Copyright Cheapskates

POSTED BY Rick Shera
01 June 2011

posted in | Intellectual Property | Copyright | Legislation



I've drafted, or been involved with, a number of responses to the Ministry of Economic Development's Discussion Paper on the Regulations (PDF) envisaged by the Copyright (Infringing File Sharing) Amendment Act 2011 (including those of the Telecommunications Carriers' Forum (PDF) and InternetNZ).

One of the thorniest issues of course is costs payable by rights owners to IPAPs (ISPs) so it was good to see MED focussing a number of questions on the issue. It is an issue raised by section 122U(1) of the Act, which provides:

 (1) An IPAP may charge a rights owner for performing the functions required of [the] IPAP under sections 122A to 122T

Unfortunately, MED prejudged the answer it wanted in two ways:

  1. It decided for some unknown reason that an IPAP's costs of gearing up for this regime should not be recoverable. There are all sorts of costs which IPAPs will have to incur to get ready for the 1 September 2011 go live date - business process design, recruitment, training, software and hardware design, purchase and implementation, legal terms and conditions changes, to name a few. There was no suggestion of this arbitrary distinction between set-up costs and on-going costs in the Select Committee's report or when the Bill was being debated in Parliament. Section 122U makes no such distinction.
  2. It framed the range of costs that IPAPs might charge rights owners as being between $2 and $28 per notice.  According to MED, that range was based on figures given to it by ISPs but no ISP I have spoken to can make head nor tail of how MED arrived at it's range. The TCF's Response pours cold water on that range and estimates that the cost per notice would be around $40 or even up to $77 if the process were run entirely manually (based on MED's estimate of 5,000 notices a month received per IPAP).

Problem. Not surprisingly, having created the range, MED has preloaded the expectation that $2 per notice is a fair amount to pay (or even too high) with rightsholder organisations. Here for example is the New Zealand Society of Authors (PDF) saying exactly that. NZFACT and RIANZ, the two most ardent supporters of the legislation, have not published their Responses but I'd be surprised if they are saying anything different, particularly since it was the refusal to pay any fees which was one of the reasons the TCF's s92A code (PDF) foundered in 2009.

Now, I have a lot of sympathy for organisations like the Society of Authors who do not have the backing of the likes of the MPA or RIAA and for whom the cost of any regime is going to be a challenge.  But, that does not mean that costs of enforcing a rights owner's copyright should be shifted to the IPAP.  After all, there is no flipside - the economic benefit of that copyright is not being shared with the IPAP.

But, judge for yourself - here are all the steps the TCF has concluded IPAPs have to take under the legislation and which MED seems to think could be done for $2. Quoting from paragraph 48 of the TCF's Response to MED:

48.1    Receiving a notice from a rights owner and checking that it complies with the Regulations (including whether it has been sent within the on-notice period);

48.2    Processing notice payment and invoicing;

48.3    Matching IP address to one of its account holders;

48.4    Determining whether an account holder has received a previous Detection Notice or Warning Notice from the same rights owner or agent (i.e. cross checking against logged rights owners as well) and then:

48.4.1Checking if any on-notice period has expired; and

48.4.2Deciding which type of Infringement Notice to send to the account holder;

48.5    Sending a Detection Notice (assuming this is a "first strike”);

48.6    Receiving any challenge from an account holder;

48.7    Forwarding the challenge to the rights owner;

48.8    Receiving the rights owner’s response to the challenge;

48.9    Forwarding that response to the account holder;

48.10  Updating records in the event that a challenge is accepted (as this negates the impact of the relevant Infringement Notice and records will have to be adjusted accordingly);

48.11  Receiving calls at the IPAP’s customer call centre (even if rights owners or The Ministry of Economic Development sets up a call centre or funds an independent one);

48.12  Repeating all of the above actions with respect to subsequent notices from the rights owner generating Warning Notices and Enforcement Notices;

48.13  Likely escalating calls to call centres, as the process progresses through later stages, particularly if account holder alleges innocence.  At this stage, both technical and/or legal questions may be relatively complex and, despite the fact that IPAPs are not responsible for the content of allegations, inevitably, they will be called on to provide guidance;

48.14  Editing an Enforcement Notice sent to an account holder so that it can be sent to a rights owner without any information identifying that account holder, in compliance with section 122F(5) of the Act;

48.15  Sending the edited copy of the Enforcement Notice to the rights owner;

48.16  Responding to a request from the Copyright Tribunal for copies of all notices, in compliance with section122J(3);

48.17  Providing further evidence to the Tribunal.  We note that the Tribunal processes are not being consulted on at this stage but we need to flag now that the per notice cost needs to cover the situation where the IPAP is called on by the Tribunal to provide further evidence.  The obvious situation where this may occur is where an account holder alleges that it was not using its account at the time the infringement was alleged to have taken place.  The only person who can answer that question is the IPAP and we therefore expect that this will not be an unusual circumstance;

48.18Storing all information in accordance with section 122T(2) of the Act; and

41.19  Complying with the reporting obligations in section 122T(4) of the Act.


POSTED BY Rick Shera
01 June 2011

posted in l@w.geek.nzIntellectual PropertyCopyrightLegislation



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