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Wednesday, 29 November 2006
Page: 102

Senator LUNDY (4:26 PM) —I rise to speak to the Copyright Amendment Bill 2006. The bill is comprised of a number of schedules—12 in fact—and yet only one of them is required to be passed before 1 January 2007 in order for Australia to fulfil its obligations under the Australia-US free trade agreement. I will speak in some detail to the flaws in schedule 12, which is the schedule relating to these obligations, but first I would like to turn to a range of other changes that, if not amended, will see the rights of consumers take a turn for the worse and, in some cases, allow the innocent activities of kids to become criminal offences, potentially resulting in thousands of dollars of on-the-spot fines.

The government has stated that the purpose of this bill was to protect consumers by making a range of real exceptions to copyright protection that reflect current practice in the home and normal private use. This it was claimed would update our laws and provide impunity to consumers using content, be it music, movies or software that they had purchased for their own private use in a way that did not breach copyright. But that is not what has emerged. With the government choosing not to adopt a general fair use exception for private use, an option open to them under the provisions of the free trade agreement, they have preferred to persist with a string of exceptions that have added complexity by virtue of their specificity about what can and cannot be done with respect to copyright. And they did not get this right. The exceptions were poorly drafted and did not reflect the basic normal practices of established technologies such as digital music players. They do not address saving podcasts and playing them later and other downloadable content. The Australian Consumers Association says in a letter that it forwarded to, I think, all parliamentarians, certainly to all senators:

Behaviour which many if not most Australians think is acceptable will be a criminal offence. Worse, it makes those offences ‘strict liability’—this means a person can be found guilty even if they did not know they were breaching copyright.

And that it allows police to issue ‘on the spot fines’ for each offence, and potentially turns possession of ordinary consumer items such as an iPod or a computer into an offence with a $65, 000 fine.

This is because it would include multiple offences to use it. The bill does not reflect sensible time shifting and format shifting of content in this way. In other words, the bill has failed in the minister’s primary claim. The Senate committee inquiry into this matter heard a lot of evidence about these problems and received submissions articulating frightening scenario after frightening scenario of the misapplication of the exceptions that were drafted, and exposed the obvious gaps of reasonable places for exceptions that were ignored by the government.

Schedule 1 of the bill relates to a new regime of strict liability fines for consumers who breach copyright. In other words, if a specific activity of a consumer were not protected by an exception, these massive fines would be imposed—regardless of the intent of the consumer. Such a strict liability regime is unprecedented in the world and, I think, represents a massive win for the large corporations that have been lobbying the Howard government to legislate to protect their interests.

The strict liability regime means that, where a consumer is believed by the authorities to be in breach of copyright, the authorities may issue an on-the-spot fine of $6,600 and record a criminal offence. The strict liability scheme means that even kids who are doing things they thought were legal will be hit with massive fines. The bizarre thing is that those organisations which have successfully influenced the Howard government to impose such a punitive regime say that it is all about stopping piracy of CDs and DVDs. Where I think their case falls apart is that this strict liability penalty system is clearly aimed at humble consumers. It is not aimed at pirates who profit commercially from the mass production of illegal material. No-one supports piracy; Labor certainly does not, and we certainly want to see laws that are strong enough to stop those who profit from it.

Unfortunately, the agenda here was to put the fear of a jail term or massive fines in the minds of consumers using new technologies. One can only assume that this was to progress their agenda of protecting future business models of downloading digital content and to try to insert a culture of fear and concern around the use of new technologies rather than one of exploration and exciting new inventions.

Evidence to back this assertion came following some discussion in the Senate inquiry about whether or not the strict liability regime was aimed at people seeking to make a commercial gain from breaching copyright. Even a suggestion put forward by academic Kim Weatherall, an expert in the intellectual property area, to codify the strict liability towards just commercial activities was rejected. I also note that the government has foreshadowed some amendments in this area, and we will be pleased to see if any remediation can be made of this strict liability scheme. Labor is concerned about the government’s choice to proceed down the exceptions path instead of a general fair use regime for consumers. Labor is also concerned about the unprecedented nature of the strict liability regime. But what we are particularly alarmed about, and we will be moving amendments to try to resolve this, is the intersection of these two problems.

I want to turn to a reasonably clear example of how vulnerable children will be to this strict liability regime if they are not protected properly by an exception. I was flipping through a Dolly magazine belonging to one of my daughters and I came across an article titled, ‘How to be a virtual celebrity’. It said:

Websites like YouTube and MySpace have started the virtual star revolution, which means all it takes for you to become an instant cyber celebrity is a little webcam and a big idea.

The article goes on to say that readers can check out a range of ideas, including ‘lip-syncing your favourite song’. It all seems pretty innocent. I should add that Dolly also published some stern warnings about internet safety, which was good to see.

Under this bill, such innocent advice from a teenage girls magazine, such as Dolly, to do the ‘virtual lip-synching instant celebrity’ stunt may get them into a whole lot of trouble if this bill passes in its current form. As was stated in an article in Tuesday’s Financial Review, Professor Brian Fitzgerald from the Queensland University of Technology submitted to the Senate inquiry on this bill that such lip-synching online was a technical breach of copyright of the song. The Australian Consumers Association noted that this could represent an on-the-spot fine of $6,600. I do not know too many teenage or pre-teen kids who can afford that kind of fine—and I am sure their parents would not be at all happy.

The bottom line is that it is outrageous to even suggest that this kind of innocent behaviour—promoted in the mainstream media, no less—should be considered illegal; yet it is, under the current wording of this bill, and the Howard government have drafted this bill so as to nail children for it. That said, the government have circulated amendments that appear to modify some of these strict liability penalties for consumers. I will be very interested to see the detail of these amendments. I think that if they do address this specific problem it is real progress. But, with the specificity of exceptions, the challenge is almost to determine every scenario that could be considered to be innocent and normal use and put that in the bill to provide that protection; hence Labor’s view that the combination of using a model that has specific exceptions and strict liability fines is too complex and confusing and leaves consumers vulnerable. The bill fails to achieve the stated objective of the minister that the bill will protect consumers from prosecution under copyright law for normal private use.

I acknowledge that there is progress, because there are many activities which technically are illegal as they stand now. This whole bill is about progressing in such a way that some of those activities are codified and protected for legitimate use, but the model makes it very difficult to catch everything and to protect consumers in a wholehearted way. From Labor’s perspective, a general fair use exception is a plausible alternative that the government ought to have considered—and I think they probably did consider it and made a policy decision to proceed along the exception path. I also want to note that it is permissible under the Australia-US Free Trade Agreement to adopt a general use private exception model, but that is an option that the Howard government have not chosen to take up.

There is no place for strict liability without genuine protections for fair use under copyright by consumers and for fair dealing by libraries and educational institutions. The bottom line is that it would be much more difficult to have a general fair use regime coexist with a strict liability penalty scheme anyway, particularly one that relates to consumers. It is only the specificity of the exceptions approach that would enable the strict liability scheme to be implemented. So it is a double whammy against consumers in this regard. That is why in the committee stage Labor will be moving amendments to delete those strict liability offences. We are concerned that the government has chosen to go down this path of convoluted exceptions for consumers.

In the absence of the fair use approach, Labor believes it is essential to remove that strict liability regime, and that that is the only way to really protect consumers from uncertainty and the potential for the unfair application of fines, to the tune of $660,000 for individual offences, which could obviously bank up through various innocent activities. These are not the sorts of provisions that target law-breaking copyright pirates; they are laws to hound kids. I urge the Howard government to heed the advice of their own backbench, who have urged further consideration of the strict liability regime in their own recommendations in the Senate committee report. We know from the evidence given to the Senate committee that the police, who will be responsible for the fines and the infringement notices, have not even considered the administration of the scheme in any great detail.

I now turn to schedule 12, which I mentioned at the start of my speech. This must pass in some form by 1 January 2007 in order to meet our outstanding obligations under the Australia-United States Free Trade Agreement. It relates to technological protection measures. Under the terms of the free trade agreement, the federal government has to determine and legislate a regime that renders actual circumvention of technological protection measures, or TPMs, illegal, given that previously it was the manufacture and distribution of devices used to circumvent TPMs that was illegal. Schedule 12 addresses the definition of TPMs and what additional exceptions, if any, ought to apply to permit circumvention of a TPM and in what circumstances. It is quite a technical area of the bill, but one I feel is worthwhile extrapolating to explain the serious point it sits within.

The FTA has already determined some of those exceptions, and since then part of the responsibility of the Howard government has been to determine if there were to be any more. Since that time, there has been a House of Representatives Standing Committee on Legal and Constitutional Affairs inquiry report entitled Review of technological protection measures exceptions. The committee recommended a number of additional exceptions, some of which have been picked up in this bill and some of which have not. The committee also made an important recommendation in respect of the definition of a technological protection measure.

We are dealing in schedule 12 with an expansion of the technological protection regime, both in the form of exceptions and in some changes to the definition. We have new criminal offences relating to the use of circumvention devices. We also have exemptions that give a picture of some balance to the changes in protection for consumers relating to a couple of issues which I will come to shortly. On the surface, it appears that the government has addressed a major area of concern for consumers. It has outlawed TPMs that enable regional coding and prevents third-party spare parts and exploitation of those markets. This is welcome and it addresses two of the best-known anticompetitive abuses of the use of TPMs.

However, there is far more going on in the detail and definitions used in schedule 12 that gives me great cause for concern. There are three main areas of concern that I have. The first concern is the complaint that the specific exceptions as they are currently worded are confusing and misleading. I note that the government is making some effort through its amendments. I will be following up and checking this to try and resolve some of that confusion. The second concern is that there ought to be additional exceptions, particularly in relation to the needs of software and data interoperability. Again, I think some of this has been addressed and some of it has not. Labor will try and fill those gaps with amendments.

The third and very serious concern is the actual definition of technological protection measures in the bill itself. I will discuss that briefly and will be able to expand further during the committee stage of this bill. We all agree with the principle that copyright owners have a right to protect their work for a period that permits them to be rewarded for their creative efforts and ensures adequate economic incentive exists to encourage innovation and creation of new content, works of art and so on. It is general premise. As new distribution methods and technologies develop and threaten the holders of copyright’s ability to receive their rewards and provide incentive to invest, new ways have been developed to protect these rights.

TPMs are one way that can be used to protect copyright in the technological digital environment—not just on the internet but also for a whole range of devices. For example, a TPM of high-level encryption on software code or content is designed to prevent it from being copied without the permission of the copyright owner. This permission might be made available under specific circumstances through a password, which is like a key to unlock that content or code. Nonetheless, there have always been people who have created new tools and ways to unlock these technological locks and, in the language used in the bill, circumvent the TPMs. There are right reasons for this circumvention and there are wrong reasons for it.

This bill has the responsibility and role of determining what the right reasons and the wrong reasons are. This bill creates a series of exceptions for the right reasons. What are the right reasons to permit circumvention? Once they are identified, exceptions are created to allow it to happen in those circumstances. There are wrong reasons as well. Those wrong reasons include pirating—people profiting from ripping off other people’s content or using it in a way that breaches copyright. The bill creates new criminal offences that go beyond the existing illegality of manufacturers and distributors of tools and devices used to circumvent and extends them to people actually using these tools and devices. The purpose of this law is to prevent this circumvention where it results in a deliberate copyright infringement. We all agree that circumvention for a deliberate breach of copyright is for the wrong reason and ought to be illegal.

New criminal offences applying to the use of circumvention for those wrong reasons also satisfy Australia’s obligations under the free trade agreement. But equally it is important to determine the right and wrong reasons for a TPM to be used in the first place and to be eligible for protection from circumvention. Contained in the definition of a TPM are the right and wrong reasons for which that they can be used in the first place. This is where I have a problem.

Predictably, business has found other uses for TPMs. We know that because there are already a couple of important exceptions, about regional coding and third-party spare parts markets et cetera. These wrong purposes, if you like, are market segmentation, price gouging consumers by locking up markets, prevention of reverse engineering for the purposes of creating interoperable products, perpetuation of unfair monopolies and so forth. In other words, TPMs are used to protect old and new business models and markets.

All of these purposes are anticompetitive practice and anti innovation in nature. They do not deserve the sanction of the law. Already the ACCC has seen fit to specifically criticise the use of TPMs in relation to market segmentation, and, in the Stevens v Sony High Court decision, the necessity of the link between TPM use and the protection of infringement of copyright was reinforced.

While the bill purports to close off the more obvious example of abuse of a TPM that is not designed to prevent infringement of copyright by creating a new exception to prevent market segmentation and third-party spare parts markets, in a typically sneaky way—and I think it is quite unforgivable—the Howard government is determined to remove from the definition the link between TPMs and the protection of infringement to copyright— (Time expired)