iiNet calls for a new independent body to police illegal downloading 28/03/2011

On 15 March, iiNet CEO Michael Malone called for copyright holders in the film and arts industries to endorse iiNet’s proposal for a new independent body to be established to oversee investigations concerning the illegal downloading of copyright material.

 

iiNet’s proposal for the new body to act as an “impartial referee for the resolution of disputes and the issue of penalties for offenders” was released in a 14-page brochure entitled Encouraging legitimate use of Online Content: An iiNet view [1]. The brochure also asserts iiNet’s view that it is not acceptable for Hollywood studios to spend millions of dollars advertising their films in anticipation of cinematic release, without also making the films available for purchase by consumers on other platforms at the same time or shortly afterwards: “In our opinion one of the most effective ways to reduce piracy is to make the content legally available in a timely fashion, at an attractive price.”

 

iiNet says its proposal attempts to fill in the gaps between consumers, ISPs and content owners who, it claims, should have access to the new independent body for all disputes. The model features a seven-step process, starting with detective investigation and identification of a suspected infringer, then determination of whether the matter satisfies the test of being “cogent and unequivocal evidence” before an issue notice is supplied to the ISP requesting personal user data. Using that data, the independent body then contacts the individual account holder, notifying them that they have been identified as having unauthorised copies of copyright material. An appeal process is available for consumers who believe they have been wrongly accused. From this point on, punitive action may be taken against the infringer.

 

The iiNet model provides for a number of penalties – excluding the removal of Internet access, which it says is “both inappropriate and disproportionate”. It proposes a graduated penalty structure, similar to that used for traffic offenders, using a points system in which each infringement results in the loss of a number of points. When the points run out, punitive action may be taken. The iiNet model requires the majority of funding for the independent body to come from the copyright owners themselves.

 

[1] available from http://www.iinet.net.au/press/releases/201103-encouraging-legitimate.pdf

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ISP Liability – the latest Australian developments 28/03/2011

Whilst it has been on the radar for some years now, the question of liability of internet intermediaries for copyright infringement has certainly become the most talked about issue in copyright circles in Australia this year.

 

Developments include the Full Federal Court’s appeal decision in Roadshow Films Pty Limited v iiNet Limited [1], AFACT’s announcement that it will seek leave to appeal the decision in the High Court, comments by the Attorney-General that legislative reform may be on the agenda, the Internet Industry Association’s announcement that it intends to fastrack development of a code of conduct, and the release by ISP iiNet, of a paper detailing a potential model for the policing of copyright infringement.

 

The focus on ISP liability intensified in February, with the Full Federal Court’s appeal decision handed down in iiNet’s favour. Whilst at first glance the decision appeared to be a win for iiNet, a closer reading revealed a number of mitigating factors, which led the executive director of the Australian Federation Against Copyright Theft (AFACT), Neil Gane, to conclude that, “While we did not prevail due to the finding of the court on a narrow, technical issue, we did succeed in terms of the court finding in our favour across a range of key issues.” [2]

 

These findings included, firstly, that ISP liability could be proven with an improved notification process, and secondly, that iiNet would not be eligible for protection under the safe harbour provisions, due to deficiencies in its implementation of a policy for regular infringers. Lawyers and legal academics are considering the implications.

 

In the same week the appeal decision was handed down, the Attorney General spoke at a conference in Sydney [see last month’s newsletter for details] at which he flagged possible review of the Copyright Act [3], listing the ‘safe harbour’ provisions as one of the matters in need of attention, as well as the issue of an industry-negotiated solution to the problem of online infringement.

 

March 11 saw the Internet Industry Association (IIA) announce its intention to begin developing an industry code of practice for internet intermediaries. An IIA press release quoted [retiring] chief executive Peter Coroneos as stating: “The iiNet case has provided us with welcome guidance on where responsibilities should begin and end, but falls short in defining reasonable steps intermediaries should take in responding to allegations of infringement by their users. The Code will address this gap." [4]

 

The IIA also expressed its intent to pursue reform to the Copyright Act, to expand the current application of the safe harbour provisions to include a wider range of other intermediaries, such as search providers, social media platforms, hosting companies and universities.

 

The next development was iiNet’s release of a discussion paper entitled “Encouraging legitimate use of Online Content: An iiNet View” [5], which outlines the ISP’s view on the changing nature of content delivery and proposes a model for policing infringing activity, callilng for an independent body to be the intermediary between rights holders, ISPs and consumers [see our recent news story iiNet calls for a new independent body to police illegal downloading].

 

Finally, in the closing days of March, AFACT’s Neil Gane announced that the film companies which had brought the case against iiNet would be seeking leave to appeal to the High Court to overturn the Full Federal Court’s appeal decision in favor of iiNet. Gane said the film companies would make the case that iiNet did have sufficient knowledge of users’ infringing activity: "The Full Federal Court unanimously found that iiNet had the power to prevent the infringements of its users from occurring and that there were reasonable steps it could have taken, including issuing warnings…However two judges of the Full Court went on to find that iiNet had not authorised the infringements of its users…We say they did not apply the legal test for authorisation correctly."

 

The chief executive of iiNet, Michael Malone, responded with the statement that continuing legal action between rights holders and ISPs was not the solution to the problem and that even a High Court win by the film companies would not curb unauthorised distribution of material. According to Malone: "It's time for the film industry and copyright holders to work with the industry to make their content legitimately available".

 

It is too early yet to see how matters will unfold. The only certainty is that 2011 will be a big year for copyright in Australia.

 

[1] Roadshow Films Pty Limited v iiNet Limited [2011] FCAFC 23

[2] AFACT Press Release – 25/2/2011 at http://www.afact.org.au/pressreleases/2011/25-2-2011.html

[3] Full text of speech available at http://www.ag.gov.au/www/ministers/mcclelland.nsf/Page/Speeches_2011_FirstQuarter_25February2011-AddresstotheBlueSkyConferenceonfuturedirectionsinCopyrightlaw

[4] IIA Press Release – 11/3/2011 at http://www.iia.net.au/index.php/all-members/881-iia-fastracks-industry-copyright-code.html

[5] available from http://www.iinet.net.au/press/releases/201103-encouraging-legitimate.pdf

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Sen. Conroy Announces Final Terms of Reference for Convergence Review 03/03/2011

The final Terms of Reference for the Convergence Review have now been announced by Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy.

 

Whilst the final Terms of Reference remain largely similar to the draft terms released in January, some new terms have been added covering subject matter such as international responses to convergence as well as Australia's international commitments.

 

In addition, the preamble now specifically makes reference to the relevance of copyright stating that, “The government recognises that any discussion of the production and distribution of Australian content raises issues of copyright in the digital age. The Review Committee may offer views on copyright and the ongoing protection of content in a converged environment, noting that the Attorney-General will ultimately determine these matters.”

 

The Convergence Review is being undertaken by the Department of Broadband, Communications and the Digital Economy and the final report is expected to be delivered by the Convergence Review Committee in the first quarter of 2012.

 

The Terms of Reference and background paper are available from the Department’s website please Click here to view.

 

 

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WIPO pushes for greater access to books for the vision impaired 28/02/2011

By Mary Anne Reid

Australian Copyright Council

 

The Director-General of the World Intellectual Property Organisation (WIPO) – Francis Gurry – will appear at two copyright conferences in Australia this year. Given the ambitious copyright reform agenda set by WIPO for 2011-12, these visits are likely to be just a fraction of the advocacy program that awaits Gurry over the next 18 months. In this month’s feature we look at the first item on WIPO’s exceptions and limitations agenda: increasing access to books for the vision impaired.

 

In November 2010, WIPO announced a two-year work program on copyright exceptions and limitations that, considering the pace at which international negotiations often move, represents a significant acceleration. The first of the three areas to be covered is access to books for the blind and vision impaired.

 

It is estimated that even in the wealthiest countries (including Australia), less than five per cent of published works are available in formats accessible to the vision impaired. According to WIPO: “The proliferation of digital technologies has added a new dimension to the question of how to maintain a balance between the protection available to right owners, and the needs of specific user groups, such as reading impaired persons. More than 160 million blind or visually impaired people around the world stand to benefit from a more flexible copyright regime adapted to the technological realities of the day.” [1]

 

Transforming works into accessible formats – whether hard-copy Braille, large print, sound recording or digital – is a form of reproduction, which requires permission, unless an exception to infringement applies. WIPO’s standing committee on copyright will have three extra days at its next regular session (May 2011) to consider options for increasing access, and will then make any recommendations to the WIPO General Assembly.

 

In the analogue world the common practice is for people with a print disability to access alternative formats through an appointed organisation or specialised library in their country. Access to material from other countries is by interlibrary loan and users of this service can wait months to receive their order. Then there is the problem of conversion itself. To date the number and range of books available has been hampered by the time-consuming and costly process of converting print into accessible formats (which is typically done by government-funded organisations assisting people with a disability).

 

As digital technologies transform the publishing business, from creation to distribution, new opportunities are arising for the vision impaired to benefit through lower-cost digital conversion and distribution. The ultimate goal, say representatives of the World Blind Union, is for the vision impaired to be able to access and purchase any book in an accessible format in the same way as other consumers (‘mainstreaming’). And while new technologies are making this ideal more achievable in large, developed national markets (with ageing populations) like the Unites States, it is still a long way off in poorer countries and even in smaller developed economies like Australia, which cannot yet support such a shift.

 

International action

 

Consequently, many developing and developed nations are sympathetic to the need to take steps through WIPO. They want to use limitations and exceptions to lever up the volume of accessible books moving across national borders, hence reducing the need to duplicate the costs of conversion in individual countries. There are two parallel processes currently underway in WIPO with this objective:

 

- Negotiations on an international treaty or instrument obliging signatory nations to make their converted works available to the vision-impaired in other countries;

- An international exchange pilot program, called the Trusted Intermediary Global Accessible Resources project (TIGAR).

 

The Australian Government is on the record as supporting both approaches. Speaking at a WIPO session in November 2010, the Australian delegation stated that while Australia had addressed this issue domestically through a system of statutory licences, “obstacles remained for people in developing countries in accessing [copyright] materials, and Australia was strongly committed to developing practical solutions to these challenges.” [2]

 

There are very different ideas afoot about the form an international treaty or instrument should take and there is no guarantee that the national groupings backing the four different proposals under consideration at WIPO will be able to reach agreement when they meet in May.

 

So what are the obstacles? From the perspective of publishers and authors, the biggest threat is piracy, or ‘leakage’ into the wider community, of electronic files moving across national borders. Some of these electronic files, such as large format and audio, are very similar to standard publisher files and therefore accessible to the general public (unlike physical Braille copies). Each of the four proposals on the table demonstrates a different level of attention to this risk.

 

The proposals put forward by the US and the European Union both stipulate that accessible digital formats should only be imported and exported through what are known as ‘trusted intermediaries’. This term is defined differently by the parties but in essence refers to the governmental or non-profit organisations which control the creation of accessible formats – authorised under exceptions in national copyright law – and ensure they are distributed to bona fide persons with a print disability. But even though the EU and the US agree that trusted intermediaries are the way forward, their proposals differ significantly in other ways: the EU document contains a relatively long list of eligibility requirements and obligations for trusted intermediaries, while the US proposal has a much lighter touch.

 

It is the absence of any requirement for trusted intermediaries which is the key difference between these and the two other proposals being considered at WIPO – one from Brazil, Ecuador, Paraguay and Mexico, and one from the African Group. In addition, the African Group’s proposal moves in another direction from all the others by requiring that limitations and exceptions for the following be dealt with alongside those for the vision-impaired:

 

- Educational and research institutions

- Libraries and archives

- Private use and research

 

While all four proposals recognise the problem and seek a solution, the risk is that a failure to agree on a pathway will produce a stalemate at the special meeting of the WIPO standing committee in May.

 

Those opposed to an international treaty or instrument argue that international legislation is already sufficient to facilitate cross-border transfer and that the real problem is an administrative one. What is needed, they say, is a global database of works available and a secure system for transferring them. With this end in mind WIPO has set up the TIGAR pilot project to lay the practical foundations for the delivery of electronic files across borders via trusted intermediaries. The pilot project was devised by representatives of creators, publishers, reproduction rights organisations and the vision impaired sector, and is seen by many as the practical way forward. The TIGAR steering committee is currently working on the adoption of model file transfer and rights clearance agreements for use by a global network of trusted intermediaries. The process will take time and there are also likely to be debates about who should bear the costs.

 

Australia’s experience

 

An examination of why the percentage of books converted into accessible formats for the vision impaired is so low even in developed countries like Australia (where exceptions and limitations already apply) shows that the perennial issue of government funding is a factor. The cost of conversion to accessible formats is covered in Australia (as it is elsewhere) by government and the resources available fall below the demands of the sector. The Australian Government is therefore keen to see the cost-saving potential of digital technology turned into a tangible result for the vision impaired within our national borders as well as internationally.

 

Then there is the service sector which undertakes the conversion and distribution of accessible formats. The fragmented nature of the sector results in double-ups in conversions and other inefficiencies in the use of scarce resources. Furthermore, these organisations are not necessarily the best equipped to make the transition to cost-effective digital conversion.

 

The Australian publishing industry meets its current obligations under national copyright and anti-discrimination legislation through the statutory licence administered by Copyright Agency Limited (CAL), as well as through direct licensing of digital files by print disability organisations. Authors and publishers have traditionally been sympathetic to the needs of the sector and they generally receive no remuneration for the use of their works (the CAL board determined that the statutory licence fee should be zero-dollar rated as there is currently no commercial market for these formats).

 

In a recent submission to the Government [3], the Australian Publishers Association (APA) spoke of a future in Australia in which the existing methods of support through limitations and exceptions would be complemented by new commercial models: “New business models are already being developed, including commercial models, which have the potential to provide much greater access…The use of digital files in the publishing process has the potential to reduce or eliminate many historical burdens in the conversion process, but there remain issues to be resolved such as technical compatibility and standardisation, which will take time to resolve and are largely driven by the US market.”

 

The APA is also actively involved in non-commercial schemes to increase access, such as working with CAL and other stakeholders on developing a single, nationwide Australian repository: “The project if endorsed would establish a repository of alternative formats, possibly through the library system and the educational sector to students, which would be accessible to organisations assisting people with a print disability.” [4]

 

These initiatives, though, are aimed at domestic users and will do little to address the cross-border issue. Many publishers and creators view with alarm the prospect of sending their electronic files outside Australia unless there is some assurance that the files will be secure. Given that the Government has stated it wants action on this issue sooner rather than later, an international instrument relying on trusted intermediaries may prove to be an acceptable common ground from Australia’s perspective.

 

 

[1] WIPO, available at: http://wipo.int/pressroom/en/articles/2009/article_0021.html

[2] Draft Report of 21st meeting of the SCCR, December 20, 2010: http://www.wipo.int/meetings/en/doc_details.jsp?doc_id=154497

[3] Australian Publishers Association, Submission to Attorney-General’s Department Stakeholder Consultation, November 2009, p.3.

[4] Ibid

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The Convergence Review and copyright 28/02/2011

The draft terms of reference for Australia’s forthcoming Convergence Review do not specifically mention copyright, however, it is likely that the issue of online copyright infringement, at the very least, will be considered under the review.

 

Speaking at a recent online retail forum, the Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy, reportedly told journalists [1] that piracy was one of the issues likely to be debated at the Convergence Review. His comments followed closely on the heels of the closing date for public submissions on the terms of reference for the review.

 

While the draft terms of reference don’t mention copyright, they do instruct the Convergence Review committee to “where necessary, advise the Government on issues outside the purview of the Minister’s portfolio responsibilities.” A number of stakeholders’ submissions on the draft terms of reference have urged the Government to more specifically recognise that a review of content and media regulation will intersect with copyright law. The following excerpts from their submissions illustrate some of the very different viewpoints these stakeholders have expressed:

 

FOXTEL: “There are also issues in need of review that arise from convergence …within the jurisdiction of the Copyright Act. These issues include the development of mechanisms to deal with illegal online streaming of content which has become a very significant problem both within Australia and worldwide.”

 

ERICSSON: “The evolution of copyright law has been a closed negotiation process of privileges, resulting in special interest legislation. The process has under every revision created or attempted to erect entry barriers for outsiders to the existing industry, barriers that have proved harmful to outsiders in emergent industry sectors.”

 

APRA/AMCOS: “In our view that notion of protection of content (i.e. works and other subject matter protected by copyright) ought to be given equal weight in the Review to those of production and distribution.”

 

AUSTRALIAN DIGITAL ALLIANCE: “The substantial time lag between new technologies which allow new uses of copyright content, and the legislation of those uses by copyright law, demonstrates that if copyright is not updated and made more flexible in order to facilitate the new uses of content, then the availability of the technology will not have a meaningful impact on the lives of Australians.”

 

In 2010, Attorney-General Robert McClelland stated his support for a separate review of Australian copyright law and regulation, possibly under the auspices of the Australian Law Reform Commission. This preference remains, and it is unlikely the Government will seek to include any broad consideration of copyright reform in the terms of reference of its Convergence Review, which is already quite far-reaching. Nevertheless, depending on the trajectory of the review, it may be that certain matters governed by the Copyright Act do make their way onto the Convergence table.

 

To see the full submissions of the stakeholders quoted above and all submissions on the terms of reference for the Convergence Review go to: http://www.dbcde.gov.au/digital_economy/convergence_review/submissions_received_on_draft_terms_of_reference_for_convergence_review

 

To see the Australian Copyright Council’s submission on the terms of reference go to:

http://www.copyright.org.au/news-and-policy/

 

[1] Josh Taylor, ZDNet, [ZDNet.com.au], February 18, 2011.

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Rapid growth in digital music sales undercut by piracy 28/02/2011

A report released by the International Federation of the Phonographic Industry (IFPI) shows that while the recorded music industry experienced growth in digital music sales of more than 1000 per cent from 2004 to 2010, digital piracy effectively reduced the value of the industry by nearly a third during the same period.

 

According to Digital Music Report for 2011, emerging artists were the hardest hit by digital piracy, with a 77 per cent drop in debut album sales between 2003 and 2010. IFPI said that with an estimated 16 per cent of recording industry revenues re-invested in emerging artists, any fall in overall revenues resulted in less investment in emerging talent. The more established acts were in a better position to combat declining sales of recorded music in the live music market, with the Pollstar report indicating that the top 5 touring acts in 2010 were Bon Jovi, AC/DC, U2, Lady Gaga and Metallica – all of which have well-established careers to bolster ticket sales.

 

Various measures to combat online piracy are currently being explored around the world, including cooperation with ISPs, increased availability of legitimate digital music services, and awareness programs to encourage people to source their music legitimately rather then downloading it illegally.

 

The IFPI report stated that various government-led ‘graduated response’ measures (where repeat infringers receive warning notices with the cooperation of ISPs) were showing some early promise. In France for example, a survey conducted by research company BVA indicated that 53 per cent of users had cut back or stopped their illegal activity since the passing of the HADOPI law (which allows infringers to be identified and contacted about their illegal activities).

 

IFPI also saw education as vital in reducing piracy and supported a number of public education programs, including Young People, Music and the Internet, Music Matters, Pro Music and Pop4Schools. IFPI said independent research indicated that the main reason users gave for illegally downloading material was, “because it is free”. IFPI hoped that educational campaigns would counter this mentality through the promotion of some of the 400-plus digital worldwide music services where music can be purchased legally online, as well as a range of subscription services (e.g. Spotify, Vodafone Music) that provide legitimate avenues for streaming free music.

 

According to Frances Moor, the chief executive of IFPI, “digital piracy, and the lack of adequate legal tools to fight it, remains the biggest threat to the future of creative industries”. However, she noted that growing momentum to reach a solution gave some grounds for optimism.

 

To access the full report go to:

http://www.ifpi.org/content/library/DMR2011.pdf

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