Nature and Magnitude of the Problem and the Need for Government Action
1. The Copyright Act 1994 ("the Act") was drafted before the widespread uptake of digital technology. Digital technology has enabled copyright works to be created, protected and distributed in new ways. It has also allowed increased avenues for infringement.
2. With the development of digital technology, three problems arise:
- There is increased risk of the production and distribution of high quality infringing copies of copyright works;
- There is a significant degree of uncertainty regarding the application of provisions of the Act to digital works; and
- The Act is not consistent in all areas with our major trading partners and with emerging international standards.
3. It is difficult to quantify objectively the losses that arise from these problems. For copyright infringement, industry figures suggest significant annual losses (music industry: US$4.3 billion worldwide, NZ$114 million in New Zealand; computer industry: US$11 billion worldwide; motion picture industry: US$3 billion for the US, US$4 million for New Zealand). With regard to uncertainty of the legislation, parties incur costs, for example, through obtaining legal advice. More general losses are suffered by the community as a whole if the incentives do not exist to create and distribute copyright works using new technologies.
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