Copyright (Infringing File Sharing) Amendment Bill 2010

As reported in previous issues of IP Forum, the New Zealand Parliament enacted digital amendments to the Copyright Act on 31 October 2008. The contentious provision in the amending legislation was s92A relating to Internet Service Provider (ISP) immunity from liability for the actions of those undertaking repeated illegal downloading of copyright works using P2P networks. As a condition for being granted Safe Harbour immunity from lawsuits by copyright owners, ISPs were required to “adopt and reasonably implement a policy that provides for termination in appropriate circumstances of the account with that Internet Service Provider of a repeat offender”.

Initially it was intended that ISPs have a policy or code of practice leading to automatic termination of an Internet account after three infringement notices. But Internet users, ISPs and some journalists waged a very public campaign in New Zealand against s92A. This led to a Legislative rethink, now culminating in the Copyright (Infringing File Sharing) Amendment Bill.

Whereas the Safe Harbour immunity for ISPs came into force on 27 March 2009, the legislative contract between State and ISPs was only “partly performed” because the ISPs’ part of the bargain - i.e. the price to be paid for receiving Safe Harbour immunity - remained to be implemented. The new Bill now seeks to implement obligations on ISPs but by a graduated response mechanism incorporating a series of warnings to Internet account holders but without automatic termination of an account. Such graduated response mechanisms (containing elements similar to those proposed in the New Zealand Bill) have been adopted to date in Chile, France, the UK, Taiwan and South Korea.

The Bill introduces a three-tiered system of notices to ISP account holders. After detecting illegal file sharing (via software programs now available), copyright owners will be able to give notice of this to the appropriate ISP. There are then three levels of infringement notice. A first notice (a ‘detection notice’) will include education information and inform the account holder that any further evidence of infringement will be logged by the ISP. The second and third notices (‘warning notices’ and ‘enforcement notices’) will contain a list of alleged infringements for the account holder. Following the third notice, copyright owners may apply to the Copyright Tribunal for damages for compensation of up to $15,000. Copyright owners may also file an application to the District Court seeking an order that the ISP suspend the account holder’s Internet access for up to six months. This would be a discretionary application requiring consideration of the individual’s circumstances and not an automatic termination as proposed in the previous code of conduct.

The Bill has now been the subject of Select Committee scrutiny with hearings being completed in early August. Issues which have been before the Select Committee and will require legislative fine-tuning are:

The removal of the restrictions that infringement notices to an account holder must relate to the same copyright owner. It seems likely that this requirement will change so that all detected infringements count towards enforcement;
A final decision as to who bears the costs of the infringement notice regime;
The criteria for account holders to challenge infringement notices;
Whether the final deterrent in terms of suspension of an account holder’s Internet account should remain. ISPs oppose account suspension (even though an account holder will be able to sign up with a new ISP without penalty). Copyright owners for their part insist that an ultimate sanction is necessary for the provision to be effective.

The Legislation is expected to be finalised and passed by the end of this year.