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Legal Focus
S.92A Copyright Act repealed
Thursday, 25 February 2010
By Mike Battersby
Notwithstanding forceful submissions from business leaders, there still remains a real risk of businesses losing their Internet connections as a result of unauthorised peer-to-peer (P2P) file sharing of copyright material by employees.
Unauthorised file sharing is an area which existing legislation both in New Zealand and overseas struggles to control, as the infringing material typically does not pass through any intermediate server or get held on anyone’s website, rendering the US-style ‘notice and takedown’ approach a waste of time.
The Copyright (Infringing File Sharing) Amendment Bill, introduced to Parliament on 23 February 2010, is intended to remedy this gap in New Zealand law. Previous legislation (S92A Copyright Act 1994) faced determined opposition from Internet Service Providers (‘ISPs’) and supporters of Internet freedom, and is to be repealed under the Bill.
The Bill, foreshadowed in a Cabinet Paper released by Commerce Minister Simon Power in December, gives the Court power to suspend Internet accounts for up to 6 months as the ultimate sanction against online copyright infringement.
Although replacing Internet account termination with suspension sounds better, it really amounts to the same thing. It is now a given that Internet connections and services are essential to most businesses, and that any suspension would cause serious problems. Suspension of a business’s Internet connection for 1 month would be damaging enough, however 6 months would be just as bad as termination.
The Minister has said that the “courts would need to determine whether such a remedy is appropriate in the circumstances and would need to take into account some of the concerns raised by submitters in respect to vulnerable, essential services, and effects on businesses if their Internet was suspended due to the actions of an employee.” That is fine, however, what business owner wants to have to go to court through no fault of their own to defend the right to stay online?
It must be noted that suspension is the ultimate step in the proposed new procedures. The process will operate as follows: firstly, a right holder must issue 3 timetabled notices (detection, warning and enforcement) to Internet account holders via the account holder’s ISP.
If infringement continues after all three notices have been served, then the right holder may lodge a complaint with the Copyright Tribunal against the account holder seeking compensation of up to $15,000, based on provable damage. The right holder may also apply to the District Court to have the account holder’s Internet connection suspended for up to 6 months.
Account holders may issue counter notices and can request a hearing to defend claims.
The scope for abuse by right holders is intended to be limited by regulations which will provide for template notices, setting out the evidence right holders must supply to the relevant ISP, and imposing notice fees.
The new proposals appear to have remedied one potential issue for some businesses. The definition of ISP under the previous legislation was intentionally broad for the purposes of the ‘safe haven’ regime for ISPs. This included organisations that provide Internet access to members or employees but which do not hold any information which enables them to identify account holders. The previous legislation imposed obligations on them which they would be unable to comply with.
This definition remains but there will also be a separate definition of ISP which applies only to the notice and infringement logging obligations for illegal P2P file sharing claims. These provisions will only apply to traditional ISPs which have the technical capability of identifying the IP addresses of their account holders, eg. Telecom and Telstra Clear.
The legislation as it now stands appears to be acceptable to most stakeholders (apart from the issue of suspension) and is intended to come into force on 1 October 2010. Following its first reading, it will be referred to select committee, and the public will have the opportunity to make further submissions at that stage.
Internet NZ has stated that given the breadth of the matters left to regulation, the Government should guarantee public consultation and involvement during the regulation-drafting process. The Ministry of Economic Development has promised it will continue to work with stakeholders in getting the detail of the system right.
