Part Five: Technological Protection Measures
A. Issue Summary
95. Technological protection measures ("TPMs") include devices, mechanisms or systems designed to guard against or restrict the unauthorised use of recordings or information and other material stored in digital format.
96. Technological protection measures provide a means to combat the ease of copying that digital technology provides. There are, however, concerns about "digital lockup" as such measures, by preventing access, cannot distinguish between infringing activities and permitted acts. It has been suggested that in seeking copyright protection for TPMs, copyright owners are attempting to go beyond the traditional scope of copyright protection by attempting to control access to works, rather than use of them.
97. Section 226 of the Act currently includes specific provisions directed against certain types of devices or means designed to circumvent electronic "copy-protection" measures. The section provides copyright owners and other persons who issue electronic "copy-protected" works to the public with rights against persons who make, sell, advertise or publish information concerning "devices" or "means" intended to circumvent copy-protection mechanisms and to make infringing copies of copyright works.
98. The WIPO Internet Treaties require that Member States provide adequate legal protection and effective legal remedies against the circumvention of effective TPMs that are used by copyright authors:
- In connection with the exercise of their rights under those Treaties or under the Berne Convention; and
- That restrict acts, in respect of their works, which are not authorised by the authors or permitted by law.33
99. These provisions are broadly drafted in recognition of the fact that legal protection of TPMs will vary in different legal systems. The terms "technological protection measure" and "effective" are not defined in the Treaties.
100. The following issues arise in relation to TPMs and section 226:
- Should the scope of section 226 extend to access control as well as copy control technologies?
- Should copyright owners have a right of action against the actual use of a circumvention device or means, or should liability be restricted to provision of the means of circumvention (as section 226 currently provides)?
- What is the impact of TPMs on permitted acts? What exceptions should apply?
- If restricted to the provision of the means to circumvent, should the standard of knowledge required for liability be subjective or objective? Should actual knowledge, or a reason to believe, that a device or means would be used to circumvent a TPM be required? Or is it enough that a device or means be produced or provided (without the knowledge requirement)?
- Are criminal offence provisions required in addition to civil remedies in relation to prohibited activities concerning TPMs?
B. Perspective and Proposed Policy Response
(i) Scope of Section 226 (Copy and Access Protection)
101. There has been considerable debate in the literature about TPMs and access to copyright works (both in terms of initial access, and subsequent acts of accessing and consulting material). A range of TPMs exist, only some of which prevent the act of copying. Others indirectly prevent copying by preventing initial access to works. Some TPMs facilitate new means of delivering material (business models) such as pay-per-view, and control each act of accessing or consulting copyright material, even after a copy of the material has been downloaded. For example, TPMs can control ongoing use where copies are automatically deleted after a certain period or when an item has been accessed a fixed number of times. 34
102. Some commentators argue that access control is necessary to address large-scale copyright infringement made possible by digital technologies. Others suggest that TPMs provide copyright owners with greater scope to control access to materials than was possible in the analogue world, and that access (along with the ability to read, view or listen), compared to use, has not traditionally been an exclusive right of the copyright owner.
103. These issues have also been raised in the WIPO Standing Committee on Copyright and Related Rights. A number of countries have expressed concerns that uncontrolled use of TPMs together with anti-circumvention legislation and contractual practices would allow rights owners to extend their rights far beyond the bounds of the copyright regime, to the detriment of the public interest. 35
Issues such as what kind of activities (i.e. copying, access) should be protected against have been identified for further work, which suggests that a number of countries are currently considering what is required to comply with the TPM provisions of the WIPO Internet Treaties.
104. Section 226 is currently directed towards devices, means or information designed to circumvent electronic "copy-protection" measures. The section does not specifically refer to devices etc. designed to circumvent access protection (such as DVD zone formats). Arguably, therefore, to qualify for protection against circumvention, a TPM must have as its function the prevention of copying (not simply access). The United Kingdom equivalent of section 226 has, however, been interpreted to apply to DVD regional zone protection technology. 36It seems, therefore, that section 226 could already apply to access control.
105. The question that arises is whether section 226 should provide specific protection for access protection that does not directly prevent the copying of copyright material?
106. The Ministry's preferred policy response is that section 226 retain its focus on copy control measures, and not provide legislative protection against the circumvention of TPMs which only control access. That is, for section 226 to apply, the TPM circumvented must prevent copying, and the circumvention must be for the purpose of copying or the infringement of other restricted acts of the copyright owner in the Act (including potentially a new technology-neutral right of communication).
107. In proposing this policy response, the Ministry intends, for example, that the supply and use of devices that allow the circumvention of regional zone access protection (to allow the playing of legitimately purchased DVD movies or games etc. from other zones), would not infringe the TPM provisions. If, however, a circumvention device directly facilitated the infringement of copyright, that would be a breach of section 226. The Ministry also seeks to avoid, in New Zealand, situations where a court may find that devices such as DVD players or PlayStation consoles constitute TPMs (with copy control) by virtue of the fact that a small amount of data may be temporarily stored or reproduced in the device's RAM (see also Part Two of this paper on transient copying exception). 37
It is the Ministry's view that it is not the role of the Act to protect access control technology, which is used in some cases to price discriminate and control geographical distribution of works, to the detriment of New Zealand users.
108. Copyright owners could continue using TPMs that control access, however, without assistance from the Act. Owners could, for example, continue to rely on other legal measures, such as the law of contract, where an access protection measure is circumvented.
109. To implement the suggested approach outlined in this section the Ministry proposes that definitions be inserted for the terms "TPM" and "circumvention device", as the Act does not currently contain these definitions. We welcome suggestions on how best to define these terms, consistent with our proposed policy response.
(ii) TPMs - Actual Use or Provision of Means of Circumvention?
110. Under section 226 of the Act, the right of action provided to copyright owners is in relation to provision of devices or means specifically designed or adapted to circumvent copy-protection, and in relation to the publication of information intended to enable or assist persons to circumvent copy-protection. The act of circumvention is not itself prohibited. The question that arises is whether copyright owners should have a right of action against the actual use of a circumvention device or means, or should liability be restricted to provision of the means of circumvention (as section 226 currently provides)? The WIPO Internet Treaties are silent on this point. 38
111. The Ministry's proposed policy response is to retain the current focus on the manufacture of devices or means, and publication of information, and not extend liability to the act of circumvention itself. It has been suggested that the extension of liability to actual circumvention would only be beneficial in terms of addressing copyright infringement where circumvention occurs on a commercial scale. Anecdotal evidence suggests that circumvention does not occur on such a scale in New Zealand. Based on the information currently available, the Ministry is not convinced that targeting the act of circumvention would generate additional incentives for the creation of works. We note also that this is the approach taken in Australia. 39
112. In making this recommendation, the Ministry is aware of concerns expressed by user groups, suppliers and manufacturers that the focus should not be on all circumvention devices. These groups suggest there may be a number of legitimate uses for such devices, and that manufacturers of general-purpose equipment that can be used for non-infringing purposes should not be held liable for infringing uses. The Ministry considers that the current requirement in section 226, that devices or means must be "specifically designed or adapted" to circumvent copy-protection, is sufficient to address the concerns of the manufacturers of devices with legitimate purposes. Our proposed policy response is that this requirement, or similar, be retained. For example, a reference to devices that have only a limited commercially significant purpose or use other than to circumvent, 40 may be appropriate.
113. The Ministry also wishes to avoid the apparent anomaly created by copyright legislation in Australia and the United States, and in the European Union Copyright Directive. Under these regimes, while the act of circumvention is not expressly prohibited, or is permitted to allow the exercise of permitted acts or specific exceptions, the manufacture or provision of devices or information to facilitate that circumvention is prohibited. 41 For example, libraries cannot obtain circumvention devices or services to allow them to take advantage of library exemptions.
114. There seem to be two possible solutions to this problem. One option is to provide an exception to section 226 to allow the manufacture of circumvention devices (for example, CD or DVD writers, software, personal video recorders) or the provision of information on circumvention to enable users to carry out permitted acts. In Australia the manufacture or supply of a circumvention device or service is allowed if a declaration is received that it is required for a permitted purpose. There are, however, practical difficulties with the application of this approach.
115. Another approach is to put the onus on copyright owners to take steps to ensure that users of copyright material can exercise permitted acts, as is the approach in the European Union, which potentially alleviates the need for an exception in respect of circumvention devices. This might be achieved through applications from users (such as libraries) to the suppliers of digital works.
116. Submissions are invited on how the means of circumvention might be provided to allow the exercise of permitted acts. The issue of exceptions is considered further in the next section.
(iii) TPMs and Exceptions
117. There are two aspects to this issue: exceptions to the TPM provisions, and access to enable the practical exercise of permitted acts generally. They are considered here in turn.
118. First, having provided protection against the circumvention of TPMs, it is necessary to consider what exceptions might apply to those provisions. In determining what exceptions may be appropriate, it is material to consider the nature and extent of the protection afforded, for example, where the act of circumvention is not itself prohibited (as is proposed) but the provision of the means of circumvention is prohibited. It is also material whether the TPM provisions apply to TPMs that have copy control or access control as their purpose. If the definition of TPM only includes copy control measures not access control more generally (as is proposed) it would be unnecessary to specify exceptions to allow circumvention of access control TPMs.
119. The Ministry proposes that exceptions apply (in respect of the manufacture or supply of TPMs designed to provide copy-protection) to allow the exercise of the following specific purposes: error correction, interoperability and encryption research. The Ministry also considers that liability should not arise where a TPM is circumvented to the extent necessary to allow a user to exercise a permitted act, or to enable copying when the period of copyright protection has expired.
120. Views are sought on any additional exceptions that may be necessary.
121. The second issue relates to obtaining access to enable the actual exercise of permitted acts, even where circumvention is not prohibited.
122. Submissions on the 2001 discussion paper pointed to the practical difficulties in gaining access to works protected by TPMs to exercise permitted acts even where copyright law does not prohibit circumvention. Some respondents suggested that the reality of new formats and business models is that some uses will not be able to be exercised if users want to use new formats, and that users can still access old formats and exercise permitted acts.
123. The literature seems to be divided on the extent to which digital lock-up is in fact occurring. Little evidence on this issue has been provided by users, and anecdotal evidence suggests that users have little need to circumvent TPMs to exercise permitted acts, as TPMs are not yet being used to any significant degree.
124. We note that some countries have undertaken to institute some form of review process to determine the effect of TPM provisions on the ability of users to make use of permitted acts (including the United States, the European Union and Australia 42 ). We suggest, therefore, that the Ministry reconsider this issue in three years time, and provide policy advice to government accordingly.
(iv) TPMs - Subjective or Objective Knowledge Requirement?
125. Section 226 applies to situations where persons knew or had reason to believe that a device, means or information would be used to make unauthorised copies of copyright works. The question that arises is whether this subjective test should be replaced with an objective one, and apply (for example) where persons ought reasonably to have known.
126. The Ministry's proposed policy response is to retain the existing subjective test, consistent with other aspects of the Act. We note, however, the suggestion that an objective test would be consistent with proposed amendments in respect of parallel importing, which substitute the current subjective test with a requirement that a defendant "knows or ought reasonably to know" that an imported object is an infringing copy. The parallel importing changes are quite specific, represent the exception rather than the norm and respond to actual difficulties encountered in attempting to prove that importers of goods knew, or had reason to believe, that goods were pirated (or infringing) copies.
127. The Ministry is not aware of any litigation on the matter of circumvention of TPMs in New Zealand. Similarly we do not know if there have been practical difficulties in determining, for example, that an importer of a circumvention device knew that it would be used to make infringing copies of copyright works (not just that it would be used to circumvent a TPM). If such a situation were to exist, the Ministry considers there may be grounds to reconsider the matter.
(v) TPMs - Offence Provisions
128. In proceedings for infringement copyright owners may seek civil remedies (such as damages, injunctions, account of profits) under section 120 of the Act (and rights of delivery up in sections 122 and 132). The offence provisions of the Act only apply where there has been commercial dealing with "infringing objects", including infringing copies of copyright works and objects used to make infringing copies.
129. The question that arises is whether criminal offence provisions are required in addition to civil remedies in relation to prohibited activities concerning TPMs, and what might be gained from such an approach.
130. The Ministry's proposed policy response is to retain the status quo. Submissions from legal practitioners and owners suggest that the deterrent effect of offence provisions is minimal in the context of limited resources to take criminal prosecutions. This suggests that the addition of offence provisions would not provide significant incentives for further creativity or investment in copyright works. Based on the information available, and balanced against the risks to "innocent infringers", the Ministry considers that the inclusion of offence provisions would not serve the public interest.
131. If offence provisions were instituted, the Ministry considers that a subjective knowledge test would be appropriate.
33 WCT, Article 11 and WPPT, Article 18.
34 Copyright Law Review Committee (Australia), Copyright and Contract (2002) p 106.
35 WIPO Standing Committee on Copyright and Related Rights, Short Description of Possible Subjects for Future Review by the Standing Committee (SCCR/8/2, August 2002).
36Sony Computer Entertainment v Paul Owen and Others [2002] EWHC 45 (CH).
37 Ibid, and note also the decision of the Federal Court of Australia in Kabushiki Kaisha Sony Computer Entertainment v Stevens [2002] FCA 906. In the Australian case the Court found that the regional zoning system of the Sony PlayStation does not constitute a TPM. The Court considered that while the access code and boot ROM of the PlayStation was designed to deter or discourage copyright infringement, it was not enough that a device provided a disincentive to copy through the inability to play games on the console. Instead a protective device must physically prevent or inhibit a person from undertaking acts, which, if carried out, would infringe copyright in a work.
38 In Australia, liability attaches to the provision of circumvention devices or services, not the act of circumvention itself. In the United States it is both the actual use and the provision of devices and measures. Similarly, in the European Union Copyright Directive, both the act of circumvention and the manufacture and distribution of devices that could be used to defeat TPMs are prohibited.
39 Copyright Act 1968 (Cth) (Australia), section 132.
40 See Article 6(2) of the European Union Copyright Directive. The focus is on devices etc. which are promoted for the purpose of circumvention, have only a limited commercially significant purpose or use other than to circumvent, or are primarily designed or produced for the purpose of enabling or facilitating the circumvention of TPMs.
41 See for example, the Australian Copyright Act 1968 (Cth), which provides a number of exceptions to the circumvention provisions, including enabling the exercise of activities covered by the libraries and archives exceptions. The manufacture or supply of a circumvention device or service is allowed if a declaration is received that it is required for a permitted purpose. This presents practical difficulties in terms of providing the necessary incentives for the development and investment in circumvention devices, if for example a declaration must first be provided.
42The European Union, under Article 12 of the Copyright Directive, has directed that the European Commission shall every three years submit a report on the implementation of the Directive, examining in particular whether acts which are permitted by law are being adversely affected by the use of TPMs. In the United States, article 1201(a)(1) of the Digital Millennium 1998 Copyright Act provides that every three years the Librarian of Congress must determine if users of a class of works are likely to be prejudiced in their ability to engage in non-infringing uses, by the prohibition on circumvention of access controls. The Australian Government undertook to review the Copyright Amendment (Digital Agenda) Act 2000 amendments after three years.
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