Leaked US copyright proposal exposes ISP liability hole

A leaked report from the Office of the U.S. Trade Representative, which is part of the U.S. federal government, indicates the Office is considering imposing strict intellectual property protections as a condition of any free trade arrangement.

The conditions, in a proposed "plurilateral anti-counterfeiting trade agreement", include an agreement to share information between nations that may assist in international cooperation to combat IP violations.

The document says strong deterrent penalties should be imposed for offenses. However, it also emphasizes that safeguards against liability should be provided for internet service providers.

That prompted an email discussion among InternetNZ members casting doubt on whether New Zealand's new Copyright Act protects ISPs sufficiently against the consequences of complaints that later turn out to be unfounded.

InternetNZ sources have questioned whether the recently amended Copyright Act can really protect ISPs against the consequences should a complaint of copyright breach against a customer turn out to be unfounded. The fear is that unfairly accused customers could still take legal proceedings against their ISPs.

There is limited protection against frivolous and mischievous complaints in the "notice and take-down" regime that has been adopted in the amended act. But this may not help an ISP faced with a claim by a customer that it has breached its (the ISP's) own terms and conditions by taking down material, or terminating service, when the material turns out not to be "infringing". Legally knowledgeable InternetNZ members say such a breach action could also include a loss claim.

ISPs may try and protect themselves by disclaiming liability in their terms and conditions. But this may not be successful given the legal doubts that already exist concerning online "click-wrap" agreements and how these square with the provisions of the Fair Trading Act, says one commentator.

Another source points out that there is a subtle difference between the U.S. document's reference to technology for circumventing copy protection and NZ law.

The document recommends "remedies against circumvention of technological protection measures used by copyright owners", as well as against "the trafficking of circumvention devices." NZ law prohibits making, importing or supplying such technology, but, deliberately, does not explicitly forbid its use.

Indeed, it makes provision for an authorized person, such as an archivist or IT specialist, to assist circumvention in order to copy works for purposes permitted under the legislation.

The local source fears adoption of the U.S. document's wording could ban, for example, the long-established practice of allowing DVD players to play media intended for multiple geographical zones.

Computerworld discussed the possibility of an FTA/copyright trade-off with Culture and Heritage Minister Judith Tizard in 2004. She indicated any concessions to U.S. ideas concerning necessary IP protection would need careful consideration.

"We should only look at moving towards the same rules and regulations where it's in New Zealand's interest," Tizard said at the time. She added that the public would be fully consulted.

Ironically, say InternetNZ's sources, we seem to have done most of what will be demanded before even starting substantive free-trade agreement negotiations.

The U.S. document also recommends that "capacity-building" measures be undertaken by participating countries, to strengthen the abilities of local agencies to combat piracy, counterfeiting and other IP-related offenses.

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