1709 Blog: for all the copyright community

Friday, 1 February 2013

First NZ file-share award: too little, or too much?

The 1709 Blog thanks Simon Fogarty (Senior Associate, A J Park, New Zealand) for the following highly topical news item:
"On 29 January 2013 the New Zealand Copyright Tribunal issued its first decision in relation to the file-sharing infringement provisions of the Copyright Act 1994. You can read the decision here.

In brief, the provisions are intended to give copyright owners – particularly in the music and film industries – a relatively quick and cheap way of dealing with unlawful peer to peer file sharing.

For a claim to go before the Copyright Tribunal a person must receive three infringement notices. The three notices are known as detection, warning and enforcement notices. After an enforcement notice has issued the copyright owner (or its representative) can request a ruling from the Copyright Tribunal. The tribunal will do that based on the papers filed although the tribunal can hold a hearing at the request of one party. This case was taken by the Recording Industry Association of New Zealand (RIANZ). The respondent is not identified in the decision.

In the decision the Copyright Tribunal confirms that, if a person does not challenge an infringement notice, there is a presumption that the file-sharing identified in each notice is an infringement.

In this case the respondent did not challenge any of the notices that RIANZ issued. In fact, the respondent acknowledged that at least one of the infringements occurred. However, she denied any knowledge of the two other infringements.

On the evidence, the tribunal ruled that the respondent downloaded and uploaded two songs. The respondent was therefore found to infringe copyright.

The tribunal then had to determine the penalty that the respondent had to pay. The tribunal must order a penalty sum unless it is manifestly unjust to do that. Any penalty is capped at a maximum of NZ$15,000.

The tribunal calculated a penalty of NZ$616.57 as follows.
• The damages component was based on what the respondent would have paid for lawfully downloading three tracks – NZ$6.57. 
• The contribution to the ISP's fees for processing the three notices was set at NZ$50 – the actual fees were NZ$75. 
• The applicant's NZ$200 official fee. 
• A deterrent sum calculated at NZ$360.
When calculating the deterrent sum, the tribunal took into account
• the flagrancy of the infringement 
• the effect of the infringing activity on the market for the work 
• whether the other sums awarded in the penalty are a sufficient deterrent to future infringing.
The tribunal held that the infringing was not flagrant and that there was no evidence that the respondent's uploading had any detrimental impact on the market for the works. The tribunal ruled that because the other penalty sums were modest, the respondent should be fined a deterrent sum of NZ$120 per infringement.

There has been a mixed reaction to the decision, including comments that this is a bad law as the onus is primarily on the defendant. There is also some speculation that the sum awarded is too low to be effective.

In relation to the latter point the decision sends a clear message to internet users that they can be penalised if they breach the provisions of the Act. At first blush NZ$616.57 may not seem like a high penalty. But for the majority of people, having to pay that fine would be a burden. Certainly, it is far more than the NZ$6.57 that the respondent would have paid if she had downloaded the songs lawfully".
The fine, in European terms, works out at about 380 euro, or US$ 520. Is it a meaningful deterrent? Is it excessive in relation to the infringement, or inadequate in relation to the complexity and bureaucracy of the procedure which leads to it?  And how is it distributed?  Readers may have further questions. This is a good time and place to ask them.

1 comment:

Francis Davey said...

The New Zealand legislation is savage. It very clearly stacks the odds in favour of copyright owners and against those who might be wrongly accused.

For example, an account holder has 14 days to object to an infringement notice. Failure to object results in a presumption that the alleged misconduct in the notice had taken place. Those 14 days start when the notice is issued (i.e. before it reaches the account holder) but the end date is computed on receipt by the IPAP (i.e. the ISP) of the objection.

By contrast the rights owner has 28 days to decide whether to accept an objection.

Does that sound broadly fair? No, of course not. It is quite plain whose side the legislation is on. The reality of private individuals not acting within tight legislative timetables is well known.

In this case the recipient may not have understood that she should have objected to the notice even if some of the notice was correct.

Another striking point is that in any hearing before the tribunal no-one may be represented by a lawyer unless the tribunal gives permission. Why would any honest system of justice seek to shut out lawyers?

In fact corporations may be represented by officers or employees - and thus may give professional training to staff to appear before the tribunal. A private individual may not, except in special circumstances, be represented by someone else.

Again, that stacks the odds in favour of the copyright owner - who will in practice be a corporation in these cases. Experience in tribunals in the UK demonstrates that having a representative make a huge difference. If I recall correctly, FRU noticed an increase in chance of success of 20% by having a relatively inexperienced but keen law student as a representative.

So it seems to me that this is not a particularly honest bit of legislation.

As to the penalty - deterrence is a complex topic as you know. Experience in criminal sentencing suggests probability of being caught is a stronger deterrent than the likely sentence. I doubt that fining people around E400 in small numbers is going to have much of an effect. I do think its unfair (having regard to the wrong done) and I can see the hope that punishing someone may act liking hanging Admiral Byng pour encourager les autres, but I don't think it can be the right thing to do.

Whether these kinds of scheme will actually be worth the money spent on them I doubt, but we have too little data as yet to really say for certain.