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Mainly intellectual property (IP) issues Down Under

ISPs and “3” strikes in Australia

On the eve of High Court hearings in Roadshow v iiNet (transcripts here, here and here), the 5 major ISPs in Australia (Telstra Bigpond, Optus, iiNet, iPrimus and Internode) released a proposal (pdf) for dealing with (illegal) file sharers and other online copyright infringers.

Under s 116AG of the Copyright Act, the remedies against an ISP (which is a carriage service provider) for infringing materials transmitted over its network may be restricted to an injunction requiring it to terminate a subscriber’s account or to take reasonable steps to disable access to an online location outside Australia provided the ISP complies with the requirements in s 116AH. Similar limitations on the remedies available are imposed in respect of ISPs in the other categories. One of the conditions in s 116AH is that the ISP had adopted and reasonably implemented a policy for termination of the accounts of repeat infringers in appropriate circumstances.

The proposal can be seen as intended to address that requirement.

The proposal refers to the large amounts of lost revenues often claimed by the copyright owners from illegal activity online. It also draws attention to evidence that large proportions of infringers do not engage in infringing conduct after receiving a warning that their activity is infringing.

Accordingly, the proposal puts forward a scheme in which:

  1. a copyright owner may send a notice alleging infringing activity to an ISP which will then send its subscriber, if it can match a subscriber to the information provided by the rights holder, an education notice;
    1. a 21 day “grace period” will follow to allow the subscriber to seek legal advice or query the notice with a proposed Independent Panel or act on the notice;
  2. after the expiry of the 21 day “grace period”, the rights holder may send a further copyright infringement notice to the ISP if the subscriber is still engaging in the conduct or some other infringing conduct relevant to the rights holder and the ISP will send the subscriber, if it can match a subscriber to the information provided by the rights holder, a Warning Notice;
    1. a 21 day “grace period” would apply for each Warning Notice as well
  3. if, in any given 12 month period, the ISP has issued to the same subscriber an Education Notice and [three] Warning Notices and, presumably, receives another allegation against the subscriber, the ISP will send the subscriber a Discovery Notice and, if the conduct is still continuing or no objection has been lodged with the Independent Panel after 21 days, the ISP will inform the rights holder that the subscriber has not addressed matters after receiving the [third] Warning Notice and the rights holder may apply for preliminary discovery or a subpoena to obtain the subscriber’s details and take direct action against the subscriber for copyright infringement.

The [three] in square brackets is how it is presented in the proposal, presumably to indicate this is an aspect they are willing to negotiate.

A feature of the proposal is its proposal for the institution of a Copyright Industry Panel to prepare and disseminate educational material and operate an “appeals” process whereby subscribers can dispute allegations of infringement.

The proposal points out that setting up the systems to implement this (or presumably any) system to deal with the problem will be expensive and, having regard to the enormous extra revenue copyright owners claim they stand to gain, they should bear some part of that cost.

The proposal is planned to operate for 18 months to evaluate how it works.

It remains to be seen how acceptable all this is to the copyright owners (which in turn may well depend on who “wins” the Roadshow appeal). The Australian Content Industry Group, apparently representing music and film copyright owners such as APRA-AMCOS, reportedly rejected it out of hand.

Except perhaps in the case of ISPs hosting third party websites with infringing material or providing “location information” tools to the sites of third parties who have infringing content and, maybe, some caching activities, it is not immediately clear how the rights owner will identify which subscriber it wants to get an Education or Warning Notice sent to.

Also, it is not clear on my first reading whether the Education Notice and the 3 Warning Notices in any given 12 month period must be sent by the same copyright owner in respect of the same infringement (e.g. the one video on a hosted website) or, presumably, may be generated by different rights holders in respect of the same or different activity?

Communications Alliance Ltd A Scheme To Address Online Copyright Infringement (An Australian Internet Service Provider (ISP) Proposal) (pdf)

ISPs and filtering

While we wait with bated breath for the High Court’s deliberations on Roadshow v iiNet (transcript of hearing here, here and here), it is worth noting that the CJEU (formerly the ECJ) has struck down an injunction against an ISP which required the ISP to monitor all its users’ traffic and filter (block) copyright infringing material.

SABAM, the Belgian authors’ collecting society (counterpart to APRA) obtained an interlocutory injunction against Scarlet, an ISP. SABAM contended that some of Scarlet’s customers were using its services to engage in peer-to-peer file sharing of copyright materials without authorisation. It obtained from the Belgian courts an order that Scarlet implement a system of filtering to ensure that its users were blocked or otherwise made it impossible for them to send or receive in any way, files containing a musical work using peer-to-peer software without the permission of the copyright owners.

It was common ground between the parties that this would require Scarlet to introduce a system for filtering:

–        all electronic communications passing via its services, in particular those involving the use of peer-to-peer software;

–        which applies indiscriminately to all its customers;

–        as a preventive measure;

–        exclusively at its expense; and

–        for an unlimited period,

which is capable of identifying on that provider’s network the movement of electronic files containing a musical, cinematographic or audio-visual work in respect of which the applicant claims to hold intellectual property rights, with a view to blocking the transfer of files the sharing of which infringes copyrigh

It was also common ground between the parties that such a system would require :

–        first, that the ISP (Scarlet) identify, within all of the electronic communications of all its customers, the files relating to peer-to-peer traffic;

–        secondly, that it identify, within that traffic, the files containing works in respect of which holders of intellectual-property rights claim to hold rights;

–        thirdly, that it determine which of those files are being shared unlawfully; and

–        fourthly, that it block file sharing that it considers to be unlawful.

That is, the ISP would have to monitor all the traffic across its network.

While the CJEU recognised that IP, in this case copyright, was a fundamental right. It also recognised that its protection needed to be balanced against the protection of other fundamental interests. It was necessary to strike a fair balance between the rights of copyright owners, ISPs and their customers. This injunction did not do that and so was incompatible with Community law (we would say “invalid”):

47      In the present case, the injunction requiring the installation of the contested filtering system involves monitoring all the electronic communications made through the network of the ISP concerned in the interests of those rightholders. Moreover, that monitoring has no limitation in time, is directed at all future infringements and is intended to protect not only existing works, but also future works that have not yet been created at the time when the system is introduced.

48      Accordingly, such an injunction would result in a serious infringement of the freedom of the ISP concerned to conduct its business since it would require that ISP to install a complicated, costly, permanent computer system at its own expense, which would also be contrary to the conditions laid down in Article 3(1) of Directive 2004/48, which requires that measures to ensure the respect of intellectual-property rights should not be unnecessarily complicated or costly.

49      In those circumstances, it must be held that the injunction to install the contested filtering system is to be regarded as not respecting the requirement that a fair balance be struck between, on the one hand, the protection of the intellectual-property right enjoyed by copyright holders, and, on the other hand, that of the freedom to conduct business enjoyed by operators such as ISPs.

50      Moreover, the effects of that injunction would not be limited to the ISP concerned, as the contested filtering system may also infringe the fundamental rights of that ISP’s customers, namely their right to protection of their personal data and their freedom to receive or impart information, which are rights safeguarded by Articles 8 and 11 of the Charter respectively.

Thus, the filtering injunction did not strike a fair balance between the protection of IP and the rights of ISPs and their customers.

Case C-70/10 Scarlet Extended SA v SABAM, 24 November 2011.

IPKat has the text of the CJEU’s Summary and as they point out, the CJEU’s ruling has some interesting implications for the filtering injunction ordered by Arnold J in Newzbin 2.

Of course, in Australia, we do not labour under a Charter of Rights. Section 116AH(2) of the Copyright Act 1968 does, however, place some limits on a “carriage service provider’s” obligations to monitor:

(2)  Nothing in the conditions is to be taken to require a carriage service provider to monitor its service or to seek facts to indicate infringing activity except to the extent required by a standard technical measure mentioned in condition 2 in table item 1 in the table in subsection (1),

which is a rather more anodyne protection. Also, under the Telecommunications Act, carriers and carriage service providers have prohibitions on disclosing information related to communications (which is not the same thing as a prohibition on monitoring), but there are important exceptions including disclosures authorised by or under law. Cf  e.g. ss 276 and 280.

 

The future (?) for booksellers

Remember all the fuss when the Minister (was reported to have) said all the bookshops (except those in the big cities) were going to close? (or something like that).

It would appear that his comments may have arisen from a report by the Book Industry Study Group.

The report is not public yet, but the 138 submissions are and so is the Market Analysis Research Report from PWC (pdf).

There are lots of facts and figures in there. You may even recognise this as a world you live in:

Lengthy delivery times and insufficient availability of eBook titles are seen as impeding the competitiveness of Australia’s booksellers (‘bricks and mortar’ and online).

On the question of insufficient availability:

Options to improve business models for publishers could involve entering into international agreements to share global rights, competing directly for global rights, and controlling costs through centralisation. Experimentation will remain a priority for book publishers.

“Sharing” global rights probably won’t help the availability problem for electronic titles as that seems to be the cause of the problem. As a consumer, don’t I want less “sharing” so that when things become available electronically overseas I can get access to them now?

Interestingly:

The available evidence suggests that overseas online booksellers are generally able to sell books published overseas at prices (including delivery) that are cheaper than those charged by Australian online booksellers. The price competitiveness of Australian booksellers is affected by the GST, the exchange rate, wholesale book prices, and postage costs.

On postage costs:

Our initial analysis suggests that an Australian business posting a book-like parcel to an Australian address would pay approximately 90 per cent more than a British business would to post the same package to the same address.

Well, if you’ve ever bought a book from The Book Depository, you know you don’t pay anything like the $10+ an Australian retailer charges you -$0. So why would you pay $30+ for a new paperback if you can get it for $10 – 15 from The Book Depository or electronically from Kindle/iBook/Nook?

Being old fashioned, I do enjoy wandering into a book store and browsing, but spending an extra $20 for a paperback which I (usually) only read once?

I do also enjoy reading books set in Australia or, more portentously, about the Australian experience. These cost pressures, however, will surely mean that Australian books will have to become cheaper to compete. It will be interesting to see how the Book Industry Study Group tries to solve that conundrum.

Lid dips: @isobelclare and @smh

 

Australia signed up to ACTA

Last Saturday, while half of us were trying not to watch Meat Loaf earn a reported $500,ooo (here, here or here) or tweeting, the Minister for Trade travelled to Japan to sign ACTA (the Department’s home page currently has a photograph of the actual signing).

According to the Minister’s Press Release:

The implementation of ACTA will not require legislative changes in Australia. Rather, trading partners will adapt their laws to the high standards of IP enforcement that already apply in Australia.

According to the USTR, no changes would be required to US law either.

The Minister for Trade’s Press Release states that Australia is one of 10 countries attending the signing + the EU. Howard Knopf reports that those signing included Australia, Canada,  Japan, Morocco, New Zealand, Singapore, (South) Korea & USA, but the EU didn’t. According to ZDNet, the EU still working on it. So this may be a bit “optimistic”.

According to the USTR, the EU, Mexico and Switzerland did attend and “confirmed their continuing strong support for and preparations to sign the Agreement as soon as practicable”.

Lid dip @howardknopf

Google’s keywords advertising

News just in:

Google’s placement of advertisements, generated through its AdWords program, on search results pages is not misleading or deceptive conduct contrary to s 52 TPA / s 18 ACL (I’m afraid you have to scroll down).  However, the advertiser’s use of another trader’s name in the headline for an advertisement which had nothing to do with that trade was.

So for example, the Trading Post used the AdWords program to generate an ad:

Kloster Ford

www.tradingpost.com.au New/Used Fords – Search 90,000 + auto ads online. Great finds daily!

The advertisements at the URL did not have anything to do with Kloster Ford or vehicles Kloster Ford was offering for sale.

The Trading Post therefore had engaged in misleading or deceptive conduct; Google did not.

Australian Competition and Consumer Commission v Trading Post Australia Pty Ltd [2011] FCA 1086

 

 

357 paragraphs to read now (or a bit later)

Lid dip @wenhu

SMH report

ICANN approves ‘historic’ new gTLD regime

ICANN’s board meeting in Singapore today voted to launch new top level generic names: apparently 13 voted for, 1 opposed and 2 abstained.

Currently, gTLDs there is a closed system, confined to 22 different types such as .com, .info, .biz etc.

Under the new plan, there won’t be any limits on what can be the top level domain. Thus, if Sony wanted to launch its own top level domain such as .sony or maybe .psp, it could apply to do so.

According to ICANN’s Chairman of the Board:

Today’s decision will usher in a new Internet age,” said Peter Dengate Thrush, Chairman of ICANN’s Board of Directors. “We have provided a platform for the next generation of creativity and inspiration.

and

ICANN has opened the Internet’s naming system to unleash the global human imagination. Today’s decision respects the rights of groups to create new Top Level Domains in any language or script. We hope this allows the domain name system to better serve all of mankind,” said Rod Beckstrom, President and Chief Executive Officer of ICANN.

Some reports also indicate that so-called internationalised domain names have been approved; i.e., those using characters other than Latin letters – Chinese, cyrllic etc.

Applications for new gTLDs are planned to be open from January 2012 to April 2012.

It is expected that it will cost US$185,000 to apply.

There looks like lots of “fun” will be in order.

Some names will be “reserved”. (See page 2-8 of the Application Guidebook (really p. 60)). Then there will be questions of applicant suitability and DNS / technical stability.

There will be an objection process to deal with 4 types of disputes:

  • String Confusion Objection – The applied-for gTLD string isconfusingly similar to an existing TLD or to another appliedforgTLD string in the same round of applications.
  • Legal Rights Objection – The applied-for gTLD stringinfringes the existing legal rights of the objector.
  • Limited Public Interest Objection – The applied-for gTLDstring is contrary to generally accepted legal norms ofmorality and public order that are recognized underprinciples of international law.
  • Community Objection – There is substantial opposition tothe gTLD application from a significant portion of thecommunity to which the gTLD string may be explicitly orimplicitly targeted.

See page 3-4 (really p. 150) of Module 3.

For IP owners, there will be a trademark clearinghouse process and, after designation of new gTLDS, a post-delegation dispute resolution procedure.

So, if you own a trademark, you may want to start planning now about how you are going to protect your interests even if you don’t plan to set up your own cyberspace.

What happens on the Internet in 60 secs

70+ domain names registered

13,000+ iPhone apps downloaded

600+ new videos uploaded to YouTube …

See the Infographic

via Peter Black

Helping make Prof. Lessig’s case for him

So, Steve Jobs introduced iCloud to the world yesterday.

Michael Speck from Music Industry Piracy Investigations (the people who bring down pirates like Kazaa for the record industry) declared:

Apple was “no better than the old p2p pirates”.

Now, at one level, Apple is not doing that much that hasn’t already been done before: Apple own webpage compares its service to those already on offer from Amazon and Google. Here’s another 17 Apps Mr Jobs made redundant.

Presumably, what you “buy” from Apple through the iTunes store is covered by a licence. The thing that Mr Speck is concerned about is the iTunes Match service: if you let Apple scan your hard drive it will store on the iCloud server for you copies of – according to Mr Speck – all the music you have there; you paid music and music you, er, ripped yourself including pirated music files.  Tidbits’ summary of iTunes Match:

iTunes Match — What about the music you purchased elsewhere or ripped from CD yourself? For a $24.99 yearly fee, iTunes Match makes those songs available, too. iTunes uploads a list of songs in your library (much as it does now for the iTunes Genius results) and matches them (probably using music fingerprinting) against Apple’s collection of 18 million tracks. If you choose to download a track to a device where it doesn’t appear, Apple provides a version at iTunes Plus quality (256 Kbps and free of DRM), even if your original copy was ripped at a lower quality.

Hmm, so if an Australian user chooses the music files to be “matched”, that puts Apple in the territory of iiNet (unless of course Apple’s servers are “in” Australia too).

But wait you say, isn’t there a fair dealing defence? See if you can fit what is being proposed into this.

From what some of the other commentators say, however, it looks like Apple may have cut a deal with the record companies so that some percentage of the annual iTunes Match fee goes to the record companies – see the comments of Kim Weatherall and Colin Jacobs here.

If that were part of the deal with the record companies, then problem solved, but Mr Speck’s interpretation is that it just a unilateral position taken by Apple without the consent of the copyright owners.

Then, for those of us in Australia, there is another problem: when it launches, iTunes Match will be available only in the USA. It will become available in other parts of the world only when licences are negotiated with the copyright owners. Wonder how long it will take before (a) Apple gets around to negotiating with copyright owners for Australia and (b) the chances the copyright owners for Australia will agree to any of this? Remember how long it took for any copyright material to show up in the iBookstore?

On the topic of territorial copyright:

When Zengobi announced Curio Core it was priced (to US customers) at US$39.99. It’s currently available in the Apple Australia Mac App store for AU$47.99, even though the Australian $ currently buys (approx) US$1.06 (which translates into just under AU$38. You can have similar fun with lots of other items in the App stores. Choice magazine provides even more egregious examples for a host of brands.

What Prof Lessig’s case is.

Lessig at e-G8 or Le civilised Internet vs gales of creative destruction

While we’re having our dark mutterings about what might be in a “Convergence Review“, the Leaders of the Free World (or at least the Western Hemisphere) meeting at Deauville have declared:

5. We discussed new issues such as the Internet which are essential to our societies, economies and growth. For citizens, the Internet is a unique information and education tool, and thus helps to promote freedom, democracy and human rights. The Internet facilitates new forms of business and promotes efficiency, competitiveness, and economic growth. Governments, the private sector, users, and other stakeholders all have a role to play in creating an environment in which the Internet can flourish in a balanced manner. In Deauville in 2011, for the first time at Leaders’ level, we agreed, in the presence of some leaders of the Internet economy, on a number of key principles, including freedom, respect for privacy and intellectual property, multi-stakeholder governance, cyber-security, and protection from crime, that underpin a strong and flourishing Internet. The “e-G8” event held in Paris on 24 and 25 May was a useful contribution to these debates.

[Slight digression: “new” issues? plus ça change?]

The real fun, however, was at the “e-G8”.

President Sarkozy, who was convening the meeting of the Leaders, had brought together all sorts of likely people

[such as Eric Schmidt, Mark Zuckerberg, Jeff Jarvis and Prof. Lessig]

and issued a clarion call for Le Civilised Internet.

It all started very well with M. le president declaiming:

You have changed the world. For me, you have changed the world, just as Columbus and Galileo did. You have changed the world, just as Newton and Edison did. You have changed the world with the imagination of inventors and the boldness of entrepreneurs.

However:

Also the States we represent need to make it known that the world you represent is not a parallel universe, free of legal and moral rules and more generally all the basis principles that govern society in democratic countries. Now that the Internet is an integral part of most people’s lives, it would be contradictory to exclude governments from this huge forum. Nobody could nor should forget that these governments are the only legitimate representatives of the will of the people in our democracies. To forget this is to run the risk of democratic chaos and hence anarchy. To forget this would be to confuse populism with democracy of opinion. Juxtaposed individual wishes have never constituted the will of the people. A social contract cannot be drawn up by simply lumping together individual aspirations.

and

Do not allow the revolution you began to violate people’s fundamental right to privacy and to be fully autonomous. Complete transparency, which never allows a person to rest, will sooner or later come up against the very principle of individual freedom.

Let us not forget that behind an anonymous Internet user, there is a real citizen who is evolving in a society, a culture and an organized nation to which he belongs and with laws he must abide by.

Do not forget that the sincerity of your promise will be assessed in the commitment of your companies to contribute fairly to national ecosystems.

Do not allow the revolution you began to violate the basic right of children to lives that are protected from the moral turpitude of certain adults.

Do not allow the revolution you began to be a vehicle for maliciousness, unobstructed and unrestricted. Do not allow this revolution become an instrument in the hands of those who wish to jeopardize our security and in doing so, our freedom and our integrity.

You have allowed everyone, with the mere magic of the Web, to access all the cultural treasures of the world in a simple click. It would be something of a paradox if the Web contributed to draining them over time.

The immense cultural wealth that provides our civilizations with such beauty is a product of the creative forces of our artists, authors and thinkers. Basically, it is the product of all those who work on enchanting the world.

Yet these creative forces are fragile because when creative minds are deprived of the fruit of their talents, they are not just ruined, what’s worse, they lose their independence, they will be required to pawn their freedom.

Unfortunately, this didn’t meet with such a good press (at least in those parts of the (western) world that Napoleon didn’t conquer). For some of the adverse press: herehereherehere. Maybe, the President said something more specific in unscripted comments as the press and Prof. Lessig all react to suggestions that the rest of the world should be introducing the 3-strikes regime of the loi hadopi (France and France again and NZ) and, in another reverberation DownUnder, the rights of governments to censor what their citizens read or do on the internet.

Prof. Lessig was willing to concede that (for intellectual property rights) the question is not whether there should be copyright protection – “No-one serious denies this” – the question is how copyright should be protected in the age of the Internet. On this question, he sharply disagreed with M. le president. The President’s solutions were answers provided by incumbents. And such answers, Prof. Lessig says, should be treated with (too put it mildly) skepticism:

From the Hargreaves Report (UK)

Instead, Prof. Lessig pointed out, the future of the Internet is not:

  • Twitter
  • Facebook
  • Google
  • (he hopes) Rupert Murdoch,

the future of the Internet is not here (yet). We need to be careful lest the rules we put in place today (at the behest of incumbents) foreclose the emergence of new developments or lose sight of reality.

Now, of course, Prof. Lessig is engaging in polemical advocacy (just as Pres. Sarkozy was), but the point he raises is important and it is important that “we” get it right. One must accept that the State can lay down rules for its citizens’ use of the internet, just as it can lay down rules for all other aspects of its citizens’ lives. Apparently, this even applies in the USA, but in the UK may be not or may be. The question is: what rules (if any) should it lay down and whose views should it be listening to?

You can watch Prof. Lessig’s speech (which I recommend you do just long enough to admire the space age Stage that proves we really are living in the future) then switch over to the slideshow for the lesson (do persevere past section 1, the alcoholic(s)).

The link to the official (English translation of) the text of President Sarkozy’s speech.

For Hargreaves and some reaction.

The G8’s 2011 communique.

If you still need more on ‘creative destruction’ after watching Prof. Lessig, start here.

Lid dip: Peter Black at Freedom to Differ.

Affinage and A.S.P. 2

For completeness, I should note that IHC UK has appealed Logan J’s decision earlier this month finding that it infringed IHC Australia’s registered trade mark for AFFINAGE. Summary here.

Interestingly, Logan J has granted a stay of his order to remove all references to A.S.P. from IHC UK’s Web site at www.affinage.com.

You will recall that IHC UK owns AFFINAGE outside Australia and had adopted A.S.P. at least partly to deal with the fact that it could no longer use “its” trade mark in Australia.

Logan J appears to have considered a stay pending the outcome of the appeal was in order as IHC UK:

  1. Had removed all references to Australia (including the drop down country box) from its web site at www.affinage.com;
  2. IHC UK was having some sort of global re-launch of A.S. P. in the UK soon, involving 150 or so distributors from around the world;
  3. His Honour accepted that the decision that the modified Web site infringed had been a “difficult one”; and
  4. IHC Australia had not sought damages and it was difficult to identify what damages might flow from the stay.

His Honour did not think that he needed to order a stay of 7 days of his orders relating to the removal of references to Australia from www.affinage.com. That stay had been sought out of an abundance of caution and IHC UK was generally trying to comply with the orders so it appeared a breach, if any, would have been inadvertent.

International Hair Cosmetics Group Pty Ltd v International Hair Cosmetics Limited (No 2) [2011] FCA 540

For the orders under appeal, see International Hair Cosmetics Group Pty Ltd v International Hair Cosmetics Limited [2011] FCA 339

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