Stevens V Sony: A Set-Back for Copyright Owners

The High Court issued a rare judgment under the Copyright Act (Act) on 6 October 2005. In a set-back for copyright owners, the court ruled in Stevens v Sony that the sale of 'mod chips' by Mr Stevens for use with Australian Playstation consoles did not breach the anti-circumvention provisions of the Act.

All CD-ROMs containing 'official' Playstation games include a string of encrypted data (access code) which the boot ROM in the Playstation console searches for when a CD-ROM is inserted in the disk-drive. If the boot ROM does not find the access code, the game cannot be played. The access code cannot be copied by conventional means so most illegally copied disks do not contain the code. And 'genuine' games intended for regions other than Europe and Australia have a different, and unrecognised, access code. This system (the Sony system) allows Sony to protect its exclusive licensees in different geographic markets against the twin evils of piracy and parallel importation. Mod-chipping undermines this strategy by enabling local Playstation users to play genuine, but often cheaper, imported games as well as pirated copies. It does this essentially by telling the boot ROM to ignore the absence of the access code.

The Act now runs to over 500 pages and is replete with examples of complex, or convoluted, drafting. The anti-circumvention provisions, which are not concerned with copyright infringement as such but rather with 'anti-spoiler devices which ... allow the side-stepping of technical barriers to copying', are no exception. In the Stevens litigation the issue before the High Court was whether the Sony system was or included a 'technological protection measure'. If so, the sale of the mod chips would have breached the anti-circumvention provisions. Relevantly, 'technological protection measure' is defined in the Act as follows:

Sony’s primary argument that the Sony system was a technological protection measure depended on a broad reading of inhibit. It argued that to 'inhibit' infringement included not just steps taken which may directly inhibit particular acts of infringement, but also anticipatory steps which may discourage people from infringing, by making their infringing copies unplayable and therefore worthless.

The court rejected this interpretation, holding that for a device to be a 'technological protection measure' it must be designed, by reason of its physical operation, to bring about a particular result. In particular, the operation of the device must directly prevent or inhibit infringing acts, by preventing or inhibiting either access to the work or the making of copies. Although in a practical sense the Sony system did inhibit access to the work to play the game (as CD-ROMs without the access code could not be played on the console), the system did not operate to prevent or inhibit the infringement of copyright in the work by the making of an illegal copy of the game—ie by burning a CD-ROM. In short, the Sony system only affected the usability of copied games and did not inhibit people in any way from making antecedent copies, albeit that if the system worked these would be worthless.

This ruling may seem very narrow and literal. The term inhibit can readily bear the meaning discourage which the court rejected and indeed, the full Federal Court had preferred this broad construction. In part, this case exemplifies the approach of the current High Court to statutory interpretation. The court noted that although the Acts Interpretation Act dictates that courts take a 'purposive' approach to interpretation, in complex legislation such as the Copyright Act it is usually impossible to discern any clear legislative purpose outside the text of the Act itself, beyond an intention to reach an opaque compromise between competing interests. In such cases no purposive rule of construction can, in the court’s view, 'obviate the need for close attention to the text and structure' of the relevant provisions.

Following a close textual analysis, the court pointed to some general considerations favouring a narrower construction of the definition which included:

• The penal character of the relevant provisions–ie a person selling a circumvention device may be liable for imprisonment for up to five years. This consideration will be even more important in future cases under the Copyright Act, with the broadening and strengthening of the penal provisions of the Act to implement Australia’s Free Trade Agreement with the United States.

• The provisions are designed to assist copyright owners to enforce their copyrights–accordingly, these provisions should not be read in an overbroad way which would effectively extend the copyright monopoly rather than match it, by preventing the carrying out of conduct which does not infringe copyright and is not otherwise unlawful.

Sony argued that if it was wrong on the meaning of inhibit, the playing of a Playstation game was in any event also an infringement either of the literary copyright in the computer program for the game or the film copyright in the game. If so, then the Sony system was a 'technological protection measure' because it clearly inhibited the playing of games. However, the court ruled against Sony on these further arguments also. Its reasoning was broadly as follows:

• The only copying of a computer program which results from playing a computer game is the temporary copying of parts of the program in the RAM of the console. To infringe copyright, a copy has to take a material form. The court ruled that copies held in RAM will normally not be in a material form because RAM is not normally a form of storage from which the program or a substantial part of it can be further reproduced. (Significantly, since 1 January 2005 the definition of material form no longer contains this requirement. So there would seem to be scope for Sony to re-argue this aspect of its case in a subsequent proceeding).

• The parties agreed that interactive computer games are protected by copyright as films as well as computer programs. The court proceeded on this basis (whilst expressing some tentative doubt about this) but found that there was no or inadequate evidence that the playing of any of the computer games in evidence involved the reproduction of a substantial part of any cinematographic film.

This immediate result is a set-back for copyright owners and has broader lessons for the interpretation of the Act. The court was apparently strongly influenced by its view that the Act is in essence a legislative compromise between copyright owners and users and that the balance struck is necessarily to some extent arbitrary. In these circumstances, the court considered that any exercise of finding legislative intention of the Act outside the text of the Act is likely to be fruitless. One may speculate that this will only lead to even more frequent amendments of the Act as the parliament attempts to plug perceived loopholes resulting from Stevens v Sony and other decisions in its footsteps.

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