The Abbott government cares little for our sovereignty

Image source: www.dfat.gov.au

Sovereignty is the quality of having power over a geographical area. Traditionally, this has referred to governments being able to exercise political power and control over their jurisdictions.

In the recent election campaign, Tony Abbott made much of the supposed threat to our sovereignty from people seeking asylum in Australia. The Abbott government even went as far as to name its refugee policy "operation sovereign borders" and militarise the operation by appointing a 3-star general to oversee it.

However, while desperate people seeking asylum on leaky fishing boats are characterised as a threat to our sovereignty worthy of a military response, a true threat to Australia's sovereignty has quietly become government policy.

On the eve of the last election the Coalition quietly released its trade policy [PDF] which significantly changed the previous government's approach to investor state dispute settlements (ISDS) in trade treaties. ISDS' are clauses which allow multinational corporations to sue national governments that are signatories to a treaty for passing laws that are harmful to the interests of these corporations. These cases are not heard in national courts but in tribunals that are often presided over by representatives of multinational corporations - hardly independent arbiters.

This effectively allows multinational corporations to over-ride government's powers effect legislation without the threat of significant legal action. Already, Australia is being sued in Hong Kong by tobacco companies for passing a law to enforce  plain packaging of cigarettes. This law was passed by both houses of the Australian parliament and confirmed by the High Court, however, the ISDS in a bilateral treaty now has the potential to penalise the Australian Government for performing its democratic function.

The previous government rejected the use of ISDS' as not being in the national interest, however, the Abbott Government's trade policy remains open to the use of ISDS'. The Abbott Government has stated that it is keen to conclude free-trade agreements, including the Trans-Pacific Partnership (TPP) - a treaty negotiated in secret that contains ISDS'.

Leaked sections of the TPP indicate it will potentially undermine fair access to copyright material and limit environmental protection laws, public health measures and the Pharmaceutical Benefits Scheme. Governments will be limited to legislate in these areas by the threat of serious financial penalties - even if it is in the national interest to legislate.

At the recent APEC conference Malaysian Prime Minister Razak characterised the TPP as:

"impinge[ing] fundamentally the sovereign right of the country [Malaysia] to make regulation and policy''.

This curtailment of a government's sovereign power represents not only a threat to democracy, but a fundamental shift in political power from the citizenry to multinational organisations.

When the Coalition said that 'Australia was open for business' what they really meant was that 'Australian sovereignty was for sale'.

Linux.conf.au 2013 - Copyright's Dark Clouds

LCA2013

This year I spoke at linux.conf.au on the Optus v NRL case and it's implications for cloud computing and the video is now available:  Copyright's Dark Clouds

There are a couple of other presentations on activism and politics, that I'd also recommend watching:
Sky Croeser's  Free and Open Source Software and Activism
and
Pia Waugh's  Geeks Rule Over Kings - Distributed Democracy

There are also plenty of interesting technical talks which can be found at http://mirror.linux.org.au/linux.conf.au/2013/mp4/

Enjoy!

Optus v NRL: Copyright's Dark Clouds

The Full Bench of the Federal Court recently handed down its decision in the ongoing Optus TV Now case (National Rugby League Investments Pty Limited v Singtel Optus Pty Ltd [2012] FCAFC 59). The Full Bench overturned the findings of Rares, J in the Federal Court and their conclusions in this appeal will have serious implications for cloud computing in Australia.

In this post, I will only be examining one of the issues that were examined by the court - the issue of who "makes" a recording.

In Singtel Optus Pty Ltd v National Rugby League Investments Pty Ltd (No 2) [2012] FCA 34, Rares, J found that the subscriber to the TV Now Service was the principal who "made" the recording. This is important because it releases Optus from liability for primary infringement and brings the subscriber under the protections of s111 of the Copyright Act (1968) which allows the "Recording [of] broadcasts for replaying at more convenient time".

According to Rares,J at [63]:

"the user of the TV Now service makes each of the films in the four formats when he or she clicks on the “record” button on the TV Now electronic program guide. This is because the user is solely responsible for the creation of those films. He or she decides whether or not to make the films and only he or she has the means of being able to view them [...] The service that TV Now offers the user is substantively no different from a VCR or DVR."

At [65]:

"[...] The legislative materials do not support the rightholders’ argument that, in effect, the user could only utilise technology or equipment with which he or she had some greater connection than the “record” button on the TV Now electronic program guide"

Rares, J approached the TV Now services as an analogue for already existent non-infringing technologies and recognised that the exception in s111 was to allow for technological advances, arguing at [77] that: 

"The value of the exception created by the Parliament, that is designed to give greater flexibility to individuals so as to take advantage of technological advances, would be seriously eroded if a service provider, who has structured a service as carefully as TV Now, had to lead evidence about each user’s individual purpose on each occasion of use"

These arguments were rejected by the Full Bench and their findings, if brought to their logical conclusion, would erode the usefulness of s111 to encourage technological advances.

At [58] the Full Bench placed the emphasis on the producing of the "physical thing" (ie. the recording), rather than the actions that caused the "thing" to be made.  This, by definition placed greater emphasis on the service provider rather than the subscriber as a "maker", rejecting Rares,J's argument that the user did not need a "...greater connection than the record button..." (Singtel Optus Pty Ltd v National Rugby League Investments Pty Ltd (No 2)[2012] FCA 34 at [65].)

The Full Bench stated at [59]:

"We merely note here that a subscriber’s clicking on a button labelled “record” may trigger a sequence of actions which result in copies of a selected programme being made, but it does not necessarily follow that the subscriber alone makes that copy."

Furthermore, the Full Bench rejected the analogy with already existent technologies stating that the "TV Now" system performs the functions of the Optus-subscriber relationship (albeit automated), not just the recording function, and stated at [64] that:

"is not apparent to us why a person who designs and operates a wholly automated copying system ought as of course not be treated as a “maker” of an infringing copy where the system itself is configured designedly so as to respond to a third party command to make that copy"

If this argument is brought to its logical conclusion, it would be extremely difficult for a cloud service provider with which an individual had a contractual relationship to allow their service to be used by that individual to make a recoding of copyrighted material. If they did, the service provider is likely to be the "maker" as it was in this case.

This argument pushes many different automated subscriber cloud-based services outside of the s111 exception. This ultimately erodes the utility of the exception in s111 and ultimately ties it to physical devices over which a user has possession and control and excludes any cloud-based subscription service which enables a user to use that cloud service to make a recording of copyrighted material.

The emergence of cloud-based services that allow access to recorded digital content, such as TiVo (EDIT: although this is not strictly a cloud based service, the problem comes from the mediation of commands by TIVO from the user to the device [thanks to @neatest for pointing this out]), are now under considerable threat from copyright holders and the danger is that investment in these innovative technologies will be stalled in Australia.

As has been pointed out repeatedly, hindering access to content is a major driver of copyright infringement. However, rightsholders have been extremely reluctant to engage with technology to enable that access, preferring to hinder technological advancement by litigation (and where that fails, legislation).

Technology companies have become extremely frustrated with the content industries, stating that they may as well be "talking to a brick wall". Content industries themselves seem to be content to rely on ever more draconian copyright laws to protect their ailing business models.

While unfilled consumer demand remains and consumer behaviour continues to change in response to technology, infringement will continue. Parliament must recognise that the law must adapt to these changes in consumer behaviour and to some degree accommodate those changes (while still protecting the interests of copyright holders). As Rares, J pointed out in his FCA opinion at [74], s111 was constructed to do exactly that. 

However, the interpretation of s111 by the Full Bench has eroded its usefulness and their construction of the section is backwards-looking, legalising old technologies while ignoring the new. Unless this construction is re-examined and widened in the inevitable appeal to the High Court, parliament must expand s111 to reflect the realities of modern consumer behaviour. If it does not, investment in new legal technologies that advantage both technology and rightsholder companies will stall. The inevitable result is more infringement and that benefits no-one.

Optus v NRL: Rightsholders vs Technology...again.

The Optus v NRL decision has thrown rightsholders into their usual frenzy of lobbying to protect their revenues from innovation. In summary the decision allows sports fans to use Optus' TVNow cloud services to stream Free to Air TV that they have recorded (often only time-shifting by a few minutes) through the time-shifting exception in s111(1) and s111(2) of the Copyright Act 1968.

As Rares,J found at [74] (emphasis mine):

"The purpose of the exception in s 111(1) and (2) was to accommodate, to some degree, the law to the realities of modern life. Copying for private and domestic use is so much a commonplace that it is not difficult to infer that a user who made a film, by clicking “record”, was doing so for such a use. Indeed, the rightholders did not suggest how anyone, for example, watching a broadcast or film of a football game or television program, on his or her mobile device or PC would be doing so for some reason other than personal pleasure or interest."

Of course, this finding has bought about the usual howls of protest from rightsholders and the attendant claims that the decision will be the end of sport as we know it - despite decisions in other jurisdictions (cited with favour in Optus v NRL) finding similar services to be non-infringing and their content industry continuing to be profitable.

The sports broadcasters seem to have found a sympathetic ear in the form of the sports minister Senator Mark Arbib. Concerningly Senator Arbib has not only used the  time-worn "think of the children" argument but has also intimated that "there were complex issues to consider before legislating, to ensure any laws were not overtaken by fresh technological developments." (emphasis mine)
Senator Arbib appears to be arguing that any law should ensure that any future technological innovation ought to be stunted by copyright law.

This is the typical position taken by a government that sees copyright as essentially an "industry problem" rather than a problem in the content market. The government's position is evidenced by the "secret" copyright meetings between ISPs and rightsholders to the exclusion of consumer interests and the government's apparent preparedness to acquiesce to international treaties that favour the interests of the US content industry.

Unfortunately the government continues to misunderstand the copyright infringement "problem" as an industry-related problem rather than one caused by an inefficient and over-regulated market which has limited consumers' access to reasonably priced legal content. Consumers are willing to pay for access to legal content and the ABC's iView service is a case-in-point recently capturing over 30% of the sources for downloading/streaming content.

Until the copyright infringement "problem" is re-cast as a problem with the market, rightsholders will continue their cat and mouse game with technological innovation and governments will be tempted to pass knee-jerk legislation to ban it.

As Rares,J pointed out, the law as it stands was passed to "accommodate [...] the law to the realities of modern life". It is these realities that have created the incentive for the market to innovate to enable content to be time and device shifted.

It is dangerous for governments to try to pre-empt market innovation by passing laws to further regulate an already over-regulated and highly inefficient market. In this case, it is particularly dangerous as the change to the law alluded to by Senator Arbib will attempt to curtail consumer expectations that are already widespread in the market - expectations that were previously codified in the s111 exemptions.

The result will be inevitable - just as P2P filesharing has become a statement of civil disobedience amongst certain internet communities - technological innovation to make time and format shifting available to the market will continue to expand regardless of the law. If the content industries refuse to harness the technology and give in to the demands of the market, it is not up to the government to prop them up with regressive regulation.

Linux.conf.au 2012 presentation: The harbour is no longer safe: AFACT v iiNet

This presentation examines the AFACT v iiNet cases. The presentation will draw on some of the ideas that I have written about in these previous posts:

• The harbour is not as safe as it looks; and
• AFACT appeals against reason

I also provide some analysis of several of the proposed solutions in the AFACT case and what their potential impact could be on end users.

This talk was presented at the 2012 linux.conf.au in Ballarat.

Obligatory top-10 tech predictions for 2012

I think there's some rule that if you're involved in technology, you have to predict stuff for the next year.

It beats me why, because everyone always seems to get them wrong - maybe the tech press wants a piece the kudos given to economists for making predictions which inevitably turn out to be incorrect.

Anyhow here's mine:

1. Apple will release another iThingy. Hipsters will buy it, regardless of the fact that it's only an incremental release on the previous iThingy. It's times like this I wish I had a Newton - so I could say: "I was using tablets before they were cool. Or even worked properly".
2. Android will continue to inexplicably gain market share, despite still not being able to crack the lucrative hipster market. Apple will continue to sue any android devices that look like they might - and lose. Hipsters will continue to prefer iThingys.
3. Windows Phone will continue to languish mainly because it's about as un-hipster as you can get.
4. Google Plus will continue to grow despite no-one actually admitting to using it. The tech pundits will continue to pronounce its failure until the first mainstream media outlet proclaims it as the new tool of choice for cyberbullying/cyberstalking/farmville and demand "something be done about it". After this, Google Plus will be a real alternative to Facebook.
5. Facebook growth will continue to slow. Pundits will continue to proclaim the death of Facebook. Facebook will still have eleventy billion members.
6. Diaspora will continue to be cool despite no-one actually admitting to using it, or indeed knowing what it is. 
7. Twitter will continue to grow in proportion to those that complain about it.
8. Rightholders will continue to push for more draconian copyright laws. Consumers will get better at using encryption.
9. The State will continue to try to crack down on <insert internet evil here> by proposing even more draconian laws. Citizens will get better at using encryption.
10. 2012 will be the year of the Linux desktop :)

There you have it - 2012, the year that tech will continue doing pretty much what it's done since 2006.

Of pizza and the privatisation of public policy

Pizza has been declared a vegetable.

The United States Department of Agriculture's (USDA) proposed food standards were undermined by a congressional spending bill that enabled pizza to be counted as a vegetable. The bill was the result of lobbying by the frozen food industry to ensure that pizza and chips would still be available for school lunches.

In addition the bill will:

• Block the Agriculture Department from limiting starchy vegetables, including corn and peas, to two servings a week. The rule was intended to cut down on french fries, which many schools serve daily.
• Allow USDA to count two tablespoons of tomato paste as a vegetable - which allows pizza to be counted as a serve of vegetables. Federally subsidized lunches must have a certain number of vegetables to be served.

The intervention and lobbying by the fast-food industry to undermine the science-based public policy making of the USDA is yet another example of the increasing trend to privatise public policy making.

Interest groups and lobbyists have disproportionate sway over lawmaking, and in some cases have been able to  get lawmakers to completely abrogate their responsibility to legislate in areas of public policy. So much so that areas that were once the purview of government are now almost purely regulated and enforced by private interests.

This is particularly the case in intellectual property (IP) policy, where industry lobby groups have monopolised the public debate so that they virtually write the legislation for lawmakers to pass.

The recent "Stop Online Piracy" (SOPA) bill is one such example. The bill, if made into law, would give content publishers unprecedented powers to censor and control the publication of online content - making the content  publishers ultimate arbiters of what can be published on the internet. Through laws such as these, Governments have bestowed arbitrary quasi-judicial powers upon powerful interests, removing requirements for due process, natural justice or evidentiary rules - thus shirking their responsibilities to legislate public policy or protect the public interest.

The powers that the bill confers have been likened to the powers that the Chinese government executes over internet content through the "Great Firewall" albeit that the Western version is executed by private, rather than government interests. However, like the Chinese Firewall, the public can not dismantle this policy by excercising their democratic powers - the interests of this private plutocracy are just as dictatorial and totalitatarian as the Chinese Government.

In Australia too, the government has abrogated its responsibility to the public on IP policy by signing up to secretly negotiated "free-trade" treaties such as the Trans-pacific partnership.  The government is also refusing to take a leadership role in regulating IP infringement on the internet - preferring to hand that process over to vested interests in the ISP and content publishing industries rather than legislating in such a way that provides a balance between industry interests and the public interest.

The pervasiveness of the ideology that advocates that public policy is best executed by private interests relegates lawmaking to mere administration and democratic power to tinkering around the edges of issues. 

This abrogation of public policy making by lawmakers has not only had a chilling effect on the rights and freedoms of people, but it has also had serious effects on the world economy (global financial crisis), environment (climate change) and public health and wellbeing (health policy). However, lawmakers are satisfied to leave these important issues up to private interests instead of providing political leadership in the public interest and when a government does try to allow its citizenry to have a say, it is loudly shouted down and decried by those powerful interests to which an appeal to democracy would disadvantage the most.

Various governments have handed over some of the most important areas of public policy to powerful private interests to varying degrees. The economy, the environment, public health and culture have all been privatised to varying extents.

The virtual privatisation of these areas of public policy has collectively given society the global financial crisis by handing the economy to bankers, global warming by acquiescing to industrialist interests, a global obesity epidemic by pandering to the fast-food industry, lack of access to drugs in developing countries by granting broad patents to pharmaceutical companies and limitations on free speech and  human creativity by the over-regulation of IP.

And as we complain about our politicians tinkering around the edges of what was democracy, at least we can drown ourselves in the vacuity of culture that is left to us by the plutocrats and reach for another slice of pizza.

Well, at least it's a vegetable.

The Communications Alliance proposal: a kinder, gentler 3-strikes

The Communications Alliance has released its proposal for dealing with rightsholders' complaints about ISP's customers engaging in alleged copyright infringements over their networks. The basic structure of the proposal is to provide rightsholders and ISPs a clear way of dealing with allegations of copyright infringements. However, in effect it is another variation of a graduated response system, albeit a kinder, gentler three-strikes.
The key features of the model include:

• An independent panel for the assessment of alleged infringement and appeals;
• A system for accrediting rightsholders (including the systems they use for detecting alleged infringements);
• A system of notices with an emphasis on compliance and education (including specified time frames for alleged infringers to respond or amend their behaviour);
• A "reset period" when further infringement has not occurred for a specified timeframe;
• A system of discovery of an alleged infringer's details with a view to private legal enforcement by rightsholders (where compliance has not occurred); and
• A funding model

This proposal broadly reflects the comments of Emmet, J in Roadshow Films Pty Limited v iiNet Limited[2011] FCAFC 23 and the proposal put forward by iiNet [PDF] in the wake of the case.

Considering that the Australian Federation Against Copyright Theft (AFACT) rejected this proposal and have appealed to the High Court (HCA), it is unsurprising that rightsholders have rejected this model, instead continuing to push for models that curtail alleged infringer's right to the presumption of innocence and due process.

In addition to the possibility of a HCA win, rightsholders are also relying on a legislative response from the government who have indicated that they would prefer to hand that process over to vested interests in the ISP and content publishing industries rather than legislating in such a way that provides a balance between industry interests and the public interest.

In the current litigious environment, the Communications Alliance proposal is a relatively balanced approach to the issues that AFACT identified in its complaint while maintaining the interests of ISPs.

Fundamentally, the proposal does not address the issue of the over-regulation of copyright that has created the problem in the first place. As the Communications Alliance itself states:

"Australian consumers' ability to legally access this content in a timely and affordable manner does, however, vary significantly from sector to sector (eg; release of TV programs and movies in Australia can lag months behind US releases). This difficulty, combined with a proliferation of access technologies, such as file-sharing software, has reportedly seen a growth in the frequency of unauthorised access to online content and therefore copyright infringement."

With vested interests controlling government policy on copyright regulation (particularly through international treaties such as the Trans-pacific partnership), it is understandable that rightsholders would refuse to accept that their own actions contribute to online infringement. It is also not surprising that they would continue to push for unbalanced anti-consumer laws to maintain their business models.

To their credit, at least ISPs have made an attempt to balance some of the concerns that have been raised about graduated response systems. However, this proposal has been developed through the prism of ISP interests to avoid being held liable for infringement. The model itself is largely a reflection of the comments of a Federal Court judge ruling on a law that successive governments have largely allowed to be influenced by the interests that are advantaged by those laws.

It is the government's responsibility to legislate to balance the interests of all stakeholders. However, its irresponsible abrogation of its responsibilities to vested interests has resulted in the litigious environment that regularly ignores the interests of the citizens that the government is supposed to represent.

It is time that the market failure that has been created by the over-regulation of intellectual property is re-examined through the prism of efficient and effective regulation. This regulatory analysis ought balance the rights of rightsholders, ISPs and citizens to encourage a dynamic market sparking the innovation that the protection of intellectual property was supposed to achieve in the first place.

Apple and the copyright maximalist cause

Apple Inc. has recently filed for a patent for a system to prevent people from filming events  such as concerts and sporting events. Although this patent does not describe any systems that are implemented in any Apple products, it does point to Apple responding to the concerns of the copyright maximalists in the content industry, most likely in an attempt to secure favourable licensing terms.

Apple has always been a company that has kept tight rein on the use of its hardware/software and has been zealous in its defence of its own intellectual property, so it is unsurprising that it would take this position. However, the ubiquity of its iTunes as a content distribution service makes receiving preferential licensing treatment in return for acquiescing to the content industries' ideology a potential further constraint to the online content distribution channel. In fact, it has the potential to set Apple up as a monopoly provider of content.

The content industries essentially left the online content distribution business when they pursued their litigation against Napster (and their subsequent litigation-as-a-business-model) and Apple has filled this gap with the iTunes store.

iTunes has been the most ubiquitous  model for online content delivery (with some oblique competition from Amazon and a johnny-come-lately from Google) and has an effective monopoly on legal content distribution. The filing of this patent indicates that Apple is prepared to further ingratiate itself with big content to secure its monopoly over content distribution. The danger of this is that as content producers effectively lobby governments and have quisling technology companies prepared to acquiesce to their particular brand of copyright maximalism, the nascent disruptive forces of content distribution over internet will be stymied.

The lobbying of governments is enhanced by tame technology companies providing a "model" system for legal content distribution, even though this "model" system might be utlimately mandated by preferential agreements struck between content producers and those distributors that are prepared to toe the ideological line. All of this will come not just at the expense of consumers, but at the expense of amateur creativity and the unique documenting of cultural events by amateur recordings.

Apple has signaled its intentions. So although they make shiny, shiny things, Apple is not your friend. Through its near-monopoly iTunes store and cosying up to the copyright maximalists it represents a threat to creativity on the web, albeit wrapped in shiny packaging with an 'i' in front of its name.

AFACT appeals against reason

In an earlier post, I predicted that Australian Federation Against Copyright Theft (AFACT) would not appeal its loss in the iiNet case. It turns out that I was wrong. I suspect I was led into error because I was assuming reasonableness would be part of AFACT's decison-making. As I pointed out in the article, AFACT was given a very broad template for an industry negotiated solution to infringement (Emmett, J at [257]), replete with disconnection as a punishment (Emmett, J at [210]) and a warning to iiNet that:

 "... circumstances could not exist whereby iiNet might in the future be held to have authorised primary acts of infringement on the part of users of the services provided to its customers under its customer service agreements." (Emmett, J at [274])

So AFACT got about as close to a win as you can get without actually winning - including a green-light for a 3-strikes system.

iiNet's reaction [PDF] has been to propose a relatively sensible solution to the problem: an independent body to handle copyright infringement complaints. This model has been met with some interest by other industry players. Although iiNet did not answer some fundamental questions about the eventual status, makeup and powers of such a body, the model was not unreasonable. The Australian Internet Industry Association (IIA) has also proposed an industry code to deal with the issue. So the industry has shown willingness to negotiate a mutually agreeable system for dealing with copyright infringement.

However, nothing is reasonable to AFACT. It's their way or the highway - hence the High Court appeal. It appears that AFACT want the ability to essentially control ISPs by the constant threat of litigation and to cower internet users into accepting AFACT's member's business models on AFACT's terms, regardless of the fact that market forces have already rendered them obsolete. It is this obsolescence that has created the infringement market. As iiNet's CEO stated [PDF]:

"People are crying out to access the studios materials, so much so some are prepared to steal it. A more effective approach would be for the studios to make their content more readily and cheaply available online..."

Unfortunately, this appeal to reasonableness will fall on deaf ears because AFACT has only one model in mind. iiNet has characterised [PDF] this model as the "Hollywood solution":

"The ‘Hollywood solution’ (in very simple terms) involves the employment of private detectives, hired by content owners, to trawl the public internet and gather information . The content owner uses this information to generate notices which are sent to internet service providers . The notices demand that the ISP should terminate the service of a customer subsequently determined by the ISP (not the content owner)"

There are several problems with this approach that were examined by Emmett, J in the AFACT v iiNet case at [257]. Firstly, the quality of the evidence needed to be "cogent and unequivocable"; and secondly, AFACT would need to reimburse the ISP for the costs of investigation and indemnify them against mistaken disconnections.

This is obviously unacceptable to AFACT who want a system were a "mere assertion" is enough to force action and that ISPs bear the total costs of being AFACT's copyright police.  This conclusion can be seen in the push from content producers in the various international treaties such as the TPP, which I have examined in a previous post. It is this conclusion that they want from the High Court.

AFACT and its ilk are particularly keen to shift all costs of the failure of their business models back to ISPs and to consumers, either by litigation or by international treaty. They are not interested in finding an actual solution to the problem of infringement as it might show up their own failures to adapt to the changing market.

TPM & TPP: The constitutional nexus

The US trade representative's (USTR) IP chapter for the Trans-pacific Partnership Agreement (TPP) suggests significant changes to the regulation of technological protection measures (TPMs). These changes extend the scope for causes of action and specifically limit exceptions to the circumvention of TPMs.

According to a leaked document the USTR has proposed the following exceptions:

• Reverse engineering for interoperability
• Research into flaws and vunerabilities in encryption
• Inclusion of a component to prevent access to inappropriate content by minors
• Security analysis and testing
• The removal of private data gathering components - so long as their removal does not then allow access to the work
• Law enforcement
• Access by public libraries for the sole purpose of acquisition decisions

There is a further exception allowed for when a a legal or administrative decision deems that the effect of the TPM makes the non-infringing use no longer available - but that exception can only be existent for 3 years.

So, the total exceptions are extremely narrow, even taking away some of the narrow exceptions existent in the Australian Copyright Act such as region encoding in s10(1)(c). Outside of these exceptions the TPP prescribes a "separate cause of action, independent of any infringement..." (emphasis mine). So the circumvention of a TPM becomes a cause of action per se.

This significantly changes the landscape of copyright. Making a modification to your own property, regardless of whether it infringes copyright, can now be a cause of action. Ultimately this breaks the nexus between a TPM being a copyright-related device to being a device that limits rights to chattels. This breaks the nexus between the TPM provision and the constitutional head of power that enables the Commonwealth to legislate with regard to copyright, section 51 (xviii).

In the 2005 Stevens v Sony case, at [218] Kirby, J comments:

"To the extent that attempts are made to push the provisions of Australian copyright legislation beyond the legitimate purposes traditional to copyright protection at law, the Parliament risks losing its nexus to the constitutional source of power."

This is not to say that the imposition of the TPP would necessarily be unconstitutional as the Commonwealth has other heads of power upon which it could rely, such as the external affairs power in s51(xxix). However, it is of concern that external treaties such as the TPP should be used to enable the Commonwealth to legislate for the regulation of the use of an individual's private property.

Needless to say, the invasion of copyright into the realm of the regulation of chattels represents a significant intrusion by the international treaties system into citizen's ordinary enjoyment of their private property. It significantly re-balances the rights inherent in intellectual and real property and has the potential to fundamentally change the rights that one has over their own property.

TPP turning ISPs into copyright police

The 6th round of negotiations for the so-called Trans-Pacific Partnership (TPP) are set to occur from 28th March 2011 - and if we were to rely on DFAT's website the TPP treaty is merely to:

"develop a high-quality, comprehensive 21st century Free Trade Agreement (FTA) that increases economic integration in the Asia-Pacific region, particularly as membership expands over time."

This all sounds very reasonable but what it doesn't mention is that, amongst other things, the TPP has a significant section devoted to copyright.

The US Trade Representative to the treaty negotiations has put forward a number of proposals which would "harmonise IPR provisions strictly upwards", these include:

• Banning parallel imports
• Increasing the term of copyright
• Criminalising Digital Rights Managment (DRM) circumvention - even when there is no copyright infringement
• Imposing ISP liability for the infringement of their users, including providing incentives for ISPs to become copyright cops for the content industry
• Requiring ISPs to identify users at the behest of the content industry
• Expanding the scope of what is patentable and limit objections to patents

This, of course, reads like a wish-list of the content industry and it would probably not surprise anyone to know that there is an extremely close relationship between the content industry and the US government.

Furthermore, the TPP contains provisions for "dispute resolutions" which means that countries that are not compliant with the increased scope of the IP provisions can be fined.

So what does this mean for Australia?

Firstly, the TPP IP provisions exceed those in the AUSFTA and even further than the completed-but-not-in-force ACTA treaty, especially the "exceptions" provisions for DRM and the expanded scope for patentable material.

Secondly, it will impose a regime of ISP copyright enforcement that goes much further than the suggested model put forward by Emmet, J in the AFACT v iiNet case. The Internet Industry Association (IIA) has already stated that it is prepared to draft a code to address the uncertainty regarding the steps that ISPs should take in responding to allegations of copyright infringement by their users. However, the imposition of the TPP will make this attempt at industry self-regulation redundant by substituting an industry negotiated code, which will likely contain at least some consumer protections, to a legislative regime which does not. Furthermore, a country is prevented from implementing more consumer friendly provisions by the "dispute resolution" clauses that may result in the country being fined.

So there is a real danger that the TPP will further tip the balance in favour of big content and away from consumers, but then this seems to be the modus operandi  of these FTAs and is hardly surprising. The irony is that the more big content punishes consumers and refuses to provide content in a way that their customers want, the more their customers will pirate their content using the ever-more sophisticated tools available to find and download content and to hide their tracks while doing so - making a legislative regime ineffective.

As IIA president Peter Coroneous said recently:

"Market failure remains a core contributor to the infringement problem. If users have access to more and better content, when, where and in the form they choose to consume it, and at a realistic price, we're quite confident the motivation for infringement will decline. We certainly don't condone the infringement of copyright - but internet users need attractive, lawful alternatives if we are to see positive behavioural change. There's no reason why Australia shouldn't be leading the way here."

And maybe that is the area in which Australia can lead the way, rather than continuing to implement an ever-more draconian legislative regime under the guise of "free trade".

The new gatekeepers- internet freedom has a price but no way to pay

Much has been made of the internet being the great 'leveler'. Citizen journalists and bloggers have challenged the model of traditional publishing, file-sharing has challenged the business models of the music and movie industry (and here, I mean not just file-sharing that infringes copyright but file-sharing as a distribution mechanism) and open source software has challenged the models of software development and distribution. Each of these mechanisms have removed, to some extent, the gatekeepers of content production and distribution, allowing an expansion of the sharing of ideas, content and culture. In the post-wikileaks world, the removal of the traditional gatekeepers of media and government has thrown the spotlight on government practices and the ability of the internet to spread information, culture and ideas has led to significant pressures being placed upon government (including, some would argue, the fall of several governments).

The reaction of government has predictably been to attempt to crack down on the internet through both censorship laws and the expansion of laws that further empower the private sector to move against the leveling influence of the internet (such as expanded copyright laws and domain seizure laws). In this case, at least citizens have the nominal right to reject these laws by excercising their rights at the ballot-box (and yes, practically this  is more difficult due to entrenched interests and money politics, but that's a rant for another day) and rejecting the government's intrusions.

However, more worryingly, a new danger to internet freedom has raised its ugly head and begun to exert its influence.  Another set of gatekeepers, ones that have not yet succumbed to the leveling influence of the internet, have begun to flex their muscle as gatekeepers of content and information and as these are private entities citizens have no way to counter their power.

I am referring to the financial gatekeepers of the internet. The duopoly of Visa and Mastercard (along with PayPal to a lesser extent) have begun to exert their power over the financial flows to entities and websites that they deem to be undesirable - and governments, recognising this power, have sought to use these gateways to censor and undermine websites and entities that threaten their power.

The most obvious recent case is that of PayPal, MasterCard and Visa halting payments to Wikileaks under the spurious auspice of 'violating their terms and conditions', something which the KKK or NAMBLA somehow don't do. It is quite obvious why the payments were halted - 'pressure' from the US government. There was no actual legal power upon which the government could rely, so they turned to the gatekeepers to block finances and attempt to hamstring Wikileaks. It was a frightening display of State power combined with the power of the gatekeepers brought to bear on an organisation which, to date, has not been shown to break any laws.

The UK government has also discovered that using the gatekeepers is easier than having  to pass legislation - since legislation has to go through that pesky transparency process known as parliamentary scrutiny.

In this case, the content industries, through their industry group IFPI, have bypassed the legislative step entirely and gone straight to enforcement - using  the police to protect their private interests through the police's "economic crime directive" which is ostensibly to combat fraud rather than copyright infringement. Basically, the police verify that the site appears to offer unlicensed copyrighted material and hand the details to Visa and MasterCard to effectively cut of the finances of these sites. There is no recourse, no appeal and no judicial oversight. Whether the accused have violated Visa or MasterCard's 'terms and conditions' is a matter for Visa and MasterCard and not for the courts.

It is not difficult to see this model being extended to other types of activities that either governments or big business find undesirable - they've already done it to Wikileaks. It is in a way similar to the corporate strategic lawsuit against public participation (SLAPP) suit - a legal threat to close down criticism - but at least with a SLAPP suit there is a way to fight it in court. A financial SLAPP from Visa and MasterCard is almost impossible to defeat - it is their terms and conditions and as private entity they can choose who to do business with, or not.

The dominance of these financial gatekeepers represents a dangerous bottleneck to internet freedom. Although we still may be able to publish and distribute information - the ability to finance this distribution also forms an important part of this freedom.

It is often said that "freedom has a price", the problem is that it may become increasingly difficult to find a place to pay.

The harbour is not as safe as it looks - iiNet wins but consumers will likely lose

On 24th February the Full Bench of the Federal Court handed down its findings in the AFACT v iiNet appeal, with the appeal ultimately being dismissed. However, although the scorers will record it as a 2-1 win to iiNet, the actual ramifications of the case may mean that the much maligned "3-strikes" rules may become existent in Australia and in the most egregious form - one with no judicial oversight and very limited ways for consumers to defend themselves from allegations of infringement.

The dominant view has been that AFACT will likely appeal their loss to the High Court, however, due to the implicit process by which iiNet could be found liable for infringement found within the judgment, I believe it is unlikely that an appeal is on the cards. It is more likely that AFACT will negotiate with iiNet a notification/termination system which iiNet can live with, and AFACT can afford.

Emmet, J's judgment sets out what could quite possibly become the template for a notification/termination regime in Australia:

• iiNet has been informed in writing of particulars of specific primary acts of infringement of copyright of the Copyright Owners, by use of particular IP Addresses of iiNet customers.
• iiNet has been requested in writing to take specific steps [...] in relation to such primary acts of infringement
• iiNet has been provided with unequivocal and cogent evidence of the alleged primary acts of infringement by use of the iiNet service in question. [...] Information as to the way in which the material supporting the allegations was derived, that was adequate to enable iiNet to verify the accuracy of the allegations, may suffice. Verification on oath as to the precise steps that were adopted in order to obtain or discern the relevant information may suffice but may not be necessary.

Emmet, J at [211] asserts that points one and two have been satisfied in the circumstances of the appeal but point three has not been satisfied. The information provided is not "cogent and unequivocal", but only represents a "mere assertion" by AFACT. Emmett, J also notes that there has been no offer of compensation or indemnity by AFACT.

Although Emmett, J does suggest that the customer ought to have a chance to refute any allegations that are made by AFACT², there is no suggestion as to what would constitute a refutation that would be satisfactory to prevent termination - I would imagine that with such a system in place iiNet would take a somewhat conservative approach to what would constitute an appropriate refutation, probably requiring a very high degree of proof (to avoid any threat of further litigation on this point). This leaves your average consumer without any realistic means of review. So, although the appeal is a win for iiNet, it does not look like an outright win for consumers.

However, there are a few outstanding issues from the case that could make the system proposed by Emmett, J unworkable.

Firstly, at [207] Emmett, J speculates that the cost³ and complexity of such a system may not be feasible:

"It would be necessary to create a system whereby sufficient information concerning the allegations is communicated to the relevant customer, acknowledgment of receipt by the customer was secured and cross checking for earlier notifications in respect of the same customer was undertaken. Choices would need to be made in the design of such a system, as to the number of warnings that should be given, whether there should be a period of grace, whether all alleged infringers should be treated the same or graded according to severity. Each of those choices adds complexity to the design of a system. iiNet would also need to implement and maintain additional customer support capability since the implementation of such a system would lead to queries and complaints from customers. Senior personnel would need to be involved in the handling of such queries and complaints. Even if such a system is feasible, it would be likely to involve significant expense being incurred by iiNet."(emphasis mine)

However, I would suggest that it is likely that AFACT would suggest a bare minimum system and iiNet (in an attempt to avoid litigation) would likely agree - so long as AFACT was paying. So, one would imagine that such a system would be feasible.

Secondly, there is the question of what constitutes "unequivocal and cogent" evidence. Emmett, J suggests that the method of deriving the evidence may suffice for iiNet to then investigate the alleged infringements however, as anyone who understands the technology, unequivocal and cogent evidence is not as easy to come by as deriving an IP address from a torrent - certainly in the criminal sphere, significant computer forensics is required to meet the high burden of proof required. There is even some English Case law that suggests that an IP address is not significant enough per se to identify an infringer⁴ - however this case does suggest that an account holder may have a "duty to assist"⁵ which may still then require the account holder to "give appropriate assurances that there will be no repetition of the acts of infringement"⁶, a breach of which may then render the account holder liable to termination - and I would guess that similar reasoning would hold in Australia.

Ultimately, the AFACT v iiNet case is a prescription for the negotiations between iiNet and AFACT to derive a workable system. Negotiations which will likely give iiNet the certainty that it has asserted that it requires, and AFACT another weapon in its war against its customers.

In the end, it will be the consumers that lose with a system that will likely have no rights of appeal bar through a court process that is too expensive and complex for the average person; A system that requires something that is a little more than a mere assertion by an organisation whose main aim is not to benefit its members (ie. artists) or to provide for its customers, but to force consumers into its outdated business model. A model which consumers have unequivocally rejected.

Let's just hope that the recently announced review of copyright by the Attorney General results in some sane legislation to restore the balance in favour of both consumers and rights holders and not the middle-men like AFACT and its ilk. I'm not holding my breath.



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¹ Emmett, J Roadshow Films Pty Limited v iiNet Limited [2011] FCAFC 23 at 210
² Ibid
³ Emmett, J suggests at [210] that these costs are to be borne by the rights holders
⁴ Media CAT Limited v Adams & Ors [2011] EWPCC 6
⁵ Ibid. at [91]
⁶ Emmett, J Roadshow Films Pty Limited v iiNet Limited [2011] FCAFC 23 at 210