The US-Australia Free Trade Agreement and
Intellectual Property - A Symposium


Transcript [draft]


Hosted by

Baker & McKenzie Cyberspace Law and Policy Centre, UNSW Law Faculty
Wednesday 28 April 2004, 6:00 - 7:45 pm




Host DAVID VAILE, Baker & McKenzie Cyberspace Law& Policy Centre. 2



2. PATRICK FAIR, Baker & McKenzie. 6


4. ANNE FLAHVIN, Baker & McKenzie. 12

5. SARAH DEUTSCH, Verizon. 15

6. ROGER CLARKE, Xamax. 19


Host DAVID VAILE, Baker & McKenzie Cyberspace Law& Policy Centre 

Good evening, I'm David Vaile, executive director of the Baker & McKenzie Cyberspace Law and Policy Centre of the University of NSW, presenting this symposium.

We are also holding another symposium in two weeks time on 'Creative Licensing to Extend the Australian Public Domain', chaired by Professor Jill McKeough. It is also in keeping with this year’s intellectual property theme. It launches the new Free for Education licence protocol and compares it with the local Creative Commons licence adapted from work done at Harvard and Stanford by Ian Oi of Blake Dawson Waldron Lawyers, who's here with us tonight.

Let's now welcome tonight’s chair, Professor Graham Greenleaf, well known to most of you as the co-founder of AustLII and also as a veteran privacy campaigner. But Graham has also been actively engaged in research and teaching intellectual property for many years.


Thanks, David.  This evening we are building on a number of other seminars on the Chapter 17 of the FTA that have been held by the Copyright Society and other organisations.  

We will be looking at policy and legal questions concerning Chapter 17, what effects it will have, and in particular, who will be affected. We have a very good panel of speakers this evening, and we also have some serious expertise scattered throughout this room.

I’d like to welcome a couple of people in particular, David Jensen and Barton Hoyle of DoCITA and the Federal Attorney Generals Department. They should feel free to correct any factual errors that anyone might make about the operation of the FTA as the evening proceeds. We hope they will take something of tonight’s deliberations back to their colleagues in Canberra. 

We are recording the proceedings and hope to publish on the Centre’s website proceedings from this evening, so if anyone does not wish their comments from the floor to be attributed, please tell David or myself during the evening and we will ensure that happens.

I would also like to thank Baker & McKenzie for providing their premises and hosting the event this evening; in particular Angela Metschke and Naomi Larkin for their organisational assistance.

You will find on the Centre’s website a wide array of materials or links or wide array of materials concerning the FTA, a number of which have been reproduced in your folders for this evening and we thank DFAT and other agencies for allowing us to do that. I’d also like thank from the Centre’s offices at UNSW our technical co-ordinator Jason Mumbulla and interns Peter Garay and Steven Fung.

The format is going to be that our six panelists will each speak for up to 10 minutes probably less than that in most cases and at the end of each speaker’s brief presentation I am going to call just for one question from the floor from someone who opposes or objects to something that the speaker has said.  At the end of the six presentations which will be about 7 o’clock we will then bring the six panellists and will open the discussion to the floor. I call on our first panellist, Charles Britton.


I am the policy officer for IT and Communications at the Australian Consumer’s Association.

People familiar with the user's interest in the Free Trade Agreement might find few in the real garb appropriate in the Free Trade Agreement context.  It is actually inspired by the character Merovingian in the Matrix Reloaded and I will come back to that in a little minute. I think probably the Matrix Reloaded give more in the cyber law centre and probably not inappropriate, we got a suitably dark and oppressive future but there is one ray of hope in this and that is that the Free Trade Agreement could be blocked. 

In our view there is a finely tuned copyright balance in Australia and it is being tipped significantly by this agreement in the producer’s interest. There is a sense amongst most stakeholders there was an uneasy balance struck in the digital agenda, amendments and that was subject to review last year by Phillips Fox. That identified key uncertainties, and I emphasise uncertainties. A number of organisations which were included in good faith put considerable effort into responding to that review, and it is very disturbing to see that in fact the Free Trade Agreement resolves a number of those uncertainties by fiat, in other words, done. 

It is worth noting that the word 'balance' doesn’t occur once in Chapter 17, and that any reference to 'consumer' or 'user' is in passing, and in terms of their obligations, and certainly not their rights. Because the balance that is being upset is so fine in our view the Free Trade Agreement has profound change and it is a huge reversal for the consumer interest.

We think it will lack consensus support, and risks compounding the alienation from the intellectual property system that many consumers feel.

I'll just establish a bit of narrative thread in my 10 minutes, and just share a quick storey from last year. I was doing my annual policy briefing to our Council and I talked 'Alice through the Looking Glass' sort of theme or flavour, and I covered things like Tweedle Dum and Tweedle Dee for the Communication Authority and Broadcasting Authority merger, painting the roses red for the ACCC’s codes initiative, and ACIP and the Mad Hatters Code Party. But I also chose the White Rabbit for the Free Trade agreement, because even then it had a weird sort of wonderland feel to it. And illustrating that power point presentation I set off to find an illustration from The Matrix, the original film where Neo is asked to follow the white rabbit and the girl turns and you can see a white rabbit tattooed on her shoulder.  I though it would be a good illustration. Took me three hours of Google searching to find that illustration.

I did find it and it was a sort of fascinating excursusa  across the grain of the Matrix I thought, sort of lateral extension. I finally found it on a tattoo shop website so that was cool. The point that I draw from the Free Trade Agreement is the number of temporary copies that three hour saga traversed. Noting the Free Trade Agreement article 17.4.1 for those who get obsessed about these things: the 'right to authorise or prohibit or provisional productions any manner form permanent or temporary'. We submit that the fact of the status of temporary copies in the Australian regime is far from settled, and that was the representation we made.

In our view it is nonsense to suggest that every copy should be subject to the rule of the originator in this temporary environment.

Now the image that I found was actually the character Dejour from the film and the young actor from Auburn way which I thought was a nice contact with Australia. I would show it to you but it is copyright, and presumably we have some enforcement people here tonight so I won’t  -- welcome to the world of the chilled IP regime. 

Lewis Carroll on the other hand is in the public domain, and the makers of the Matrix could mine that rich cultural vain but the Free Trade Agreement intends to extend copyright another 20 years. Again, we don’t think that the case to extend copyright term in Australia in any way won in the domestic debate, but there is a global agenda for the role extension of the copyright which will work like permanent copyright in my view. That has never been the way the system was meant to work.  The next generation of Matrix makers will not be able to freely appropriate as did the current creators which I think a splendid example of intergenerational inequity and Australia shouldn’t conspire in this fraud on the future.

Another reason I raised the Matrix in my Council briefing was the loss of consumer control of high tech intellectual property as epitomised in the Matrix Reloaded DVD. When you press play you get advertisement for Warners Bros World, just where you wanted to go, but you cannot fast forward it and you cannot stop it. Those operations are prohibited in disk. And the point of contact with the Free Trade Agreement here in 17.4.7 'effective technological measures'. We now got considerable concern over first the technological measures that control access, emphasis added, not 'copying', Access.  As technology moves the point of control from copying to access, and I won’t bore you with a great deal of verbiage on that, take it from me consumers are going to need to utilise various techniques to get at material legitimately obtained or perhaps they have rights to access for various reasons. I think that is also a glimpse of the future of digital television and personal video recorders etc. Will it be illegal to zap the ads?  Would in fact the mute button defeat an access control mechanism?

It reminds me of a case last year, where a shift key in Apple CD copying. Unfortunately it was dropped too soon. I was really looking forward to pictures of keyboards with a shift key taken out of them and T shirts with a shift key with a big cross through but that is the sort of access control that you could inadvertently undermine. 

I don’t think this point can be separated from the essential need for consumers in Australia have a 'fair use' right (and a small parenthesis footnote: free speech amendment) but these things are enjoyed by the consumers in the USA are not enjoyed by the Australian consumers.

Those sort of things would perhaps balance the existence and potential excesses of technological protection measures, but they would themselves said to be protected from contractual and technological displacement.

The other thing is this article Free Trade Agreement would unequivocally confirm zoning systems as a form of technological protection measure and that will place the consumers of multizone DVD player in contravention of the law and there are hundreds of thousands of them.

The key point is, Americans don’t have to worry about zoning: they are Zone 1, and they've got marines to look after it!

So you place in situations of mass non-compliance in the context of ready access to subscriber details as contemplated in Article 29(b)(xi), which creates an environment of intrusive track and trace of consumers, all of this to support a private monopoly right.

Now I recently watched Matrix Revolutions on DVD and enjoyed it more on the small screen. The ad was there again but I knew it was coming and I zapped it. Should I tell you how. Well it might be circumventing so perhaps I shouldn’t.

Consumers associations are more than a little grumpy about the Free Trade Agreement in the Matrix Reloaded Merovingian character said “I sampled every language, French is my favourite. Fantastic language especially the curse words. It is like wiping your arse with silk."

The language in the Free trade agreement in the intellectual property context is like asking Australia to wipe its arse with sandpaper. The only choice we going to get is to decide what grade.


2. PATRICK FAIR, Baker & McKenzie

(powerpoint presentation)

Because the time is limited what I thought I do is, first go a little wider than Chapter 17 and point out that the FTA is relevant to intellectual property in chapters other than 17 and that some of the things that provides there are also of great interest to copyright owners and copyright users generally.

I am expecting that not everybody is right up to date where it is up to so I thought we just look at this very quickly. It was concluded on the 8 February in terms of having been agreed between the parties and negotiations having ceased. We have to consult with our joint standing committee on treaties with a 90 day Congressional notification period, and then there is an exchange of diplomatic letters which notes the date the treaty comes into force.

What is significant about that is not on the slide, is that the Government genuinely intends I understand to try and implement this by the 1 January 2005.

Whether that possible or not is very much doubted by everyone concerned but the last time I had a government representative on the podium with me they said they will really going to do it, and we are about to receive lots of draft legislation and effecting these changes which we will have time to consult with, and which may overcome some of the criticisms which everybody is going to make as to the lack of specificity and the ambiguities which exist in the agreement itself.

The structure of the thing is 23 Articles, not just article 17, and 27 clarifying Side Letters. It is terminable on six months notice, so if it gets too tough for one party it can get out of it, and it provides for payment of a monetary assessment for breach assessed by a panel. So it has some reinforcement mechanism but it hasn’t got a civil enforcement mechanism for parties who feel that the other government has done the wrong thing.

The key things which are imposed generally throughout the structure are these principles here.

'National treatment' ie. you give foreign nationals what your own nationals get.

That is beefed up with the 'most favoured nation treatment' meaning that even if you decide that your nationals going to get less than somebody else from another country then we have guarantee that we will give the US what we give to somebody else from the other country. So by have running the two together you make sure that there is nobody more favoured than the US, even if that standard is higher than what you give your own national.

There is a principle of 'non discrimination' which is important in relation to electronic items as you see in chapter 16.

'Transparency of process' is important. At various stages in the Free Trade Agreement it is imposed on us that we will make it plan how we make decisions and how the review processes are so that we cannot sneak in dirty export controls or import controls that are based on some dodgy basis, and we are supposed to bring into alignment our systems and procedures something which is very relevant in relation to patterns and trademark and design processes.

These articles that I think are relevant to IT not just 17 but also 10 the annexures associated with 10 for non-confirming measures.

Article 11 on investment, article 16 on electronic commerce and of course the IP section.

In relation to 10, I'll just talk some of these points. What article 10 generally does is that it obliges national treatment and most favoured nation status for service providers from the other party. This has a big impact potentially on broadcasters, on people streaming media into this market, it has a big impact on telcos in terms of regulatory treatment. And it has an interesting impact which is a bit of a side discussion on government bodies that face competition in the Australian market, because the way that the definition of government body is couched in this free trade agreement.

This means that if they are in competition with anybody else then they are treated as a competitive entity and a subject this fair competition rules so we cannot allow our semi government organisations to have a favourable uncompetitive position these of the foreign service providers who come in from the US.  Lets skip over that. 

Now as the supplies to TV stations you think now wait the second we just undermined the oligarchy that existed in Australian television because we now have to allow people who want to broadcast in Australia equal access to the spectrum and so to overcome that we have excluded broadcast TV and we have also excluded expressly some of our Australian content laws and in Annex 1 we list measures which are accepted but if liberalised could not be made more restrictive subsequently and in that we have these quotas for local content, local advertising and the inability to have sub quotas within that. We also have Annex 2 which lists exceptions which can be made more restrictive and we can invent new restrictions if we like.

So these are very broad restrictions and that includes transmission quotas for multi channelled commercial free to air expenditure on subscription TV, Australian content on interactive audio on video which is important. For this discussion I think broadcast licensing and spectrum management, taxation on video and film production and the creation of co-production arrangements with other nations.

Now that looks OK when you first see the generality, but when you get to the specifics you find that it is actually very limited. I apologise for just how busy this slide is but this is an example with the detail of what we got to present Australian content in the various screening and broadcast media. The first one is my favourite and probably the most relevant here and that is in terms of whether or not we can legislate to protect Australian content in relation to interactive audio and video.

Right under the Free Trade Agreement is to ensure that Australian content is not unreasonably denied to Australian consumers upon a finding by the Australian government that content is not readily available to consumers through such services. Oh boy, that's a high hurdle to jump! If anybody is going to be able to say, 'wait a second, I just established that Australians are being unreasonably denied of Australian content on line,' and use that to justify a subsidy scheme, I think at least on the face of it, it seems to me less than we would have liked.

In relation to multi-channeling and free to air, there is an ability to have some subsidies but as the channels go out then the Australian content requirement goes down so we don’t have control there of our ability to protect the ability to seek Australian content going out on our broadcast and video I think.

In relation to article 11 there is an agreement that we will open up investment but it excludes foreign investment in relation to various media assets and Telstra so we won’t be seeing competition through that mechanism and those particular assets.

In relation to electronic commerce I think it is worth pointing out that the definition in article 16 of digital products this section is relevant too and is extremely wide.

'Digital products' includes all digital forms of encoding computer programs, text video images, sound recordings and other products, regardless of whether they are fixed or on a carrier medium or transmitted electronically. The principles imposed are non-discrimination, ie. no distinction between digital products on the basis of origin. So that means that the we have agreed to open competition on line potentially to streaming and other forms of digital media subject only to the content restriction that I mentioned a minute ago and that is a very broad power but it is subject to article 17 so there is a copyright interest you can moderate to some extent.

In terms of IP, I know what Anne Flahvin is going to say and I know how much there is here for other people to talk about, but what I would like to do is just skip to the end and look quickly at the protection for internet service providers.

As a kind of introduction I think to some of the points that will be made subsequently.  The idea of the regime is that in agreeing to certain conditions the ISPs will accept certain benefits and the benefits you get are limitation on the ability to take legal action against the ISP.  The problem is that the FTA is drafted in very broad terms and it is drafted in a way which overlays the definition of the various types of provider ie. transmitter the post and the service provider with definition of the elements and then adds to those conditions on whether or not you can have the limit of liability and then it says these will be the benefits if you qualify through those two steps it is too complicated and it is too hard to know exactly what the governments going to do with it.

The general description of the legal addendums as specified we get limited scope of remedies, we get preclusion of monetary relief and we get reasonable restriction on court ordered relief if we fit into these various conditions and the conditions are that we must not … transmitter initiate the transmission or select the material or its recipients and we have to adopt an intimated policy terminating account holders if they are repeated offenders and we have to adopt certain standards technical measures.

All of that as you can see from the discussions follows requires particularity that haven’t been and the particularity is not in the FTA, particularity is going to be in consultation that comes up and the question will be who the benefit we get by meeting all of those conditions that make you qualify for the benefits sufficiently good and in my view they are not.

In my view some general principles as annunciated in the law that we have got at the moment is probably clearer and certainly easier to apply than what these kind of general descriptions of what benefits you might receive on the imposition.



I am power pointless, that means I am could be powerless or pointless but I hope neither. We had a long history of involvement with the … in the area of copyright. 

Just by way of background we did actually have some bearing on the Digital Agenda Act as it currently stands through consultations that occurred in the lead up to its passage in ..99?  A bit foggy on the date there.

The big issues are time for us and remember this occurred the context of the action by ARIA against Ozemail in respect of downloads recurring by Ozemail customers and there was a whole issue surrounding what constituted authorisation liability there and we actually agree that part of the settlement to work with Aria to make joint submissions as it were to the Government on what needed to be done to the Copyright Act to bring it up to date with the realities of the Internet.

In fairness to Aria they recognised legal certainty was necessary to for their business as well as for that of the ISP’s. The key areas that we considered to be at the time victories were the clarification and the creation of an exemption of temporary copies we called the caching exemption and the other was of course the broad exemption for the owners of operators of networks to the extent that they simply providing the facilities.

I note in reading today the report that was just released from the review of the Digital Agenda Act by Phillips Fox that certainly there is some uncertainty surrounding both of what we considered to be clarifications at the time and I think that is something we can work through.

But along comes the Free Trade Agreement, and suddenly opens up whole new areas of uncertainty which we are only still grappling with.  In fairness again, the Government negotiators consulted extensively with us during the course of the negotiation, but it soon became fairly evident to us that Australia was being presented with essentially a fait accompli, and were really asked to implement a system of law that I think demonstrably is not working that well in the US.

I am privileged that Sarah Deutsch has come out from America, she is speaking this evening and was our guest come to Australia yesterday to present at a workshop that we held in Parliament House in Canberra to work through the implementation issues surrounding particular the ISP liability sections. I think Sarah would agree that the DMCA has not implemented particularly well, but certainly in the context of peer to peer, which was something that really wasn’t around when the DMCA was drafted. So when we come to look at the terms of the Free Trade Agreement what our Government has actually agreed to implement in Australia suddenly we are looking with a great degree of trepidation that new concepts like safe harbours that address areas that we think narrow the kind of protection that are already available to ISPs under the existing provisions of the Act notwithstanding as I say there may be some uncertainty.

Let me give you some examples of that. As Patrick has said we got some 'safe harbours' there in respect of transmission, routing or providing connections so there is a basic connectivity safe harbour which says that if all you do is transmit, route, provide connection then you will be exempt from any monetary relief well before … relief.  The problem with this is that we think we already have that under Section 39B.

Unfortunately the 'Safe harbour' agreement that we now being presented with adds an additional element without modification of its content. So it is no longer enough that you are simply a network provider, but you cannot engage in any modification …….. without the clarity of what that means. One of the issues that we have been canvassing yesterday at our forum was whether or not the translation of data or the reformatting the cross protocol for instance if you were an ISP and offering a text or speech service, whether that would constitute a modification of the contents that would then take you outside of the safe harbour.

Other examples could constitute where you are providing a service that attempts to cross the device threshold so that you are going from a fixed internet environment to a mobile environment. I am not a technician, but I know enough to know that there could be modification that occur to the data, albeit at an automatic level, but nevertheless it would take you outside of that.

So suddenly where we thought we had the safe harbour on the existing 39B, we might be looking at a scenario where, maybe with the best will in the world, ISPs are going to be exposed in a way that they never thought they would be. And we are concerned of course that you have a Free Trade Agreement that is not amenable to change, to modification.

We like codes of practice in the IIA as a good instrument of co-regulation or self-regulation because they can adapt with the technology. I think what the DMCA has proven is how poorly a legislation can adapt to changes in technology. I see it as a bit of a hierarchy where if you going on a scale from less flexible to more flexible at the bottom end, at the most flexible layer you got the Code of Practice and then you might have domestic legislation and they beyond that you have the Free Trade Agreement at the other end of the extreme.

So I think there is a bit of a concern there that we may be locking ourselves into something which is going to be very hard to adapt and change. The second area I want to highlight conscious of the time is the caching exemption. Now under Section, I think it is 43A of the existing Act there is what we consider to be I suppose a safe harbour in respect of temporary reproduction.

It was unqualified except to the extent of material itself may have been infringing but now in the FTA it qualifies the caching exemptions to say but only where it occurs through automatic process. Now again, we believe that most caching is probably is automated but there may be instances in the future where caching will have some manual elements. Again we have concerned that we are not being asked to entrench provisions that will impede basically the development and uptake a new technology as it occurs.

The Government accepted our arguments on caching as a public interest benefit when we argued that caching was necessary in Australia at the time because we were saving having back all the same data across from particularly the US or anywhere really provided quicker downloads to local users and avoided a duplication of costs which would ultimately be passed on to end users I think the government accepted that on the basis that the ISPs are not actually deriving any direct monetary value from the content itself. 

So I think there is an issue there that we are still very concerned about the caching. Does that mean that any degree of configuration of the cache takes you outside of that manual process. Is there a question of maintenance of the cache that somehow removes that quality of automatic and so on. I am not despairing you I am just flagging that these areas are new concepts that we are being asked to accommodate in a way that we don’t really think is necessary. In passing might I also say that we invited the right holders, Michael Specks from … and Michael Williams who now acts for rights holders in Australia.

We put to them the question how well or how poorly do you think the existing legislation works  in your ability to enforce the rights of your members requirements and the answer was, quite well, very well in fact. We think that we have adequate legal tools under Australian law at the moment where we can go after and prosecute or litigate against the worst kind of offenders and that has been happening. So in fact what comes from that is the benefits that we would be gaining kind of marginal versus the huge uncertainty that we are opening ourselves up to and introducing quite a different paradigm.

We asked the minister by the way, because we are quite concerned about the expedited subpoena provision in front of the DMCA and the extent to which customer information can be handed over without judicial supervision and of course the minister was quick to say that he thought that we should preserve from judicial process in the provision of customer information and we think that is necessary because Australia does have a very strong privacy environment and one that we worked hard to deal with here and we are very concerned about the effect of confidence where we sort of throw the baby out with the bath water.  I will wrap it up there, but I am happy to talk about more of this in due course.  Thank you.

GG: One question before he goes.

[Cannot hear question.]


... because presumably Australia is being asked to modify here to bring new ... legal process that may assume the implications ... clear whether Section 39B stays or whether 39B goes and is replaced by the safe harbour provision.

It could be, we don’t have clarity on what has been agreed ...

4. ANNE FLAHVIN, Baker & McKenzie

(powerpoint presentation)

I am going to talk about two points tonight.

I will have a quick look at the plan to extend the term of copyright to life +70 years and consider what impact that might have on works which has moved into the public domain in Australia and in that context I will talk briefly about a case that going through the US court s at the moment Golan v. Ashcroft which is the case which is challenging the constitutionality of the US law which revives copyright in respect of works which had moved into the public domain.

Then I want to look briefly at some of the provisions relating to temporary reproductions and asking particularly with respect to the education sector because this is a big part of my practice, universities, TAFEs and what have you. Whether or not we are likely to see caching become a remunerable activity and people who have a look at the Phillips Fox report on Digital Agenda review which has been released today will now that so far as educational institutions are concerned it looks as though the answer to that question is yes.  Universities and schools might turn out to the only people in the world being asked to pay money for caching if Phillips Fox’s recommendations are accepted by the Government.

Finally I want to look very briefly at the question of why it is that Australia still has no broad based US style 'fair use' rights. 

So to have a look at the life +70 year recommendation, despite the misgivings expressed by our own trade minister as late as December last year, they said they were pushing very hard, resisting the US demands that we extend our term of copyright they realised this was likely to result in increased costs for universities and libraries and other users of copyright material pending a miracle it looks as though we are going to be stuck with this extended term of copyright.  The question arises will that be applied to material that is already moved into the public domain in Australia.

If we look at the FTA Clause 17.1.10 tells us that there is no obligation to do so to revive copyright in works which have moved into the public domain subject to one exception dealt within Clause 17.1.5 and that says that each party shall apply article 18 of the Berne convention to the subject matter and rights and obligations which includes term in Articles 17.4 to 17.6 of the FTA. 

Article 18 of the Berne Convention deals with retro-activity and while it is not entirely clear to me as a non Berne treaty expert it appears as though the possibility is left open for the parties US and Australia to reach a bilateral agreement which would have the effect of reviving copyright in material which had moved into the public domain in Australia and you can imagine a scenario that might well come up.

We know that some of the Disney copyrights are coming right up against their term, that term has now been extended in the US as results of the copyright to an extension Act which came into force I think in 1998 maybe a little earlier so quite possibly either a copyright which have been revived in the US which would have expired according to Australian law the material has been moved to public domain in Australia, query whether or not the effect of the FTA will be that we will be asked at some stage to revive copyright.

Colleagues have told me they have seen some word from the Government that they don’t intend to do this. I have seen nothing certainly nothing official but I would be interested to hear if anybody has heard anything other than that.  And of course there is a precedent for that kind of revival in the EU article 10.2 of the EC term directive has that effect so terms of protection applies to all works of subject matter which are protected in at least one member states at the time of that directive coming into effect.

That did have the effect that copyright in some EU countries had expired but was revived as a result of some that directive taking effect. In the US section 5 1 4 of the Uruguay Round Agreements Act which came into force in 1994 has this affects to extend copyright protection to all foreign works that were in the public domain in the US if the term of protection had not expired in the source country or if the work have fallen into public domain in the US through non  compliance with some formality and for various other reasons which I won’t go into tonight.

Now that was introduced as I understand it to further the goals of the North American FTA. It had the effect several hundred Picasso paintings that moved into public domain copyright was revived, several Tolkien’s works, the Hobbit, the Lord of the Rings, The Two Towers, The Return of the Kings came back into copyright as did I am sorry to say Virginia Wolf’s Room of One’s Own. So you know to the extent that this possibility is open in Australia I think there are some serious concerns in the States as I said there is a case running through the courts, Gollan and Ashcroft.

Gollan, the plaintiffs in this case, there are some music conductors and the other plaintiffs are also users of copyright material which had moved into the public domain. They are challenging the constitutionality of the provision I just referred to which has this effect of reviving copyright in works which had moved into public domain.

The Government filed a notion to dismiss based on this argument that the United States Supreme Court decision in Eldred v Ashcroft which considered the constitutionality of the life plus 70 years term foreclosed the arguments raised by the plaintiff’s in Gollan’s case.

The US court, the district court of the District of Colorado handed down a decision just last month saying , no Eldred’s case looked only at that question, it did not consider these other constitutional arguments being raised in particular, the constitutionality of reviving copyrighting works that had moved into the public domain.

Of course the constitutional position in the US is very different to that here and I am not suggesting that the same constitutional argument might apply here to the extent that our government decide to give effect to this agreement in that way.  OK, I just wanted to talk briefly about temporary reproduction as other speakers have touched on this already, Article 17.4.1 imposes an obligation on the parties to ensure that temporary reproductions come within exclusive rights of the copyright owner. 

I would like to ask what that might mean for the law in relation to caching and browsing as we know that remains quite unsettled, 17.4.10 of the FTA tells us that any exception to the exclusive rights must satisfy the three step test.

That begs the question whether or not Section 43A and Section 111A the Temporary Reproduction Provisions in our Copyright Act will survive the signing of the FTA  will require some amendments and in any event they wouldn’t appear those temporary reproduction exceptions to apply to active caching. Universities and schools among others are engaged in what you might call for lack of a better technical expression active caching where they cache material for many reasons.

One might be protecting students from material that might be perceived to be harmful but also cutting down costs. What is the faith of that kind of activity if these provisions are given effect to and as I said the Phillips Fox review of the Digital Agenda Act that was handed down today as recommending to government that the educational statutory license of the copyright act be amended to allow educational institutions to cache with impunity. That is the good news.

Bad new is they will have to do that subject tot he terms of the statutory license which means put your hand in your pocket and pay CAL. So watch this space may very well be that universities and schools in Australia are the only bunnies throughout the world who are asked to pay for the privilege of caching material that is put up on the Net. And I just wanted to finish up tonight with this is an old Bugbear of mine but I think it is a very important one.

The FTA was sold to us as an exercise in uniformity bringing our copyright law in line with US copyright law. Well there was one area where there is a glaring lack of uniformity and that is the difference between the US fair use right which is a non-purpose based broad base fair use right, very flexible right and our very narrow purpose based fair dealing right. Our own copyright law review committee recommended some years ago in its simplification report that we adopt the US style fair use rights.

In the light of the two issues I discussed tonight my view is that that becomes screemingly important while it wasn’t necessarily the kind of think you expect to see being dealt within the Free Trade Agreement it is a little concerning that it doesn’t seem to have hit the government’s agenda so far as I can see at least. Phillips Fox took the view that it didn’t fall within the terms of reference as their digital agenda review. I am sorry to say I did not really agree with that assessment but there you have it.

So they were not prepared to take any discussion or submission on that point. And I suppose one point you might make is that the Eldridge court, the US Supreme Court in the Eldridge case made the point that the extension of copyrights was of less concern in the light of the US fair use right we have no such fair use right. We have a very specific purpose based fair dealing right. And finally it might seem a kind of a light point but I think quite an important point. In an age where more and more otherwise upstanding, law abiding citizens are walking around with their entire music collection on a personal MP3 player in breach of our copyright act the law looks a little silly. I think it is time that we thought more carefully about some of those questions.



I have had the unfortunate privilege or horror as the case may be of working on the original sand paper of the Digital Millenium  Copyright Act that are now forms the basis of Chapter 17 as has been force fed to you. I apologise. I negotiated as one of the telecommunication company negotiators and at the time it seemed very simple. If you hosted content then you had an obligation to take down the content however if you were a conduit you were absolutely exempt. So the DMCA worked well for many years but now that the peer to peer problem have arisen US copyright owners try to twist the DMCA to fix a new business problem. So I am going to give you just two examples of why it is not working.

Basically the DMCA process was very workable originally. We got notices and when we received the notices we took the works down. But as again I mentioned the problem shifted to peer to peer system. This notice and take down system has turned to a completely automated process. The copyright owners are hiring bounty hunters with names like Media Force that actually use search bots and these are like the spiders in the movie Minority Report you might remember these little spiders crawl into your apartment and were zapping pictures of your retina. Well these little spiders are scouring the Internet and are matching file names to the names of copyrighted work. 

The copyright owners are doing no due diligence whatsoever the robots automatically scour the Internet and they automatically generate these notices and tell the service provider to take them down. The problem is that these materials are not on our system of network they are on the users hard drive.

So just to give you an example last year one small ISP in the US received over 20,000 notices of all these automated peer to peer notices that asking us not only to take the material down but effectively to terminate the subscriber and since the ISP has no idea what is on the users’ hard drive in this case we just pipe, it’s a very egregious remedy. Another US ISP received from January to today over 30,000 notices only two of them actually related to materials that were on its system of network. So these were all non-compliant notices and in the past 12 months the same ISP received over 90,000 notices.

Each of these automated notices requires human intervention to track and see if it is on your network and when the ISP tries to reply for example to one of these robot notices from Paramount pictures they getting email bounce back that says the destination domain name specified in this address doesn’t exists or is incapable of accepting mail.

So it is actually means that notice and take down in the US today is essentially a joke. The copyright owners are flooding ISPs with false ineffective notices and they are taking steps to make sure that we cannot even reply to them. They don’t want to hear back from us.

It is just inconceivable why we are pushing this line on Australian when our own copyright owners in the US are so busy trying to distort the original intent of the line try to unravel the deal. And as I mentioned these copyright bounty hunters are the cause of the process we are using are making mistakes and some serious mistakes and abuses. For example last year Warner Brothers sent a take down notice to UUNET telling them to terminate a subscriber who was downloading the Harry Potter movie, however when we looked at the actual file that was attached by the search part, it said Harry Potter Book Report file size 1k.

It was a text file so it was clearly a child’s book report and they working asking UUNET to terminate. The recording industry sent a notice this year to Pen Sate University telling them to take down their astronomy server ... because they were infringing songs by the artist Usher. It turned out to be Professor Usher and the song turned out to be a song sung by some of the professors relating to gamma rays.

And the recording industry has actually sent dozens of other mistaken notices and they blaming it on their temporary employees whoever they may be.  … is an archive of public domain material gathered all these movies for example the Duck and Cover film from a nuclear days anything you looking for in this archive. They received a notice from the owner of the movie U571 the search part has matched numbers in the archive 19571 and 2571. These were movies relating to home economics and fuel efficiency. And the church of scientology has been active using the DMCA to threaten Google - the examples go on and on. One of the biggest concerns however is that under the DMCA in Europe Chapter 17 says the notice has to be accompanied by a good faith belief that infringing conduct is occurring.

However in the case of the US MPA v Rossi the Motion Picture Association and recording industry have argued that good faith belief requires due diligence. So again when you are asking a service provider not only to take down material that is on its network but to terminate is really hurts the whole process. The other example I give you of how the DMCA is been challenged is the case you might have heard about with the expedited subpoenas where the recording industry actually sued my company Horizon.

They sent us a notice in 2002 asking us to turn over the name of just one of our subscribers who they said had infringing material on his or her hard drive and this was not a subpoena they got from a judge that was something they got from a clerk and in this case again we were just a conduit or pipe and we have no idea what is on the user’s hard drive we were very concerned about turning over the name without having a judge involved so we fought the case not because we oppose their right to enforce but we were concerned about how they were enforcing.

So what they were essentially doing is taking a provision of the DMCA that was only supposed to apply when we hosted the material and they twisted it into this new extraordinary roving subpoena power that actually gave them more power than law enforcement in the US enjoys today if it tries to get the identity of a terrorist under our Patriot Act.

So they were using a district court clerk essential to go into the clerk who has never been to law school, no judges supervising this. You simply pay a $35 fee you tell the service provider that or the clerk the time someone was online, you have their IP address which is apparently visible every time you visit a website or a chat room. This little number is accessible to everyone and they pay the $35 and the clerk was rubber stamping subpoenas.

They issued 1000s and 1000s of these to service providers throughout the US and there were very clear privacy and safety concerns we had over 50 consumers groups, conservative groups, liberal groups, groups like Children’s Safety Groups and even the National Coalition Against Domestic Violence who were concerned that anyone could march into the clerk’s office and get your identity through this process whether they are a paedophile or a stalker or fraudster.

So we actually have pornographers using this DMCA subpoena process to try to extort the identities of certain customers and get them to pay money because they were apparently down loading copyrighted material.  So fortunately this December the Court of Appeals unanimously sided with Verizon, and found and hold that our statutory interpretation was correct.

They said that the recording industry’s use of this process and their arguments actually bordered on the silly and were illegal but the problem was the recording industry had already unleashed thousands and thousands of these illegal subpoenas and had collected people’s names and were suing people and even with this material they were making plenty of mistakes.

For example you might have heard that they sued a 12 year old girl in a housing project who had dangerous songs on her hard drive such as “When you are happy and you know it, clap your hands” and they sued a 66 year old grandmother in Massachusetts who owned a Macintosh computer that didn’t even have file sharing software and she was woken in the night by a process server and her name was plastered over the paper as a pirate and the recording industry’s response to all of this was “well when you fish with a net you are going to get some dolphin”.

So we were very pleased that the court for now has put an end to their fishing expeditions. But there is actually another case pending in the US the same as ours but with the different party and they are trying to create a split to bring that case up to the Supreme Court.

I don’t’ have much more time but these are just two very small examples how the DMCA has been extorted and twisted in some many extraordinary ways and that many other sections that you are struggling with where our content industry is trying to twist it and my concern here is that they would be trying to force Australia to adopt a very different interpretation of this lot and what we originally intended when we negotiated in 1998.


Question ………

Answer:  ………….. Material misrepresentation and that the service provider actually took the material down so they can misrepresent all they want, in the peer to peer process and there is nothing for us take down. That is really never been tested and the penalty of perjury issue they have argued “Oh well nobody is going to walk into a court and testifying something but the groups that we work with said “do you think that a murderer or a paedophile or stalker would have any problem lying on a one page form. So penalty of perjury doesn’t really mean very much.


  without going into the user’s hard drive. If you have a file sharing program, they are looking in there and copyright owners doing more than that, they are putting false files, snooping files, they are using services called entrydiction. If you are trying to download a file you will see it there and then it is a fake file and so your computer will work in an endless cycle trying to get the file. They call this self help and the robots are self help too but I think it is crossing the line.



Our last analyst this evening is Dr Roger Clarke.  Roger is in e-commerce consultant, and a Visiting Professor at the Baker & McKenzie Cyberspace Law and Policy Centre at UNSW.


(powerpoint presentation)

Good evening all. I am not a lawyer. I was going to test you with the FLAIANLA [???] but we haven’t got time because Graham will stop me talking. I am going to look at only three specific aspects which are much more from an economic and industry perspective and have got very little to do with the specifics of the law. There are some materials, the double sided sheet in your folder which provides my basic argument and highlights the key points that I am most concerned about in Chapter 17.

But my role here is to look at the question of innovation. My first concern is that I have a nasty little white patch down the bottom of my screen. This must be an Wintel machine, why don’t you using Macintosh?  It works on sensible machines. That is actually a FFE a free for education license an open content license which is available to certain kinds of people under certain circumstances.

Of course I would practice 'open content' as well as arguing its support. The first point that I am going to make is that when I look at the basis upon which increases in monopoly powers of copyright owners and patent owners are being granted under these US proposed arrangements the justification is all wrong.

The justification for monopoly powers should not be based on some moral argument. That doesn’t fit with the history it doesn’t fit with the economics it doesn’t fit with our predominantly rationalist economist philosophy of the last quite some years. It is not a question about micro economics either.

We should not be out there trying to advantage specific individuals nor specific corporations in terms of their ability to raise revenue, their ability to gain competitive advantage in the marketplace. There could be some such effect but that is not the justification.

The justification also should not be about national strategy trying to achieve national competitive advantage out there in the world against other countries. Mind you, if that were a reasonable justification then it would open up a quite simple argument in Australia, because it is quite easy to demonstrate that the approach taken in Chapter 17 is not good for Australia’s national competitive advantage and therefore we should close the chapter.

So if people want to argue that – fine but that is not the appropriate approach to take. The appropriate justification is a macro economic one.  The economy will work better because we create an environment in which people are encouraged to innovate. That is the justification that should be used and it should be the argument that should be pursued carefully and analysed carefully.

Now, what I’ll be pursuing in the remaining 36 seconds is that our economy works in such a way and innovation works in such a way particularly in the information technology arenas, the information industries, it works in a way that requires us to not give significant powers to monopolists, significant powers to copyright owners and to patent owners. 

I’ll skip the lack of an economic case I think it is a simple straightforward thing to say that these chapters that we have been presented with do not show us the convincing manner in which US corporations or indeed a few Australian Corporations have shown that they desperately need extensions to copyright and patent powers. The case just has not been made.

But let me come with a counter case which is my primary concern here. In the three page attachment that you got with a bunch of slides on it, I have a dozen slides which run the argument about what is innovation, how does it really work?  These are the two central slides that I show you, these are the pretty pictures. Firstly, within an organisation that innovates there is a complex set of processes.  You depend on individuals who got passive knowledge, that is to say unformed, unstructured knowledge heavily depended up here because without those you will not be able to achieve innovation.

You also depend on a whole pipe of input information. You depend on seeing things out there that encapsulate ways of doing things.  You see artifacts and artifacts in use and based on this combination you come up with new ideas. New ideas involve new artifacts and new ways of using those artifacts and you then put them out into the world, preferably for significant sums of money.

Note the multiple interdependencies that are involved. And then watch the way in which you move beyond the individual innovative organisation there are many more interdependencies as well. That innovative organisation does not exist in the vacuum. It gets its ideas from many places. Suppliers remember say we have these capabilities in our forthcoming component versions.

Do you think you can use them?  We think you might be able to use them in the following ways. Customers actually say we like an improved product that did these things as well, do you think you could come up with such a thing? 

Meanwhile each organisation is watching its competitors, watching their products as they come out into the market and getting indirect feedback through the user organisation about competitor’s products as well. Plus of course all of the leeches like me, I am a consultant. All the leeches around educational institutions trust me I am a visiting professor and labour mobility, trust me I change lots of jobs in years gone by. There are people who wonder around taking ideas with them.

This is the real way innovation works in most industries but especially in the information related industries. It is about humility, interdependence, it not about lots of big bangs, brilliant people sitting in laboratories coming up with brilliant ideas and single corporation coming forward with this brilliant new innovation.

Has it happened once or twice, yes definitely it has once or twice. It is unusual in this industry. It is cumulative and ongoing.

Old fashioned economics, rationalist economics, economics related to scarcity doesn’t’ work when are looking at information, information related artifacts and software. It is straightforward for innovators to achieve returns. They don’t need dramatic intellectual property laws to assist them.

Some intellectual property laws are supported by an information economic analysis but it is only straightforward imitators who do no value add, who offer nothing to the pool, who do nothing cumulative. There are the ones where it is perfectly reasonable to have intellectual property laws holding them back restraining their actions but for us to achieve ongoing innovation we need significant amounts of encouragement to people to do these things down the bottom.

That involves them being able to see things, being able to manipulate things, being able to wash your mouth out Roger reverse engineer. These things are important to cumulative innovation which is supposed to be justification for intellectual property laws. 

The two areas that I want to then talk about is particular instances here are open source software. We have the noises being made by one or two large corporations that are all about proprietary software that open source software is somehow unreal that everybody is like Richard Stallman that everybody is an extreme leftwing socialist who has got no sense of a real economy of the way the world really works.

Well I am sorry it is not like that. The open source initiative is quite strongly comprised of people who are believers in making in money and believers in having a straightforward economy that economists will understand, based on money and based on profit. They have no problem with these ideas. Richard Stallman does. His software foundation has an ideological bend about it. It is important that people understand that open source software is a functioning economy now.

Now unfortunately a great deal of damage is going to be done to this burgeoning form of market place as a result of the kinds of things that are embodied in Chapter 17. There are all sorts of complexities involved I’d love to have arguments about the kinds of license terms that are involved here but the critical point is that open source software doesn’t say throw away copyright, it says use the framework of copyright law somewhat differently in constructive ways which will end up with all of us being better off which will enable us to generate revenue streams in somewhat different ways from the way we used to but to generate revenue streams. 

The other part that I want to draw attention to is much less talked about and that is open content.  I feel this is the better term to use, Creative Commons gets used.

Open content has the benefits that it points out that there are similarities not complete identical relationships with open source of course but there are similarities in the philosophies and indeed in license terms. In this case the approach is all about making content available under relatively very liberal terms. Once again, it works within the framework of copyright laws, it says the broad ideas are good, it looks at various business models that is ways in which revenue can be generated based on the thing I own and based on the license terms that I apply to the product. 

The bottom two of these sub bullets here are completely orthodox mechanisms that economists can understand can very easily. It is all about immediate and direct reciprocity. That is to say I give you something now and you give me something back now, which is the primary way in which economists like markets to work because it is really simple to model them and the mathematics doesn’t work out to be too complicated. 

There are some extremely important happens of reciprocity that don’t fit that model and indirect reciprocity where you give some value to somebody and get some value from somebody else instead.  You see lots of circumstances in which we actually do it, it is a pattern which gives rise to an important business model in open content and similarly to third reciprocity where I give something to somebody but I don’t’ actually receive value in return for quite some time. Once again there are quite a few circumstances when this happens currently in the economy.

Economists try to ignore them and try to push them away to one side. They are normal described economics. Open content is to a considerable extent about these things. I was going to talk about briefly about the ideologies and placing people in locations, it is all useful to classify bodies but I think the important point to appreciate here is that public domain clearly is going to be a major difficulty because it runs out of control very quickly.

It is difficult to structure effective economies of public domain, let alone proprietary content is got enormous problems about it, especially if the power of copyright owners are strengthened but there is an extremely wide range of possibilities of open contents which allows the possible powers of business moguls to be implemented only if these problems are discovered. There are many licensing choices that are need to be made, there are many active 'open content' licensing schemes around and the Centre is going to be launching in a couple of weeks time the Free for Education license from AEShareNet.

We have been around a long time and so NSW copyright license predates both the US version and the Australian adaptation of the Creative Commons, which has been launched quite recently. … These are very important and there are activities which need to be watched. The problem is that we are undermining all these things if we were to implement the Chapter 17.

There is another point that I could make: it is about the social and cultural aspects. I think several of these points have already been made by other speakers. Australian society as well as its economy would be seriously harmed if our parliamentarians were foolish enough to actually pass the changes required by the FTA.