File sharing, fair use and the Trans-Pacific Partnership free trade agreement

Part one of Q and A with intellectual property lawyer Rick Shera

Intellectual property lawyer Rick Shera is a prominent voice on issues relating to the internet. Here he talks to Stephen Bell about the ongoing copyright debate, privacy concerns and whether New Zealanders will make the most of high-speed broadband.

What is top of mind right now for you as an intellectual-property lawyer involved in ICT? I know copyright and file-sharing rates highly with us in the media, but is there something more important in your eyes?

Copyright and privacy; those are the two issues in the online environment that are really developing areas, where the law is having to morph to take into account the internet and connectivity; but areas where, in copyright particularly, the law is struggling.

Do you think we’ve reached a stable state on file-sharing legislation now; have we got the best deal we can?

There are passionate people on both sides of the debate. It is a little like mediation; both sides are now probably equally frustrated and annoyed, which is a kind of balance. I don’t think it is the end of the debate; it is probably only round one.

Even with respect to the file-sharing legislation that is just come through. The penalty of termination [of a repeat offender’s internet account] is sitting there like the sword of Damocles and can be brought into effect with little or no consultation.

It was interesting to hear the National Party members speak in the final stages of the Bill. I think every one of them emphasised that if the regime didn’t work, termination would be brought in as a remedy. I think the deal — if there was a deal — at the select committee stage was, in the eyes of the current government, only a postponement. If that is true, then for those like me who see termination as a draconian and disproportionate remedy, there will need to be continuing scrutiny.

We’re aware the rights-owning organisations internationally bandy about huge figures as to their losses, which even the US government’s Accountability Office has questioned. But those figures will be used, I don’t doubt, to justify an argument that this regime is not working and termination needs to be brought in. There has to be a lot of care around that.

There’s still debate, as you know, on the regulations. There will be an arm-wrestle on what fees rights-holders will be charged when they submit their notices to ISPs – or IPAPs [internet protocol access providers] - and there are various other regulatory matters that need to be sorted out.

Beyond this particular piece of legislation, I think copyright as a whole will be an ongoing debate. The Copyright Act is on a scheduled review – I think the next review is due in 2013; and there are issues around whether New Zealand should have an overarching fair-use exemption, and around the TPM [technological protection mechanisms] regime.

What’s the fair-use discussion about?

In New Zealand we have limited exemptions to copyright; for example journalists and others have a right to report on current affairs and not infringe copyright; there are educational uses and a few other specific uses; but they’re very strictly confined and defined.

In the US, arising out of First Amendment rights, they have an overarching fair-use defence, which is more fluid and more flexible. It will protect a number of things, particularly where no commercial damage is done to the copyright owner’s rights. For example parody and satire is fair use in the US, but because it’s not one of our defined exemptions it would be no defence in New Zealand.

How do you view the current state of the Trans-Pacific Partnership free-trade negotiations?

From my reading of where the Anti-Counterfeiting Trade Agreement (ACTA) got to, there will be minimal changes to our law. In the early stages of ACTA negotiation it looked like significant changes would be required. TPPA looks like it is going back to Stage 1 of ACTA and is proposing all the provisions and more that were such a concern with ACTA last year in New Zealand and around the world and gave rise to the Wellington Declaration.

So the TPPA is a real cause for concern, not only in its impact on copyright, but also trademark and patent law and other areas. It would require us to sign up to a number of international treaties that in the past we either considered and decided we didn’t want to sign up to, or considered and decided we already complied with [their provisions] and therefore didn’t need to [sign].

Signing up to TPPA in the area of intellectual property law would be the biggest change in the last 20 years at least, if we were to adopt the provisions that the US negotiators want us to adopt – as we have seen from leaked reports.

Anything else in TPPA apart from file-sharing that’s relevant to ICT?

There is the question of TPMs[technological protection mechanisms]. The suggestion from the US is that the mere breaking of a TPM should be a criminal offence, even where the material protected is out of copyright. If some US person decided to put Shakespeare on a CD and protect it with a TPM, you wouldn’t be able legally to get to the work.

What these measures are typically used for is to preserve zone control, where we pay more for, or can’t access material in New Zealand when it is a lot cheaper or has been released months ago in the US. That’s a very artificial way of looking at the world in the days of a global internet.

Do you see commercial services like iTunes changing the business model and attitude of the movie and music industries?

I think they are trying to change; but they have shareholders and investors who want returns. They are clinging for as long as they can to their [current] business models, and preparing, in the hope that when we realise where we are shifting to, they will be able to shift. But I think the ground is moving so fast that they will lose the game.

The danger is that they have created a generation of people who equate copyright with those outdated business models and therefore have lost respect for the fair control that people should have over their own creativity.

What might cure that is to have better access online. In New Zealand, we just can’t access a lot of this material. If you’re on a social network and people are talking about the latest series of a television programme in the US, you’re left out. In a globally connected world, what are people expected to do?

The irony about that is that a copyright owner will suggest that someone who file-shares [such] a television programme is causing them loss. If we can’t obtain that programme, there isn’t actually a lost sale.

What’s your impression of where our negotiators are on TPPA?

I think they are doing a very robust and good job. They are to be congratulated on two counts; firstly they have been relatively open. I see they have recently put up a TPPA discussion page on the MFAT website. That’s very useful; it reveals the local negotiators’ position quite clearly. Transparency is very welcome, given the secrecy of such negotiations in the past.

Secondly, the positions they have taken are balanced. They recognise that copyright and intellectual property laws are a balance between the rights of creators and the rights of users; and the interests of intermediaries such as ISPs also have to be factored in.

On the New Zealand side, this flows from a discussion New Zealanders have been having for at least 10 years about how technology and the internet should interact with the laws. That is a result of the discussion we have been having about changes to our intellectual property laws.

The position we have reached through changes to our Copyright Act, our Trademark Act and the Patents Act – those [last] are still going through [Parliament] – and by virtue of signing up to treaties, in particular TRIPs, we have reached a considered and balanced position. We are saying we have thought about this. Yes we recognise it is necessary to consider whether changes need to be made, but in our view the position we have reached is the right position at this stage and we do not need to go further.

Intellectual property is not the only matter that is being debated in TPPA, so if IP rights are going to be strengthened and that is the bargaining chip that US interests require, then we have to be damned sure we obtain countervailing benefits to New Zealanders.

I am not qualified to talk about those other aspects, but what we need is more transparency. At the moment we have some around the intellectual property aspects because of the agitation in that area, but we don’t have any as far as I know in the rest of the agreement.

Is there anything in the less-open parts of the agreement that might affect ICT?

The one thing I am aware of that would is the clauses relating to international investment. As far as I understand those clauses they suggest that if we change our law to comply with the agreement and later decide to change it again to deal with changing circumstances and that impacts adversely on an overseas company trading in or with New Zealand, then as I understand it, that company would have the right to sue the New Zealand government.

There have been examples of companies taking action against governments on the basis of similar clauses in existing agreements. We need to take notice of that, particularly in respect of intellectual property law that does and will need to change in the future.

Tomorrow, Rick Shera shares his views on privacy issues, the government's broadband schemes and what's holding New Zealand back from becoming a successful hi-tech economy

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