30 September 2003

Digital Agenda Review

Below is EFA's submission to the review of the "Digital Agenda" amendments to the Copyright Act in response to the call for submissions made by Phillips Fox.


Introduction and Executive Summary

[EFA submits] the following response to the call for submissions made by Phillips Fox in its interpretation of the Terms of Reference issued by the Government.

Electronic Frontiers Australia Incorporated ("EFA") is a non-profit national organisation representing Internet users concerned with on-line rights and freedoms. EFA was established in 1994, is independent of government and commerce, and is funded by membership subscriptions and donations from individuals and organisations with an altruistic interest in promoting online civil liberties.

EFA's major objectives are to protect and promote the civil liberties of users of computer based communications systems (such as the Internet) and of those affected by their use and to educate the community at large about the social, political and civil liberties issues involved in the use of computer based communications systems.

EFA does not purport to be a broadly-based consumer organisation, and urges the Review to hesitate to make or advise policy without the input of consumer groups. The nature of the Review, its terms of reference and the interpretation of those terms of reference by Phillips Fox invite policy review as a consensus of commercial stakeholders rather than the broader balance between the interests of copyright owners and the general public.

EFA would assert that the general public are disinterested with the economic arguments or jockeying by interested stakeholders, however the public does have a particular interest in computer technology within their own use and experience. This provides fundamental issues of parity and fairness of immediate importance:

  1. Consumers want the right to purchase media from Australia or overseas.
  2. Consumers want the right to use their purchased media on any suitable appliance they own.
  3. Consumers want the right to back up media that they have purchased.
  4. Network owners want to be free of threats of prosecution by copyright owners.
  5. Copyright protection of digital media ought not be more restrictive than similar rights to analogue media.

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The Terms of Reference

Copyright Law affects all Australians, yet for too long it has been the plaything of the intellectual property cartel made up of publishers, lawyers and governments. The balance between private rights and the public interest has been abandoned, with copyright owners now arrogantly proclaiming that devices to remove advertisements from broadcast television are "stealing", or record companies suing minors and their parents for exchanging MP3 music files. Enough is enough, it is time for the Government to protect the public from the predation of copyright owners before rights of first publication destroy every subsequent consumer right.

The terms of reference do not address the experience of end users at all - only the tribulations of the cartel members such as public libraries, carriage service providers and creators of works. Outside the cloisters of the cartel members, ordinary Australians are finding it impossible to play media purchased legally, impossible to backup media and impossible to legally transfer content from one platform to another. While this Review dithers in the detail, the Copyright Act is demonstrably failing to address the challenges of new technology.

The terms of reference invite a totally different form of inquiry - including a scientific analysis of the economic impact of the copyright owners' grab for total control over digital expression of copyright works. With due respect, a questionnaire to self-interested stakeholders inviting commentary over individual clauses of the Act is unlikely to yield any evidence as to the actual effects of the 2000 amendments on the general public. Phillips Fox's "forums" on the east coast of Australia have been designed for the convenience of leading stakeholders at the expense and exclusion of the general public and non-commercial entities.

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The areas under analysis

"The Consultant shall undertake research and analysis (including economic analysis where appropriate), and report on the impact of the amendments made by the Digital Agenda Act as follows:

(a) the operation of the libraries and archives exceptions including:

(i) an examination of the effects of these exceptions on copyright owners' markets and the ability of libraries to discharge their community function as disseminators of information in digital form; and

(ii) whether the definition of library in section 18 of the Copyright Act 1968 should exclude 'corporate libraries' having regard to factors including the extent of the provision of copyright material from corporate libraries to public libraries."

While this is an issue of definition for professional librarians, the impact on free online services should not be ignored. Among the abuses of copyright by software vendors are the opportunistic withdrawal of code from public availability, forcing owners of older software to upgrade in the event of damage to the disc media. Free availability of "orphan" software is an important international resource, and while the licensors may begrudge end users the ability to replenish software withdrawn for commercial reasons, it is a necessary corrective for the inability of the law to secure for consumers the reasonable ability to backup software.

Accordingly, the definition of "library" could in fact be broadened to include amateur, hobbyist or enthusiast websites which provide access to software that was commercial but is no longer available due to planned obsolescence, corporate failure or restrictive international licensing.

"(b) the operation of the provisions dealing with circumvention devices and services including:

(i) an examination of whether the approach taken in the amendments ensures a reasonable balance between the competing interests of enabling copyright owners to protect their copyright material in digital form whilst allowing reasonable access to such material by copyright users;

(ii) the extent to which the illegal manufacture, dealing and provision of circumvention devices and services, and the subsequent use of circumvention devices and services (in so far as it is possible to gauge), is impacting on copyright owners' markets;

(iii) the extent to which circumvention devices and services are being legally manufactured, supplied and subsequently used under the permitted purpose exemptions; and

(iv) the impact of the use of technological protection measures in conjunction with the use of contractual restrictions on reasonable access to copyright material (to the extent that this has not been considered by the Copyright Law Review Committee in its inquiry into Contract and Copyright)."

The ability of copyright owners to licence restricted uses of computer code and other copyright works must be balanced against the rights of the purchaser. For example, it is unfair that Microsoft can assert that a licenced user of its software must purchase a new copy if a part of the computer is replaced. It is unfair that the owner of a video tape cannot copy it to a DVD for the owner's own use. It is unfair that media cannot be legally backed-up against damage.

Much of what has been broadly categorised as "circumvention devices" comprises technology which enables both reasonable aspirations of backup capability and also commercial scale piracy of copyright. Commercial infringement can be dealt with under laws of general application, it is not necessary or desirable to criminalise the tools.

Equally, new laws to criminalise the possession or use of such tools are unnecessary. The Act deals adequately with the outcomes of commercial piracy - it is not necessary to criminalise incidental matters in a conspiracy to defraud any more than it is necessary to make "driving a motor vehicle in the course of copyright theft" a discrete crime.

"(c) the operation of the provisions relating to carrier and carriage service provider liability, in particular whether they have operated effectively in clarifying and limiting Internet Service Provider liability having regard to the Government's policy of adopting a technology neutral approach to copyright"

The "protection" provided by section 39B of the Act is illusory when section 36 is considered. It is of no value to the owner of a network providing carriage services to have an immunity against "mere provision" of carriage services incidentally being used to infringe copyright if the act of a copyright owner giving notice negativates that immunity; let alone if the act of "authorising" an infringement can be deemed to include any circumstances which technically enable the infringement.

Revelling in this legal uncertainty, copyright owners are asserting to network owners such as ISPs and universities that:

(a) they are "on notice" that their users are pirating songs and software;

(b) that failure to block peer-to-peer software amounts to authorising infringing uses;

(c) that users' details are to be handed over without court process; and

(d) that the Act allows parallel prosecution of user and network owner.

It is essential that carriage service providers that subscribe to an industry code of practice delineating reasonable takedown procedures be considered inviolate "safe harbours" against copyright owners' prosecutions and that there remains a judicial procedure for deciding circumstances in which network owners must deliver user details to prospective plaintiffs.

"(d) the operation of the exceptions for the making of temporary copies as part of the technical process of making or receiving a communication including:

(i) whether the exceptions should be broadened to encompass a wider set of activities (such as forward caching), and if so, what considerations should guide in the broadening of the exceptions."

Caching is a reasonable and efficient means of maximising the value in the communications infrastructure and should never have been asserted as a concern to copyright owners. A disciplined study of the workings of cache technology would establish that the use of the same has no impact whatsoever on the rights of copyright owners - at most it has an impact on sellers of wholesale Internet bandwidth. To the extent it is a matter of copyright law controversy , caching is an example of the problems of defining electronic copies to capture every potential use. If instead, definitions within the Act were focused on commercial piracy rather than legal theory it would be apparent that caching is an incidence of transmission of no commercial consequence to the copyright owner.

"(e) the operation of the amendments to the educational statutory licence provisions and whether they provide an effective means of allowing reasonable access to copyright material by educational institutions whilst providing equitable remuneration to copyright owners."

The electronic licence provisions still penalise digital copyrights against their analogue counterparts in several ways including:

(a) licensable digital copyrights do not include broadcasts on the Internet or other streaming technology;

(b) patent rights may be asserted against purchasers' rights and licences;

(c) the "1%" rule is more restrictive than the analogue counterparts; (d) the "no two copies" rule is more restrictive that the analogue counterparts;

(e) the labelling of the statutory notice is pedantic and of unclear application in multimedia presentations or compilations;

(f) adaptation rights are few, notwithstanding the higher use and cost of digital media which asserts a value upon adaptation capability; and

(g) electronic works which are transmitted become subject to a second copyright - communication - and may therefore be illegal to use in the same way as their analogue counterpart.

"(f) the operation of the "right of first digitisation" and its effects on the market place and users of copyright material."

This so-called right assumes a mature electronic market and a national marketplace. Adaptation rights and similar fair dealings are important to assess in a regional context - if fewer than 15% of available movies are available in Zone 4 (Australian) DVD format, the market fails for Australians.

The Andrews Committee rightly rejected this approach and there is no reason to revive it.

"The Consultant shall undertake research and analysis and report on the present use of technological protection measures and electronic rights management information, and their evolving role in copyright systems (including likely trends in their use)."

Extensive consumer input is required here, the abuses by copyright owners to restrict reasonable fair dealing aspirations is notorious in the mass market but no doubt has distinct and potentially ruinous effect on small business purchasing proprietary software for professional and industry applications. It is a hardship for a consumer to have to replace a $400 product if the media fails, it is ruinous for a small business to have to replace a $40,000 product under the same circumstances.

In the ISP industry, a major manufacturer of telecommunications hardware refuses to allow purchasers to resell the equipment with software, thus distorting the secondary market and preventing purchasers from realising value for equipment surplus to requirements or which have been replaced by newer equipment.

It is notable that the ACCC has tried, and failed, to reduce the unfair impact of the Act on measures designed to allow owners of hardware to access games and DVDs purchased from overseas. EFA urges the Government to remove from the category of protected rights management any provision which has the effect of refusing an Australian the right to import software and other media for use in Australia or to backup that media.

"The Consultant shall undertake research and analysis (including economic analysis where appropriate) and report on the operation of the amendments made by the Copyright Amendment (Computer Programs) Act 1999 to allow the decompilation of computer programs for specific purposes, including whether the amendments allow all legitimate acts necessary to fulfil such purposes, particularly in relation to the creation of interoperable products."

Were it not for the unfair practices of copyright owners, such decompilation would not be as necessary. EFA urges a review of these provisions to preserve reasonable aspirations of consumers to be able to use purchased media on a variety of platforms. Further, decompilation of computer code is a proper matter for education and training and it is important that academic activities remain legal.

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EFA submits that the balance between copyrights and the public interest is relevant and important to the general public, who have had limited opportunity to put their concerns to this Review. The rule-based analysis and terms of reference shy away from the fundamental public interest in maintaining consumer rights under a barrage of litigation and unfair licensing schemes by copyright owners. Rather than tinker with the owners and lawyers’ concerns, the Review should address the debate on consumer rights which is presently being played out in the public arena and through court cases against ISPs and educational institutions.

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