August 2009

02 Dec 2009

Section 92A – The Saga Continues

A proposal to replace Section 92A (a contentious proposed change to the Copyright Act covering ISPs' obligations in relation to subscribers who are repeat infringers) has now been released. The proposal releases ISPs from the obligation to have a policy to terminate the internet accounts of repeat copyright infringers. Under the proposal, repeat copyright infringement and termination of accounts will now be determined by the Copyright Tribunal.

Background

The requirement under section 92A for ISPs to have policies providing for the termination in appropriate circumstances of repeat copyright infringers' accounts was part of a broader regime intended to combat unlawful file-sharing. File-sharing facilitates copyright infringement on a large scale and is very damaging to New Zealand’s creative industries and copyright owners generally. 

Section 92A was the subject of intense lobbying from interest groups, including a frenzied viral internet campaign which gained significant media attention. It was felt that the boundaries of an ISP’s obligations were uncertain - it was not clear what amounted to “repeat infringing”, or how ISPs could determine infringement. Opponents questioned whether it was appropriate for ISPs to be able to "judge" allegations of copyright infringement and claimed that many legitimate users could be unjustifiably disconnected. In addition, due to broad drafting, it seemed likely that many businesses would fall within the definition of an “ISP” (rather than those traditionally considered to be ISPs). 

The new proposal

The new proposal puts forward a three-phase procedure to deal with repeat copyright infringers in the digital environment

• Phase 1: A copyright holder who believes its rights have been infringed may send a first infringement notice to the relevant ISP, who must forward that notice to the subscriber. After a period of 30 days, if there has been a further copyright infringement, the copyright holder may send a cease and desist notice to the subscriber via the ISP.
• Phase 2: After a further period of 30 days, if a copyright holder believes there has been a further (ie third) instance of copyright infringement, the rights holder may apply to the Copyright Tribunal to obtain an order from the ISP to provide the name and contact details of the infringing subscriber.
• Phase 3: The copyright holder may then file an infringement complaint with the Copyright Tribunal. The subscriber has the opportunity to respond to the allegation and opt for mediation. The Copyright Tribunal will otherwise be convened and on a finding of infringement, may fine the subscriber or order termination of the subscriber's account in addition to other available relief such as damages, injunction and account of profits.

Comments

The proposed procedure certainly relieves some of the perceived pressures on ISPs, as it places the responsibility of determining infringement and the decision to terminate an account with the Copyright Tribunal. The procedure itself is extremely complicated, and copyright holders will require a certain amount of stamina to see it through. The result of this onerous bureaucratic process will almost certainly mean that virtually no user accounts are actually terminated.

These new responsibilities will significantly expand the role and jurisdiction of the Copyright Tribunal, currently a team of three part-timers which deals with certain disputes arising from licences which allow the copying, performing and broadcasting of works. It remains to be seen how the Tribunal will be resourced to deal with this considerable increase in workload.

While most ISPs will welcome the proposed changes, it seems unlikely that all will be fully appeased. Some industry members have already expressed disappointment that termination of an internet account remains a possibility, believing that it is unjust punishment in proportion to the offence - which is slightly surprising given that counterfeiting can be a criminal offence. If it is possible to go to jail for copyright piracy, termination of an internet account hardly seems disproportionate.

This sort of response raises concerns that copyright infringement is simply not taken seriously. Under the proposal, to order termination of a subscriber's account, the Copyright Tribunal must actually find that the subscriber is a repeat copyright infringer. The subscriber will have received at least two notices alleging infringement over a period of at least 60 days, and had the opportunity to respond to those allegations. It will be well aware that the matter is being heard by the Copyright Tribunal (having had the option to mediate to settle the dispute). If termination of its account is a genuine concern, the subscriber will have had ample time to locate an alternative ISP before the Tribunal issues its decision. 

While the proposal addresses most of the original concerns raised, it is disappointing that it offers no further explanation of the meaning of ISP and whether this covers businesses not traditionally considered to be ISP. It would also be useful to have some clarity on whether a "subscriber" means an individual internet account holder, or includes employees or businesses.

Alongside this procedure, most ISPs and employers will continue via their standard service terms of terms of employment to deal with repeat copyright infringers, including by terminating their internet accounts if circumstances justify this. That is, they have policies by which they are empowered to terminate internet accounts in appropriate circumstances, which the are likely to "reasonably implement". The original, flexible section 92A concept already exists as a matter of contract and practice, and will continue to do so.

Submissions on the proposal have been invited and are due by Friday 7 August 2009. Please contact Richard Watts or Claire Foggo or your usual Simpson Grierson IP contact if you wish to consider making submissions.

Authors

Earl Gray

Partner - Intellectual Property

DDI: +64 9 977 5002

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Karen Ngan

Partner - Corporate & Commercial

DDI: +64 9 977 5080

Mobile: +64 21 648 977

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Richard Watts

Partner - Intellectual Property

DDI: +64 9 977 5182

Mobile: +64 21 895 931

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Sarah Chapman

Senior Associate - Intellectual Property

DDI: +64 9 977 5167

Mobile: +64 21 498 965

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Claire Foggo

Senior Associate - Intellectual Property

DDI: +64 9 977 5314

Mobile: +64 21 582 674

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