Copyright

Copyright safe harbour scheme

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Links to the Consulatation Paper on the Copyright safe harbour scheme for carriage service providers.

Broadly, the safe harbour schemes provide some protection from some remedies for carriage service providers:

Category A – acting as a conduit for internet activities by providing facilities for transmitting, routing or providing connections for copyright material
Category B – caching through an automatic process
Category C – storing copyright material on their systems or networks, and
Category D – referring users to an online location (for example, linking).

The first problem is that the definition of csp isFrom

    in

the Telco Act (i.e.) those providing the, er, telephone service. Didn’t cover Google or Yahoo or a whole host of other Internet service providers. The Australian definition is much narrower than the US definition. So, the Government is exploring broadening this.

There may be a question of what the US Free Trade Agreement permits.

The second question is looking at ways to streamline the notice system.

Lid dip Libby Baulch

Submissions must be in by 22 November 2011.

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Talking head, travelling slideshow

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My Copyright Update 2011 for IPSANZ travels to Adelaide on 28 September.

If you’re in Adelaide, hope to see you there.

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Optus TV Now … 2

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Follow last Friday’s post, in the twittersphere @wenhu points out that s 22(6) defines who the maker of a communication is:

(6)  For the purposes of this Act, a communication other than a broadcast is taken to have been made by the person responsible for determining the content of the communication.

(6A)  To avoid doubt, for the purposes of subsection (6), a person is not responsible for determining the content of a communication merely because the person takes one or more steps for the purpose of:

                     (a)  gaining access to what is made available online by someone else in the communication; or

(b)  receiving the electronic transmission of which the communication consists.

Example:    A person is not responsible for determining the content of the communication to the person of a web page merely because the person clicks on a link to gain access to the page.

It’s a good point, but I’m not sure at first impression why that doesn’t make the subscriber the maker.

Section 22(6) was introduced as part of the legislative clean-up of the mess made in the Music on Hold case –  to make it clear the telephone company was not communicating the music played by the subscriber to a caller when they were placed on hold. For example, para. 40 of the EM explains:

40.    The new s.22(6) provides that a communication other than a broadcast is taken to have been made by the person responsible for the content of the communication.  This provision relies on the extended definition of communicate in Item 6.  The provision has the effect that communications carriers and Internet Service Providers will not be directly liable for communicating material to the public via their networks if they are not responsible for determining the content of that material.

Meanwhile in the comments “Copyright Fanatic” asks why Optus TV Now is any different to using your TIVO at home? That (if the media reports are to be believed) is the $153 million question: is using someone else’s servers in some other point in cadastral space different to using your own equipment in the privacy of your own home?

Optus TV Now … 2 Read More »

Optus TV Now and the threat to sports’ millions

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The media yesterday was splashed with stories about how Optus is threatening the flow of revenues to sports such as the NRL and the AFL through its TV Now service (for example, here and here and here). Hundreds of millions of dollars are apparently at stake.

Basically, it looks like you download an “app” to your phone or computer and you can then record (or perhaps more strictly, instruct Optus to record) a television program being broadcast on free to air television on Optus’ servers and then have the recording streamed to your mobile or computer at a time and place of your choosing – Optus’ promotional video suggests as your sitting on the bus. The media reports suggest you might be able to start watching as soon as 2 minutes after the game program starts broadcasting. There are a few constraints: You have to watch within 30 days of the recording. You can only nominate programs broadcast in the area where your account address is located. It looks like, if you’re an Optus (mobile) subscriber you get 45 minutes storage “free”, but you can “buy” more if you want.

Optus’ version of how it works here and here.

It is billed as just like home taping or recording only for the 21st century.

Optus is reported to be seeking an injunction against the AFL and the NRL to stop them suing it for copyright infringement. In fact, Optus has brought proceedings against both the NRL and the AFL and the first directions hearing was heard by Rares J today: NSD1430/2011. Rares J made timetabling orders for defences (and cross-claims) and evidence with the trial fixed for 19 December 2011.

The injunction part is easy: someone who is on the receiving end of threats of copyright infringement can bring an action for groundless threats of infringement and, if successful, the remedies include an injunction against continuation of the threats and possibly damages for loss suffered.

Presumably, the AFL and/or the NRL sent Optus letters of demand telling it to stop or else. If so, there will be a threat and then it will be over to the AFL and/or the NRL to establish that what Optus is doing infringes their copyright.

In the case of a (largely unscripted) sporting spectacle like a footy final, the copyright is going to subsist only in the broadcast (hmmm, what about the jumpers and logos and ….)

I am guessing (but I don’t know) that the AFL’s and the NRL’s contracts with the broadcasters involve the broadcasters assigning their copyright in the broadcast to, respectively, the AFL and the NRL.

As I haven’t seen Optus’ claim or, more likely, defence to cross-claim, I am also guessing Optus will be relying on s 111 of the Copyright Act:

(1) This section applies if a person makes a cinematograph film or sound recording of a broadcast solely for private and domestic use by watching or listening to the material broadcast at a time more convenient than the time when the broadcast is made. Note: Subsection 10(1) defines broadcast as a communication to the public delivered by a broadcasting service within the meaning of the Broadcasting Services Act 1992 . Making the film or recording does not infringe copyright

(2) The making of the film or recording does not infringe copyright in the broadcast or in any work or other subject-matter included in the broadcast.

Note: Even though the making of the film or recording does not infringe that copyright, that copyright may be infringed if a copy of the film or recording is made.

Dealing with embodiment of film or recording

(3) Subsection (2) is taken never to have applied if an article or thing embodying the film or recording is:

(a) sold; or

(b) let for hire; or

(c) by way of trade offered or exposed for sale or hire; or

(d) distributed for the purpose of trade or otherwise; or

(e) used for causing the film or recording to be seen or heard in public; or

(f) used for broadcasting the film or recording.

Note: If the article or thing embodying the film or recording is dealt with as described in subsection (3), then copyright may be infringed not only by the making of the article or thing but also by the dealing with the article or thing.

(4) To avoid doubt, paragraph (3)(d) does not apply to a loan of the article or thing by the lender to a member of the lender’s family or household for the member’s private and domestic use.

The first thing here will be who makes the recording. Will the Optus subscriber’s use of the technology to get a recording made on Optus’ servers (in the cloud) mean that the subscriber is the person who makes the recording or will it be Optus?

If Optus is the person who makes the recording (a) can the subscriber delegate the making to them as an agent or (b) does the recording need to be made for Optus’ private and domestic use or will the private and domestic use of its subscriber suffice?

As to who makes the recording, the US Circuit Court of Appeals for the Second Circuit in the rather different legislative setting of the US Copyright Act considered that the party in the position of Optus did not make the recording: Cartoon Network v Cablevision Inc. 536 F. 3d 121.

On the other hand, while recognising the possibility of a person making a fair dealing copy through an agent, in Australia Beaumont J found that a news monitoring service infringed copyright by making clippings of newspaper articles for its clients. While the clients may have had a relevant fair dealing purpose, the news monitoring service’s purpose was not a fair dealing purpose but a commercial purpose of making copies for its clients: De Garis v Nevill Jeffris Pidler Pty Limited [1990] FCA 218.

(You will have noticed that s 111(2) applies to not just to the copyright in the broadcast, but also any other copyright included in the broadcast. So that takes care of the logo, jumpers and all the other copyrights in scripted shows like, er, Home and Away etc.)

Section 111(2) only immunises the making of the recording. What happens when Optus streams the recording back to the subscriber? If it is set up so that the recording is streamed only to the individual subscriber, it will be difficult to call it a broadcast. But is it otherwise a communication to the public? This might turn on whether the communication is made by the subscriber (or his or her agent) to themselves or Optus. In the Music on Hold case (largely superseded now as a result of significant changes in the legislation), Dawson and Gaudron JJ emphasised that the public were people whom the copyright owner might fairly regard as its public and downplayed the number of persons involved. Will the commercial nature of Optus relationship with its subscribers colour the characterisation of this situation?

I guess we will have to wait and see.

Singtel Optus v National Rugby League and the Australian Football League NSD1430/2011.

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How wide should an injunction be?

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Having granted summary judgment against Paul’s Retail for infringement of a range of fashion brands trade marks and copyright, Kenny J has now made orders for the remedies flowing from the infringements. One point of general interest was the dispute about the scope of the injunctions.

Her Honour accepted that injunctions were a conventional remedy for intellectual property infringement and were appropriate for grant in this case, largely because it appears the respondents did not offer undertakings and continued to engage in infringing conduct after they had claimed to have ceased it.

The applicants sought broad injunctions in terms typically granted in patent cases (where the order is often as broad as “thou shalt not infringe the patent” – expressed in modern plain English of course). The respondents argued such wide injunctions would travel well beyond the pleaded and proved infringements. Kenny J referred to cases identifying the Court’s concerns against overly broad injunctions, especially as they carried with them the risk of contempt.

Kenny J accepted, on the basis of those cases, that an injunction could in appropriate cases be framed in terms of the statutory command and need not necessarily be tied to prescribe specific conduct. Nonetheless, her Honour considered:

23 As noted above, in Universal Music Branson J stated that it may be permissible to incorporate in an injunction the terms of a statutory prohibition. It does not follow from this, however, that it is permissible to include in injunctions prohibitions against forms of infringing conduct that have not been proven, let alone alleged: compare Microsoft Corp v Goodview Electronics at 592. Bearing these considerations in mind, I propose to grant injunctions in terms incorporating the statutory language but substantially designed to guard against the infringing conduct that has been proven.

Thus, the specific terms of the injunctions granted differed according to the nature of the infringing conduct.

For example, instead of granting an injunction to restrain the respondents from infringing copyright [or the applicant’s copyright in a particular work], Kenny J granted an injunction:

Pursuant to section 115(2) of the Copyright Act 1968 (Cth), the first respondent be permanently restrained from:

(a) reproducing or authorising the reproduction of the whole or a substantial part of any of the Ug Manufacturing Copyright Works without the licence or authority of the fifth applicant;

(b) publishing and communicating to the public or authorising the publication and communication to the public of the whole or a substantial part of any of the Ug Manufacturing Copyright Works without the licence or authority of the fifth applicant;

(c) selling, offering for sale, supplying, offering to supply, importing or distributing any articles bearing any Infringing Ug Manufacturing Copyright Works (such Works being a copy of the whole or a substantial part of any of the Ug Manufacturing Copyright Works which has not been made or applied by or with the licence or authority of the fifth applicant);

(d) authorising, directing or procuring any other company or person to engage in any of the conduct sought to be restrained by sub-paragraphs (a), (b) and (c).

Apparently, the injunctions against the proven trade mark infringements were also tailored more narrowly.

QS Holdings Sarl v Paul’s Retail Pty Ltd (No 2) [2011] FCA 1038

 

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Telstra v PDC update

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The transcript of Telstra’s unsuccessful application for special leave has now been posted here.

The Sydney Morning Herald speculates that Telstra is seeking talks with the Attorney General “to close the loophole”.

One consequence of the High Court’s revolution in copyright law is that the privacy regime which prevents the use of the Integrated Public Number Database (and IPND Industry Code) to create reverse-number directories has been undermined.

As its name suggests, a reverse-number directory is one where you have the telephone number and you can use it to identify who the subscriber is. Now, you may question whether that is an invasion of privacy (and many people happily (or maybe unknowingly) permit their telephone number to be transmitted to the person they are calling, but Parliament, the ALRC and the Privacy Commissioner (pdf see p. 402) have taken the view that it is, or should be.

Now, it could well be argued that copyright (I mean) a sui-generis database protection right would be a blunt instrument for protection of privacy and that privacy concerns would be better addressed, if necessary, by amending privacy laws. The economic case for database protection, therefore, would be key.

The Full Federal Court’s decision from which leave was not granted.

Lid dip: Copyright Council.

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Telstra v PDC special leave

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The High Court (Gummow and Bell JJ) refused Telstra’s special leave application this morning.

Young QC for Telstra ran hard on the concurrent findings that there was human skill and effort in the collection and verification of the data. However, that ran up against Yates J‘s findings at [167] – [169] and Keane CJ’s findings at [89] – [90].

At [113], Perram J had said:

Had the tasks been attended to manually an original work would have ensued.

Which might seem a very strange, technology specific approach to take in this day and age.

Bell J, however, challenged Young QC about the difference between “computer-assisted” and “computer-generated”. Gummow J at one point stated, you need a database directive.

One might wonder whether allowing special leave in this case would have thrown any light on the differences in approach between the two judgments in IceTV. In November, the Full Federal Court is scheduled to hear an appeal in Dynamic Supplies. Who knows whether it will get there or not. If it did, however, it might present an interesting vehicle for exploring the new world which IceTV ushered in.

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How much to pay for an infringement

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Over at the Fortnightly Review, Ass. Pro. David Brennan takes issue with the economists who argued that Larrikin should not have been paid any damages for the Kookaburra infringements.

The economists’ argument seems to have been that Larrikin didn’t lose any sales as a result of Men at Works’ infringements and so suffered no loss.

Damages under s 115(2) of the Copyright Act are compensatory: that is, they are calculated to compensate the copyright owner for the loss suffered as a result of the infringement. One way to measure that may be the profit the copyright owner lost on sales which typically applies where the copyright owner and the infringer are competing in the same market. One problem with this is that the figure for lost sales must be discounted to reflect infringements by the infringer which would never have been sales made by the copyright owner. So for example in Autodesk v Cheung, the infringer gave the pirate copies away for free while the copyright owner’s genuine software programs sold for hundreds of dollars.

Another measure often used is the licence fee approach, particularly applicable where the owner exploits the copyright by licensing. So, Autodesk wanted the licence fees it would have been paid as if Cheung had taken out a distribution agreement like its other distributors. Wilcox J was not prepared to order damages at a reasonable royalty level because, as is typically the case, there was no way Autodesk would have licensed Cheung or, for that matter, that Cheung would have paid for a licence from Autodesk. In that situation, Wilcox J felt that the basis for a reasonable royalty — the price a hypothetical willing (but not overly anxious) licensor and a hypothetical willing (but not overly anxious) licensee would have struck — could not apply.

While some courts at first instance have been willing to use a ‘reasonable royalty’ as a basis, Wilcox J’s concerns have been endorsed by Black CJ and Jacobson J in Aristocrat.

It is interesting to contrast this approach with the way the courts in the UK have dealt with it. Relying on some “old” patent cases (including a House of Lords decision), the Court of Appeal in Blayney (trading as Aardvark Jewellery) v Clogau St David’s Gold Mines was willing to use a “notional royalty” as the measure of the damages. The foundation of this approach was a rejection of the idea that the only loss suffered by the copyright owner was lost profits. Thus, in Watson, Laidlaw & Co Ltd v Pott, Cassels and Williamson (1914) 31 RPC 104, Lord Shaw expressed the principle:

wherever an abstraction or invasion of property has occurred, then, unless such abstraction or invasion were to be sanctioned by law, the law ought to yield a recompense under the category or principle, as I say, of price or hire. If A, being a liveryman, keeps his horse standing idle in the stable, and B, against his wish or without his knowledge, rides or drives it out, it is no answer to A for B to say: “Against what loss do you want to be restored? I restore the horse. There is no loss. The horse is none the worse; it is the better for the exercise.

and applied it in the context of patent infringement:

If with regard to the general trade which was done, or would have been done by the Respondents within their ordinary range of trade, damages be assessed, these ought, of course, to enter the account and to stand. But in addition there remains that class of business which the Respondents would not have done; and in such cases it appears to me that the correct and full measure is only reached by adding that a patentee is also entitled, on the principle of price or hire, to a royalty for the unauthorised sale or use of every one of the infringing machines in a market which the infringer, if left to himself, might not have reached. Otherwise, that property which consists in the monopoly of the patented articles granted to the patentee has been invaded, and indeed abstracted, and the law, when appealed to, would be standing by and allowing the invader or abstractor to go free. In such cases a royalty is an excellent key to unlock the difficulty, and I am in entire accord with the principle laid down by Lord Moulton in Meters Ld. v Metropolitan Gas Meters Ld. (28 R.P.C. 163). Each of the infringements was an actionable wrong, and although it may have been committed in a range of business or of territory which the patentee might not have reached, he is entitled to hire or royalty in respect of each unauthorised use of his property. Otherwise, the remedy might fall unjustly short of the wrong.

The Meters case was referred to by Wilcox J, but it does not seem that Watson, Laidlaw was cited to his Honour.

Now, of course, the 19th century considerations of a horse owner and “borrower” seem “quaint” in the age of Gogle and P2P torrents. But is the principle really so different?

It appears that the third member of the Court in Aristocrat, Rares J, may well have been willing to adopt the Watson, Laidlaw approach, but the evidence failed to provide a basis for any “judicial” estimate.

How much to pay for an infringement Read More »

iTunes Match and making Prof. Lessig’s case

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Recap: Prof. Lessig’s argument.

You will remember that Michael Speck from Music Industry Piracy Investigations was outraged by Apple’s pending iTunes Match service and, in particular, the part where the service would in your iCloud account copies of music on your hard drive which had not been bought through iTunes.

At the time, it wasn’t clear (at least to me) whether Apple was going all gung-ho and just offering this unilaterally or had the agreement of the record companies to this.

Of course, if the record companies had agreed to this, it would be rather hard for them, or their representative, to complain about the pirate’s charter.

Jonathon Bailey, at Plagiarism Today, reports here that Apple is in fact offering the service in the USA with the agreement of the record companies. He also goes on to discuss indications that this is all part of a clever new strategy by the record companies to combat piracy – one of the indications he identifies includes recent reports that the music industry in Australia is not pursuing a 3 strikes policy (at least as strongly) as the movie industry.

Swerving to another aspect: the iTunes Match service Steve Jobs announced was for the USA only. Media reports suggest it will take up to 12 months for the service to be extended to the UK and speculate other countries will have similar delays.

Copyright is, of course, a territorial right and there are often different owners and licensees for different territories (i.e., countries). Thus, just because you have consent from the (or a) copyright owner in one country does not give you rights to do the same thing with the corresponding copyright in another country. No doubt, therefore, a large part of any delay will be attributable to the need to negotiate separate arrangements with the owners of copyright in different territories.

So the delay reported in the media should come as no surprise. That shouldn’t come as too much of a surprise to those in Australia who monitored, for example, how long it took for the iBookstore to get any “in copyright” content. Perhaps, if Mr Speck’s view is representative of the views of the copyright owners in Australia, the wait would be even longer – what an economist might describe as “infinitely long”.

All of which goes to highlight, as representatives around the world assemble in Geneva to debate extending copyright and introducing limitations for visually impaired readers, why are we still dealing in the 21st century with territorial rights for electronic rights which can be accessed virtually instantaneously from virtually anywhere in the world?

Oh, perhaps it’s not just an electronic “problem”. This product is advertised for sale in the USA for US$399. You can buy it here for AUD$699 or (depending on exchange rate fluctuations) approximately US$736. (By the way, I am certainly not recommending that you do buy the product from either source, I have no experience with it.) Almost makes you wonder where’s Prof. Fels?

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Helping make Prof. Lessig’s case for him

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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.

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