New Zealand: Copyright Infringing File Sharing Bill passes into law in New Zealand

Last Updated: 15 April 2011

The controversial Copyright (Infringing File Sharing) Amendment Bill passed its third reading today (14 April 2011) with the majority of its provisions to come into effect on 1 September 2011.

What the new law does

The Bill was passed under urgency and amends the Copyright Act 1994.  It includes provisions dealing with copyright infringement over the internet and has implications for all New Zealanders – but particularly those involved in sharing/downloading music or movies without a copyright owner's authorisation.

The law repeals section 92A of the Copyright Act (enacted by section 53 of the Copyright (New Technologies and Performers Rights) Amendment Act 2008), which would have required Internet Service Providers (ISPs) to adopt a policy providing for the termination of a repeat infringer's Internet account. 

Various civil liberty groups protested against section 92A and the section also raised considerable debate among academics and lawyers (as have similar provisions around the world – for example, in France, with the enactment of the HADOPI regime, and in the UK with the approval of the Digital Economy Bill 2010).  As a result, section 92A was never brought into force.

The new notification and take down regime

The new law implements a three-strike notice regime to deter illegal file sharing under which:

  • Copyright owners notify ISPs that someone is downloading infringing material, (such as films or video) without paying for it, through file sharing.
  • ISPs send warning notices to those customers advising them they may have infringed copyright. 
  • After three warnings, if the user does not stop, the copyright owner is able to take a claim to the Copyright Tribunal. 
  • The Tribunal has the power to impose a maximum $15,000 penalty on the Internet account holder.

The jurisdiction of the Copyright Tribunal has been extended to enable this regime to operate.  It aims to provide a "fast track, low cost process" to decide on illegal file sharing claims.  However, many observers remain sceptical as to whether this will be the case given the size of the Tribunal (currently three part-time members) relative to the anticipated work load.

Suspension of internet accounts

The Bill, as originally proposed, provided for a District Court to suspend an Internet account for up to six months, in appropriate circumstances.  Under the legislation as passed, that power has effectively been delayed by virtue of a new section 122PA whereby such a suspension cannot be applied for until a date set by Order in Council – which may be made by the Governor General on the recommendation of the Justice Minister.  

It is expected this issue of Internet suspension will be reviewed in two years time, in conjunction with the five year review of the digital copyright amendments that were passed in 2008 and is likely to be implemented if the Minister is persuaded that the notice process and the remedies in the Copyright Tribunal are proving ineffective.
The law will not apply to cell phone networks until 2013.

Is there a need for new law in this area?

Proponents of the Internet suspension are optimistic that the legislation will discourage illegal file sharing and provide more effective measures to help rights-holders enforce their copyright.  They acknowledge that the Copyright Act, prior to the introduction of this new law, already provided civil and criminal sanctions for infringement of copyright.  However, in practice (as is the case in other jurisdictions), current enforcement measures are ineffective in countering infringing file sharing. 

The New Zealand Federation Against Copyright Theft (NZFACT), the enforcement arm of the Motion Picture Association of America in New Zealand, estimates that there are approximately 150,000 illegal file shares occurring in New Zealand every month.  And a recent survey (Synovate Survey 2008) found that two in five young people have downloaded illegal copies of movies free of charge.

Meanwhile, on the other side of the equation, opponents of the law have reignited a campaign to black out their social network avatars (or photos), first introduced - to worldwide publicity - when the original section 92A was introduced.

Will the law achieve what it sets out to do?

Overall, the new law appears to be a step in the right direction towards a solution (or at least reduction in the extent of) the problem of illegal file sharing in New Zealand.  It provides the basis for a new framework for dealing with copyright infringing behaviour, and has real potential to provide a cost-effective, credible regime to deter individuals from infringing via peer-to-peer file sharing, whilst at the same time ensuring to a great extent that privacy of individuals is respected and that the measures are proportionate to the infringing actions.

However, there are a number of issues yet to be resolved including the amounts payable by rights holders to ISPs to process a warning notice. These will have a significant impact on whether or not the system is workable in practice.  These issues will no doubt be sorted out over the coming months.  Until then, one thing is for sure, the law will continue to generate controversy.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

James and Wells is the 2010 New Zealand Law Awards winner of the Intellectual Property Law Award for excellence in client service.

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