Advances in technology prompt proposed changes to Copyright Act

In June 2003, a Cabinet Paper set out the Government's proposals on amendments to the Copyright Act 1994 (the “Act”) to take account of advances in digital technology.

The proposed changes recognise that the Act has not kept pace with technological developments in this area and that reform is required if New Zealand is to move closer to compliance with its international obligations.

The Ministry of Economic Development is progressively posting all submissions received on the Cabinet Paper on its website.

“Format shifting” of sound recordings

The proposal that has the New Zealand and international music industries crying foul is the creation of a new exception to infringement of copyright in sound recordings. Effectively, if enacted, it will allow what is known as “format shifting”; the owner of a legitimately acquired sound recording will be able to make one copy of that recording in different formats for his or her personal and domestic use.

The proposal is intended to legalise the practice of “ripping” (the creation of mp3 files or other digital copies of the tracks on a CD), so long as no more than one copy of each track is made in the relevant digital format and it is for personal and domestic use.

It is not surprising that the music industry has been particularly vocal in its opposition to this proposed amendment, particularly as it has been the practice of “ripping” that has allowed peer-to-peer music file sharing via the Internet to undermine the industry's profits.

The Government's response to criticism of this change appears to be that, if made, the change will recognise the fact that format shifting is widespread both in New Zealand and elsewhere and will allow New Zealanders to take advantage of the benefits of digital technology in a way that does not compromise the rights of copyright owners. It is not surprising that the music industry has viewed this response sceptically.

Other significant proposed changes

• Exception for “transient” copying: A limited exception to the reproduction right is proposed that would allow the creation of “transient' copies by computers and communication networks. If enacted, this will make it clear that routine and temporary storage in the random access memory (RAM) of a computer of a copyright work in order to execute a program or view a web page will not amount to an infringement of copyright.
  
  
• Recognition of “communication works”: A new class of protected work is proposed. This class is to be known as “communication works” and it is intended to extend the protection currently given to the signals that carry programme content in broadcasts and cable programmes to all communication technologies, including, for example, interactive and on-demand services.
  
  
• Clarification of Internet service providers' (“ISPs”) liability: It is proposed to exempt ISPs from liability for infringement where they merely provide the physical facilities (e.g. a server) that enable infringing conduct to take place. It is also proposed to limit the liability of ISPs for certain types of caching they undertake when providing their services. It is also proposed that where an ISP is hosting infringing material on behalf of a third party, it should only be held liable for secondary infringement under the Act if the ISP knows that the relevant material infringes copyright and fails to take action to remove or disable access to it.
  
  
• Technological protection measures (“TPMs”): TPMs include devices, mechanisms or systems to protect or restrict the use of media in digital format. They have become commonplace (e.g. encryption of pay television channels; regional zone coding of games and DVDs). It is proposed to amend section 226 of the Act to enable copyright owners to take action on devices, means or information which enable the circumvention of TPMs where that circumvention could enable infringement of any of the copyright owner's exclusive rights, not just copying. However, the Government has indicated that copyright owners should not be able to take action on circumvention devices, means or information where the purpose of the circumvention is to enable a user to exercise a permitted act, or to view or execute a legitimate non-infringing copy of a work (e.g. a parallel imported region code protected DVD). The creation of a criminal offence for large scale commercial dealing in circumvention devices, means or information is recommended. A penalty of a fine not exceeding $150,000 and/or five years' imprisonment is recommended for this offence.
  
  
• Electronic rights management information (“ERMI”): Provisions are also proposed which will prohibit the intentional removal or alteration of ERMI or commercial dealing in copyright material where the dealer knows that the ERMI has been removed or altered. The creation of a criminal offence for such conduct is also recommended.
  
  
• Clarification of the fair dealing exception for news reporting: This exception is to be clarified so that it is apparent that it will apply to all communication technologies and media, including the Internet.
  
  
• Clarification of the ambit of the research and private study exception: This exception is to be clarified to make it apparent that it does not authorise the making of more than one copy of a work, or part of a work, on any one occasion.
  
  
• Provisions relating to libraries, archives and museums: It is recommended that section 55 of the Act be amended to allow libraries, archives and museums to preserve works by digital means, including format shifting where there is a need to preserve works.
  
  
• Extension of the “time-shifting” exception: The Government is also recommending that section 84 of the Act be amended to apply to all “communication works” (e.g. to web-casts). However, the section is also to be clarified to make it apparent that time-shifted copies of works are only to be kept for as long as is reasonably necessary to enable them to be viewed or listened to. In other words, the section will expressly indicate that time-shifted material cannot be kept indefinitely.
  
  
• New exceptions for decompilation and error correction of software: An exception is proposed to allow the copying of software to enable a lawful user to obtain the information necessary to create an independent, but not substantially similar, program, where that information is not otherwise readily available. A further exception is also proposed which will allow users to copy or adapt software, where the activity is necessary for the program to be used for its intended purpose (i.e. to correct an error or bug). This exception will only apply if a functioning and error-free version of the software is not available within a reasonable time and at an ordinary commercial price.

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