The Commerce Committee has examined the Copyright (New Technologies and Performers' Rights) Amendment Bill and recommends that it be passed with the amendments shown.
Introduction
This bill amends the Copyright Act 1994 to address the emergence of technologies such as the Internet. It seeks to maintain the existing balance between the interests of the owners and those of the users of copyright works. It also seeks to create a more technology-neutral framework for the Copyright Act.
This bill takes account of international developments in copyright law, and incorporates many aspects of the two treaties negotiated by the members of the World Intellectual Property Organisation (WIPO)—the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty.
The Ministry of Economic Development advised us that this legislation will be reviewed in five years' time to ensure that copyright legislation in New Zealand keeps pace with technological advances.
This commentary addresses the key issues considered, and explains the substantive amendments recommended. Technical and minor amendments are not discussed.
Title
We recommend that the title be changed from “Copyright (New Technologies and Performers' Rights) Amendment Act” to “Copyright (New Technologies) Amendment Act”. Although the bill does amend some provisions concerning performers' rights, all these amendments relate only to making these provisions technologically neutral.
Copying for educational purposes
We recommend amending new section 44(4A) (clause 24) to make it clear that the section, which describes one of the conditions under which copying for educational purposes would be allowed, applies to copies communicated electronically.
Storing for educational purposes
We recommend several amendments to new section 44A (clause 25), which sets out the conditions under which an educational establishment would be allowed to store pages from websites.
We recommend amending new section 44A(1)(b)(ii) to make the requirement to identify the author dependent on the author's identity being known. As authors of works available on the Internet are often unidentifiable, we consider that it would be unrealistic to require educational establishments to identify authors in every case.
We recommend that new section 44A(1)(b)(iv) be deleted. This section provides that an educational establishment storing pages from websites must identify the course of instruction for which the material is stored. We consider this requirement impractical, as the same website page could be used in many courses. This requirement could also reduce the flexibility of assembling teaching components and thus stifle innovation in the use of the Internet for teaching.
We also recommend that new section 44A(1)(d) be deleted. This section requires that the material concerned cannot be made available to authenticated users until it has been removed from the original website or other electronic retrieval system. This proposal is impractical because a website page cannot be physically copied after it has been removed from the site, and this section would require an educational establishment to continuously monitor the website pages concerned.
Copying by librarians and archivists for replacement
In the bill as introduced, a librarian of a prescribed library or an archivist may make a digital copy of any item in the library or archive's collection to replace the original item, provided that the conditions stated in paragraphs (a) to (d) of new section 55(3) are satisfied (inserted by clause 34(2)).
The condition in new section 55(3)(c) is that the original item is not accessible by members of the public after replacement by the digital copy. However, some researchers may want to compare the original item with the digital copy to examine features such as the paper quality, watermarks, and foliation symbols, which cannot be distinguished in a digital copy. We therefore recommend that new section 55(3)(c) be amended to add an exception for access for research purposes where the nature of the research requires or would benefit from access to the original item.
We recommend that new section 55(4) be inserted into clause 34(2) to make this clause consistent with section 55(1)(b) of the Act. This amendment would allow a digital copy to be made to replace an item in a prescribed library or archive under limited circumstances.
Conditions for libraries and archives making and supplying digital copies
New section 56A (clause 36) sets out some of the conditions under which a prescribed library or archive would be permitted to communicate digital copies of copyrighted works to authenticated users. Some submitters were concerned that this section would harm the interests of copyright owners, who they believe would consequently have fewer market opportunities to supply digital copies of their works. However, we are not satisfied with evidence offered in support of this claim. Noting that libraries and archives are already allowed to supply digital works to their users under existing laws, we consider that the new section 56A should be retained, subject to the following amendments.
We consider that all the conditions in new section 56A should apply whether access to the digital copies in question is provided by means of terminals on-site or off-site, as we consider that it is impossible, in practical terms, to differentiate between on-site and off-site access. We also recommend defining “authenticated user” in this section in a more restrictive way.
We recommend that new sections 56B(a) and 56C(a) (clause 36) be deleted. These provide that a person or a library must make a written request for a digital copy of a work, and must state the purpose for which the material will be used. We consider that this condition is unnecessary in the light of the current practice of copying such requests, thus identifying the requester and the work. Also, sections 51 to 54 and 56 of the principal Act allow libraries and archives to supply a copy of work only for the purposes of research or private study.
We recommend that new sections 56B(b) and 56C(b), which require a written declaration that certain provisions of the principal Act have been complied with, also be deleted to reduce compliance costs for libraries and archives.
We recommend deleting new section 56B(c) as we consider that nothing under the principal Act would permit a library or archive to supply copies of works requested to anyone other than the person who made the request, making this provision redundant.
Observing, studying, or testing of computer program
We recommend inserting new section 80BA (clause 43) to clarify that a lawful user of a computer program may observe, study, or test the functioning of the program under certain circumstances without infringing copyright.
Communications works
The bill makes a number of amendments to the provisions regarding transmitted works such as broadcast and cable television programmes.
Format-shifting for personal use
New section 81A (clause 44) provides a limited exception for copying sound recordings for personal use. In other words, “format-shifting” of music would be allowed if certain conditions were met.
Some submitters asserted that a person who purchases a copy of a sound recording on CD, for example, should be allowed to copy it to another format without restrictions. However, we are of the view that such a person does not acquire copyright in the sound recordings concerned; the copyright owner retains the exclusive right to control copying of his or her works under section 16 of the principal Act. We therefore recommend retaining the restrictions on copying sound recording for personal use, which are set out in sections 81A(1) in clause 44, subject to some recommended amendments.
We recommend amending new section 81A(1)(e) to clarify that the copy must be solely for the personal use of the person who made it or of a member of his or her household if the format-shifting exception is to apply.
We recommend amending new section 81A(1)(g) so that a person who has purchased a copy of a copyrighted sound recording must retain possession of both the original copy and any copy made under this clause. A member of the public would therefore not be able to retain the copy if they sold the original CD.
We recommend that new section 81A(2) be amended to make it clearer that copyright owners always have the option of contracting out of all of the permitted acts, including those in new section 81A.
We recommend that new section 81A(3) be deleted. This subsection provides that new section 81A expires two years after enactment unless the Governor-General extends the expiry date by Order in Council. In our opinion, this subsection would create uncertainty as to whether purchasers of sound recordings recorded on older technology would be allowed to continue format-shifting those recordings for private and domestic use in the future.
Some submitters were concerned that new section 81A is limited to sound recordings only. We do not believe that an extension of the provision to other works such as films would be justified under the Berne Convention for the Protection of Literary and Artistic Works, of which New Zealand is a member. Furthermore, we consider that format-shifting of music for private and domestic use is widespread, while format-shifting of other types of copyrighted works is not. We therefore do not recommend extending the exception in new section 81A.
Time shifting
New section 84, inserted by clause 45, provides an exception for recording for the purpose of viewing or listening at a more convenient time. In other words, this section allows time shifting of communication work under certain conditions.
We recommend amending new section 84(1)(a) to make it clear that the recording must be solely for the personal use of the person who made it or of a member of his or her household if the time-shifting exception is to apply.
We also recommend rewording section 84(1)(c) to clarify that a time-shifted recording must not be made from an on-demand service.
Free public playing or showing of communication work that is simultaneous with reception
We recommend amending new section 87A(1)(b) (clause 48) and new section 188A(1)(b) (clause 84) to clarify that new sections 87A and 188A apply to free-to-air broadcasts, but not to subscribed broadcasts such as cable programmes. New sections 87A and 188A provide for an exception for the situation where a communication work for which no subscription fee is charged is shown or played simultaneously with its reception.
Reception and retransmission of broadcast in cable programme service
The majority of us are concerned about the effect of clause 49, which repeals section 88 of the principal Act, on the delivery of broadcasts to remote areas. We therefore recommend that clause 49 be amended to retain section 88 of the principal Act.
As section 88 contains a number of technologically specific terms that will not be used elsewhere in the principal Act after its amendment, we recommend the insertion of new subsection (4) to preserve the definitions of these terms for the purposes of section 88 only.
Internet service provider obligations
We recommend amending the definition of “Internet service provider” in clause 3(2) to ensure that a person who hosts material on websites or other electronic retrieval systems that can be accessed by a user falls within the definition.
Requirement for a policy to terminate accounts of repeat copyright infringers
We recommend that new section 92A (clause 53) be deleted as the standard terms and conditions of agreements between an Internet service provider and its customers usually allow for the termination of accounts of people using the services for illegal activity. Moreover, new section 92C already requires an Internet service provider to delete infringing material or prevent access to it as soon as possible after becoming aware of it.
Liability if user infringes copyright
We consider that the wording of new section 92B (clause 53) is unsatisfactory because it could expose Internet service providers to liability for copyright infringement where a person had infringed the copyright concerned before using the services of the Internet service provider to send or distribute the infringing content. We recommend that new section 92B be amended to clarify that this section would apply only if a person infringed copyright in a work by using Internet services of the Internet service provider. We also recommend the addition of a definition of “Internet services” in this section.
Liability for storing infringing material
In clause 53, we recommend amending new section 92C(2)(a) and inserting new section 92C(2)(ba) to make it clearer when Internet service providers would be required to take material down.
We also recommend amending new section 92C(2)(b) to provide that an Internet service provider would become liable for copyright infringement by storing infringing material if a user of the service committed an act of copyright infringement on behalf of, or at the direction of, the Internet service provider. We were concerned that the bill as introduced was unclear whether students of educational institutions or employees of companies would be considered to be acting under the authority and control of an Internet service provider if those educational institutions or the companies provided them with email services. We believe that our recommended amendment will remove this uncertainty.
We recommend clarifying new section 92C(4) and new section 92D(3) by providing that nothing in new section 92C or 92D limits the right of the copyright owner to seek injunctive relief in relation to either a user's infringement or any infringement by the Internet service provider.
We recommend inserting new section 92CA (clause 53) to prescribe the requirements for the notice of infringement that is referred to in new section 92C(2)(ba)(i). We also recommend inserting new section 92CB to set out offences in relation to notices of infringement. The maximum penalty for such offences would be a fine of $50,000 for an individual, and a fine of $100,000 for a body corporate.
Unjustified proceedings
We recommend inserting clause 64A to amend section 130(1) so that a person can bring proceedings against a person who has brought unjustified proceedings for contravention of new section 226A, which sets out prohibited conduct in relation to technological protection measures.
Use of recording without the consent of the performer
We recommend amending new section 172 (clause 77) to provide that a person would infringe a performer's rights if he or she showed or played in public, or communicated to the public, a recording that he or she knew or had reason to believe was made without the consent of the performer. We consider that the original wording of section 172 could unintentionally erode the performer's right to control unauthorised use of his or her performances, and would therefore fail to maintain the existing balance between the performer's interests and users' interests. Our recommended amendment would address this concern.
Technological protection measures
We recommend retaining all the proposed provisions (new sections 226 to 226J) in clause 89, which relate to technological protection measures (TPM), subject to our proposed amendments. We consider that these provisions are necessary to manage the risk of piracy of copyrighted works in a digital environment, and that they strike the correct balance between the interests of copyright owners and those of copyright users.
We recommend that the definition of technological protection measures in new section 226 be amended to specifically exclude controls on access to a work for non-infringing purposes, such as geographic market segmentation. We consider that the principal Act is not intended to protect access-control technologies that are used to price-discriminate or control the geographical distribution of works to the detriment of users in New Zealand. The principal Act and this bill protect only technological measures that prevent copyright infringements. For example, regional zone access protections, which prevent users from playing DVDs purchased from other zones, are not linked to copyright infringement and therefore should not fall within the definition of a TPM under new section 226.
We recommend deleting references to “TPM spoiler”, and substituting the term “TPM circumvention device” for “TPM spoiling device”, so that the language in the bill is consistent with that used by the courts.
We recommend that new section 226E (clause 89) be amended to allow a user to seek assistance from a qualified person to exercise a permitted act using a TPM circumvention device without prior application to the copyright owner. We also recommend inserting new section 226E(4) to ensure that such persons cannot charge unreasonably high fees for such assistance. We recommend the addition of a new regulation-making power in new section 226D(3)(d) that allows the Governor-General to specify persons as qualified persons by Order in Council.
Some submitters are concerned that the act of circumventing a TPM is not itself prohibited by the bill. However, we consider that there are many circumstances where users of copyright works may want to circumvent a TPM for legitimate purposes, such as fair dealing with a work for the purposes of research and private study. Also, this bill provides an effective way of controlling the circumvention of TPMs by prohibiting dealings with circumvention devices and the provision of circumvention services. Furthermore, where the act of circumvention occurred in the course of business, the person committing the act would often be in breach of the principal Act, for example, by possessing or dealing with a copy that infringes copyright.
Issues not leading to amendments
We believe that several issues discussed during the hearing of evidence and consideration are noteworthy, although they did not result in any recommended amendment to the bill.
Decompilation of computer program
Some submitters are concerned about the effect of new section 80A(3)(d) (clause 43), which provides that it would be illegal for a user of a copy of a copyrighted computer program to use the information obtained from decompiling the program to create a substantially similar program.
We consider that new section 80A(3)(d) would not prohibit decompiling a copy of a copyrighted computer program for the purpose of developing other products that would be easily distinguishable from the original program and therefore would not act as a barrier to innovation.
To ensure that new section 80A(3)(d) is not used to restrict competition in the software market, we do however urge the Ministry of Economic Development to monitor closely the effect of this new section after the enactment of this legislation.
“Notice and takedown” provision
We note concerns raised by submitters, but consider that the “notice and takedown” provision proposed in new section 92C (clause 53) is consistent with the comparable legislation in other jurisdictions such as the United States of America, the European Union, and Australia. An Internet service provider is in a unique position to be able to take down infringing and potentially harmful material, and should have an obligation to do so when it becomes aware of the material.
Issues requiring further review
We have identified several significant policy issues that are outside the scope of this bill or cannot be resolved within the scheduled time frame for the passing of this legislation. We urge the Associate Minister of Commerce to review these issues without delay.
Off-air recordings of television programmes to educational establishments
The Ministry of Economic Development is reviewing the effect of new section 48 (clause 28) to establish whether it would apply to off-air recordings of broadcast television programmes provided to an educational establishment by an external agent. We were not able to resolve this issue in the time available. The ministry will report to the Associate Minister of Commerce in September 2007.
Directors' rights
A submitter asserted that film directors should be defined as “authors” under the principal Act and thus as the copyright owners of films. This is an issue which requires attention. However, it cannot be considered as part of this reform. One of the reasons for this is that other interest groups that may want to make submissions have not had an opportunity to do so. The Ministry of Economic Development has advised us that it will commence work on this issue in early 2008.
Orphaned works
Some submitters suggested that the principal Act should provide a process that enables the legitimate copying of “orphaned works”—copyright works whose copyright owner is unknown, cannot be located, or has ceased to exist.
The Ministry of Economic Development gave us an undertaking that it would conduct a review of this issue and report to the Associate Minister of Commerce in 2007.
Access to works for print-disabled persons
Some submitters sought amendment to section 69 of the principal Act, which prescribes the conditions under which organisations may make adaptations of works for print-disabled people without infringing copyright. They highlighted the issue of the distribution of adapted works to print-disabled persons, by sending copies of adapted works to and receiving copies from overseas organisations serving print-disabled persons.
The Ministry of Economic Development advised us that it will consult the Royal New Zealand Foundation of the Blind, the Association of Blind Citizens of New Zealand, and copyright owner groups on this issue. The ministry intends to report to the Associate Minister of Commerce by September 2007 on the options for addressing the issue.
Appendix
Committee process
The Copyright (New Technologies and Performers' Rights) Amendment Bill was referred to the committee on 12 December 2006. The closing date for submissions was 9 March 2007. We received and considered 66 submissions from interested groups and individuals. We heard 45 submissions, which included holding hearings in Auckland.
We received advice from the Ministry of Economic Development, and independent specialist advisory services were provided to us by Earl Gray and Geoff McLay.
Committee membership
Gerry Brownlee (Chairperson)
Charles Chauvel (until 21 February 2007)
Gordon Copeland (Deputy Chairperson)
Dave Hereora (from 21 February 2007)
Shane Jones
Hon Luamanuvao Winnie Laban
Simon Power
Maryan Street
Lindsay Tisch
Dr Richard Worth
Nandor Tanczos was a non-voting member for the consideration of this item of business.
Commentary
Recommendation
The Commerce Committee has examined the Copyright (New Technologies and Performers' Rights) Amendment Bill and recommends that it be passed with the amendments shown.
Introduction
This bill amends the Copyright Act 1994 to address the emergence of technologies such as the Internet. It seeks to maintain the existing balance between the interests of the owners and those of the users of copyright works. It also seeks to create a more technology-neutral framework for the Copyright Act.
This bill takes account of international developments in copyright law, and incorporates many aspects of the two treaties negotiated by the members of the World Intellectual Property Organisation (WIPO)—the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty.
The Ministry of Economic Development advised us that this legislation will be reviewed in five years' time to ensure that copyright legislation in New Zealand keeps pace with technological advances.
This commentary addresses the key issues considered, and explains the substantive amendments recommended. Technical and minor amendments are not discussed.
Title
We recommend that the title be changed from to . Although the bill does amend some provisions concerning performers' rights, all these amendments relate only to making these provisions technologically neutral.
Copying for educational purposes
We recommend amending new section 44(4A) (clause 24) to make it clear that the section, which describes one of the conditions under which copying for educational purposes would be allowed, applies to copies communicated electronically.
Storing for educational purposes
We recommend several amendments to new section 44A (clause 25), which sets out the conditions under which an educational establishment would be allowed to store pages from websites.
We recommend amending new section 44A(1)(b)(ii) to make the requirement to identify the author dependent on the author's identity being known. As authors of works available on the Internet are often unidentifiable, we consider that it would be unrealistic to require educational establishments to identify authors in every case.
We recommend that new section 44A(1)(b)(iv) be deleted. This section provides that an educational establishment storing pages from websites must identify the course of instruction for which the material is stored. We consider this requirement impractical, as the same website page could be used in many courses. This requirement could also reduce the flexibility of assembling teaching components and thus stifle innovation in the use of the Internet for teaching.
We also recommend that new section 44A(1)(d) be deleted. This section requires that the material concerned cannot be made available to authenticated users until it has been removed from the original website or other electronic retrieval system. This proposal is impractical because a website page cannot be physically copied after it has been removed from the site, and this section would require an educational establishment to continuously monitor the website pages concerned.
Copying by librarians and archivists for replacement
In the bill as introduced, a librarian of a prescribed library or an archivist may make a digital copy of any item in the library or archive's collection to replace the original item, provided that the conditions stated in paragraphs (a) to (d) of new section 55(3) are satisfied (inserted by clause 34(2)).
The condition in new section 55(3)(c) is that the original item is not accessible by members of the public after replacement by the digital copy. However, some researchers may want to compare the original item with the digital copy to examine features such as the paper quality, watermarks, and foliation symbols, which cannot be distinguished in a digital copy. We therefore recommend that new section 55(3)(c) be amended to add an exception for access for research purposes where the nature of the research requires or would benefit from access to the original item.
We recommend that new section 55(4) be inserted into clause 34(2) to make this clause consistent with section 55(1)(b) of the Act. This amendment would allow a digital copy to be made to replace an item in a prescribed library or archive under limited circumstances.
Conditions for libraries and archives making and supplying digital copies
New section 56A (clause 36) sets out some of the conditions under which a prescribed library or archive would be permitted to communicate digital copies of copyrighted works to authenticated users. Some submitters were concerned that this section would harm the interests of copyright owners, who they believe would consequently have fewer market opportunities to supply digital copies of their works. However, we are not satisfied with evidence offered in support of this claim. Noting that libraries and archives are already allowed to supply digital works to their users under existing laws, we consider that the new section 56A should be retained, subject to the following amendments.
We consider that all the conditions in new section 56A should apply whether access to the digital copies in question is provided by means of terminals on-site or off-site, as we consider that it is impossible, in practical terms, to differentiate between on-site and off-site access. We also recommend defining in this section in a more restrictive way.
We recommend that new sections 56B(a) and 56C(a) (clause 36) be deleted. These provide that a person or a library must make a written request for a digital copy of a work, and must state the purpose for which the material will be used. We consider that this condition is unnecessary in the light of the current practice of copying such requests, thus identifying the requester and the work. Also, sections 51 to 54 and 56 of the principal Act allow libraries and archives to supply a copy of work only for the purposes of research or private study.
We recommend that new sections 56B(b) and 56C(b), which require a written declaration that certain provisions of the principal Act have been complied with, also be deleted to reduce compliance costs for libraries and archives.
We recommend deleting new section 56B(c) as we consider that nothing under the principal Act would permit a library or archive to supply copies of works requested to anyone other than the person who made the request, making this provision redundant.
Observing, studying, or testing of computer program
We recommend inserting new section 80BA (clause 43) to clarify that a lawful user of a computer program may observe, study, or test the functioning of the program under certain circumstances without infringing copyright.
Communications works
The bill makes a number of amendments to the provisions regarding transmitted works such as broadcast and cable television programmes.
Format-shifting for personal use
New section 81A (clause 44) provides a limited exception for copying sound recordings for personal use. In other words, of music would be allowed if certain conditions were met.
Some submitters asserted that a person who purchases a copy of a sound recording on CD, for example, should be allowed to copy it to another format without restrictions. However, we are of the view that such a person does not acquire copyright in the sound recordings concerned; the copyright owner retains the exclusive right to control copying of his or her works under section 16 of the principal Act. We therefore recommend retaining the restrictions on copying sound recording for personal use, which are set out in sections 81A(1) in clause 44, subject to some recommended amendments.
We recommend amending new section 81A(1)(e) to clarify that the copy must be solely for the personal use of the person who made it or of a member of his or her household if the format-shifting exception is to apply.
We recommend amending new section 81A(1)(g) so that a person who has purchased a copy of a copyrighted sound recording must retain possession of both the original copy and any copy made under this clause. A member of the public would therefore not be able to retain the copy if they sold the original CD.
We recommend that new section 81A(2) be amended to make it clearer that copyright owners always have the option of contracting out of all of the permitted acts, including those in new section 81A.
We recommend that new section 81A(3) be deleted. This subsection provides that new section 81A expires two years after enactment unless the Governor-General extends the expiry date by Order in Council. In our opinion, this subsection would create uncertainty as to whether purchasers of sound recordings recorded on older technology would be allowed to continue format-shifting those recordings for private and domestic use in the future.
Some submitters were concerned that new section 81A is limited to sound recordings only. We do not believe that an extension of the provision to other works such as films would be justified under the Berne Convention for the Protection of Literary and Artistic Works, of which New Zealand is a member. Furthermore, we consider that format-shifting of music for private and domestic use is widespread, while format-shifting of other types of copyrighted works is not. We therefore do not recommend extending the exception in new section 81A.
Time shifting
New section 84, inserted by clause 45, provides an exception for recording for the purpose of viewing or listening at a more convenient time. In other words, this section allows time shifting of communication work under certain conditions.
We recommend amending new section 84(1)(a) to make it clear that the recording must be solely for the personal use of the person who made it or of a member of his or her household if the time-shifting exception is to apply.
We also recommend rewording section 84(1)(c) to clarify that a time-shifted recording must not be made from an on-demand service.
Free public playing or showing of communication work that is simultaneous with reception
We recommend amending new section 87A(1)(b) (clause 48) and new section 188A(1)(b) (clause 84) to clarify that new sections 87A and 188A apply to free-to-air broadcasts, but not to subscribed broadcasts such as cable programmes. New sections 87A and 188A provide for an exception for the situation where a communication work for which no subscription fee is charged is shown or played simultaneously with its reception.
Reception and retransmission of broadcast in cable programme service
The majority of us are concerned about the effect of clause 49, which repeals section 88 of the principal Act, on the delivery of broadcasts to remote areas. We therefore recommend that clause 49 be amended to retain section 88 of the principal Act.
As section 88 contains a number of technologically specific terms that will not be used elsewhere in the principal Act after its amendment, we recommend the insertion of new subsection (4) to preserve the definitions of these terms for the purposes of section 88 only.
Internet service provider obligations
We recommend amending the definition of in clause 3(2) to ensure that a person who hosts material on websites or other electronic retrieval systems that can be accessed by a user falls within the definition.
Requirement for a policy to terminate accounts of repeat copyright infringers
We recommend that new section 92A (clause 53) be deleted as the standard terms and conditions of agreements between an Internet service provider and its customers usually allow for the termination of accounts of people using the services for illegal activity. Moreover, new section 92C already requires an Internet service provider to delete infringing material or prevent access to it as soon as possible after becoming aware of it.
Liability if user infringes copyright
We consider that the wording of new section 92B (clause 53) is unsatisfactory because it could expose Internet service providers to liability for copyright infringement where a person had infringed the copyright concerned before using the services of the Internet service provider to send or distribute the infringing content. We recommend that new section 92B be amended to clarify that this section would apply only if a person infringed copyright in a work by using Internet services of the Internet service provider. We also recommend the addition of a definition of in this section.
Liability for storing infringing material
In clause 53, we recommend amending new section 92C(2)(a) and inserting new section 92C(2)(ba) to make it clearer when Internet service providers would be required to take material down.
We also recommend amending new section 92C(2)(b) to provide that an Internet service provider would become liable for copyright infringement by storing infringing material if a user of the service committed an act of copyright infringement on behalf of, or at the direction of, the Internet service provider. We were concerned that the bill as introduced was unclear whether students of educational institutions or employees of companies would be considered to be acting under the authority and control of an Internet service provider if those educational institutions or the companies provided them with email services. We believe that our recommended amendment will remove this uncertainty.
We recommend clarifying new section 92C(4) and new section 92D(3) by providing that nothing in new section 92C or 92D limits the right of the copyright owner to seek injunctive relief in relation to either a user's infringement or any infringement by the Internet service provider.
We recommend inserting new section 92CA (clause 53) to prescribe the requirements for the notice of infringement that is referred to in new section 92C(2)(ba)(i). We also recommend inserting new section 92CB to set out offences in relation to notices of infringement. The maximum penalty for such offences would be a fine of $50,000 for an individual, and a fine of $100,000 for a body corporate.
Unjustified proceedings
We recommend inserting clause 64A to amend section 130(1) so that a person can bring proceedings against a person who has brought unjustified proceedings for contravention of new section 226A, which sets out prohibited conduct in relation to technological protection measures.
Use of recording without the consent of the performer
We recommend amending new section 172 (clause 77) to provide that a person would infringe a performer's rights if he or she showed or played in public, or communicated to the public, a recording that he or she knew or had reason to believe was made without the consent of the performer. We consider that the original wording of section 172 could unintentionally erode the performer's right to control unauthorised use of his or her performances, and would therefore fail to maintain the existing balance between the performer's interests and users' interests. Our recommended amendment would address this concern.
Technological protection measures
We recommend retaining all the proposed provisions (new sections 226 to 226J) in clause 89, which relate to technological protection measures (TPM), subject to our proposed amendments. We consider that these provisions are necessary to manage the risk of piracy of copyrighted works in a digital environment, and that they strike the correct balance between the interests of copyright owners and those of copyright users.
We recommend that the definition of technological protection measures in new section 226 be amended to specifically exclude controls on access to a work for non-infringing purposes, such as geographic market segmentation. We consider that the principal Act is not intended to protect access-control technologies that are used to price-discriminate or control the geographical distribution of works to the detriment of users in New Zealand. The principal Act and this bill protect only technological measures that prevent copyright infringements. For example, regional zone access protections, which prevent users from playing DVDs purchased from other zones, are not linked to copyright infringement and therefore should not fall within the definition of a TPM under new section 226.
We recommend deleting references to , and substituting the term for , so that the language in the bill is consistent with that used by the courts.
We recommend that new section 226E (clause 89) be amended to allow a user to seek assistance from a qualified person to exercise a permitted act using a TPM circumvention device without prior application to the copyright owner. We also recommend inserting new section 226E(4) to ensure that such persons cannot charge unreasonably high fees for such assistance. We recommend the addition of a new regulation-making power in new section 226D(3)(d) that allows the Governor-General to specify persons as qualified persons by Order in Council.
Some submitters are concerned that the act of circumventing a TPM is not itself prohibited by the bill. However, we consider that there are many circumstances where users of copyright works may want to circumvent a TPM for legitimate purposes, such as fair dealing with a work for the purposes of research and private study. Also, this bill provides an effective way of controlling the circumvention of TPMs by prohibiting dealings with circumvention devices and the provision of circumvention services. Furthermore, where the act of circumvention occurred in the course of business, the person committing the act would often be in breach of the principal Act, for example, by possessing or dealing with a copy that infringes copyright.
Issues not leading to amendments
We believe that several issues discussed during the hearing of evidence and consideration are noteworthy, although they did not result in any recommended amendment to the bill.
Decompilation of computer program
Some submitters are concerned about the effect of new section 80A(3)(d) (clause 43), which provides that it would be illegal for a user of a copy of a copyrighted computer program to use the information obtained from decompiling the program to create a substantially similar program.
We consider that new section 80A(3)(d) would not prohibit decompiling a copy of a copyrighted computer program for the purpose of developing other products that would be easily distinguishable from the original program and therefore would not act as a barrier to innovation.
To ensure that new section 80A(3)(d) is not used to restrict competition in the software market, we do however urge the Ministry of Economic Development to monitor closely the effect of this new section after the enactment of this legislation.
provision
We note concerns raised by submitters, but consider that the provision proposed in new section 92C (clause 53) is consistent with the comparable legislation in other jurisdictions such as the United States of America, the European Union, and Australia. An Internet service provider is in a unique position to be able to take down infringing and potentially harmful material, and should have an obligation to do so when it becomes aware of the material.
Issues requiring further review
We have identified several significant policy issues that are outside the scope of this bill or cannot be resolved within the scheduled time frame for the passing of this legislation. We urge the Associate Minister of Commerce to review these issues without delay.
Off-air recordings of television programmes to educational establishments
The Ministry of Economic Development is reviewing the effect of new section 48 (clause 28) to establish whether it would apply to off-air recordings of broadcast television programmes provided to an educational establishment by an external agent. We were not able to resolve this issue in the time available. The ministry will report to the Associate Minister of Commerce in September 2007.
Directors' rights
A submitter asserted that film directors should be defined as under the principal Act and thus as the copyright owners of films. This is an issue which requires attention. However, it cannot be considered as part of this reform. One of the reasons for this is that other interest groups that may want to make submissions have not had an opportunity to do so. The Ministry of Economic Development has advised us that it will commence work on this issue in early 2008.
Orphaned works
Some submitters suggested that the principal Act should provide a process that enables the legitimate copying of —copyright works whose copyright owner is unknown, cannot be located, or has ceased to exist.
The Ministry of Economic Development gave us an undertaking that it would conduct a review of this issue and report to the Associate Minister of Commerce in 2007.
Access to works for print-disabled persons
Some submitters sought amendment to section 69 of the principal Act, which prescribes the conditions under which organisations may make adaptations of works for print-disabled people without infringing copyright. They highlighted the issue of the distribution of adapted works to print-disabled persons, by sending copies of adapted works to and receiving copies from overseas organisations serving print-disabled persons.
The Ministry of Economic Development advised us that it will consult the Royal New Zealand Foundation of the Blind, the Association of Blind Citizens of New Zealand, and copyright owner groups on this issue. The ministry intends to report to the Associate Minister of Commerce by September 2007 on the options for addressing the issue.
Appendix
Committee process
The Copyright (New Technologies and Performers' Rights) Amendment Bill was referred to the committee on 12 December 2006. The closing date for submissions was 9 March 2007. We received and considered 66 submissions from interested groups and individuals. We heard 45 submissions, which included holding hearings in Auckland.
We received advice from the Ministry of Economic Development, and independent specialist advisory services were provided to us by Earl Gray and Geoff McLay.
Committee membership
Gerry Brownlee (Chairperson)
Charles Chauvel (until 21 February 2007)
Gordon Copeland (Deputy Chairperson)
Dave Hereora (from 21 February 2007)
Shane Jones
Hon Luamanuvao Winnie Laban
Simon Power
Maryan Street
Lindsay Tisch
Dr Richard Worth
Nandor Tanczos was a non-voting member for the consideration of this item of business.