Last month, I was interviewed by 4ZzZ’s Zed Games show on the introduction of an R18+ rating in Australia. The show also includes an interview with Gamers 4 Croydon. You can grab the mp3 here: 20100218-ZedGames-R18-EFA-G4C.
Thanks a lot to Ray and Chani for having me on the show. It’s great to see a gaming show on prime-time community radio, and I’m really excited to hear future episodes.
Kylie Pappalardo has an excellent case note on Telstra Corp Ltd v Phone Directories Pty Ltd [2010] FCA 44 (Full decision). This case continues the process that began when the High Court tightened the requirements of originality and authorship in IceTV, applying that logic to contain the previous FCAFC authority of Telstra v Desktop Marketing to its facts. The result is very interesting for Australian copyright law: there is no longer any certainty that telephone directories will be protected by copyright, bringing Australia more into line with international authority on this point.
Michael Geist is reporting that the text of the secret Anti-Counterfeiting Trade Agreement (ACTA) chapter on internet enforcement has been leaked. As suspected, the text is unlikely to require major changes to Australian law, but it does do two very concerning things:
A core chapter of my PhD has just been accepted for publication as an article by Berkeley Technology Law Journal. You can view the pre-print here: The Role of the Rule of Law in Virtual Communities (forthcoming BTLJ 2011) (PDF).
There is a severe tendency in cyberlaw theory to delegitimize state intervention in the governance of virtual communities. Much of the existing theory makes one of two fundamental flawed assumptions: that communities will always be best governed without the intervention of the state; or that the territorial state can best encourage the development of communities by creating enforceable property rights and allowing the market to resolve any disputes. These assumptions do not ascribe sufficient weight to the value-laden support that the territorial state always provides to private governance regimes, the inefficiencies that will tend to limit the development utopian communities, and the continued role of the territorial state in limiting autonomy in accordance with communal values.
In order to overcome these deterministic assumptions, this article provides a framework based upon the values of the rule of law through which to conceptualise the legitimacy of the private exercise of power in virtual communities. The rule of law provides a constitutional discourse that assists in considering appropriate limits on the exercise of private power. I argue that the private contractual framework that is used to govern relations in virtual communities ought to be informed by the values of the rule of law in order to more appropriately address the governance tensions that permeate these spaces. These values suggest three main limits to the exercise of private power: that governance is limited by community rules and that the scope of autonomy is limited by the substantive values of the territorial state; that private contractual rules should be general, equal, and certain; and that, most importantly, internal norms be predicated upon the consent of participants.
A few weeks ago I lodged EFA’s submission on legitimacy and transparency in Mandatory ISP Filtering, written by myself, Kylie Pappalardo and Irene Graham. We received a lot of negative feedback at EFA for engaging with the DBCDE on this issue, but I think it’s very important. Stepping back from my opposition to the Labor Government’s plan to introduce mandatory filtering, the issue is theoretically quite complex.
[edit: now with more slides! PDF (3MB) ODP (5MB)]
My final seminar for my PhD is this Tuesday. All are welcome; let me know if you’re interested in coming along!
Date: Tuesday 16 February 2010
Time: 11:00am -12:00pm
Venue: Z Block Room 1124, QUT Gardens Point campus
Panel Chairperson/Principal Supervisor: Prof Brian Fitzgerald, Faculty of Law
Other Panel Member: Dr John Banks, ARC Centre of Excellence for Creative Industries
External Panel Member: Professor Louise Longdin, Auckland University of Technology
This thesis considers how the law should regulate the exercise of private governance power in virtual communities? This question centres on the legitimacy of governance in the way that community norms are created and enforced. This is the project of digital constitutionalism, which seeks to articulate a set of limits on private power that will best encourage innovation and autonomy and simultaneously protect the legitimate interests of participants in these increasingly important spaces. In answering this question, I provide a normative framework based upon the broad ideals of the rule of law through which to conceptualise the tensions about governance that arise in virtual communities.
This thesis argues that the flexibility inherent in the private contractual law model that is currently used to govern virtual communities should be informed by constitutional principles – particularly those of the rule of law – in order for the law to properly address the tensions that arise out of private governance.
Rule of law values highlight three main themes that should serve to limit the abuse of private power in virtual community governance: a suggestion that participants ought not be subject to arbitrary punishment; that rules be general, equal, and certain; and, most importantly, that legitimacy in the rules is derived primarily from the consent of participants. This thesis argues that these values should be taken into account in interpreting contractual terms of service and the application of contractual doctrine in order to create a regulatory framework that supports autonomy and innovation in virtual communities whilst simultaneously limiting the abuse of power from illegitimate governance.
Warwick Rothnie is reporting that the Federal Court has declined to follow Desktop Marketing (which held that telephone directories were protected by copyright in 2002) in light of the High Court’s decision in IceTV (which held that copyright was not infringed by taking time and title information from a timetable). Decision is here: Telstra v Phone Directories [2010] FCA 44.
This is very interesting. The argument that IceTV effectively overrules DMS was inevitable, given Telstra’s near monopoly on a relatively lucrative compilation of information. Telstra argued that IceTV’s discussion of DMS was obiter and that the Federal Court would still be bound by the older Full Federal Court decision. As Warwick highlights, Justin Gordon explains that that contention was incorrect: ([46], citations removed)
Before turning to the facts, mention must be made of the decision of the Full Court of the Federal Court in Desktop Marketing. In that decision, copyright was found to subsist in certain editions of WPDs and YPDs. The Applicants submitted that the resolution of the present case remains governed by the outcome in Desktop Marketing and that the High Court’s comments on copyright subsistence in IceTV should be regarded as obiter dicta. I reject that contention. Firstly, IceTV is binding authority on the proper interpretation of the Copyright Act. The reasoning of both plurality judgments establishes principles of law beyond copyright infringement. Secondly, the High Court directly warned of the need to treat Desktop Marketing with particular care: see IceTV at [52], [134], [157] and [188]. Thirdly, Desktop Marketing [...] did not deal directly with the issue of authorship. Rather, all issues in respect of copyright had been conceded other than that of originality. In fact, Finkelstein J (at first instance) questioned the assumptions the parties had made about authorship: Telstra Corporation Ltd v Desktop Marketing Systems Pty Ltd [2001] FCA 612 at [4]. Finally, the facts of this case are significantly different. The WPDs and YPDs in question are different. Moreover, the Genesis Computer System which stored the relational database and which was used in the production of some of the WPDs and YPDs in issue in these proceedings (after September 2001 in the case of YPDs and late 2003 in the case of WPDs) was not in use in Desktop Marketing[...].
Very interesting. It seems that the High Court’s decision in IceTV is already having flow-on effects, bringing Australian copyright law more into line with the higher standard of originality required in the US and other jurisdictions for copyright protection. It seems that Her Honour’s decision was predicated on the lack of identifiable authorship as well as the lack of originality of contributions. The rising importance of authorship is quite interesting; it is something that has been somewhat neglected in copyright law in the past. (See Tim Wu, ‘On Copyright’s Authorship Policy’ 2008 U. Chi. Legal F. 335 (2008) (pre-print at SSRN).)
Justice Cowdroy’s decision in Roadshow v iiNet held that a person who provides facilities that are used for infringement but does not play a more active part — for example by intentionally designing the system to profit, or providing facilities in circumstances where there are only limited non-infringing uses, or explicitly inviting or promoting the use of the system for infringement — will not be held to ‘authorise’ those infringements, because it does not provide the ‘means’ for infringement.
This construction minimises the role of the Category A safe harbour, which is designed to insulate ISPs who “facilities or services for transmitting, routing or providing connections” (s 116AC) for copyright material from monetary damages for copyright infringement. What is the extent of the overlap between this safe harbour and Cowdroy J’s intrepreation of authorisation for ISPs?
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The ‘means’ of infringement: tracing a line through Moorhouse, Tape Manufacturers, Cooper, and Kazaa (via Sony)
The iiNet judgment traces an interesting line through authorisation liability in the context of technology cases. Cowdroy reads the technology authorisation cases (Moorhouse, Australian Tape Manufacturers, Cooper, and Kazaa) as predicating liability firstly upon whether the defendant has provided the ‘means’ of infringement; a complex factual determination that depends on the context, but seems to implicitly incorporate the Sony test of whether the technology has substantial non-infringing uses and an intention test that goes to the design of the system and the invitation to infringe.
The conclusion that Cowdrow J draws is that iiNet does not provide the ‘means’ to infringement, because (a) the internet has many ‘lawful uses’ (Tape Manufacturers) (cf Sony, ’substantial non-infringing uses’); and (b) iiNet has not actively supported the system that is the ‘means’ of infringement (the BitTorrent system, as a whole). Crucially, one does not infringe merely by using the internet – users need to do something else (seek out BitTorrent trackers and files) in order to infringe. If iiNet had played a more active part in the infringement, then it may be seen as providing the ‘means’ (in Moorhouse, this was by providing a copier in a library and effectively extending an invitation to infringe (per Jacobs J) or where it was ‘likely’ to be used for infringement (per Gibbs J); in Kazaa this was the advertising, predominantly ‘join the revolution’; in Cooper it was the knowledge and intent that most files on the website were infringing). What makes this interesting is that ‘means’ appears to incorporate intent in some way, although it is not exactly clear how this plays out.
Only after the ‘means’ are identified do the other factors become relevant – control, power to prevent, and knowledge of infringements. It would seem that the best reading of Cooper is that the ISP in that case was that while it did not provide the ‘means’ by hosting Cooper’s website, it was drawn into his infringement by the support it gave him with knowledge and intent that the files were predominantly infringing. No such relationship of control or support existed between iiNet and anyone providing BitTorrent services.
Much of this reasoning appears to depend on a finding that the internet is much more useful for non-infringing uses (not a ‘human right’, but performs a “central role in almost all aspects of modern life”).([411]) This distinguishes general technologies that “have lawful uses” (Tape Manufacturers) from technologies like Kazaa and Cooper’s website, whose ‘predominant’ or ‘overwhelming’ uses are to infringe ([412]). This seems explicitly draw Australian authority into line with the development of US authority in Sony, that developers will not be liable for products that have “substantial non-infringing uses”, and the exception that was drawn in Grokster holding developers liable where they ‘induced’ infringement. In this way, Cowdroy neatly reads Moorhouse in line with Sony and both Cooper and Kazaa in line with Grokster.
This is actually quite a neat distinction. Rather than treating every link in the chain that makes infringement possible as the ‘means’ of infringement and then having to carefully examine factors such as control, power to prevent, and knowledge, Cowdroy J has managed to articulate a distinction between mere facilities and services that are actually either designed to aide infringement, promoted to do so, or have little other purpose than to facilitate infringement. This puts an end to the classic confusion – if iiNet are liable for the acts of its users, surely the electricity company can also be liable, because but for their power, infringements could not occur. By interpreting ‘means of infringement’to require some more active role, Cowdroy J has created some certainty for the providers of general use technologies.
A potential problem on appeal may be whether this definition of ‘means’ is consistent with s 101(1A), which requires that in addressing authorisation, a court must take into account control (power to prevent), relationship, and reasonable steps taken. If the enquiry is ended by the definition of ‘means’ of infringement, these factors may not be adequately taken into account. Justice Cowdroy dealt with this by relying on Kazaa and Metro as authority that 101(1A) did not change the common law for authorisation([415]); the statutory considerations are therefore relevant, and must be considered, but they seem to be subsumed within the threshold question of whether the respondent provided the ‘means’. So, in this case, iiNet did not have a power to prevent because they had no control BitTorrent – which meant that iiNet did not provide the ‘means’.([424],[444]) Similarly, there was nothing in the relationship of iiNet with its subscribers that suggested that iiNet authorised their infringements – unlike Kazaa.([452]) Finally, the Court found that iiNet had no reasonable steps it could have taken to prevent infringement.([458]) It would seem, in Cowdroy J’s framework, that if any of these factors were different, iiNet may be taken as having provided the ‘means’ for infringement (though they are not determinative of themselves). The same goes for knowledge and encouragement, which are relevant but not statutory factors.([463], [473]). More analysis is required as to how exactly the statutory factors inform both the finding of whether a technology provides the ‘means’ of infringement and the questions that must be asked after the means have been identified, but, as a complex question of fact, Cowdroy J’s use of a distinction based upon the ‘means’ does not seem to fall into an error of law and seems to provide a useful way to distinguish active from passive actors.
[ edit: full decision is now available: Roadshow Films Pty Ltd v iiNet Limited (No. 3) [2010] FCA 24. More commentary to come. ]
More analysis on iiNet, after I have seen the written summary of the judgment. Justice Cowdroy found that iiNet did not ‘authorise’ the infringements of its users. In coming to this conclusion, Cowdroy J drew a distinction between iiNet and Moorhouse, Jain, Metro, Cooper, and Kazaa based upon what it meant to provide the ‘means’ of infringement:
“There does not appear to be any way to infringe the applicants’ copyright from the mere use of the internet. Rather, the ‘means’ by which the applicants’ copyright isinfringed is an iiNet user’s use of the constituent parts of the BitTorrent system. iiNet has no control over the BitTorrent systme and is not responsible for the operation of the BitTorrent system.”
This is very interesting; it suggests that not every link in the chain that enables infringement will constitute providing the ‘means’ of infringement. It seems to make sense, but it does change the way we have come to think about infringement. Having said that, Cowdroy J did not find that ss 39B and 112E, which insulate a provider from liability where it merely “provides the facilities” for infringement, would have prevented iiNet from being liable. This suggests that the scope of ss 39B and 112E are not particularly greater than the Moorhouse test for infringement, which is something the Philips Fox report suggested, but has never been made clear.
Interestingly, as a finding of fact, Cowdroy J found that iiNet had actual knowledge of infringements and did not act to stop them.
So, the decision was based primarily upon the Moorhouse test for infringement – whether iiNet ’sanctioned, approved, or countenanced’ the infringements of its users. Justice Cowdroy found, in relatively strong terms, that iiNet could not be seen as authorising any infringements, as “iiNet has done no more than to provide an internet service to its users.” His Honour contrasts this clearly with the most recent secondary liability cases, where there was clearly bad faith in the actions of the providers: “This can be clearly contrasted with the respondents in the Cooper and Kazaa proceedings, in which the respondents intended copyright infringements to occur, and in circumstances where the website and software respectively were deliberately structured to achieve this result.”
In coming to this conclusion, Cowdroy J worked through the requirements for authorisation liability in s 101, which include the extent of iiNet’s power to prevent infringements and whether iiNet took any reasonable steps to prevent or avoid infringements. Very interestingly, His Honour found that a scheme for notification, suspension and termination of customer accounts is not “a relevant power to prevent copyright infringement” pursuant to s 101(1A)(a); nor is it a ‘reasonable step’ pursuant to s 101(1A)(c). It seems that here the Judge must have been impressed with iiNet’s arguments that disconnection of internet access is not a correct or reasonable response to allegations of copyright infringement. Given the way in which Cowdroy J distinguished the earlier authorisation cases, it seems that the factors in 101(1A) are more likely to be relevant where the provider has some sort of more fine-grained control over the network or service that provides the actual ‘means’ to infringement; not just a big switch on the entirety of a customer’s network connection.
This is an excellent finding of fact – it shows that Cowdroy J rejects AFACT’s argument that it would be ‘reasonable’ to disconnect users based upon unproved allegations of infringement. Clearly a win for the interests of users.
This finding of fact in itself is sufficient to allow iiNet to escape liability. Justice Cowdroy, however, also made some findings of facts on the safe harbours, in case of any appeal. Interestingly, His Honour held that the safe harbours would have covered iiNet’s actions if it were liable for authorisation; the critical finding here is whether iiNet reasonably implemented a policy for termination of the accounts of repeat infringers. In explicitly turning to US authority, Justice Cowdroy found that though it was not a policy of the form that AFACT would have liked, iiNet did reasonably implement a repeat infringer policy. There’s not much detail on this point in the summary, but this will be an important consideration in the future. We were a bit concerned for a while that the safe harbours, which many of us had assumed were designed to cover ISPs in iiNet’s position, did not provide adequate certainty. It seems that that may now have been rectified, at least for passive ISPs, and the interpretative battle lines will have to be redrawn around content providers now – particularly sites like YouTube who are more directly involved in any infringements.
All in all, this seems like a very strong win for iiNet. The two main findings of fact – that iiNet did not ‘authorise’ and that iiNet’s policy was ‘reasonable’ – will make it extremely difficult for AFACT to appeal. Having said that, an appeal does seem inevitable. I will provide some more information when the full text of the judgment is available.
