Copyright Law: Update on Recent Practical Developments – 2007
Paper given to the Auckland District Law Society in August 2007
1. The purpose of this paper is to update practitioners on recent developments in the copyright law area. I approach the task in two parts. Firstly, dealing with the principal legislative developments and secondly looking at a couple of other developments of interest.
Main Legislative Developments
Copyright (New Technologies) Amendment Bill
2. The proposed amendments to the Copyright Act 1994 took another step when the Commerce Select Committee reported back to Parliament on 29 July 2007. A number of provisions in the Bill remain the same. However, others are likely to change. The key changes are discussed below.
3. Firstly, it is proposed that that the title of the legislation be changed to the Copyright (New Technologies) Amendment Act, removing reference to “performance rights”. That is, given the relatively limited treatment they receive in the Bill, the committee has stated that while the Bill does have some sections that refer to performers’ rights their only purpose is to make those sections technologically neutral.
Storing for educational purposes
4. The committee recommends amending the new s 44A(1)(b)(ii) so that the requirement that the author of a copyright work be identified be dependent on the author’s identity being known. This is to take into account the fact that authors on the internet are often not capable of identification.
5. It is recommended that s 44(1)(b)(iv) be removed. The section provides that educational establishments must identify the course of instruction for which material is stored, if it is stored. The committee suggests that this is impractical as the website could be used in many courses and it will also reduce flexibility in internet based teaching.
Copyright for librarians and archivists for replacement
6. The committee posits that the new s 55(4) be inserted into clause 34(2) so that it is consistent with s 55(1)(b) of the Act. This would allow a digital copy to be made to replace an item in a prescribed library or archive but only under certain limited circumstances.
7. In accordance with submissions made by the New Zealand Law Society, the committee has accepted that it impossible to differentiate between on-site and off-site access and as such the conditions in the new s 56A should apply no matter where digital copies are accessed. It has also accepted that the term ‘Authenticated user’ be more restrictively defined in order to properly balance the competing rights of protection and access.
8. It is now proposed that the new ss 56B(a) and 56C(a) be abandoned. These sections require requesters of digital copies to state the purpose for which the material will be used and to put the request in writing. This is seen as unnecessary in light of current practice and existing sections in the Act.
9. The committee recommends that ss 56B(b) and 56C(b) be deleted because of compliance costs for libraries and archives. These two sections require a written declaration that certain provisions of the Copyright Act have been followed.
Observing, studying, or testing of computer program
10. The committee recommends inserting new s 80 BA (clause 43) in order to clarify that a lawful user of a computer program may observe, study, or test the program and how it runs under certain circumstances without infringing copyright. This is recognition of the need, once again, to balance the often competing interests of copyright owners and the wider public, who may need or wish to access a particular copyright work.
11. Fair dealing defences, exceptions or savings relating to CDs, DVDs and a range of audiovisual works remain an area of continuing debate and disagreement.
12. In terms of format shifting, the committee received a number of submissions from parties contending that a purchaser of a copyrighted sound recording (for example a CD) should be able to copy it to another format without restrictions. The committee however stressed that such a person does not acquire copyright in the sound recordings and that the copyright owner retains the exclusive right to control copying of the works under s 16 of the Act. On this basis it maintained the status quo to the extent of maintaining the existing form of restrictions.
13.However, it is now proposed that s 81A(1)(e) be amended to clarify that the copy must be solely for the personal use of the person who made it or of a member of the person’s household if the format-shifting exception were to apply.
14.Further, it is now proposed that s 81A(1)(g) be amended so that a person who has purchased a CD must retain possession of both the original copy and any copy subsequently made, meaning that if the original CD is sold, the copy could not be retained.
15. Is also proposed that s 81A(3) be removed on the basis that it would create uncertainty as to whether purchasers of sound recordings recorded on older technology would be allowed to continue format-shifting. The section itself states that new s 81A will expire two years after enactment, unless extended by the Governor-General by Order in Council. The committee rejected submissions that s 81A should be extended beyond sound recordings, on the basis that this would not be in accordance with our obligations under the Berne Convention for the Protection of Literary and Artistic Works.
16. In terms of time shifting, the committee recommends that new s 84(1)(a) be amended so that it is more clear that the recording must be solely for the personal use of the person who made it or of a member of his or her household were the time-shifting exception to apply. Equally, it is envisaged that s 84(1)(c) be reworded in order to clarify that a time-shifted recording must not be made from an on-demand service.
Internet service provider obligations
17.The committee has recommended that the definition of ‘internet service provider’ (‘ISP’) in clause 3(2) be amended so that a person who hosts material on websites or other electronic retrieval systems that can be accessed by a user falls within the definition.
Liability if user infringes copyright
18.The committee is of the view that the wording of new s 92B (clause 53) is not satisfactory because of the risk of it exposing ISPs to liability for copyright infringement – specifically when a person has infringed the copyright concerned before using the services of the ISP. That is, for example in sending or distributing any infringing content. If amended the section will make it clear that it applies only if a person infringed copyright in a work by using internet services of the ISP. Likewise, ‘Internet services’ are defined.
Liability for storing infringing material
19.It is proposed that in clause 53, the new s 92C(2)(a) be amended and that a new s 92C(2)(ba) be inserted so that it is clear when ISPs would be required to take material down, an issue of some concern to ISPs. A new s 92C(2)(b) also provides that an ISP would become liable for copyright infringement by storing infringing material if a user of the service committed an act of copyright infringement on behalf of, or at the direction of, the ISP.
Technological protection measures
20. Technological protection measures (‘TPM’) are devices designed to manage and prevent piracy of digital copyright works. Certain interests argued that the Act should be extended so that the act of circumventing a TPM is prohibited. However, the committee resisted this approach on the basis that there are likely to be situations in which users of copyright works may want to circumvent a TPM for legitimate reasons and purposes, such as fair dealing.
21. Therefore, the existing provisions are largely retained. The definition of TPMs in new s 226 is to be amended to specifically exclude controls on access to a work for non-infringing purposes. It is however now clear that the Copyright Act is not meant to protect access-control technologies that are used for price discrimination or to control the geographical distribution of works. Once again, this will please those who argued that access control is a competition law issue and has little or nothing to do with copyright law and that ultimately many access control measures work to the detriment of users in New Zealand.
22. Again, in accepting another of the Law Society’s submissions, it has been acknowledged that the rather pejorative term ‘TPM spoiler’ should be replaced by the more accurate and neutral term ‘TPM circumvention device’.
23.Finally, in recognition of the need to find the appropriate balance between competing interests, new s 226E (clause 89) is to be changed to allow users to get assistance from a person who is qualified to exercise a permitted act using a TPM circumvention device without applying to the copyright owner, something which many saw as onerous and unnecessary. Further, new s 226E(4) ensures that such persons cannot charged unreasonably high fees for such assistance.
Commissioning of Copyright Works
24. In March 2006, the Ministry of Economic Development released a discussion paper The Commissioning Rule and the Copyright Act 1994. This paper can be found on the MED website at http://www.med.govt.nz/templates/MultipageDocumentTOC____18837.aspx
25. The discussion paper dealt with two issues. The first is the adequacy of s 21(3) of the Copyright Act which provides a regime for dealing with ownership of copyright in commissioned works. The second is the relationship between copyright law and contract law. It is understood that 70 responses were received by the MED. These responses have been considered and a second discussion paper has been released, eliciting further comment from interested stakeholders. This paper focuses in particular on the following areas:
•Whether the underlying rationale for the commissioning rule continues to be relevant;
•The scope of copyright works covered by the rule;
•How privacy interests of those who commission works for private and domestic purposes should be protected; and
•Consistency between the Copyright Act and the Designs Act.
26. Submissions on the discussion paper are due later this month and the New Zealand Law Society is likely to contribute to the debate.
Other Areas under Review
27. A number of other related issues are being considered at present. These include the following.
Off-air recordings of television programmes to educational establishments
28. The MED is in the process of reviewing whether the Copyright Act should apply to off-air recordings of broadcast television programmes provided to an educational establishment by an external grant. A report is expected in September.
29. Film directors have argued that they should be defined as ‘authors’ and thus the first owners of the relevant works under the Copyright Act. The committee has indicated that the issue requires further attention but that it needs to be done as a separate exercise, because other interest groups are likely to want to have their say. It is understood that the MED is likely to look at this in early 2008.
30. It has been proposed that the Copyright Act needs to be amended to allow the legitimate copying of so called orphaned works. These are works where the owner cannot be identified for some reason. The MED is also to investigate this and report back to the Associate Minister of Commerce.
Access to works for print-disabled persons
31. The issue of whether and under what circumstances entities may make adaptations of works for print-disabled people without infringing copyright is dealt with by s 69 of the Copyright Act. The issue of consultation between the MED and the Royal New Zealand Society for the Blind and other parties is to be considered and once again a report made to the Associate Minister of Commerce.
32. Finally, in terms of the Act as a whole, the MED has indicated that it will be subject to review in five years time to ensure that it maintains its relevance in the face of new technologies. This is welcome but it is not just in the area of new technologies that the Act requires attention. I consider that more fundamental issues such as the whole area of “fair use” needs to be reviewed. Hopefully, this process can be initiated before too long.
Case Law Developments
The Da Vinci Code
33.A case of particular interest relates to the celebrated novel, The Da Vinci Code, written in 2003 by Dan Brown. On 28 March 2007 the Court of Appeal handed down its decision in Baigent and another v Random House Group Ltd  EWCA Civ 247. This was an appeal against a decision of the High Court to dismiss the Claimants’ claim of breach of copyright under s16 of the Copyright, Designs and Patents Act 1988 (UK). At issue was whether the High Court Judge was correct in legal principle, and therefore whether he was entitled to his conclusions.
34.The Claimants are two of the three authors of a book first published in 1982, The Holy Blood and the Holy Grail (‘HBHG’) which is described by them as a work of historical conjecture, and suggests a secret history of the Holy Grail and Christianity. The Defendant is the publisher in the United kingdom of The Da Vinci Code (‘DVC’).
35. It was common ground between the parties that HBHG was essentially historical in nature whereas DVC was a thriller. It was also common ground that the thriller adopted certain themes similar to and overlapping with the content of the historical work. It was not in dispute that HBHG is an original literary work in which copyright subsists, nor that the Claimants are two of the joint holders of the copyright. The Claimants’ case is that Brown derived the majority of six chapters of his work from HBHG, that he copied part of HBHG and that what he copied was a substantial part of the work.
36. The case first went to trial before Mr Justice Peter Smith in the High Court (Chancery Division) in February and March 2006. His Honour’s judgment was delivered on 7 April 2006, dismissing the claim. Lloyd LJ, in the Court of Appeal, describes Peter Smith J’s judgment as “not easy to read or understand”, and suggests he should “have allowed himself more time for the preparation, checking and revision of the judgment”. Smith J appears to have held that while the six chapters of DVC in question were largely derived from HBHG, the claim for breach of copyright did not succeed as the claimants failed to establish that a substantial part of HBHG had been copied. Peter Smith J refused permission to appeal, but the Claimants’ application to the Court of Appeal was accepted by Lloyd LJ, with permission to appeal being granted on 13 June 2006.
Decision of the Court of Appeal
37. All three judges delivered concurring decisions. The first and most detailed judgment was delivered by Lloyd LJ, who noted at para  the unusual nature of the claim:
If the copyright work in question is a literary work, the allegation will normally be that part of the text of the earlier work was copied exactly or with some modification, in the creation of the later work. In the present case that is not what is alleged as the basis for the claim in copyright infringement. What is said to have been copied is a theme of the copyright work
38. In setting out the test for breach of copyright, Lloyd LJ stated at para :
Copyright does not subsist in ideas; it protects the expression of ideas, not the ideas themselves. No clear principle is or could be laid down in the cases in order to tell whether what is sought to be protected is on the ideas side of the dividing line, or on the expression side.
39.As legal authority for the lack of a definite rule with regards to delineating ideas and expression, Lloyd LJ cited Lord Hoffmann’s discussion of artistic copyright in the House of Lords in Designers’ Guild Ltd v Russell Williams (Textiles) Ltd  1 All ER 700,  1 WLR 2416, at para 24,  FSR 113:
There are numerous authorities which show that the “part” which is regarded as substantial can be a feature or combination of features of the work, abstracted from it rather than forming a discrete part. That is what the judge found to have been copied in this case. Or to take another example, the original elements in the plot of a play or novel may be a substantial part, so that copyright may be infringed by a work which does not reproduce a single sentence of the original. If one asks what is being protected in such a case, it is difficult to give any answer except that it is an idea expressed in the copyright work.
40.Lloyd LJ also cited paras  and  of Lord Hoffmann’s judgment in Designers’ Guild, which is now authoritative on this point, namely that:
The other proposition is that certain ideas expressed by a copyright work may not be protected because, although they are ideas of a literary, dramatic or artistic nature, they are not original, or so commonplace as not to form a substantial part of the work.
Generally speaking, in cases of artistic copyright, the more abstract and simple the copied idea, the less likely it is to constitute a substantial part. Originality, in the sense of the contribution of the author’s skill and labour, tends to lie in the detail with which the basic idea is presented.
41.Applying this approach His Lordship set out the following test at para :
•what relevant material was to be found in both works;
•how much, if any, of that had been copied from HBHG
•whether what was copied was on the copyright side of the line between ideas and expression; and.
•whether any of the material that was copied and did qualify as expression, rather than as ideas, amounted to a substantial part of HBHG.
The third and fourth of these issues, as often, are interconnected.
42. Lloyd LJ further stated at para  that:
If, by applying those tests, the judge found that a substantial part of HBHG had been copied by Mr Brown in writing DVC, it was irrelevant to consider Mr Brown’s intention in doing so. Breach of copyright does not depend on the intention or state of mind of the alleged infringer.
43. According to Lloyd LJ, Peter Smith J found that even though relevant material in HBHG was also found in DVC, that Dan Brown had access to HBHG while including this common material in DVC (and Brown used HBHG at this stage), and that Brown based relevant parts of DVC on material in HBHG. His Lordship summarises the position thus at para :
what [Brown] took from HBHG amounted to generalised propositions, at too high a level of abstraction to qualify for copyright protection, because it was not the product of the application of skill and labour by the authors of HBHG in the creation of their literary work. It lay on the wrong side of the line between ideas and their expression.
44.As a result, Peter Smith J was correct to conclude that:
whatever elements (if any) were copied from HBHG, they did not amount to a substantial part of it.” Concluding at para  that it had not been shown that the judge was wrong in the conclusions to which he came and indeed he was entitled to come to those conclusions. I would therefore dismiss the appeal.
45.One of the real difficulties the Claimants faced in this case was that even though the trial judge had found that Brown had in fact copied some material from HBHG in writing DVC that however viewed this did not amount to a substantial part of HBHG and in effect was on the wrong (ideas) side of the dividing line between ideas and expression. That is, because it was expressed at too high a level of abstraction. More fundamentally however the trial judge concluded that the so-called Central Theme was not in fact a part of HBHG at all.
46.In practical terms, the Claimants position was seriously undermined by two critical factors. The first was that when one of the authors, Mr Baigent gave evidence as to what the Central Theme was and where it could be found in the copyright work as a theme, his evidence was “comprehensively destroyed” in cross-examination (see paragraphs 231 and 233 of the High Court judgment). The second was that the Claimants made repeated changes to the way in which the Central Theme was formulated, the Appeal Court noting with displeasure the number of changes in the particulars provided. Indeed, after observing (at paragraph 231) in a very direct way that this evidence was “lamentably inadequate” the trial judge went on to note at paragraph 240:
“I am entitled to see whether or not the Claimants evidence about their Central Theme is credible. At the end of the day if they are unable to say in a coherent way what their Central Theme is that is strongly supportive of the proposition that there is no such Central Theme as alleged.”
47.That makes it clear that in a literary copyright case that where a party seeks to allege infringement and does not rely on copying of the text, structure or architecture of the work that as a minimum they should at least to have a clear idea as to what part has been copied and try to have a reasonably consistent stance in terms of what comprises the work in issue.
The Brash E Mail Saga
48.The Don Brash e-mail saga was not just the last straw that broke the camel’s back in the case of Dr. Brash’s political aspirations. It also throws up some very interesting legal issues around the question of confidentiality, privacy and copyright. The exact sequence of events is a little unclear. It does however appear that a relatively large number of e-mails to and from the Dr. Brash got into the hands of the author Nicky Hager and formed part of his book “The Hollow Men”. Dr. Brash indicated that while he had nothing to hide over the misappropriated emails he nevertheless obtained an ex parte interim injunction to prevent their publication, on the basis that the threat of publication had become more tangible in the weeks prior to seeking such relief.
49.At the time, Commentators such as Fran O’Sullivan stated that there appeared to have been a serious security breach which should be investigated by Parliament’s Speaker Margaret Wilson and that a full-scale inquiry was necessary. She also expressed the view that the electronic theft of the Opposition Leader’s emails from Parliament’s server was a significant matter and that it was necessary that our politicians could operate, secure in the knowledge that their emails would not find themselves in their opponents’ hands.
50.In Brash v John Doe & Jane Doe (HC, Wellington, CIV-2006-485-2605, 16 November 2006, per Mackenzie J) Dr. Brash sought an order for an ex parte application for an interim injunction alleging that an unknown person or persons had gained unauthorized access to his computer and had taken copies of email messages without authority. He also claimed to have reason to believe that this person or persons had distributed copies of these emails and with the intention of having them published in book form.
51.Mackenzie J granted the order relying on earlier cases where interim injunctions had been granted against unknown persons; in Tony Blain Pty Ltd v Splain  3 NZLR 185 per Anderson J and Bloomsburny Publishing Group Ltd v News Group Newspapers Ltd  EWHC 1205 (ch). Mackenzie J was satisfied on the basis of these authorities that the necessary jurisdiction to make the order existed. Dr. Brash established a serious question to be tried, in relation to four causes of action: conversion, copyright infringement, breach of confidence and the tort of privacy.
52.On the breach of copyright action in finding that a serious question arose the Judge relied on Ashdown v Telegraph Group Ltd  4 All ER 666 (CA) where it was held that copyright protection will prevail over freedom of expression. In terms of the balance of convenience His Honour found that it lay with the plaintiff in that he would suffer damage if the emails were published and the orders were made without notice, given the prejudice that would be suffered if this was required.
53.However, the situation was soon to change because on 24 November 2006 Mackenzie J was asked by the plaintiff to discharge the orders and a minute was issued accordingly. By then, the book ‘The Hollow Men’ had been published and at that point the plaintiff stated that he did not wish to have the orders to have continuing application to the book.
54.A question that arises is whether Nicky Hager was entitled to publish the e-mails contained within his book, even if they were ‘stolen’, as alleged. Leading to one side possible ramifications under the Crimes Act the question is whether the Court would have granted or continued an interlocutory injunction once the matter had been fully argued or indeed whether a permanent injunction would have been granted. Obviously, the Court would have had little difficulty in recognizing the need to protect confidences whether of a personal nature (for example a communication between a constituent and a member of Parliament) or a more formal communication (for example, one involving a government official or the Leader of the Opposition, something in the nature of a government secret).
55.However, that is only one side of the coin. Given the nature of certain of the communications, some of which were less than flattering of Dr Brash (and had been leaked from time to time when it suited his political opponents) the question of the public interest arises. Accordingly, the question which would need to be addressed at either the interim or substantive stage of any proceeding was whether the public interest and the need of the public to know what was said, by the road any other interests. Certain commentators have suggested that the public interest arguments should have also prevailed in terms of the copyright argument and that an injunction should not be granted where, as in this case, the public interest is necessarily involved. I am not sure that that is necessarily so if, following full argument, Ashdown is followed in New Zealand. Having said that, the proposition in Ashdown is that copyright should, except in rare cases, prevail over freedom of expression. Where however the issue of freedom of expression is closely connected to broader issues of public interest, for example, involving a prominent politician, the balance may well shift.
56.Coming back as we should to copyright, the difficulty might well be that copyright in the various e-mails would belong to the authors of those e-mails and even though they may have resided for the time being on Dr Brash’s computer (or more correctly the Parliamentary server) he would not actually own the copyright. On the other hand, if he had responded to a particular e-mail he would arguably own the copyright in the response. And then there are the issues of privacy and the Bill of Rights Act. That however will need to be for another day.