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
http://www.cyberlawcentre.org/fta/
Contents
Host DAVID VAILE, Baker & McKenzie Cyberspace Law& Policy
Centre
2. PATRICK FAIR, Baker & McKenzie
4. ANNE FLAHVIN, Baker & McKenzie
Good evening, I'm David Vaile, executive director of the Baker & McKenzie Cyberspace Law and
Policy Centre of the
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
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
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
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
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
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
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
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
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
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
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
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
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.]
Answer:
... 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 ...
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
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
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
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
The FTA was sold to us as an exercise in uniformity bringing
our copyright law in line with
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
...
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
It is just inconceivable why we are pushing this line on
Australian when our own copyright owners in the
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
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
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.
GG:
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.
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
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
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.
---------------------------------------