners to protect their works.[158] It divides TPMs into two categories, those that control access to a copyrighted work, [159] and those that protect a right of a copyright owner[160] (for example, by preventing copying of a copyrighted work).
107. Making or selling devices or services that are used to circumvent either category of TPM is prohibited in certain circumstances.[161] Section 1201 makes it illegal to “manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service or device, component, or part thereof”.[162] There is a further requirement that the technology must either be primarily designed or produced for the purpose of circumventing the technological measure, have only a limited commercially significant purpose or use other than to circumvent a TPM, or be marketed for use in circumventing a TPM.[163]
108. The reason for the distinction between access control measures and copy control measures is that the act of circumvention is prohibited only in relation to access control measures, and not copy c ontrol measures.[164] Section 1201(a)(1)(A) provides that “no person shall circumvent a technological measure that effectively controls access to a work”, but there is no equivalent section for copy control measures. The following table illustrates this:[165] Circumventing technological protection measures Trafficking in circumvention devices or services Access control measures Copy control measures prohibited by s 1201(a)(1)(A) prohibited by s 1201(a)(2) prohibited by s 1201(b)(1)
109. The US Copyright Office explains that this distinction was employed so that the public would be able to continue to make fair use of copyright works.[166] It argues that the fair use doctrine allows some copying of a work but it is not a defence to the act of gaining unauthorised access to a work. [167] This argument is flawed. Specifically, if a person wishing to make fair use of a copyright work is not able to access that work, how can they copy the work? If an access protection measure is used in conjunction with a copy protection measure (which they often are), then this provision provides no assistance to those wishing to make fair use of the work. Copyright laws do not give copyright owners the exclusive right to access their work. There is thus no reason why people wishing to make fair use of a copyrighted work should not be able to access the work.
Exceptions
110. The prohibitions
in
section 1201 are subject to a number of exceptions. These
include:
111. In recognition of the likelihood that section 1201 would impact on the activities
of many individuals and organisations, the legislature established an ongoing administrative rule-making procedure to evaluate the impact of the prohibition on users of copyrighted works who are likely to be adversely affected by the prohibition.[173] These rulemakings are made by the Librarian of Congress on the recommendation of the Register of Copyrights. The Act sets out a list of criteria that the Librarian of Congress must consider. [174] On 27 October 2000, the Librarian of Congress made its first rulemaking under this provision, creating two new classes of works that are now exempt from the prohibition. [175] To date this is the only rulemaking that has been made.
112. The exception for “non-profit libraries, archives and educational institutions” would be of assistance to those organisations that wish to make fair use of works. However, these are not the only organisations which are entitled to the fair use defence. For example, some people may wish to rely on the fair use defence in order to access works for criticism or comment, or for reporting news.[176] There is no specific exception that allows people to circumvent T PMs if it is for fair use purposes. Presumably, this is why the US legislature thought it necessary to include the fair use saving clause.
The Fair Use Saving Clause
113. Section 1201 contains a saving clause that states that “nothing in section 1201 shall affect rights, remedies, limitations, or defences to copyright infringement, including fair use, under this title”.[177] However, this section does affect fair use rights and therefore this clause would appear to be mere rhetoric. As I have explained above, circumventing an access control measure is prohibited which means that users cannot access works locked away by an access control measure even if they only wish to access it for fair use purposes. For example, if a work is password protected then fair users has no way of accessing that work.
114. Although users are able to circumvent copy control measures, this will be difficult due to the fact that dealings with circumvention devices are prohibited. Unless the user is technologically sophisticated and can develop a method of circumventing the work themselves they will be forced to purchase circumvention devices and services. However, it is illegal to manufacture or provide circumvention devices to the public so it will be very difficult to obtain those circumvention devices and services. Clearly section 1201 does affect fair use rights and therefore this fair use saving clause is rather pointless. Indeed, the Australian legislature did not see the need for such a section in its implementation of the WIPO Copyright Treaty.
The Australian Implementation – Digital Agenda Act
115. Although Australia is not a contracting party to the WIPO Copyright Treaty[178] , Australia was an “active participant” in the Diplomatic Conference in December 1996 at which the WIPO Copyright Treaty was agreed upon. [179] The Copyright Amendment (Digital Agenda) Act 2000 (Cth) was introduced in order to bring Australian law in line with international standards and to “update Australia’s copyright standards to meet the challenges posed by rapid developments in communications technology.” [180]
116. According to the Explanatory Memorandum for the Copyright Amendment (Digital Agenda) Bill 1999 (Cth) one of the aims of the amendments is to ensure that the balance between the rights of owners and rights of users that has applied in the print environment is carried forward to the digital environment. The Explanatory Memorandum predicts that: “These provisions will operate to provide copyright owners and their licensees with an effective means of enforcing their rights in the online environment whilst simultaneously allowing for the operation of some exceptions to the exclusive rights of copyright owners. In this way, the provisions are intended to strike a fair balance between the rights of copyright owners and the rights of copyright users.” [181]
117. The Digital Agenda Act is thought to be more sympathetic to the users of copyrighted works than the DMCA, particularly in relation to the circumvention of TPMs.[182] The DMCA goes far beyond what is required by the WIPO Copyright Treaty.[183] It covers dealings with circumvention devices as well as the act of circumvention itself. In contrast, the Digital Agenda Act only covers dealings with circumvention devices. Hence, the focus is more on the preparatory activities than the circumvention.[184] This is illustrated below: Access control measures Copy control measures Circumventing technological protection measures Dealings with circumvention devices or services prohibited by s 116A(1) prohibited by s 116A(1)
118. The reason why the Australian Parliament took this approach is explained in the Exposure Draft and Commentary – Copyright Amendment (Digital Agenda) Bill 1999: “The Government is of the view that adequate legal protection against the circumvention of effective technological protection measures can only be afforded if the manufacture and commercial dealings in circumvention devices are banned. As the proposed EC Directive[185] notes… it would be more effective for owners of copyright to be able to seek remedies against the manufacture and commercial dealings with devices rather than seek remedies against individual users of those devices.”[186]
119. The obvious difficulty in seeking remedies against the individual users is that it is difficult, (but not impossible, as recent cases on peer to peer music file swapping has shown) to identify and locate them. If the individuals are located in other jurisdictions (which is quite possible) then you also have the problems associated with cross-border litigation and enforcement of foreign judgments.
120. In addition, commercial dealings in devices pose more of a threat to the commercial interests of copyright owners.[187] There is an obvious commercial advantage in attempting to recover damages from a large company as opposed to an individual. In the Federal Court of Australia decision of Sony v Stevens,[188] for example, Sony chose to pursue a manufacturer of the mod-chips (the alleged circumvention device) rather than the multitude of individuals who have used mod-chips to infringe copyright in PlayStation games.
Activities in Relation to Circumvention Devices
121. As noted above, the Copyright Act 1968 (Cth) does not prohibit the actual use of circumvention devices, but rather commercial dealings in such devices. The relevant provision in the Act is section 116A. This section contains three elements that must be satisfied for an action to succeed. Firstly, the work or other subject-matter must be protected by a technological protection measure.[189] The definition of “technological protection measure” is discussed above.
122. The
second element is that the person must carry out one of the following
prohibited acts:
123. Thirdly, the person must have known, or ought reasonably to have known, that the device or service would be used to circumvent, or facilitate the circumvention of, the TPM.[197] The onus of proof is reversed in relation to this element. A rebuttable presumption arises that the defendant knew, or ought reasonably to have known, that the circumvention device or service would be used for one of the prohibited purposes.[198]
124. Gamertsfelder suggests that the reason the onus of proof is on the defendant is because Parliament assumed that it would be easier for the defendant to rebut the presumption than for copyright owners to prove the defendant’s knowledge.[199] It is more logical to require the defendant to adduce evidence of something that is peculiarly within his or her own knowledge and is in his or her interest to bring to the attention of the court.[200] For example, it would be difficult for a copyright owner to prove that the defendant had not received a signed declaration in relation to the supply of a circumvention device or service (and hence was protected by the “permitted purpose” exception explained below).[201]
125. If a copyright owner can satisfy these three elements and no exceptions apply, they may be able to bring an action against a defendant.[202]
Exceptions
126. The Act provides for some exceptions to the exclusive rights of copyright owners in order to maintain a fair balance between the rights of copyright owners and copyright users. However, the exceptions provide little assistance to copyright users who wish to make fair use of works protected by TPMs.
127. The first exception is in relation to anything lawful done for the purposes of law enforcement or national security by the Commonwealth or a State or Territory.[203] The second exception is in relation to the supply of a circumvention device or service to a qualified person for a permitted purpose.[204] This subsection also requires that the person give the supplier a signed declaration that the device or service is to be used for a permitted purpose, identifying what that permitted purpose is and stating that the work is not readily available in any other form not protected by a TPM.[205]
128. The permitted purposes include reverse engineering, error correction, security testing, copying by Parliamentary libraries for members of Parliament, copying by libraries and archives for users, copying for preservation and other purposes, and copying by the Crown. [206] “Qualified person” is defined in the individual sections that relate to permitted purposes.
129. The requirement that the work must not be readily available to the person in a form that is not protected by a TPM may prove to be problematic in practice. As Gamertsfelder points out, it is not clear what is meant by “readily available”.[207] How much searching is necessary before the work is considered readily available? Also, how much cost will need to be incurred before something is no longer readily available? It is difficult to see why Parliament thought it necessary to impose these onerous obligations on top of the preconditions to exercising rights under ss47D, 47E and 47F. [208]
130. Unlike the DMCA, which contains a fair use “saving provision”, the Digital Agenda Act does not mention fair dealing anywhere in the section that concerns circumvention devices. Fair dealing is not one of the permitted purposes and the section does not make any provision for fair dealing. Effectively, this means that fair dealing rights will not apply to works which are protected by TPMs.[209] Given that dealings with circumvention devices are prohibited in most cases, it will become quite difficult to obtain them. [210] Therefore, although the fair dealing defence is technically still available, people will not be able to exercise their fair dealing rights if they are not able to obtain circumvention devices which enable them to access the works that are protected by TPMs. Although the use of circumvention devices is not prohibited, it might as well be if circumvention devices are unavailable.
131. The availability of circumvention devices is inhibited by the fact that the second exception only applies to the supply of circumvention devices. “Supply” is defined as “(a) in relation to a circumvention device – sell the device, let it for hire, distribute it or make it available online; and (b) in relation to a circumvention service – provide the service”.[211] According to Gamertsfelder this means that: “organisations that are in a position to ‘supply’ circumvention devices will not be able to exhibit, advertise, promote or market this fact... This begs the question: how do organisations communicate the availability of circumvention devices and services to copyright users?”
132. If copyright users are not aware of the availability of circumvention devices or services they will not be able to exercise fair dealing rights.[212]
133. Despite claims that the Digital Agenda Act will “replicate the balance that has been struck in the print environment between the rights of owners of copyright and the rights of users”,[213] the balance seems to have tipped strongly in favour of copyright owners in the digital environment. Copyright users will have difficulty accessing and copying works that are protected by TPMs. Although they are not prohibited from circumventing the TPMs, they are effectively prevented from doing so because dealings in circumvention devices have been outlawed.
The Copyright Balance
134. It is well established in copyright law that copyright represents a delicate balance between the rights of copyright owners and the interests of copyright users.[214] It is also a widely held belief that this balance should be maintained in the digital environment.[215] At least, this was the view of the Australian Parliament when the Copyright Amendment (Digital Agenda) Act 2000 (Cth) was introduced. [216]
135. Two years after the introduction of the anti-circumvention provisions it appears that the existing balance has not been maintained in the digital environment. The anti-circumvention provisions inhibit the activities of those wish ing to use copyright works for fair dealing purposes. The fair dealing provisions are a fundamental aspect of the copyright balance and yet now risk being overridden.
136. Copyright owners feel that the anti-circumvention provisions are necessary in the digital environment because of the ease with which perfect reproductions can be made and the difficulty in detecting copyright infringement. Copyright users, on the other hand, object to the anti-circumvention provisions because they provide legal protection of technological protection measures (“TPMs”) which make it very difficult for them to make use of copyright works.
The Stakeholders – Copyright Owners and Copyright Users
137. The “copyright owners” referred to throughout this paper are basically the people who produce and distribute copyrighted works. This includes those in the film industry, the recording industry, the multimedia industry and the computer games industry. These copyright industries have a strong presence in the US and Europe. Obviously they favour strong copyright protection because of the economic threat that digital piracy poses to them.
138. The “copyright users” are those people who wish to make use of copyright works, in particular, at least for the purposes of this paper, for fair dealing purposes. This includes academics, researchers, students, journalists, critics and reviewers. Rigid copyright protection and the threat of increased legal intervention make it difficult for these people to use works for fair dealing purposes. They are, therefore, wary of the anti-circumvention provisions and the push by some to strengthen them.
139. The copyright industries were primarily responsible for the introduction of the anti-circumvention laws in the US. They managed to persuade the Clinton Administration that a ban on circumvention devices was necessary to protect their works from piracy in the digital networked environment and to induce them to make digital works available via the Internet.[217]
140. Amongst those opposed to the anti-circumvention provisions were the telecommunications companies and online service providers. However, according to Samuelson these companies “spent virtually all of their political capital on the safe harbour provisions” and therefore did little or no lobbying against the anti-circumvention provisions. [218] This left the other opponents of the provisions (the copyright users) in a relatively weak negotiating position. Hence, the anti-circumvention provisions basically took the form that the copyright industries preferred.[219] Given that the copyright industries did play such a large role in the formulation of the anti-circumvention provisions it is useful to look at what their reasoning for such strong copyright protection was.
The Price of Piracy
141. The main justification for the anti-circumvention provisions is that they assist in combating digital piracy. Digital piracy is a major problem in Australia and the US, as it is worldwide. This is partly because copying technology is becoming increasingly more available, has substantially dropped in price and is so advanced that it is almost impossible in many cases to distinguish between an authorised and unauthorised reproduction.
142. CD-Recordable (“CD- R”) technology is a good example of a copying technology that is now widely available and inexpensive. In 1989 it cost over $US100,000 to purchase a system that could record onto CDs.[220] In 2002 the devices that enable you to record onto CDs (CD- R drives) are included in almost all personal computers or can be purchased separately for around $US100. [221] Writable CDs (blank CDs that can be recorded onto using CD- R drives) have also substantially dropped in price over the last few years. They have dropped from $20 in 1996[222] to around $1 or 2 in 2002. [223]
143. It is difficult to measure the amount of money that copyright industries lose to copyright infringement because a lot of it goes undetected. However, the MPAA offers the following estimate of the price of piracy in relation to the motion picture industry: “The Motion Picture Association of America (MPAA) and its international counterpart, the Motion Picture Association (MPA), estimate that the U.S. motion picture industry loses in excess of $3 billion annually in potential worldwide revenue due to piracy. Due to the difficulty in calculating Internet piracy losses, these figures are NOT currently included in the overall loss estimates. However, it is safe to assume Internet losses cause untold additional damages to the industry.”[224]
144. The $3 billion figure includes piracy of analog technologies such as videocassettes and laser discs (although laser disc technology is basically obsolete), as well as digital technologies such as DVDs (digital video discs) and VCDs (video compact discs). The anti-circumvention provisions are not directed at videoc assettes because they do not contain any TPMs to prevent copyright infringement. Also, the quality of videocassettes does not compare to that of DVDs and it is not practical to transfer the content of videocassettes onto the Internet. It is the digital technologies that pose a real threat to the copyright industries.
145. Digital piracy also affects the recording industry. According to the Recording Industry Association of America (“RIAA”), which represents the US recording industry, the sale of pirated recordings exceeds $4.2 billion worldwide.[225] The RIAA recently released statistics on music piracy in the US which showed that in the first half of 2002 CD shipments dropped 7% while seizures of counterfeit CDs increased by 69.9%. [226]
146. The total US music shipme nts dropped from $5.93 billion in the first half of 2001 to $5.43 billion in the first half of 2002. [227] Digital piracy of music is also a problem in Australia, with the Australian Record Industry Association (“ARIA”) reporting that music piracy levels incre ased from 4% to 9% between 1998 and 2001. [228]
147. Computer games piracy is another area of concern. Sony has estimated that games piracy costs the Australian industry $30 million a year.[229] In fact, the only type of piracy that is actually decreasing over time is software piracy. According to a survey conducted by the Business Software Alliance, software piracy in Australia decreased from 33% in 2000 to 27% in 2001.[230] The worldwide piracy levels had been steadily decreasing since 1994 (when the survey began) but in the last two years the levels increased from 37% in 2000 to 40% in 2001. [231]
A State of Panic Leading to Increased Restrictions?
148. Lest it be thought that piracy is not relevant to the issue of fair use, it is worth noting the recent public relations and legal battles now ensuing over what is commonly referred to as peer to peer music file sharing. The Napster case, discussed thoroughly by other authors [232] and beyond the scope of this paper, signified the beginning of an all-out assault by the Recording Industry Association of America (RIAA) and others over digital copyright in peer-to-peer networks. Since then, the case law on this issue has revealed an undeniable intertwining of both politics and copyright law.[233]
149. There is little doubt that music piracy is an issue in need of attention, and in this, the digital age, the meaning and effect of piracy, and our ability to deal with it, take on a legal and social significance not yet seen by governments, copyright holders and copyright users.
150. In submissions before the House of Representatives Standing Committee on Legal and Constitutional Affairs in 1999[234] , the Music Industry Piracy Investigations (MIPI) submitted that piracy, in all its forms, was equivalent to 7% of the identified music market in Australia [235] , while the Australian record industry reported in March 2001 that the black market in pirated in CDs amounted to $70 million a year. [236] This total, MIPI explained, was likely to increase with the rapid rise of infringement on the Internet and the emergence of peer-to-peer networking. As MIPI noted, the most common forms of this activity consist of the posting of sound recordings, music and lyrics[237] and in relation to sound recordings, the most common form of infringement is committed by the use of what is referred to as the “MP3” format.
151. So pervasive is this type of infringement that at any given time, in excess of 300,000 infringing MP3 files are posted on the Internet.[238] Each contains sound recordings posted without the consent of the copyright owner and it is possible for more than 3,000,000 pirate sound recordings to be downloaded, worldwide, every 24 hours.[239]
152. In addition, approximately 70,000 new infringing MP3 files are posted on the Internet by approximately 500 new infringers each month.[240] All of this, MIPI submitted, resulted in losses in Australia in 1998 in excess of $67,000,000. [241] This sum may, however, be conservative, because this amount does not include a number of losses such as those incurred by composers or publishers; losses in revenue resulting from unpaid taxation; losses in revenue resulting from diminished earnings to IP rights owners; and losses in revenue resulting from diminished earnings to others in the production/distribution process (such as retailers and others service providers).[242]
153. In contrast to these assertions others have queried the actual loss of profits claimed, citing instead a number of factors such as a downturn in the economy, and the fact that lost revenue statistics are based on the revenue that would have been made had a person actually purchased a legal product instead of downloading a pirated copy. Refusing to acknowledge the growing statistical evidence that the music industry is losing money as a result of online copyright infringement, one commentator has even gone so far as to suggest that: “[b]ecause of the exceptional brilliance and innovation evident in today’s pop offerings, discussions of dwindling consumer interest in vapid, predictable cliché products would clearly be out of place. No, the industry is doing everything right, so the only possible explanation for a loss of revenue has got to be the pestilence of Internet piracy.”[243]
154. While it would be naive to deny the reality of music and other forms of copyright piracy, as Bowrey and Rimmer explain, the present debate continues to rage in terms of opposition.[244] The record companies claim piracy is forestalling the development of new talent, as well as damaging the income potential of artists and record companies. Alternatively, peer-to-peer users claim copyright law acts as the disempowerment of creative talent, and see the law as entrenching corporate greed.[245] Still others fear that a crackdown on digital access will only serve to deter legitimate on line use of materials which clearly do not offend the very basics of copyright use.
155. These concerns have not been eased with recent litigation in both the US and Australia. In recent litigation in the US the RIAA has sought to remove peer-to- peer networks completely, relying on provisions of the Digital Millennium Copyright Act 1998 (US) (the DMCA). But even in a country where legislative controls on Internet access grow more strident every day, the rights of copyright holders, those who access material online, and those who provide it, seem at best uncertain.
156. As Borland notes, in the largest case post-Napster, MGM is suing Grokster and Streamcast[246] for copyright infringements in relation to file sharing networks. In a remarkable reversal of previous victories for MGM, the Californian Federal Court recently handed down summary judgment in favour of the defendants.[247] Specifically, Wilson J ruled in the Los Angeles Federal Court that Grokster and Streamcast were not liable for copyright infringements that took place using their software. This is arguably a big win for peer-to-peer networking, although the case will almost certainly be appealed. [248]
157. Relevant to Australian copyright watchers, KaZaA has been joined in the action of Grokster and Streamcast, although it was not included in the summary proceedings. Sha rman, which now owns the key assets of KaZaA, is a company incorporated in Vanuatu and primarily run from Australia. [249] In a first under the DMCA, Wilson J of the District Court California issued an opinion that denied Sharman Network’s motion to dismiss for lack of personal jurisdiction. The Court held no general jurisdiction but found specific jurisdiction citing “specific quantum of commercial contact”.[250] Significant in the KaZaA case will be the issue of enforcement across jurisdictional boundaries.
158. Despite this setback, the RIAA is increasing its efforts to shutdown peer-to-peer file sharing by pursuing users and facilitators of KaZaA software. In the Washington District Court, Verizon Internet Services has been ordered to divulge the name of a Verizon subscriber allegedly using the KaZaA software to upload more than 600 songs while connected to the company’s Internet service.[251] . The controversy over the subpoena provisions is not just over the revelation of a name, but the legal mechanism used. As one commentator has noted, the DMCA s.512(h) subpoena provisions are “turbo charged”, cheaper and faster than other methods. Anyone can now identify users without first filing a lawsuit. Verizon challenged the order arguing the provision does not apply to ISPs that are merely a conduit for peer-to-peer users and which are not hosting potentially infringing material. The court rejected these arguments.[252]
159. The main purpose of the anti-circumvention provisions is to prevent commercial dealings in circumvention devic es and services because this is what poses the greatest threat to the copyright owners. Fair dealing is not raised as a defence in the anti-circumvention cases because the defendant is not being sued for copyright infringement but for producing anti-circumvention devices and services. However, in the US cases, the fact that the anti-circumvention provisions override fair dealing has been relied upon as a way of challenging the constitutionality of those provisions on the basis that they violate the First Amendment. Defendants have also relied upon the fact that the TPM in question prohibits fair dealing and that their circumvention device permits fair dealing in order to prove that they are not liable. It is therefore useful to consider some of the statements made by the courts in relation to fair dealing and the anti-circumvention provisions. The willingness of both some courts and those who bring these cases to them send an unsettling message to those concerned about increased restrictions on the right to fair use and Internet - based information and technologies.
The DeCSS cases - Universal v Reimerdes and Universal v Corley
160. In 1999, Jon Johansen, a 15 year old Norwegian teenager, developed software that enables users to view DVDs on players that are not approved players.[253] This software is known as DeCSS because it circumvents the copy control measure in DVDs, the content scrambling system (“CSS”). Johansen did this in order to be able to play DVDs on his Linux machine because the Linux operating system did not support any licensed DVD players at the time. [254] He then uploaded the DeCSS program onto the World Wide Web.
161. On 9 January 2002, the Norwegian government, under extreme pressure from the US entertainment industry, indicted Johansen. [255] The Motion Picture Association of America (“MPAA”) was the driving force behind Johansen’s indictment. The MPAA became aware of the software in 1999 and subsequently contacted the Norwegian Economic Crime Unit to request a criminal investigation into Johansen. [256] Once he turned 18, Johansen was indicted for violating a section of the Norwegian Criminal Code which outlaws breaking into another person’s locked property to gain access to data that one is not entitled to access[257] (for want of a more appropriate crime). He could face two years in prison if convicted.
162. The MPAA then went after Eric Corley, one of the hundreds of people who had posted a copy of DeCSS on their websites, and sought to make an example of him. He had written an article on DeCSS, which contained the DeCSS code itself as well as links to other sites which contained the code, and posted it on his website, “2600: The Hacker Quarterly”. [258] Eight motion picture studios bought an action in the US District Court for the Southern District of New York seeking injunctive relief against Corley under the DMCA. [259] Following the trial, the District Court entered a permanent injunction barring Corley from posting DeCSS on his website or from knowingly linking to any other website containing DeCSS.[260] Corley then appealed to the United States Court of Appeals.
The US Court of Appeals’ Decision
163. One of Corley’s primary arguments was that the DMCA violates the First Amendment and the Copyright Clause by unduly obstructing the “fair use” of copyrighted materials.[261] He tried to argue that section 1201(c)(1) which provides that “nothing in this section shall affect rights, remedies, limitations or defences to copyright infringement, including fair use, under this title” permitted the circumvention of TPMs when the material would be used for fair use purposes. [262] The court disagreed, saying: “[Subsection 1201(c)(1)] clearly and simply clarifies that the DMCA targets the circumvention of digital walls guarding copyright material (and trafficking in circumvention tools), but does not concern itself with the use of those materials. Subsection 1201(c)(1) ensures that the DMCA is not read to prohibit the “fair use” of information just because that information was obtained in a manner made illegal by the DMCA.”[263]
164. Corley also argued that fair use is rooted in and required by both the Copyright Clause and the First Amendment and that the DMCA unconstitutionally eliminates fair use of copyrighted materials. The court noted that Corley did not claim to be making fair use of any copyrighted materials and said that the evidence as to the impact on fair users was inadequate and failed to address the issues. [264] The court found that although CSS prevented direct copying of DVDs, it did not prevent fair users from making a “variety of tradit ional fair uses” such as commenting on their content, quoting excerpts from their screenplays, and even recording portions of it by pointing a camera at the screen. The court rejected Corley’s argument, stating that the fact that the resulting copy is not as perfect or manipulable as a digital copy provides no basis for a claim of unconstitutional limitation of fair use.[265]
165. Corley then appealed to the United States Supreme Court but dropped the appeal in July of 2002, after realising that the court was unlikely to reach a decision in his favour. [266] The Electronic Frontier Foundation, that assisted Corley in his legal defence, felt that by going ahead with the appeal rather than waiting for a stronger test case to emerge, they would have risked setting a precedent that could hurt future challenges to the DMCA. [267]
166.It has been argued by some commentators that this decision highlights the fact that the anti-circumvention laws are not about preventing copyright infringement. Neither the software developers nor the defendants were trying to copy DVDs – the software developers were trying to enable DVDs to play on Linux machines and the defendants were trying to publish the code so that others would be able to play DVDs on Linux machines. But the law is not concerned with whether your intention is to infringe copyright or enable DVDs to play on other devices or use the copyrighted works for fair dealing purposes. Rather, it is concerned with whether your activities enable others to infringe copyright. Hence, it has been argued, the law protects the interests of copyright owners at the expense of copyright users. As Macmillan states, “the effect of this case is to strengthen considerably the rights of the filmed entertainment corporations over their output and fatally undermine the cogency of the fair use/fair dealing defences.”[268]
The Russian Programmer Case – USA v Elcomsoft and Sklyarov
167. Obviously the US government could not prosecute a Norwegian programmer under their own copyright laws while he was in Norway. They thus pressured the Norwegian government into prosecuting him under Norwegian laws. Similarly, they could not prosecute a Russian programmer for breaching US copyright laws while he was in Russia. Fortunately for the US government, the Russian programme r decided to go to the US for a software hacker convention. Upon his arrival in Las Vegas on 16 July 2001, Dmitry Sklyarov was arrested.[269]
168. Sklyarov’s arrest caused uproar amongst Internet civil libertarians. [270] Sklyarov had written software that overcomes the copyright protection in Adobe eBooks, an activity which is not illegal in Russia. He never sold the program to anyone (although his employer did) and his employer never infringed anyone’s copyright (although it potentially permitted others to do so).[271] He was charged with trafficking in, and offering to the public, a software program that could circumvent technological protections on copyrighted material under section 1201(b)(1)(A) of the US Copyright Act of 1976. He was also charged with aiding and abetting his employer, Russian software development company Elcomsoft.[272] Adobe quickly withdrew support for the prosecution in the face of a “self-inflicted public relations nightmare”.[273]
169. On 28 August 2001, Sklyarov and Elcomsoft were both indicted with four counts of circumvention offences and a charge of conspiracy to traffic in a circumvention program. [274] On 13 December 2001, Sklyarov was released from US custody and allowed to return home to Russia under an agreement with the US government that he would testify in the case against Elcomsoft.[275] Elcomsoft’s trial was meant to commence on 21 October 2002 but Sklyarov and Elcomsoft’s chief executive (both crucial witnesses) were denied US visas.[276]
170. In January 2002, ElcomSoft’s legal team filed motions in the US District Court for the Northern District of California to dismiss the charges against ElcomSoft. The hearings for these motions were held in March and April of 2002. Judge Ronald Whyte handed down his decision on 8 May 2002.
The US District Court’s Decision
171. In his decision, Judge Ronald Whyte first discussed the technology at the centre of this case.[277] The Adobe eBook Reader enables electronic books (“eBooks”) to be read on personal computers. It enables publishers or distributors of electronic books to limit the distribution to those who pay for a copy. It also allows the publisher to grant or withhold a range of privileges from the consumer, for example, printing the eBook or lending the eBook to another user. [278]
172. Elcomsoft developed and sold a produc t known as the Advanced eBook Processor (“AEBPR”) which allows a user to remove the restrictions from Adobe Acrobat PDF files and eBooks so that they can be copied, printed and distributed electronically.[279] As Judge Whyte points out, this technology may be used for both fair use purposes and for copyright infringement: “The conversion accomplished by the AEBPR program enables a purchaser of an ebook to engage in “fair use” of an ebook without infringing the copyright laws, for example, by allowing the lawful owner of an ebook to read it on another computer, to make a back-up copy, or to print the ebook in paper form. The same technology, however, also allows a user to engage in copyright infringement by making and distributing unlawful copies of the ebook.”[280]
173. As in the DeCSS case, the defendant challenged the constitutionality of the DMCA. They argued that the DMCA was unconstitutionally vague because it was not clear whether Congress intended to ban all circumvention devices or only those that would facil itate copyright infringement.[281] The court disagreed, holding that it is clear that the statute imposes a blanket ban on trafficking in or the marketing of any circumvention devices.[282] Judge Whyte said that Congress’ intention was to ban all circumvention devices because most of the time these devices would be used to infringe copyright.[283] He held that Congress’ intent to preserve fair use was not inconsistent with a ban on trafficking in circumvention devices, even those that could be used for fair use purposes. He did, however, acknowledge that it would be more difficult to circumvent TPMs for the purpose of engaging in fair use if circumvention devices could not be readily obtained. [284]
174. The defendant also raised a First Amendment argument, claiming that the DMCA is unconstitutional because it infringes upon the First Amendment rights of third parties to engage in fair use.[285] The court did not agree that the First Amendment protected the right of fair use [286] , and in any event, did not agree that the DMCA eliminated fair use. Judge Whyte said that although fair use may have become more difficult, it had not been prohibited.[287] He said it was still possible to handwrite or retype the eBook, for example. Quoting from the Corley decision above, he said that a “fair user” did not have a right to the most technologically convenient way to engage in fair use.[288] He concluded that the defendant’s motions to dismiss the indictment on constitutional grounds should be denied.[289]
175. Justice Whyte acknowledged many times in his decision that fair use has been made more difficult as a result of the anti-circumvention provisions. He recognised that the anti-circumvention provisions do have a serious impact on the ability of users to make fair use of copyright works. However, he concluded that digital piracy poses a sufficient threat to justify depriving users of these rights. Specifically, he stated: “The inescapable conclusion from the statutory language adopted by Congress and the legislative history discussed above is that Congress sought to ban all circumvention tools because most of the time those tools would be used to infringe a copyright. Thus, while it is not unlawful to circumvent for the purpose of engaging in fair use, it is unlawful to traffic in tools that allow fair use circumvention. That is part of the sacrifice Congress was willing to make in order to protect against unlawful piracy and promote the development of electronic commerce and the availability of copyrighted material on the Internet.”[290]
Australia’s Lead Precedent - Sony v Stevens
176. The first Australian decision concerning the anti-circumvention provisions in the Copyright Act (Cth) was handed down on 26 July 2002. The technology that this case concerned was precisely the type that the anti-circumvention provisions were directed at. However, at first instance, Sackville J found that the technology did not fall within the provisions, in a decision that was criticised by some as being inconsistent with the legislative intent of the provisions [291] and a similar UK High Court decision. [292] On appeal, the Full Court of the Federal Court found that the technology did in fact within the provisions, thereby arguably expanding the definition of a TPM and further tilting the copyright balance in favour of copyright holders, like Sony.
177. The action was brought by Sony, the manufacturer and distributor of PlayStation consoles and PlayStation computer games. Sony alleged that the defendant (Stevens) sold computers games for use in the PlayStation consoles which contained marks that breached Sony’s trade marks and that Stevens had engaged in conduct that constituted a contravention of s 42 of the Fair Trading Act 1987 (NSW). Sony also brought an action for contravention of s 116A of the Copyright Act (Cth) (the anti-circumvention provision). Sony alleged that each of the PlayStation games are protected by a technological protection measure (“TPM”) as defined in s 10(1) of the Copyright Act (Cth) that comprises the access code contained within a track on each of the CD-ROMs on which the games are contained and a device in the PlayStation console which ensures that access to the works is available solely by use of the access code.[293] They alleged that Stevens sold devices having a limited commercially significant purpose or use, or no such purpose or use, other than the circumvention or facilitation of the circumvention of the TPM. They claimed that Stevens knew or ought reasonably to have known that the devices sold by him would be used to circumvent or facilitate the circumvention of the TPM.[294]
178. The devices that Stevens sold are more commonly known as “mod chips” (“mod” being an abbreviation of “modification”). When a mod chip is inserted into a PlayStation console it enables imported PlayStation games and legitimate backup copies to be played. [295] The mod chips overcome the copy protection in DVDs and PlayStation games which use a system known as regional playback control (or regional coding). This technology is explained in more detail above. It effectively prevents consumers fro m purchasing films or PlayStation games overseas.
179. Copyright industries claim that regional coding is necessary because there are numerous reasons why movies must be released in different countries at different times[296] and because it prevents consumers from purchasing pirated copies from countries in which piracy is widespread.
180. The main issue in this case was whether the access code stored on the PlayStation game and the chip on the circuit board of the PlayStation console which reads and verifies the access code together constituted a “technological protection measure” that was “designed, in the ordinary course of its operation, to prevent or inhibit the infringement of copyright in a work”.[297] Sony advanced two main theories as to why the relevant protect ion device was a TPM, the main one being that the device inhibited the making of infringing copies of PlayStation games by rendering the exercise pointless. Unless the protective device could be circumvented, infringing copies would be unusable and therefore unsaleable.[298] They said that the definition of TPM was satisfied as long as the device removed or minimised the incentive for persons to copy games as a prelude to playing the copies in the console.[299]
181. The Australian Competition and Consumer Council (AC CC) disputed the claim that the devices were designed, in the ordinary course of their operation, to prevent or inhibit the infringement of copyright.[300] They argued that the protective devices did not discriminate between infringing and non-infringing copies.[301] The fact that the device deterred some people from unauthorised copying or importing of games did not mean the device prevented or inhibited copyright infringement.[302] The device merely prevented the consumer using copies of games in the console, an act which does not itself constitute infringement of copyright.[303]
182. Sackville J therefore had to determine whether it was enough to satisfy the definition of TPM that the device had the practical effect of deterring or discouraging infringement of copyright.[304] Sackville J held that Stevens' modchip was not a circumvention measure in breach of s 116A of the Copyright Act because Sony has no technological protection measure within the meaning of that term in s 10(1). This was because all the access code does is discourage people from copying PS2 games because they can't play them on their consoles. To be a technological protection measure, his Honour held, it must be designed to function, by its own processes or mechanisms, to prevent or hinder acts that might ot herwise constitute an infringement of copyright. His Honour concluded: “…a “technological protection measure”, as defined, must be a device or product which utilises technological means to deny a person access to a copyright work, or which limits a person ’s capacity to make copies of a work to which access has been gained, and thereby “physically” prevents or inhibits the person from undertaking acts which, if carried out, would or might infringe copyright in the work.... I do not think the definition is c oncerned with devices or products that do not, by their operations, prevent or curtail specific acts infringing or facilitating the infringement of copyright in a work, but merely have a general deterrent or discouraging effect on those who might be contemplating infringing copyright in a class of works, for example, by making unlawful copies of a CD-ROM.”[305]
183. His Honour made reference to the legislative history of s 116A of the Copyright Act (Cth) and said that although it is not conclusive on the question of construction, there is nothing to support the view that “a technological measure is to receive legal protection from circumvention devices if the only way in which the measure prevents or inhibits the infringement of copyright is by discouraging infringements of copyright which predate the attempt to gain access to the work or to copy it.”[306] He therefore found that Sony’s claim under s 116A failed.
184. Had the decision stood, it would have had far reaching implications for the copyright industry. It effectively legalises mod chips so that people may purchase PlayStation games from overseas and make their own back up copies of them. The decision would also have affected manufacturers of DVD players and DVDs as well because they too contain copy protection me asures and utilise the regional coding system, and it is possible to purchase mod chips for DVD players.
185. The decision would have had far reaching implications for those wishing to use works contained on CDs and DVDs for fair dealing purposes. Although fair dealing was not mentioned once in this decision, it was alluded to by the ACCC which pointed out at trial that the devices did not discriminate between infringing and non-infringing uses. The ACCC was not allowed to present arguments on behalf of the defendant in this case but it is highly likely that, had they been allowed to, the doctrine of fair dealing would have been raised. The effect of this decision, had it stood, would have been that those wishing to use works for fair dealing purposes could, for example, legally purchase a mod chip so that they could copy a “reasonable portion” of a film or computer game contained on a CD or DVD.
186. Sony immediately appealed it to the Full Court. After reviewing the legislative history of s 116A, Lindgren J (with whom the other judges agreed) held that Sackville J was wrong to limit “access” in the definition of technological protection device to “access for the purpose of subsequent infringement”. His Honour found: “…the extrinsic materials to which I have referred show an intention that the opening words coupled with par (a) of the definition of "technological protection measure" were intended to embrace that inhibition, in the sense of deterrence or discouragement of infringement, which results from a denial of access to, and therefore prevention of use of, a program copied in infringement of copyright.”
187. If, as in the present case, the owner of copyright in a computer program devises a technological measure which has the purpose of inhibiting infringement of that copyright, the legislature intended that measure to be protected (subject to any express exception), even though the inhibition is indirect and operates prior to the hypothetical attempt at access and the hypothetical operation of the circumvention device. By ensuring that access to the program is not available except by use of the Boot ROM, or the access code embedded in the PlayStation games, or both in combination, Sony's measure does inhibit the infringement of copyright in the PlayStation games in that way.
What next? Peer to Peer Shut Down and ISP Liability
188. Some have argued that this case represents a huge victory for all persons concerned about copyright piracy. Others, however, query whether the case signals a shift towards a more US-styled approach to Internet regulation – one which limits innovation and risks legitimate and fair dealings.
189. In that regard, it is worth noting that the tensions now evident in both camps is likely to increase if recent reports from the US suggest that Australia will soon be expected to follow the US approach to copyright piracy. According to Simon Hayes, writing for The Australian, US trade negotiators are pushing for Australia to sign up to a tough new copyright regime that could hold internet service providers liable for breaches: “The first round of talks in an Australian-US Free Trade Agreement will commence in March and the Internet industry is flagging that ISP liability for copyright material is on the table as far as the US is concerned. … The US Digital Millenium Copyright Act holds ISPs liable for the transmission of copyright material unless they sign up to a content management agreement that requires them to remove material judged to be in breach of copyright law.”[307]
190. These tensions have not been helped by the introduction in 2001 by US Senator Fritz Hollings of a Bill which, if passed, would have required that piracy- detection systems be built into all digital playback devices, including PCs.[308] As John Davidson explains, Hollings’ Security Systems Standards and Certification Act, “would silence all types of electronic devices by making it unlawful to manufacture, import, offer to the public or otherwise traffic in any interactive digital device that does not include and utilise certified security technologies.”[309] This, Davidson concludes, at least in so far as the downloading of music on the Internet is concerned, has resulted in a value-neutral medium becoming value- laden – with those values being the values of big business: “Instead of rushing into a legal regime designed to offer perfect protection to media companies, often at the expense of long-held consumer rights, such as fair use and free speech, legislators and courts should wait and see just how much protection copyright holders need, and how much can be given without undermining the public interest.”[310]
191. There are no easy solutions to what is clearly a source of considerable frustration and legislative tension, for as one commentator notes: “At the moment, if you buy a CD, you can lend it to a friend, play it in your car, and listen to it on a portable player: the same disc will work on any playback device. Extending this ease of use of music delivered over the Internet, however, is problematic, because the ability to transfer music from one device to another opens the door to piracy. But the alternative, which is to use digital rights management (DRM) technology to lock each track to a particular device, infuriates consumers. While proponents of DRM claim that it merely helps to keep honest users honest, in fact, argues Cory Doctorow, of the Electronic Frontier Foundation, it keeps honest users in chains.” [311]
192. The question that needs to be asked by these and other cases now working their way through the courts is: can Australia’s digital copyright legislation deal with emerging technologies? The House of Representatives Standing Committee inquiry into copyright piracy expressed serious concerns about the extent to which our current regime, aimed at dealing with digital-based piracy, could in fact cope. The government’s response, released in late June, fails to respond to most of the Committee’s concerns and certainly does not ease the tensions felt by those who fear they are losing the battle on fair use. To quote the Attorney General’s Department: “The amendments strengthen civil and criminal provisions against piracy. For example, they ease the burden of proof in relation to the existence and ownership of copyright and they emphasise deterrence as a factor in relation to additional damages in civil cases. Criminal sanctions have also been broadened to include advertising the supply of infringing copies of any type of copyright -protected material. These legislative initiatives have been welcomed by stakeholders in the entertainment industry. The Government has also taken steps to improve the gathering, sharing and use of intelligence relating to intellectual property offences. The Intellectual Property Enforcement Consultative Group, led by the Australian Federal Police, assists the exchange of information and views to provide practical collaboration in relation to intellectual property offences. The Government remains committed to the continued provision of Customs staff dedicated to monitoring and policing the importation of infringing material.
193. In concluding, the AG’s Department notes that, “the package of measures announced today will help to ensure that Australia continues to enjoy an effective, first class copyright regime.”[312]
194. The question is, will it? Praise for Australia’s copyrig ht laws are not new and recent statements from the government that Australia can and will stop piracy do little to appease the concerns of those who, while committed to ending piracy, fear a state of hysteria leading to unnecessary restriction.
195. In that regard, it is worth noting the government’s recent comments regarding the recent case of three students charged over an alleged Napster-style file- swapping website as clear evidence that “the infringement provisions of the Copyright Act are an effective tool against the threats posed by internet piracy.”[313]
196. The three youths at the centre of the Government’s showcase were all charged on 23 April 2003 with breaching copyright by making hundreds of digital music files available for downloading at an Internet site known as “MP3 WMA Land”. The Australian Federal Police alleged the operation of the site resulted in potential music industry losses of over $60 million, making the matter one of Australia’s largest copyright infringement cases.[314] Simultaneously, Australian Federal Court proceedings were commenced by Universal Music, EMI and Sony against University of Melbourne, Sydney and Tasmania to release information needed to identify users which have allegedly infringed copyright using university computers.[315] On 30 May 2003, Tamberlin J allowed Sony access to the requested Internet files pursuant to O 15A rr, 3, 6 and 12 of the Federal Court Rules – that order which allows an aggrieved party to force a party suspected of holding documents necessary to prove the other party’s case to release those documents for the purpose of discovery.[316]
197. Despite the claims of the Government, the question remains: does this latest scenario spell success for Australia’s copyright regime? Or, does it signal the desire of some for a shift towards a more US-style approach to Internet control and restricted use? Thus far, despite the penalties available under the Act, according to industry insiders, the number of copyright prosecutions in Australia has been small and the penalties attached to infringement less than satisfactory.[317]
198. Many witnesses before the recent House of Representatives Standing Committee on Legal and Constitutional Affairs Inquiry into Copyright Piracy,[318] noted that because of the the difficulty encountered in trying to gather the evidence needed to prove copyright ownership etc., many copyright prosecutions have been discontinued. Others were only dealt with summarily, with the CDPP stating that for the years 1997–98 and 1998–99, of the 13 successful convictions, “penalties ranged from non-conviction bonds to fines of $4,800”.[319]
199. While at first glance it is easy to attach blame to the courts for not handing down more severe penalties, as the CDPP notes, copyright matters are “difficult, highly technical and expensive prosecutions with enormous problems in proving ownership of copyright, particularly where it is held overseas”.[320] As such, successful criminal prosecutions are few and far between, with the penalties attached to those that do get a hearing inadequate for reasons that do not always equate with judicial leniency.
200. This situation has led some to argue for more regulation, more government funding for investigations and prosecutions, and even stricter controls on what can and cannot be done with emerging Internet technologies. For others, the lack of any real success triggers concerns that the Australian Government will be encouraged to adopt a more US -style approach – one which, as outlined above, risks holding ISPs liable, allows record industry companies to tap into the chat functions of clients run on peer-to-peer networks, and then serve users transferring copyrighted material with automatic infringement notices[321] , and one which further restricts the use of circumvention devices (thereby further eroding the right to fair use). All initiatives which, it has been argued, are particularly odd coming from a nation that has tended to dictate the terms of free speech, privacy and civil liberties generally.
201. Perhaps, as other recent events seem to indicate, the law alone will not (and should not) provide the answers needed – at least not without the risk of eroding the rights of those who legitimately use new technologies to advance communication and understanding. Without careful analysis, we risk crossing the line between the need to restrict activity that hinders innovation and social progress, and activity that ensures that progress remains the norm.
202. In that regard, it is worth noting that to recover some of the revenue lost to illegal copying, the Australasia n Performing Rights Association and Screenrights have been lobbying the Australian Government to put a levy on blank CDs and DVDs. At the same time, as reported in the Australian Financial Review, Apple Computer opened an Internet music store featuring 200,000 music tracks, licensed from all of the major record labels, available for legal download for only US99 cents per song. In its first week of operation it sold a million tracks.[322]
Conclusion
203. So where to from here in this highly charged atmosphere of good versus bad? The future remains uncertain. If anything is to be learned from the peer-to- peer debates now dominating IP news it is that for any deterrent to be effective, government agencies, industry, the courts, the media and the community all have a role to play in reducing the incidence of copyright piracy. Intellectual property creation is of benefit to the community and industry, and measures to protect intellectual property, including the prevention of piracy, are, as a result, the responsibility of both. The task ahead poses numerous challenges. What is clear is that an approach to law reform that remains unwilling to accommodate legal and social innovation will not ensure that this issue is addressed in a way that is effective and equitable.
204. What many seem to ignore is that not everyone who copies a work, or part of a work, infringes copyright in the work. When asked to respond to concerns that proposed US copyright legislation (the Hollings Bill) would take away some of the users’ rights, Jack Valenti, Chief Executive of the Motion Picture Association of America, said, “What rights are we talking about?”[323] He then went on to say, “I’m not trying to be glib. A lot of people who haven’t thought it through believe that anything on the Internet is free…”[324]
205. Opponents of anti-circumvention do not believe that everything on the Internet is free, they merely feel that they are entitled to access and use works on the Internet for fair dealing purposes and that technological innovation should be encouraged, rather than shut down through legislative intrusion. The anti- circumvention provisions now in place in Australia were not meant to displace fair dealing. This is evident from the fact that “TPM” has been defined to only cover devices which prevent or inhibit the infringement of copyright, not devices which prevent all access and use of the works. [325] Therefore, the anti- circumvention provisions should only be protecting the works from copyright infringement, not access and use for fair dealing purposes.
206. The problem is that TPMs often prevent or at least inhibit users from accessing and/or copying those works regardless of whether they intend to infringe copyright in the works or use them for fair dealing purposes. According to a lawyer for Time Warner, there is a simple solution to this problem: “The technological and legal measures are intended to protect the copyrighted works against unauthorized uses… Anyone wanting to make a ‘fair use’ of a copyrighted work need only follow the same steps as he or she would in the absence of technological protection; buy or rent a copy, subscribe to a transmission thereof or borrow a copy from the library.” [326]
207. This solution is impractical. If an academic only wants to read one article in an online journal then it is unreasonable to expect them to pay a fee of say $50 to subscribe to the journal for a year. If copyright users are forced to pay for works in order to use them for fair dealing purposes then we will become the “pay per use” society envisioned by copyright owners.[327]
208. The suggestion that copyright users should have to go to the library to access the works is also impractical. Firstly, it places an unreasonable burden on the library to subscribe to all these online services. Even the US Librarian of Congress has warned that the anti-circumvention legislation “places considerable burdens on the scholarly, academic, and library communities”.[328] Secondly, it defeats the purpose of having the material available online. After all, the whole purpose of the World Wide Web is to enable users to access a wealth of information, wherever they are in the world, without having to leave their computers.
209. It is often suggested by representatives of the copyright industries that people wishing to access works for fair dealing purposes should obtain a hardcopy or printed version of the work that is not protected by a TPM. In light of the increasing reliance on the World Wide Web as a way of distributing and accessing information, this suggestion is somewhat myopic. Why should people such as academics, students and journalists be denied the use of one of the most useful research tools ever invented? And why should they be limited to the information that is available in print form? As the Electronic Frontier Foundation argued in a submission to the US Copyright Office, this idea undermines the important role that fair dealing plays in spreading knowledge and propelling society forward. [329]
210. There can be no doubt that the new copyright regime risks tipping the balance in favour of copyright owners. The anti-circumvention provisions afford copyright owners a lot more power than they had under previous copyright laws and recent litigation efforts, although aimed at stopping piracy, risk ensuring that “fair” use becomes use “only with permission”.
211. The Copyright Act 1968 (Cth) is no longer simply concerned with copyright infringement. It is now concerned with preventing manufacturers from producing devices which may assist others to infringe copyright but may also enable people to use works for fair dealing purposes. The founders of copyright law would never have envisaged that copyright law would cover activities which are in some ways completely unrelated to copyright infringement. Indeed, the anti-circumvention provisions have now made criminals of software developers and publishers who have no intention of infringing copyright. The first person to find himself in court for violating the US anti-circumvention provisions, Eric Corley, was a journalist and the second, Dmitry Sklyarov, was a computer programmer. Neither Corley nor Sklyarov had actually infringed copyright.
212.
Proponents of the anti-circumvention
provisions argue that they are
necessary to prevent copyright infringement. However, copyright
infringers can be
punished under the existing copyright infringement provisions. There is
no need to extend the reach of copyright
so far that it criminalises
innovation and discourages some from using a system of information
sharing that aims to facilitate learning.
Recent litigation efforts
both
here and in the United States do not bode well for those concerned to
ensure the
development of new
ideas and the fair use of new
technology.
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