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Infringing file sharing two years on

22 November 2013

The copyright law that has become known as the “three strikes” law, the Copyright (Infringing File Sharing) Amendment Act 2011, came into force in September 2011. The new law provides a system where internet account holders can be sent warning notices for illegal downloading and uploading of copyright material on their account. After three notices, the copyright owner can then apply to the Copyright Tribunal for an order against the account holder, and hence the name “three strikes”.

The law is controversial because it makes the account holder responsible, regardless of who uploaded or downloaded the material. This makes flatmates, parents, cafés and employers liable for illegal file sharing on their internet accounts.

The law is also controversial because internet service providers (ISPs, or IPAPs as they are known under the Act) are responsible for sending the notices on behalf of copyright owners. ISPs are unhappy about this arrangement because they face increased administrative costs in sending notices on behalf of copyright owners, and they are effectively required to police someone else’s copyright. There is also unease about admonishing their customers.

Some copyright owners are upset at the $25 fee required to be paid to ISPs to send notices on their behalf. For example, the Motion Picture Association does not participate in the three strikes regime because of the fees it would have to pay to ISPs.

Since the new law came into force, we have watched and waited to see what copyright owners would do. At first, the answer was not much. It was late in September 2012 when we saw the first case taken to the Copyright Tribunal, and it was not until early 2013 that we saw the first decision issued.

Since then, there have been 17 decisions. All have been cases taken by the Recording Industry Association of New Zealand (now known as “Recorded Music”). There are no discernible patterns at this stage in terms of the songs or artists being targeted. While Jason Derulo’s It Girl seems be a favourite, the artists include Rihanna, Ke$ha, Lady Gaga, Red Hot Chili Peppers and Elton John.

As noted by Peter Dengate Thrush in his most recent decision on behalf of the Copyright Tribunal (RIANZ v TCLEA-T7364885 [2013] NZCOP 17 (4 September 2013)), all of the decisions so far relate to the illegal uploading of songs. Peter Dengate Thrush remarks that a lack of technical knowledge of file sharing – and, in particular, uploading – is a recurring problem.

At risk of making a broad generalisation, it seems to me that downloading is mostly understood – you find a song on the internet, and make a copy of it on, for example, your computer. The problem seems to be the passive way in which file sharing software stored on a person’s computer automatically allows third parties to upload music from that computer when the computer is turned on.

There seems to be a further problem in that, even if the account holder realises this, difficulties are encountered when trying to uninstall the file sharing software.

In terms of the 17 decisions issued by the Copyright Tribunal, all of them have found the account holders liable, and all of them have issued fines against the account holders. The average fine is $500, well below the amount typically requested by RIANZ.

When issuing a fine, the Copyright Tribunal can take into consideration the cost of copyright work (what would it have cost to buy the song on iTunes, for example), the flagrancy of the infringement, deterrence, the effect of the infringement on the market, and the fees paid to ISPs. Of the average fine of $500, usually $250 goes toward fees paid by RIANZ to the ISPs, as well as the Copyright Tribunal fee.

There has been varied commentary on the fines. Some have said that they are a slap on the wrist with a wet bus ticket, making comments like “underwhelming” and “incredibly low”. Another candid commentator on the internet said that he or she had been criminally convicted of damaging someone else’s property and had received a lesser penalty.

Although there are claims that there has been a reduction in infringing file sharing since the scheme was introduced, the efficacy of the scheme, and the fines, is difficult to assess. This is largely because there is limited information available.

Rebecca Giblin of Monash University in her very interesting article Evaluating Graduated Response 14 September 2013 available at SSRN, or evaluates the limited information that does exist. She notes that some research indicates that use of P2P file sharing has decreased, but at the same time, so has the use of technology to circumvent the infringing file sharing scheme. Ms Giblin’s conclusion is that evidence that infringing file sharing schemes in New Zealand, and other countries, reduces illegal activity is “extraordinarily thin”.

As Peter Dengate Thrush addresses in his most recent decision, there is a massive gap in public understanding of file sharing, particularly uploading. This is something for copyright owners to think about in the war against illegal file sharing.

There is surely a need for more education if copyright owners and enforcers such as RIANZ want to reduce the occurrence of illegal file sharing.

Kate Duckworth is a partner of Catalyst Intellectual Property. She is both a barrister and solicitor and a registered patent attorney.

Last updated on the 17th March 2016