Copyright, creativity and the internet in New Zealand

Karl Rice, anti-piracy manager, RIANZ

October 2010

This article originally appeared the New Zealand Author

New Zealand's authors now face the same challenge that its filmmakers, musicians and software developers have for the past few years - selling their product in an online environment dominated by piracy.

Policymakers in Wellington were so concerned about the damage caused by unfettered online piracy that they began the process of updating copyright law to tackle the problem three years ago. That process is continuing despite a change in government and protests from those that have become used to illegally accessing creative content for free.

The government is not acting in isolation. Around the world, policymakers are seeking to ensure the rights of creators are not ignored in the online environment. France, South Korea, Taiwan and the UK have passed similar legislation to that being discussed here. Politicians elsewhere are trying to broker deals between the content and technology industries that will lead to a similar outcome.

France's President Sarkozy and John Key have both said that the internet should not become a "Wild West" where the writ of law does not run. Sarkozy, the first global leader to introduce such legislation, feared that if no action was taken, online piracy would reduce incentives to invest in the creative industries and that French culture would subsequently suffer.

File-sharing

File-sharing on peer-to-peer (P2P) networks is a major vehicle for online infringement. It involves users making files available on their computers for others to access and download. Potentially, the content being uploaded sits on many individuals' computers rather than a single central server. There are many online services that facilitate file-sharing by indexing available content and directing users to it.

Rights holders have tackled illegal file-sharing already for several years. When a user uploads content through a file-sharing network their Internet Protocol (IP) address is visible. Rights holders can see it when participating in the network too, and can create a time and date stamped evidence pack, showing the content uploaded and IP address used.

Under current law, rights holders require a court order to approach the relevant Internet Service Provider (ISP) and ask them to release the user's details relating to an IP address so that legal action can be taken against them.

This approach has been pursued worldwide when creators' rights have been seriously infringed. Yet such action is costly and time consuming for rights holders, meaning it can only ever be pursued against a minority of illegal file-sharers. As a result, there is little deterrent effect. There has also been criticism that legal action is not an appropriate response to many cases of online infringement.

That is why a graduated response approach has been developed as a more proportionate and effective way of tackling illegal file-sharing.

Under such an approach, as set out in the pending Copyright (Infringing File-Sharing) Amendment Bill, right holders would continue to provide evidence packs and submit them to the relevant ISP. Instead of releasing user details to enable legal action however, the ISP would write to their customer informing them their account has been used to infringe copyright law and urging them to use legal services. This is an opportunity for the account holder to speak to others in their home about using their internet connection legally.

If a user ignores the warning from their ISP and the account is used for infringing file-sharing again, he would receive a second notification, warning him sanctions could be applied if he continues to break the law. In cases where a user ignores repeated warnings to change his behaviour, rights holders could approach the Copyright Tribunal to seek compensation of up to $15,000 and the relevant District Court to seek suspension of the account holder's connection for up to six months.

It is expected that graduated response will migrate users to legal services - and research shows that this would be the case. For example, research by IPSOS in France, ahead of the introduction of legislation there, found 90 per cent of infringing music file-sharers would migrate to legal services on receipt of a second warning from their ISP rather than risk account suspension.

Direct downloads

The second predominant form of online piracy, direct downloading, involves a user accessing a site and transferring data from it to their own computer. In this case, content is hosted by the service that allows people to access it, meaning it can be easier for rights holders to locate and remove infringing material as they can contact the service concerned. The most popular type of direct download site is often referred to as a 'cyberlocker' or 'webhard' site and its content is 'advertised' through links on blogs, forums and social networking sites.

Rights holders have long acted to take down such infringing content online. Last year, for example, IFPI secured the removal of more than five million copyright infringing links worldwide.

Under Section 92c of the Copyright (New Technologies) Amendment Act (2008) the ISP providing hosting facilities to the site can be deemed liable for copyright infringement if it fails to delete or prevent access to the material when notified about its illegal nature.

The need for legal alternatives

The amended copyright law will hopefully arrive for the book industry much earlier in the development of digital piracy than it does for the rest of the creative sector. At the same time, however, it is important to provide innovative services as an alternative to meet genuine consumer demand. Record companies, for example, have licensed more than 13 million tracks to over 400 legal digital music services worldwide.

It is also vital to educate consumers about the importance of copyright and the economics of the book publishing business. Already the blogosphere is filled with comments that JK Rowling and Stephanie Meyer are wealthy enough and that piracy will not hurt them. The concepts that profits from successful books are reinvested in the next generation of local writers and that discovering, nurturing and promoting authors requires upfront investment are not widely understood.

The internet offers great opportunities for authors to reach a vast readership who can access their work anywhere, any time and on any device. If consumers understand the need for creators to be paid for their work, just as is the case in the physical format world, this could be a golden age for publishing. If people believe they are entitled to something for nothing, then authors may be unable to make a livelihood. The young writer with the potential to be the next Alan Duff may decide to pursue a different career so he can put a roof over his head. That would be a loss to us all.