Australian Internet Law – Breach of Copyright – File Sharing Is it a good policy to apply criminal penalties to file-sharers?

Introduction

            The Internet has to be one of the most life changing inventions of the twentieth and twenty-first century.  All of a sudden anybody with a working computer, a modem and a phone line can have access to more information than could ever be held in a bricks and mortar library.  The possibilities that lie behind the use of all that knowledge are endless and so the problem with copyright infringements and file sharing became a hotly debated topic under Internet law, as users on an international scale saw the Internet as a means to cash in on the sale of “other people’s works”. 

            The concept of file-sharing first hit the media when it was found that music files were being uploaded to websites, and then being available as a download to users for a subscription or even for free.  If this little scam had remained small scale then there was a strong possibility that the whole concept would have remained “under-wraps”, but unfortunately (for the users) the scheme became so successful that major music corporations were noticing substantially lower sales figures for new songs released by popular artists.  Profit margins were being affected and music companies started getting flexing legal muscle over the whole file-sharing business.

            Given that the Internet has been largely perceived as an American entity for most of its life, the idea that Australia would need legislation to prevent the pirating and selling of “other people’s works” seems a little unnecessary.  After all Australia only has a small population in relation to somewhere like the United States, or even places like India or China, both of which are boasting a growing use of Internet services. It would be easy to assume that even if a few Australian users were managing to make a few dollars selling subscriptions to sites that host protected works, or even providing websites that provide free download facilities, surely in relation to the scale of the problem experienced in the United States for example, spending time and resources on implementing and regulating Internet usage in relation to file sharing and copyright infringement seems a little unnecessary in Australia.

            One of the major flaws with this line of thinking, excusing the legal ramifications for the moment, is that the very nature of the Internet does mean that countries like Australia do need their own Internet legislation.  The Internet has opened the door to a global marketplace, where people from outback Australia can now access products from around the world.  The term “free download” is one of the highest ranked search terms on two major international search engine sites (http://www.google.com and http://www.altavista.com)[1] as users search for the best bargain of all – free goods. So it is just as likely that a person from rural Australia can be just as capable of setting up their own file-sharing system with remote users, as anybody else with a computer could do.

            Legally Australia does have some Internet legislation in place, but traditionally despite there being a provision for charging copyright breaches under criminal law, for the most part the few cases that have been tried in Australia have been classified as civil cases.  A sample of these cases will be discussed later in this paper.  Before moving on to that issue though it is important to define the extent of current Australian law with regard to file-sharing, copyrights and breaches of these laws.  Then this paper will cover a sample of existing cases that have already been through the Australian legal system.  Following that will be a brief section on the implications of criminal penalties before a discussion section looks at the question, “Is it a good policy to apply criminal penalties to file sharers, or is there a better alternative?”

Defining the current situation under Australian law

            Before a comprehensive discussion can be had over whether or not criminal penalties are relevant or appropriate for people who breach or abuse copyright legislation, it is important to understand what aspects of our current Australian Internet law are already in place regarding this issue.  This part of the paper is split up into the following sections – Background to the problem, copyright law and file-sharing legislation.

Background to the problemThe basics of copyright law were established well before the electronic age.  In 1831 the United States copyright law, which previously applied to written and painted works only, was extended to include “musical compositions in traditional notation”[2].  As technology started to improve so to did the copyright protection laws, especially in Europe and the United States.  Since Charles Edison invented the first ever “talking machine” in 1877, with the first music radio broadcast being played in 1906, legislators in the United States and the United Kingdom started addressing how copyright legislation could ensure that an owner’s right to copy, sell and modify their own works was not impeded either technically or financially by “other people” using this same information and/or technology in such a way as to detract from the owners right to make a living from his or her own invention[3].

            The Australian Copyright Act was first established in 1912 and was basically a copy of the UK copyright Act 1911.    By 1926, as the capacity send radio waves for user entertainment was increased through new technologies, the Australasian Performing Right Association Limited (APRA) was founded.  By 1934 the first copyright breach case was held in the UK (Gramophone Co v. Cawardine & Co) which resulted in radio broadcasters having to pay owners of music and public performances[4].

            By the 1980’s home computer usage was starting its slow growth in popularity and the first Compact Disk player (CD) was invented.  By 1982 companies such as Phillips and Sony were launching their first music CD’s although these first disks did not contain any form of copy protection software.  By 1985 CDs were being put in home computers.  The start of the 1990s saw an increase in storage technology and this new technology gave rise to further amendments in law including the American Audio Home Recording Act (AHRA) in 1992 and the launch of the Internet Underground Music Archive in the same year. In 1998 Emusic.com was set up as the first website ever to sell music in MP3 format online[5].

            The new millennium saw the increase in court cases, especially in the United States concerning the issue of copyright breaches.  MP3.com was made to pay more that $250 million to Universal Music Studios, and the heavy metal group Metallica sued a file sharing service, Napster for damages after their music was being distributed by the file-sharing service.  In Australia the year 2000 saw the Commonwealth Parliamentary report on “Copycats: enforcement of copyright in Australia”, and two new pieces of legislation, the Australian Copyright Amendment (Digital Agenda) Act 2000 and the Australian Copyright Amendment (Moral Rights) Act 2000.   In 2003 an Australian peer-to-peer MP3 site was closed down through legal investigations, and Sony Music Entertainment (Australia) Limited sued Australian universities over the issue of student file sharing.  After the 2005 US Supreme Court ruling that showed that distributors of file-swapping software could be held liable for copyright infringement, in Australia Stephen Cooper from MP34free.net and the Australian ISP Comcen was found guilty by the Federal Court for breaching Australian copyright and internet law simply because they had on their website links to sites that were providing pirated sound recordings[6].

Copyright Law – Australia

            As seen in the above section the first Australian copyright law was established in 1912, and was largely based on similar laws in the United Kingdom. Since that time, and particularly since technology improvements have increased the accessibility for some home users to music and other works covered by copyright, legislation has been struggling to keep pace with the new methods in which an individual user or company could breach copyright legislation.  In April 2004 the Australian Copyright Council put out an information sheet (G70, 2004) that gave the general public an idea of what the copyright standards were for copying MP3s, CDs and audio cassettes, especially music files.   In particular the fact sheet noted that;

·         “There is no general right for individuals to copy recorded music, even from a CD you own.

·         There is no general right to copy copyright material for personal use (or fair use right) under Australian law.

·         Ownership of a physical item (such as a CD) does not give you the right to make copies (including copying into digital or other format).

·         There is no general right to copy recorded music from the Internet without the copyright owner’s permission”[7]

The fact sheet went onto explain that for each different song on a music CD for example there were more than one copyright consideration to be made.  For example one single song track on a CD can have the lyrics to the song owned by one person, the actual music of a song owned by another and the sound recording itself owned by yet another individual or company.  Any purchaser of a music CD has only purchased the right to listen to that particular selection of song(s) for their own private use.  Permission needs to be granted by the copyright owner if the CD purchaser wanted to copy that CD, perform “a substantial part” of a song on the CD, communicate “a substantial part” of a song in a public domain which includes the Internet, or wants to adapt “a substantial part” of a song track or whole CD for another use, such as background to an advertisement or similar.  The term “substantial part” is one ambiguous area of the copyright legislation as the term means, under this act, “[any] part that is important, distinctive or recognizable.  A part may be important or distinctive even if it is a small part.  A few notes of music, for instance a ring tone for a mobile phone, or a sample used in a rap song, may be substantial in the copyright sense”[8].

            The Australian Government, Attorney General’s Department put out a more recent overview of copyright law in Australia[9] in their short guide published in June 2005.  This publication made four further distinctions to the definition of copyright law, namely the idea of copyright is an intangible product and that copyright owners can also have a number of “non-economic” or moral rights.  Copyright has to be considered separate and “distinct”[10] from physical property and finally copyright is considered part of intellectual property laws.   This means that copyright has similar legal frameworks as patents[11], trademarks[12], designs[13] and plant breeders[14].  The Copyright Act 1968 is the applicable legislation that governs all forms of copyright works including all forms of literary works, art, songs, and also timetables, databases and computer programs. Copyright can also be granted on plans, photographs, engravings, blueprints maps and buildings or model of buildings.

            There are some things that are not covered by copyright.  Ideas, book titles and information as such cannot be covered by copyright.  This is an important distinction in law.  Say for example a person wants to write a new textbook on Calculus.  Much of the information contained in that book would have probably been included in other works, but previously found calculus equations can be included in this new book as the equations are considered information.  What copyright does cover is the way in which an author has created his/her own way of conveying the information.  An example given by the Attorney General’s Department guide on copyright is where two artists both set up to paint a canvas of the same waterfall[15].  At the end of the day they will have created two different renditions of the same scene, and both painters will own the copyright to their work – but no-one can own the copyright of the actual scene that they painted, in this case the waterfall.

There are some exemptions to copyright infringements, noted in the Australian Copyright Council Sheet, G70[16].   Music tapes and CDs can be use for research or study purposes without seeking permission from the copyright owner.  There is also a provision for “fair dealing” if the user wants to offer criticism, a review, news report or legal advice based on a work without breaching copyright.  In some cases educational institutions are granted the rights to copy and communicate material, but it must be proven to be for educational purposes and finally there are provisions under the Copyright Act 1968 that allow the government to use copyright material under certain circumstances[17].

On a final note before we finish this section it should be noted that the “Copyright Police” does not generally scrutinize certain acts that we do in our personal lives with our own possessions.  Although technically it is illegal under the Copyright Act 1968 to copy a stack of musical records onto a CD because it is changing the “format” of the work and it also involves making a copy of the records, and permission should be sought from the record company that produced the record, it is unlikely that permission would be refused if the copy was made for an extension of personal use.   It is interesting to note that under the Copyright Act 1968 it is also a breach of copyright if a person makes a back-up CD of either programs on a computer, or musical CDs[18]

File Sharing (P2P) Legislation

            In November 2003 the Australian Vice-Chancellors” Committee (AVCC)[19] completed a report on the legal perspective of P2P file sharing, based on the fact that many film and music companies were trying to prevent the P2P practice through the Justice system.  Whilst the report acknowledged that for the main part the pressure was being put on universities, especially in the United States, there was evidence that similar problems were being experienced in Australian universities.  According to the introductory letter covering the report John Mullarvey (CEO-AVCC) wrote, “In Australia, three universities have been subject of Federal Court action by the music industry with a view to seeking evidence that students have been using university systems to engage in unlawful trading of music files”[20] and that “copyright liability…of university computer systems to engage in P2P file sharing is, potentially very significant”[21].

            So what is meant by P2P file sharing?  Basically what P2P file sharing software does is allow the transfer and sharing of information within a defined set of users without the need for a user to email another user.  Some of the more popular examples of the P2P software have been P2P systems put out by Napster, KaZaA and Streamcast.  Under these systems a variety of remote users could connect to an equally diverse number of file servers and exchange, download and use a wide variety of files for free.  Whilst Napster was a centralized system, in that all users logged into the same server, Streamcast and KaZaA used the multi-user, multi-server system approach which meant that users could download software, songs and games from another user’s computer, usually for free.

            According to the AVCC report using P2P software on its own did not constitute a breach of the Copyright Act 1968[22].  This was because users were generally granted a free license to use the software.  Also in cases where owner permission had been granted to allow copyright information to be transferred or shared, then that too was legal under the copyright act.  In the case of universities an example of allowed P2P file sharing could be when a tutor has allowed copies of his lecture (that he would own copyright for) to be placed on the university server for later access by his students.  In a case where a student had uploaded a completed assignment to a university server for comments and grading by the tutor, the permission of the copyright owner (in this case the student) would be implied. The main concern with regards to copyright infringement occurs when information is made available to one or more users without the permission of the owner of the file in question.  According to the AVCC the act of placing copyright information on a server alone is enough to breach copyright laws in terms of the copyright owners right to “communication to the public” and a breach of reproduction rights as downloaded files are generally copies of the original work[23].

            Alan Davidson of the University of Queensland noted in his article published June 2005 that, “more than 2.7 billion songs, movies and other files are shared online annually.  Most transfers are facilitated using peer-to-peer (P2P) software.  A significant number are transferred without the consent of the copyright owners”[24].  The article noted that Australian copyright law already provided a defence of fair dealing, but as Davidson noted this defence was not applicable for individual users.  Davidson also commented on the fact that Australian copyright law did differ from United States fair use laws as in the United States it was possible for individual users to have a limited number of copies of copyright works.  In Australia any person that participated in file sharing, including universities were subject to civil and even criminal penalties in some cases[25].

Australian Case Law

            The Australian Internet Law site has highlighted six different court cases concerning copyright issues, between 2001 and 2005.  The most notable of these were Kabushiki Kaisha Sony Computer Entertainment v. Stevens (2001)[26], Kabushiki Kaisha Sony Computer Entertainment v. Stevens (2003)[27] and Kabushiki Kaisha Sony Computer Entertainment Inc (t/a Sony Computer Entertainment Inc) v. Ball & Ors (2004)[28].  In each of these cases Sony alleged that Stevens in two cases and Ball & Ors in the other had sold computer games and had infringed Sony’s copyright in relation to technology embedded in Playstation disks that were used to prevent the illegal copying of these disks.  The technology in question was considered a “technological protection measure” as noted in the Copyright Act 1968.  In the case of Stevens, Sony also alleged that the defendant had sold a device that “had not purpose or use, or only a limited purpose or use, other than circumvention of the ‘technological protection measure’ incorporated in the computer games”[29].  Sony finally alleged that Stevens “would have known, or could have reasonably known, that the devices that he sold would be used to circumvent the technical protection measure incorporated in the computer games”[30].  Specifically the Sony Corporation was suing Stevens (and later Ball and Ors) under section 116A of the Copyright Act, which reads,

                     “(1) Subject to subsections (2), (3) and (4), this section applies if

            (a) a work or other subject-matter is protected by a technological protection measure; and (b) a person does any of the following acts without the permission of the owner or exclusive licensee of the copyright in the work or other subject matter; (i) makes a circumvention device capable of circumventing, or facilitating the circumvention of, the technological protection measure;  (ii) sells, lets for hire, or by way of trade offers or exposes for sale or hire or otherwise promotes, advertises, or markets, such a circumvention device; (iii) distributes such a circumvention device for the purpose of trade, or for any other purpose that will affect prejudicially the owner of the copyright; …; and (c) the person knew, or ought reasonably to have known, that the device or service would be used to circumvent, or facilitate the circumvention of, the technological protection measure. (5) If this section applies, the owner or exclusive licensee of the copyright may bring an action against the person. (6) In an action under subsection (5), it must be presumed that the defendant knew or ought reasonably to have known, that the circumvention device or service to which the action relates would be used for a purpose referred to in paragraph (1)(c) unless the defendant proves otherwise.”[31]

These examples show the variety of ways that a person can be held liable for breach of copyright. Not only are those writers who “copy and paste” being targeted by this amended legislation, the Copyright Act 1968 has now been amended to cater for a whole range of applications that could arise from thoughtless or careless computer usage.

Criminal Penalties

            In June 2001 the Australian Law Reform Commission Conference held at Sydney[32] addressed what was considered a rise in the use of civil and administrative penalties supplementing criminal law.  At the time the paper was quoted as saying “the Government is committed to having in place the best possible mix of legal sanctions to serve all situations.  To help achieve this we need to get the balance right between civil and administrative penalties and criminal laws…[this] means that criminal laws are used when they represent the best legal option”[33].  By 2004 the Minister for Justice and Customs had issued a framework for what it considered civil and criminal offences[34].  According to this report the main reasoning behind the differences between civil and criminal offences were that in the case of a criminal offence, the punishments resulting from a conviction was more inclined to be a deterrent against future offences.  However the document then went on to note a number of considerations that should be determined before a decision was made as to whether an offence should be tried under criminal or civil legislation.  These considerations included the nature of the crime and what actually needed to be “deterred”; how a definition might fit into an overall legislative structure; did the conduct actually harm other people or contravene societal values and was a criminal conviction warranted in light of the offense and the situation surrounding the offence.

            The paper also noted the implications of a criminal conviction (as opposed to a civil conviction).  For example someone that is convicted of a criminal offence is not able to hold public office in later life; this person would also be forced to disclose the conviction when applying for jobs, or other situations where security and honesty were an important issue; and that a convicted criminal was prevented from traveling to many foreign countries because of a criminal conviction, or in other cases be banned from becoming a director of a company[35].

“Is it a good policy to apply criminal penalties to file sharers, or is there a better alternative?”

            James Tobin[36] noted that the problem with copyright on the Internet was similar to a very small David fighting a very big Goliath.  The analogy came from a discussion on the fact that with written or printed works at least the author did have the ability to hide their work if they wanted to keep it private, but Tobin explained that as the Internet continues to grow at a fantastical rate, the ability to “hide” information was becoming harder to do.  Tobin wrote, “it takes one person, any person with a scanner or burner and appropriate software to make information in their hands available to millions of people almost instantaneously”[37]. This growth of Internet usage did pose a valid threat to copyright legislation, especially when copyright is based (according to Tobin) on having physical ownership of a piece of property.  The Internet was in a sense eroding the level of control a person could have over their own piece of work, which would in turn reduce the incentive for a person to create their own products, which in turn would adversely impact the growth of the Internet. Tobin calls this the paradox of the Internet.

            Libby Baulch[38] felt that there was some pressure for Australia to conform to the American methods of dealing with copyright infractions when she identified copyright issues that were standing between the Australia and America Free Trade Agreement.  In particular she noted that the United States had wanted Australia to consider ratifying the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty.  Other issues noted included the option to “transfer and exercise rights”; an extension of the term of protection of works based on the authors lifespan (authors life plus 70 years) and a consideration of liability of Internet Service Providers[39].

            One major difference between Australian and American copyright law is the concept of “fair use”.  Remington[40] noted that in the USA there were six different exemptions considered fair use of copyright works – criticism, comment, news reporting, teaching, scholarship or research; plus there were other situations where the fair use clause could also apply such as “the use of space shifting of previously purchased sound recordings to different platforms”[41]. Despite this relatively lax attitude to the copyright problem, it would seem in the United States at least that whether file sharing through P2P software is a breach of copyright or not is determined on a case-by-case basis, although Remington noted that many cases had held the decision that P2P file sharing could not be considered “fair use”[42].

            But back to the Australian copyright issue – should students and the like that share information using P2P file sharing technology be criminally convicted under the Copyright Act 1968?  Obviously the law is clear in that it is not illegal for an individual or group to use P2P software providing the user has been granted a license for use, but surely allowing the use of the software, and then convicting the user on receiving, copying or changing the format of some original work that has been shared through the software is a bit harsh.  Surely if the Australian Justice system, or any other justice system for that matter wanted to make an issue about copyright protection then surely it would be more productive to ban the use of the software that facilitates so many breach of copyright cases.

            On the other hand if the use of P2P file sharing technology cannot be banned or made illegal, and given the advantages of using P2P software is to universities it shouldn’t be, then maybe there needs to be a change in how the copyright law is administered.  It has to be remembered that the main reason why there was such a ruckus about copyright protection only happened when major music companies realized that so many of their new products could be sourced online as a free download.  However in this respect the increase in technology that resulted in this problem can now be the same tool that can reduce this same problem, especially in relation to music files.  Many music companies now have websites of their own and are making money through this inexpensive avenue of product distribution thanks to the increases in computer technology that made this situation possible.

            Should file sharing become a criminal offence – personally I don’t think so.  Given the parameters for determining a criminal offence noted earlier in this paper I think it would be a crying shame if a student had his or her entire life ruined by a criminal conviction incurred whilst at university through his or her file sharing activities.  I do think it is important that criminal penalties for other crimes should remain firm and act as a deterrent to future offending, but in the case of file sharing I don’t think for the average individual user that there is much in the way of profit to be made out of the actions, and that in many ways P2P file sharing could be a way in which gaming, software and music companies could actually turn the craze to their own advantage.  By allowing certain demo software packages, sample music and video clips and demo games to be downloaded through P2P software could become one of the cheapest methods of advertising other products not available in the free domain.  Given the huge number of resources and costs involved in policing Internet law among individual users, seeking a way to profit out of the P2P file-sharing situation may be the only positive way this problem can be resolved.

References

Attorney General (June 2001).  Penalties: Policy, principles and practice in Government Regulation, Paper presented at Dockside Conference Centre, Sydney, June 8, 2001.

Australian Copyright Council (April 2004).  Music: Copying MP3s, CDs and audiocassettes. Australian Copyright Council, Information Sheet G70

Australian Government, Attorney General’s Department (June 2005).  Copyright law in Australia:  A short guide.  Commonwealth of Australia Publication

Australian Vice-Chancellors’ Committee (November 2003).  Peer-to-peer file sharing:  The legal landscape.  Retrieved from the AVCC website at http://www.avcc.edu.au, October 2005.

Baulch, L., (October, 2003).  Copyright issues for the proposed Australia/US Free Trade Agreement.  Australian Copyright Council, retrieved from http://www.copyright.org.au October 20, 2005

Caslon Analytics, (2005). “Caslon Analytics Profile File-sharing” accessed online at http://www.caslon.com.au/filesharingprofile4.htm, October 20, 2005

Davidson, Alan. “Peer-to-peer file sharing online..”, PROCTOR 25 (5) June 2005: 37-38, http://search.informit.com.au.mate.lib.unimelb.edu.au/fullText;dn=20052519;res=AGISPT 20 October 2005

Minister for Justice and Customs (February 2004).  A guide to framing commonwealth offences, civil penalties and enforcement powers, Attorney General’s Department.

Remington, M.J., (2003).  ACE: Background discussion of copyright law and potential liability for students engaged in P2P file sharing on university networks.  American Council on Education, retrieved from http://www.acenet.edu October 20, 2005

Tobin James. “Monkey business..”, Intellectual property forum:  Journal Of The Intellectual Property Society of Australia and NZ (57) June 2004 : 30-45, http://search.informit.com.au.mate.lib.unimelb.edu.au/fullText;dn=20042971;res=AGISPT 20 October 2005