Comment
14. Copyright is a property right that exists in original "works".1 The Act gives certain exclusive rights to copyright owners to control the way in which a copyright work can be exploited ("restricted acts"). The Act also provides certain limited exceptions to these rights for copyright users ("permitted acts"). In this way, the Act seeks to provide incentives to ensure the creation, production and distribution of creative works that meet society's needs. At the same time the costs to society are minimised and reasonable access to copyright material is provided, for creators as an input in cumulative innovation, for special needs groups and for consumers in general.
15. Digital technology (including the Internet, for example) presents both risks and opportunities for creators, owners and users of copyright material. It allows copyright works to be copied, manipulated and disseminated with minimal effort, cost and reduction in quality. Digital technology can also be used to protect copyright, through technological protection measures that prevent copying or access to material. The Digital Copyright Review has sought to determine how new technologies have impacted on the careful balance of objectives and interests reflected in the Act.
16. Analysis undertaken by the Ministry, supported by a thorough public consultation process, indicates that substantial amendment of the Act is not required at this time. The recommended changes to the Act, outlined in this paper, are designed to clarify the application of existing rights and exceptions in the digital environment. These recommendations are based on the suggested policy responses contained in the Position Paper, which were generally supported by respondents in the recent submission process.2 A more detailed analysis of submissions received and copies of the Position Paper are available to Ministers upon request to my office.
Reproduction Right
17. The Act provides copyright owners with a number of exclusive rights, including the right to copy a work. The current definition of copying in section 2 of the Act is sufficiently technology-neutral to allow copyright owners to prevent unauthorised copying of material in digital formats. Some respondents to the Position Paper expressed concern that the definition is difficult to understand and, in particular, that the reference to "material form" does not clearly include digital formats. To address this concern it is recommended the definition be amended to clarify that "material form" includes digital formats and, where possible, to make it easier to understand.
18. It is also recommended that a specific and limited exception to the reproduction right be provided for "transient" copies made by computers or communication networks (such as the Internet) as a result of automatic or inevitable technical processes. These processes are generally designed to increase efficiency. Examples of transient copying, to which the exception would apply, would include the routine temporary storage in the random access memory ("RAM") of a computer for the purpose of executing an authorised program or browsing the World Wide Web.
Communication Right
19. The Act currently contains a technology-specific communication right to broadcast a work or to include a work in a cable programme service. It is proposed that these existing rights be incorporated in a new broad technology-neutral right of communication to the public that would cover both the transmission (by any means or combination of communication technologies) and making available (via interactive, on-demand services).3
20. The extension of the communication right to new and future communication technologies such as webcasting, increasingly used to communicate works, is necessary to encourage investment in, and provision of, these efficient on-line distribution methods demanded by consumers.
21. If the communication right is extended, I propose an amendment to the exception contained in section 69 of the Act, which allows prescribed bodies to make copies or adaptations (by Braille or other means) of published literary or dramatic works to meet the needs of persons with a print disability. The proposed amendment to the exception would allow prescribed bodies such as the Royal New Zealand Foundation for the Blind to make use of communication technologies in delivering services in accessible formats to the print disabled, which would otherwise amount to a breach of the communication right.
22. Consistent with the proposed technology-neutral right of communication it is proposed that the protection currently afforded to the signals that carry programme content in broadcasts and cable programmes be extended to all communication technologies including, for example, webcasts, and be replaced by a technology-neutral category of "communication works".
23. It is also recommended that section 88 of the Act, which allows cable programme services to re-transmit free-to-air television broadcasts without the permission of the broadcaster, be repealed. The majority of respondents who commented on this issue agreed with the Ministry's view that the provision is no-longer suitable to encourage competition and investment in the cable network and service industry, or to improve the quality of television reception in areas where signal quality was inadequate.
Internet Service Provider Liability
24. Copying is central to the function of the Internet and to the services provided by Internet Service Providers ("ISPs"). ISPs, therefore, face potential liability for both primary infringement of copyright (through transient copying and transmission of infringing material) and secondary infringement (primarily through hosting of infringing material on behalf of third party subscribers). The Act is currently silent on the issue of ISP liability. It is recommended that changes be made to the Act to limit the liability of ISPs in certain cases, thereby ensuring that ISPs continue to provide their services and that cost-effective access to the Internet for New Zealanders continues.
25. Where an ISP merely provides the physical facilities that enable a communication to take place it is recommended that this not constitute infringement. It is also recommended that liability be limited for some forms of caching undertaken by ISPs in order to provide more efficient Internet services. Where an ISP hosts material posted by third parties, secondary infringement should be limited where the ISP does not know that the material infringes copyright and upon obtaining knowledge takes action to remove or disable access to it.
Technological Protection Measures
26. Technological protection measures ("TPMs") include devices, mechanisms or systems designed to guard against or restrict the use of material stored in digital format. Copyright owners are increasingly using TPMs as a practical means to protect their copyright and develop new business models (such as pay-per-view). TPMs may prevent access to or use of a work and may, therefore, inhibit the exercise of "permitted acts" allowed by the Act.
27. Section 226 of the Act currently allows copyright owners to take action against persons who supply or manufacture devices, means or information specifically designed to circumvent "copy-protection" and intended to be used to make infringing copies of copyright works.
28. It is proposed that section 226 be amended so that copyright owners would have the ability to take action in respect of devices, means or information where circumvention could enable infringement of all the copyright owner's exclusive rights, not just copying. In particular this recommendation is cognisant of the increasing importance of rights of communication and the necessary incentives for the provision of online and digital services.
29. The focus of section 226 should continue to link circumvention to copyright infringement. Copyright owners should not, for example, be able to take action in respect of circumvention devices, means or information where the purpose of the circumvention (and the provision of the device, means or information) is to enable a user to exercise a permitted act, or to view or execute a legitimate non-infringing copy of a work. In other jurisdictions (such as the UK and the USA) companies such as Sony have relied on TPM provisions in copyright legislation to prevent the circumvention of equipment fitted with regional zone coding TPMs. These TPMs prevent the playing of legitimate copies of DVDs and games from other zones where there is no copyright infringement. Such a result would be inconsistent with the Government's parallel importing policy.
30. It is proposed that specific exceptions to the TPM provisions be available for error correction in computer programs, interoperability of software, encryption research and similar purposes. For the purposes of clarification it may be necessary to specifically state that none of the provisions concerning TPMs should be construed to prevent the exercise of permitted acts or any circumvention required to effect permitted acts.
31. New provisions are proposed to enable the actual exercise of permitted acts where TPMs have been applied. Initially the onus would be on copyright owners, upon application from users, to take voluntary steps to allow the effective exercise of permitted acts. Where owners failed to take voluntary steps the Act would allow the provision or manufacture of circumvention devices, means or information, on receipt of a declaration from a library, archive or educational establishment that circumvention is required for the purposes of exercising a permitted act.
32. The Act currently provides civil remedies in respect of the provision of circumvention devices, means and information. It is proposed that an offence provision be introduced in limited circumstances where there has been large scale commercial dealing in circumvention devices, means and information. Such offences would be punishable on conviction by a fine not exceeding $150 000 and/or imprisonment for a term of not more than five years (consistent with existing offence provisions). It is submitted that an offence provision would provide a necessary deterrent.
Electronic Rights Management Information
33. It is proposed that a new provision be introduced protecting against the intentional removal and alteration of electronic rights management information ("ERMI") or the commercial dealing in copyright material where the dealer knows that ERMI has been removed or altered. Only ERMI that identifies content protected by copyright, and terms and conditions of use, should be protected. ERMI that tracks the use of copyright material should not be included in a definition of ERMI on the basis that the protection of such functions is outside the scope of copyright protection and raises privacy issues. An offence provision would apply (as for TPMs, above).
Database Protection
34. No changes in respect of database protection are recommended on the basis that non-original electronic databases are protected sufficiently as compilations under the Act.
Permitted Acts and Exceptions
35. The exceptions to the exclusive rights of copyright owners contained in the Act were developed primarily in the analogue and hard copy world. The Digital Copyright Review sought to determine how they should apply in the digital environment, starting from the premise that existing exceptions should apply to digital works unless there are cogent reasons to the contrary.
36. In considering any possible changes to the permitted acts, it is important to recall that the balance between protection and incentives for copyright owners and access for users was very thoroughly considered when the Act was drafted. It is not the intention of this review to change that balance, but to ensure that the balance continues in the digital environment. It is also important to keep in mind that the current permitted acts do not cover all the uses of copyright material that users, including educational establishments, libraries and archives, would like to undertake without purchasing copies.
37. The following proposed changes to the permitted acts are, for the most part, intended simply to clarify the extent of the exceptions in the digital environment. The proposals also seek to address concerns expressed by a range of copyright users in the submission process about uncertainty in the application of the exceptions to digital works and technologies.
Fair Dealing
38. The fair dealing exceptions in sections 42 and 43 of the Act provide users with the ability to use works, in certain circumstances, for news reporting, criticism and review and research or private study. These provisions are largely technology-neutral in their scope and application. Clarification is, however, required in two instances.
39. First, it is proposed that the fair dealing exception for news reporting, which currently refers specifically to sound recordings, broadcasts and cable programmes, be extended to apply to all communication technologies or media including, for example, news reporting across the Internet. This technology-neutral approach is consistent with the recommended broad technology-neutral communication right (discussed above).
40. The second recommended change relates to the proviso that the research and private study exception does not authorise the making of more than "one copy" of a work, or the same part of a work, on any one occasion. It is proposed that the Act be clarified so that transient copies (referred to above in relation to the reproduction right and in respect of ISP liability) are not taken to constitute the one copy.
Archiving and Preservation
41. Digital technology offers significant benefits for the preservation of materials held by libraries and archives. Section 55 of the Act already provides libraries and archives with a fairly broad technology-neutral exception for archiving purposes. There is, however, a significant degree of uncertainty amongst these institutions about the application of the provision in the digital environment.
42. It is recommended that section 55 be clarified to enable preservation by digital means, including format shifting (for example from print to digital). The provision should not, however, allow digitisation of whole collections (as suggested by libraries and archives) where there is no current need for preservation or replacement. Such a practice would interfere with the normal commercial exploitation of a work by the right holder, and would therefore be inconsistent with New Zealand's international obligations under the World Trade Organisation Agreement on Trade -Related Aspects of Intellectual Property Rights.
43. It is also proposed that section 55 apply to museums to the extent that they carry out archiving functions.
Digitisation and Making Available
44. The provisions in the Act relating to copying by libraries (including the libraries of educational establishments) are largely technology-neutral. It is recommended, however, that the following amendments be made to clarify the scope of the exceptions for libraries (and archives, where relevant) in the digital environment. In considering any limits placed on libraries in this context, it is important to keep in mind that copying in the digital environment can have quite different consequences from copying in the print world. For example, it is possible for a number of people to access one digital copy of a work simultaneously and communicate that work to others, thereby potentially reducing the market for legitimate copies and communications. The following recommendations are subject, therefore, to conditions that limit the risk of infringement.
- Libraries and archives should be permitted to provide access to material that is made available to them in digital form, through on-site terminals. Material may not be copied or communicated without a formal request to a library and access at any one time must be limited to the number of copies purchased or licensed to the institution.
- Remote access should be permitted by libraries and archives provided that material is in read-only form and cannot be copied. Access at any one time must be limited to the number of copies purchased or licensed by the institution and access is only available to authenticated users (for example, students enrolled in an educational establishment).
- Libraries should be able to reproduce and communicate materials in a digital form, on written request from a user, where the library makes a declaration stating the nature of the request and that the terms of the Act have been complied with. The digital copy may only be provided to the requestor and must be accompanied by a copyright notice. Digital copies made in the process of responding to the request must be destroyed by the library and cannot be retained for future requests.
- Interloan provisions should also be amended to clarify the conditions under which material can be interloaned in digital form. Requesting libraries must make a written request including the purpose of the request. Receiving libraries, in processing requests, must make a declaration stating the nature of the request and that provisions of the Act have been complied with. Copies made in the process of responding to the request must be destroyed by the library (as for paragraph c).
Educational Establishments
45. The Act provides a number of specific exceptions (sections 44 - 49) for educational establishments, in addition to the copying that may be legitimately undertaken by librarians of these institutions under the library and archive provisions of the Act (discussed above). These provisions are currently written in technology-neutral terms and would allow the permitted activities to be undertaken by digital means, which is in most cases appropriate, but it is recommended that these provisions are clarified where necessary. The following changes to the Act are also recommended:
- Section 44 (which provides various permitted acts for educational purposes) should be amended to enable educational establishments to cache4 websites for educational purposes for a limited period of time (linked to the duration of a period of time for which they are relevant to the teaching of the related course). This exception would enable access to Internet material that is subsequently changed or deleted, which has ongoing significance for teaching purposes, but would be subject to the adequate identification of the material and the course for which it is cached.
- Section 44(3) should be amended to allow for the communication of works in a digital form (including restricted remote access via the Internet to authorised students), where communication is consequent to the permitted copying.
Time-Shifting
46. The time-shifting exception in section 84 allows the recording of a broadcast or cable programme for private and domestic use and solely for the purpose of viewing or listening at a more convenient time or for making a complaint. It is recommended that this provision be amended to apply to all communication works. This approach is consistent with the suggested technology-neutral communication right discussed above. The exception should not apply, however, to some on-demand services that can be conveniently accessed on request. Time-shifted copies should only be kept for as long as is reasonably necessary to enable them to be viewed or listened to, thereby clarifying that time-shifted material cannot be kept indefinitely.
New Exceptions
47. The following new exceptions are recommended to enable users to take advantage of the benefits of digital technology, but in a way that does not compromise the rights of copyright owners.
- Format-shifting: this limited exception would allow the owner of a legitimately acquired sound recording to make one copy of that recording (and the musical work contained therein) in each format for his or her personal and domestic use. This exception should not apply to borrowed or hired sound recordings.
- Decompilation of software: this exception would allow copying of software to enable a lawful user to obtain information necessary to create an independent, but not substantially similar, program, where that information is not otherwise readily available. Information obtained in this way could not be used for any other purpose. The exception would contain a number of conditions to protect the legitimate interests of copyright owners. Any term or condition of an agreement that purported to prohibit copying for these purposes would be deemed to be void. For the purposes of clarity, the exception would not apply to copying from any infringing copy of a computer program.
- Error correction of software: this exception would allows users to copy or adapt software, where the activity is necessary for the program to be used for its intended lawful purpose. Problems, such as errors, may only occur when particular programs interact with each other. The proposed exception recognises that it may be more efficient in those circumstances for the authorised user and not the developer to correct the error. The exception would only apply where a functioning or error-free version of the software is not available within a reasonable time and at an ordinary commercial price. It would not apply to copying or adaptation of an infringing copy of a computer program.
- Exceptions to the provisions regarding TPMs (discussed above) should also be provided for error correction and interoperability.
WIPO Internet Treaties
48. A number of the proposed amendments contained in this submission would, if enacted, move the Act closer to compliance with the WIPO Internet Treaties (the WCT and WPPT). These treaties update international copyright standards to take account of developments in digital technologies. Additional changes would be required to comply with the performers aspects of the WPPT, which will be subject of a separate submission following the conclusion of that review. A separate process, including national interest analysis, would be required should New Zealand wish to consider acceding to the treaties.
Future Review
49. It is proposed that any amendments to the Act resulting from the Digital Copyright Review be fully reviewed five years after the enactment of amending legislation.
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