Dotcom Decision: Some Initial Observations

POSTED BY Rick Shera
21 February 2017

posted in | Online Liability | ISP | Computer Crime | Data Theft | Intellectual Property | Copyright | Megaupload | Crime



At 363 pages,the decision of Justice Gilbert in the High Court on the extradition appeal by Messrs Dotcom, Van der Kolk, Ortmann and Batato is not something to be digested lightly. Apart from the overall decision itself that the appellants are eligible for extradition, a few very interesting things that leapt out:

  • We're already starting to see the impact of the Supreme Court's decision in Dixon (Dixon v R [2015] NZSC 147), that digital files are property. With that finding in hand, it now becomes a simple matter to find that "property", when referred to in any provision of the Crimes Act, refers to digital material. So, in Dotcom, the High Court finds that the there would be a prima facie case under New Zealand law that the appellants have obtained property (the alleged infringing copies of films) by deception under section 240 of the Crimes Act 1961 and therefore that that provides a "pathway" for extradition. One wonders how long it will be before we see a civil action for conversion of digital files.

  • Also of interest here is the High Court's finding that an "object" referred to in section 131 of the Copyright Act means a physical object rather than a digital file. This may have ramifications in other areas (e.g. the parallel importation provisions which also refer to "objects").

  • The analysis of the computer crime provision in section 249 of the Crimes Act is interesting and may come as a surprise to some. The section forms part of a series of provisions which were brought in primarily to deal with hacking and other forms of unauthorised access to, and use of, computer systems. Here however, the High Court holds that by sending misleading emails to copyright owners, advising that digital files that were the subject of the copyright owners' takedown notices had been removed (when they had not been removed), the appellants have accessed a computer system for a dishonest purpose. That purpose being to mislead the copyright owner into thinking the allegedly infringing digital file has been removed when, in fact, it is retained on the Megaupload or Megavideo platform. There is no need for unauthorised access by the appellants. As long as there is a dishonest purpose and "property, privilege, service, pecuniary advantage, benefit, or valuable consideration" (required under section 249), is obtained as a result, it does not matter whose computer system is used. In this case, the appellants were using their own computer systems to send the allegedly misleading emails. One can therefore imagine section 249 being added to any charge sheet where a computer system has been used and some advantage obtained by deception or dishonesty. Note here that computer system is defined widely and includes the internet.

These are just some initial thoughts, but it is clear that no matter what happens on appeal, this case will have significant ramifications in both the copyright and criminal law spheres.

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