Internet Service Provider Liability
The Internet is a wonderful distribution mechanism that is based on the use of multiple copying of content, in distribution, display, and in caching for optimizing performance. As such, it is both a great boon for copyright owners (as an efficient and inexpensive means of distribution) and potentially a great bane (as that same inexpensive, efficient technology also facilitates illicit copying and piracy). As noted before, strict enforcement of copyright could close down the Internet, which I believe would have severe and harmful social impacts, particularly for the poor and for special interests of all kinds. Thus, it is vital to develop policy that will protect and foster the development of the Internet while protecting copyright owner interests.
There would seem to be three key issues: how to deal with transient copying of authorized content (addressed earlier); to what degree should non-transient caching be allowed as a means to improve efficiency; and how to appropriately deal with the posting and use of unauthorized content on the Internet.
The position paper correctly notes that there appears to be a strong public interest in promoting and protecting cost-effective access to the Internet and the content that it offers. It is also appropriate to protect copyright owner rights to limit unauthorized use of their content, and to seek relief if such use results in economic harm. Policy, again, needs to balance these interests.
Policy should also recognize that Internet Service Providers (ISPs) often incorporate multiple functions. The central function is as a conduit, an entry to the Internet, simply passing content among users. Many ISPs also offer hosting, that is, they allow users to place content on their servers so that others may access that content through the Internet. Finally, some ISPs are themselves content providers. I believe that policy needs to address these functions separately, and with an emphasis on control and intent.
First, I would suggest that in terms of the central ISP function of "conduit" that such use falls under the general transient and incidental copying exception, as in that regard the ISP is truly operating as a common carrier. While I would argue that such activities would clearly fall within such an exception, the growing importance of the Internet as an international communications system may call for an explicit exception or compulsory license to be granted to ensure that its growth and utilization are not threatened by litigation.
In the case of caching, I would also extend the "common carrier use" exception in cases where the caching is automatic, and temporary (but allowing for renewals). Depending on the length of the caching between refreshes (that is, how long the content remains in storage before being discarded or renewed), it may be appropriate to require ISPs to remove content that is found to be illegally offered on the Internet. However, I would argue that as long as an ISP operates in good faith, that they should be held free from liability for their communication activities.
The Ministry's proposal would seem to be in line with my "common carrier use" approach. They do enumerate several conditions, however, and while I think that most would fall under the scope of my preferred approach, I would like to comment on one. I would suggest caution in requiring explicit compliance with conditions of access and rules of updating, particularly if those are determined by individual content providers and not by broad policy. The problem is that caching is automatic, and such rules may imply that ISPs review and monitor caches, and check each original site for terms, and possible require positive action to implement terms and conditions. This is likely to be cost-prohibitive and detrimental to the primary goals of caching. If access and currency is of serious concern, it may be more effective to encourage development of a marker that sites could use that would signal that they do not want their content to be cached.
There are two related aspects that I did not see addressed in this section, but may be relevant . First is the issue of making back-ups. ISPs and others make regular back-ups of content and caches in order to be able to restore services and materials in case of a service loss. Conceptually, these serve a similar purpose to caches, and, I would argue, should be treated in the same way as caches are treated. I would hope that the Ministry would seek to expand their definition and treatment of caches to include automatic back-ups.
I do wish to step back into my role as an academic researcher of the Internet to make a special pleading for the right to establish archives of the Internet and Internet content for historical and research purposes. Due to the immaterial nature of raw digital content and communications, and the fluid nature of the Internet, potentially valuable content may be lost if it is not transferred to more permanent media at some point. The ability to take, in effect, a snapshot of the Internet (or some portion thereof) for research or historical purposes can be extremely useful in studying the Internet's operations, utilization, and aid in understanding its implications for society. This right should, however, be a listed exception, less it be exploited for the purposes of piracy.
The problem of what liability should exist for the posting and dissemination of unauthorized or illegal content would seem to be the most serious and important issue to copyright holders. Current law and policy already is clear in enabling action to be taken against the infringer (the actual creator of the infringing material or act). On the Internet, however, such content is often hosted by ISPs, and clearly, any dissemination may involve ISPs. Thus, there is a question of liability for what might be called secondary infringement.
The current trend of policy and litigation on secondary infringement would seem to suggest that the fundamental issue is one of knowledge and control. If the ISP has knowledge of an infringement and continues to support the infringing activity, liability may ensue. However, if the ISP has no knowledge or control, and takes positive action when it is informed of such activity to end the infringement, then it is often held to be exempt from liability. The position paper suggests that this is the manner in which secondary infringement is currently treated in New Zealand copyright policy, using a definition of "constructive knowledge" (par. 92).
I believe that this is an appropriate approach, although I am somewhat worried by the desire of the Ministry "to ensure that the scope ... is not unduly broad, and to allow content owners greater scope to protect their exclusive rights." (par. 93 a). The second part of this would seem to run counter to the Ministry's goal of maintaining a balance of rights, placing an emphasis on content owner rights. Certainly, a content owner should have the right to challenge possibly infringing material, and under many approaches, the ISP may only claim exemption from liability if the offending site is removed or access restricted. While a seemingly appropriate response, it does place a presumption of guilt on the offending party that is counter to judicial tradition, and the response may well be disproportional. It grants a great deal of power to copyright owners with no proportional or corresponding rights for users. A mere claim of possible infringement in one part of a site may well lead to immediate removal of an entire site by an ISP eager to remain free of liability, with no assurance that service would be restored in a timely manner in the case where the act was judged to not be an infringement, or if the allegedly infringing material was removed. A claim that an individual might have downloaded an illegally posted file may be sufficient to deny that individual service. In a recent U.S. case, an ISP was forced to provide customer information to a group that alleged only that there might have been an infringing file downloaded, based on the fact that the individual had downloaded a lot of information from the Internet. There is a strong potential for abuse in a system where ISPs fearing liability feel compelled to take extreme measures on the basis of mere allegation of possible infringement.
Thus, I would urge that the Ministry also provide for consumer rights in such cases. For example, the copyright owner should be obliged to notify both the ISP and the primary infringer, allow for the alleged infringer to either challenge or remove the alleged infringing material in a timely manner, with restoration of services by the ISP, and provide a mechanism for challenges to be heard and resolved in a timely manner. Moreover, if an unfounded claim of infringement is successfully challenged, the user should be able to seek damages from the copyright owner.
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