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The ADA Monthly Intellectual Property
Wrap-Up
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A monthly summary of recent legislation, cases, reports and other events
relating to intellectual property and the public interest, published by the
Australian Digital Alliance.
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January
2004
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[1] About this Publication
[2] Copyright and the Fast Forward
button
[3] Italian decision on "modchips"
[4] Spam Wars cont.
[5]
99c song: the online music equation
[6] I can copy this,
right?
[1] About this publication
This summary of recent
IP (but chiefly copyright) happenings of relevance to Australia is published
every month by email and on the Australian Digital Alliance website at
http://www.digital.org.au/issue/issue.htm. If you have
any suggestions as to what should go in the next issue, please let Miranda Lee
know by email: (mlee@nla.gov.au).
Nothing in this publication constitutes legal advice.
[2] Copyright and the Fast Forward button
The
controversial issue of the right to skip commercials has been left unresolved
after a US Federal Court dismissed a suit over the issue in mid January.
The issue arose in October 2001 when 28 entertainment companies
launched a lawsuit against SONICblue and its wholly owned subsidiary ReplayTV,
arguing that using their newly develped digital video recorder (DVR) is against
the law. The complaint asserted a variety of copyright infringement claims,
including contributory and vicarieous copyright infringement based on the sale
by RePlay TV of a digital video recorder ("DVR"), which enabled consumers to
make digital copies of television programs in order to skip commercials and
which may be used to send copies of televised programs to other RePlay TV
owners via internet connections (the vicarious and contribuotry infringment
claims were based on the alleged direct copyight infringment committed by the
owners of the RePlay TV DVRs).
Subsequent to the filing of those
claims, SONICblue filed for bankruptcy and sold its assets to another company,
which sold the DVRs without the two features which gave rise to the action.
During this time, top entertainment industry executives began to publicly claim
that people who don't watch television commercials are "thieves", asserting
that consumers were committing copyright infringment when they used devices
such as DVRs.
Following SONICblue's bankruptcy, in April 2003, a class
action was launched by five owners of RePlay TV DVRs who sought declaratory
relief regarding their rights to use their DVRs.
The class action was
launched on the basis that the legal uncertainty of the use of DVRs impaired
the value of these devices to the current owners and in the resale market. The
class action claimed that the widely circulated public accusations of "theft"
made by the entertainment compies, and the ensuing threat of invasion of
privacy and litigation had created a loss of beneficial use of their DVRs based
on possible liability for infringement through use of DVR features, namely
ad-skipping, and space shifting features.
The practice of
"time-shifting" had been clarified to be lawful in the landmark decision
Sony Corporation of America v Universal City Studios (1984) when the US
Supreme Court considered the challenge brought by entertainment producers
against the manufacture and sale of home videotape recorders ("VTRs") on the
grounds of copyright infringement. The court in Sony ruled that time
shifting merely allowed viewers to watch material at a time more convenient to
them and that this was a noninfringing use outside of copyright owners'
monopoly. The Sony case did not however consider the practice of
ad-skipping (which necessarily involves time-shifting) although VTRs enabled
the practice. The plaintiffs in the class action sought to clarify the public
assertions being made by media executives that imply watching commericals of
time-shifted programs was a condition of such use; "it's the ad skips…it's
theft…..Any time you skip a commercial or watch the button you're actually
stealing the programming"(Cableworld, 29/4/02).
The class action
also sought to clarify that "space-shifting" - the practice of reproducing
copyrighted works that have been lawfully acquired in order to experience them
in other locations is within the scope of the U.S. "fair use" doctine.
Due to a rash of negative publicity and unexpected controversy in
December, the entertainmnet companies in the original action dropped their suit
and have promised not to sue the DVR users. In January, the federal court
accordingly dismissed the class action after determining that the scenario
hence failed to meet the "case or controversy" requirements (or lack of subject
matter jurisdiction) for consideration by the court. The dismissal comes as a
disappointment to many who had hoped gain some insight to the intense and
controversial debate which rages on between the rights of copyright owners to
protect the value of their works and the rights of consumeres over freedom of
access in the digital age.
The court documents are accessible from the
EEF
website in their case archive.
[3] Italian decision on "mod
chips"
In January, an Italian Court handed down a decision which
asserted the legality of using "mod chips". The decision was strongly rooted in
consideration of consumer rights and the undesirability of supporting
monopolistic practices. The Italian court proceeded from the basis of an
earlier decision in September 2003 which categorised Sony Xboxes and
playstations as computers rather than merely game consoles (this was strongly
supported and submitted at the time by Sony- consoles sold in the in the EU are
subject to custom duties while computers aren't subjected to this tax).
In this decision, the court characterised the imposition of artificial
limitations to render playstations unable to DVDs and discs not zoned for
Europe as "manufacturers who sell not-fully-working hardware to be only used
the way they like".
The court went on to assert that the mod-chip's
primary function is to avoid monopolistic stakes and better use the playstation
rather than to read illegal copyrighted material, on the basis of the numerous
capabilities mod chips enable that do not infer copyright infringements.
The court concluded that mod chips were legal because the weight of
consumer rights far overwhelmed the purely commercial basis on which Sony
handicapped playstations units. In closing, the court drew an analogy to Sony's
market behaviour; "this is as if FIAT would sell a car forbidding the use to
non-EU citizens and on out-of-town roads".
The Italian contingent of
EFF has translated the
decision.
[4] Spam Wars cont.
Australia has joined an
international operation, initiated by the US United States Federal Trade
Commission (FTC) aimed at decreasing spam. Operation Secure Your Server
involves 37 agencies in 26 countries; in Australia, the Australian
Communications Authority (ACA) and the Australian Competition and Consumer
Commission (ACCC) are both participating directly in the initiative.
As
part of the initiative, the participating agencies have identified tens of
thousands of owners or operators of potentially open relay or open proxy
servers around the world. The agencies will work now at informing and
encouraging these operators and users to shut down 'open relays' and 'open
proxies' that for the most part unknowingly facilitate spam. Open relays and
open proxies allow the senders of spam to route e-mail through servers which
disguise their identity and evade detection. These unsecured servers make it
possible for spammers to send large volumes of unsolicited emails which not not
only overload servers, but also could damage an unwitting business' reputation
if it appears that the business sent the spam.
The participation of the
ACA and ACCC forms part of a multi-layered effort to combat spam. In December
last year, the Government enacted The Spam Act (see
Dec IPW), to come
into force on 11 April 2004, which placed legislative reins on businesses using
electronic marketing techniques.
However, international cooperation is
essential to solve what is essentially an international problem (most spam
received in Australia originate from overseas). Australia has been calling for
countries to join in a combined international effort to fight spam through
entry into Memorandum of Understandings (MoUs). MoUs are essentially agreements
between parties to make best efforts to achieve agreed objectives without
binding parties to particular actions. Although MoUs create "weaker"
obligations than treaties, they have the benefit of being able to be negotiated
and implemented quickly and are suited to dealing with matters that are
constantly and quickly evolving. MoUs are already used in the digital
technology environment to underpin several international internet structures,
such as IP address space.
In October last year, Australia signed a spam
MoU with South Korea, and since that time and several other countries have
approached Australia about signing a similar agreement. Currently, a
multilateral approach to agreements is being discussed with the hope of
simplifying the establishment of international cooperation principles for
locating and dealing with spammers and creating an alliance of "spam-free"
nations. A number of sticky issues will however need to be dealt with, first
and foremost the differing legal regimes in each country.
Spam Act 2003
can be found in the Australian Communications Authority website.
Australia-Korea
MoU on spam from NOIE website.
[5] 99c songs: the online music
equation
Over the past year, a swathe of companies headed first by
Apple's iTunes made individual songs available
for purchase at 99c per download. The move has achieved considerable momentum
in the last 12 months and the music market has since seen the first sign of
hope since its downward slide over 5 years ago.
The companies offering
download services still have some lengths to go to win back users who are
downloading song music for free- currently the industry is considering the
exploration of alternative pricing structures in authorised download services
in order to hasten the recovery of the market. To date, 99c has been the
industry standard adhered to by nearly all the services on the market,
moderately promising market response suggests that there may be scope for
mainstream migration given some further encouragment.
Having
successfully broken through the biggest barrier - the culture shock of enabling
music buyers to choose to download from licensed sites what they could only
previously obtain through illegal sites- the music industry must now sort out
the legal complexities of buying and selling music online before paid downloads
services will produce profits on the scale that these companies enjoyed in the
past. The first obstacle is that of sorting out the performance and publishing
copyrights; contracts between musicians and labels signed before about 1998
simply do not contemplate royalties for Internet music sales, or the digital
rights, so contracts must be renegotiated for permission and rates with all
parties for various publishing, performing and recording rights. In addition,
there is the politics of marketing decisions, artists' egos and negotiating
power plays which currently fragment the market.
Only after negating
these problems will the music industry have hope of creating a friendly and
accessible interface for would be customers. At the moment online buyers who
search any of one of the current offers by iTunes or Napster, BuyMusic.com,
Musicmatch, Rhapsody will be unlikely to find everything they want given that
the rights to the material may lie with different recording companies.
Unauthorised sites like KaZaa or Limewire however is likely to have not only
all of artists but film clips, interviews and other material for free
downloading.
Other initiatives such as or
MUDDA - "Magnificent Union of Digitally
Downloading Artists" -- a new alliance launched by Peter Gabriel and Brian Eno
is also jostling the presumption that the reins will return to recording
companies in the digital environment. MUDDA enables artists to sell their music
online instead of only through record labels, allowing artists to set their own
prices and opening up new options for the delivery of music.
[6]
I can copy, right?
Yes, you can copy this publication. Feel free
to send it to friends or colleagues, print it off or even archive it on your
website provided that all text is included or, in the case of an excerpt,
appropriate credit is given
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