Copyright liability for someone else's file sharing

POSTED BY Rick Shera
09 December 2010

posted in | Copyright | Legislation



One of the major changes which would be made by the Copyright (Infringing File Sharing) Amendment Bill is to make an internet account holder liable for any file sharing infringement that occurs using that internet connection, whether the account holder knows about it or not.

This is a dramatic expansion of the exclusive rights normally allocated to a copyright holder and it seems to have snuck through under the radar to some extent. 

At present, those exclusive rights are set out in section 16 of the NZ Copyright Act 1994. They are rights that have been developed over hundreds of years in various Commonwealth jurisdictions (UK, Australia, Canada, NZ etc) and are at the heart of what it means to hold copyright. Section 16 reads:

16 Acts restricted by copyright

(1) The owner of the copyright in a work has the exclusive right to do, in accordance with sections 30 to 34 the following acts in New Zealand:

(a) to copy the work:
(b) to issue copies of the work to the public, whether by sale or otherwise:
(c) to perform the work in public:
(d) to play the work in public:
(e) to show the work in public:
(f) to communicate the work to the public:
(g) to make an adaptation of the work:
(h) to do any of the acts referred to in any of paragraphs (a) to (f) in relation to an adaptation of the work:
(i) to authorise another person to do any of the acts referred to in any of paragraphs (a) to (h).

Now, the intention of the Bill has always been to cater for the difficulty in identifying, catching and bringing to justice infringing file sharers.  No expansion of the rights already held by a copyright owner under section 16 is required to make the infringer liable of course.  If a file sharer has illegitimately copied a copyright work (or done any of the other restricted acts without permission), they have infringed and are liable.  No question. 

The difficulty is although the rights owner can identify the IP address at which the infringement has taken place, they cannot identify who is responsible for that account. What they can identify however is the ISP (IPAP as the Bill refers to it) that has allocated the IP address to an ISP customer.  So, the intention of the Bill was to enable a rights owner to better enforce the rights it already has (in section 16) by creating a better enforcement regime.  Under that regime as proposed ISPs match IP addresses to customers and convey notices backwards and forwards between rights owners and those customers.

The problem though was that an IP address is just an address via which a device (e.g. a computer or mobile phone) connects to the internet - it is not a person.  So, how does the rights owner sheet home liability to a particular person, when the information the rights owner is able to collect online does not enable them (or the ISP) to know who was operating that device at the time?  The answer - it can't. Under current law, it would therefore need to engage in other evidence collection strategies (physical surveillance and the like) to find the actual person who is infringing.  For a few $1.79 songs, or even a few thousand, that is uneconomic.

The solution - an expansion not of the enforcement regime but of the underlying core exclusive rights.  In my view, this is unnecessary and unwarranted.  You see, there is already an exclusive right which caters for this situation and which would allow the Copyright Tribunal to properly assess the culpability or otherwise of the account holder.  It is the 9th exclusive right above - authorisation.  A person will be liable for copyright infringement if it has authorised infringement by someone else.

This of course was what the iiNet case was all about so I won't go into it in detail here but what is well understood is that no-one would be liable for authorisation if they did not know about or somehow condone that underlying infringement.  Merely providing wifi access without more would not count and certainly having one's wifi hacked and used for infringement by some unknown third party would not make you liable - the idea it could seems ludicrous doesn't it?

Judge Birss QC in the UK agrees.  In a case rejecting one of (now infamous) ACS Law's attempts to obtain default judgement, he notes:

ii) The Particulars of Claim include allegations about unsecured internet connections. I am aware of no published decision in this country which deals with this issue in the context of copyright infringement. The German Bundesgerichtshof (BGH) dealt with a similar case in its judgment of 12th May 2010 – I ZR 121/08 – Sommer unseres Lebens (Summer of our lives). According to the court's press release the German Supreme Court decided that the owner of the unsecured wireless internet router accused of being involved in a sharing network on the internet could be subject to an injunction to secure their router but was not liable to pay damages. I mention this decision not to decide the point but simply as an illustration of the complex and significant legal issues arising.

iii) The plea that "allowing" others to infringe is itself an act restricted by s16 (1)(a) and 17 of the 1988 Act is simply wrong. The term used by those sections of the Act is "authorising" and the difference may be very important if the allegation is about unauthorised use of an internet router by third parties.

And yet, this is the regime which we are now faced with in the Bill.  Account holders will be liable for whatever happens at their IP address, whether they know about it or not and whether they have the power to do anything about it even if they did know.  Not only that but the account holder starts off completely on the back foot because, under the new section 122MA, they are presumed to have infringed and then have to show that they are innocent (reversing the usual innocent until proven guilty burden of proof).

If the account holder is unable to do that they will therefore be guilty of infringing file sharing.  Even if no penalty is imposed, it is quite conceivable that the mere finding of guilt will be prejudicial.  For example, it is not hard to imagine rights owning representative organisations such as RIANZ and NZFACT seeking to have ISPs impose prohibitions on persons who have been found guilty of file sharing, as part of commercial negotiations for access to music or films. Liability is always a separate issue to penalty.

But wait; there's more.  Even the penalty provision (section 122N) is loaded against the account holder.  Normally, after liability has been established, the parties would again be on an equal footing when it comes to deciding what penalty (damages in a civil case), if any, is to be imposed.  In the Bill however, an account holder must convince the Tribunal that awarding damages up to NZ$15,000 is "manifestly unjust".  That is an extremely high benchmark - much higher than the criminal standard of beyond reasonable doubt and we are not even in a criminal setting here.  In the Disputes Tribunal, the venue for small civil claims in New Zealand up to NZ$15,000, on which this copyright regime is modelled, there is no such bias against one party.

There are a couple of alternative solutions to this:

  1. Preferably, remove the presumption in section 122MA and make it clear that an account holder will only be liable for another person's infringement if it has authorised it under section 16; or
  2. If there is to be a presumption and liability for unknown third parties, at least create an exception for public good and community wifi providers, as has been submitted by InternetNZ, Creative Freedom Foundation, Techliberty and others (including me).

POSTED BY Rick Shera
09 December 2010

posted in l@w.geek.nzCopyrightLegislation



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