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Copyright Amendment (Parallel Importation) Bill 2003

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2002-2003

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

SENATE

 

 

 

 

COPYRIGHT AMENDMENT (PARALLEL IMPORTATION) BILL 2002

 

 

 

 

 

SUPPLEMENTARY EXPLANATORY MEMORANDUM

 

 

 

 

(Circulated by authority of the Attorney-General, the Honourable Daryl Williams, AM QC MP)



COPYRIGHT AMENDMENT (PARALLEL IMPORTATION) BILL 2002

GENERAL OUTLINE

This amendment adds a new schedule to the Bill. 

Schedule 4 provides a range of amendments dealing with copyright enforcement. These amendments focus on improving the enforcement of copyright. They provide a range of important enhancements to a system of enforcement that has continued to provide an effective system of assistance to copyright owners in the defence of their intellectual property rights.   They provide direct and practical assistance in copyright enforcement within the context of a balanced general policy framework. 

The amendments ease the burden of proof of subsistence and ownership of copyright for both criminal and civil matters and improve the provisions for damages in civil cases.  They apply criminal penalties to the advertising of all infringing copies of copyright material (this penalty currently only applies to computer programs) and raise the monetary penalty for importation of infringing copies.  The criminal sanction for infringement of copyright by importation is increased by $55,000 for corporations (to a maximum of $357,500 per offence) and $11,000 for individuals (to a maximum $71,500 per offence).

The amendments also provide for the Federal Magistrates Court, which may be referred to as the Federal Magistrates Service (see the Federal Magistrates Act s.8), to have jurisdiction in various civil copyright matters. Consistent with current practices, the Federal Magistrates Service would refer more complex cases to the Federal Court utilising existing procedures. One of the main benefits of the Federal Magistrates Service having jurisdiction will be its availability as a quick, relatively cheap, forum for resolving routine cases - with reduced complexity. The Federal Magistrates Service has developed procedures that aim to be as streamlined and as user-friendly as possible, reducing delay and cost to litigants.

 

Specifically in relation to criminal proceedings these amendments provide for general presumptions supporting proof of subsistence and ownership of copyright to be drawn from labels and marks and from information in foreign certificates of copyright registration. The amendments also provide for the use in prosecutions of presumptions relating to the labelling of sound recordings.  These  support proof of subsistence and ownership of copyright in the sound recording and are directed to the specific labelling practices in that industry.

In relation to civil proceedings, the amendments add general presumptions supporting proof of subsistence and ownership of copyright to be drawn from various sources - labels and marks, information in foreign certificates of registration or through citation of each of the owners and transactions in the relevant ‘chain of title’ of the copyright. 

The amendments encourage courts hearing civil matters to consider the assessment and award of additional damages for serious infringement.   Australian copyright law allows ‘additional damages’ to punish or make an example of undesirable conduct.  The courts can currently award additional damages for infringement in certain circumstances the main element being ‘flagrancy’.   Two further factors, deterrence of similar infringements of copyright and the defendant’s conduct subsequent to becoming aware of alleged infringements, are now added to the list of factors to be considered in the award of additional damages.  This approach effectively targets and penalises serious copyright infringement and avoids potential arbitrary application of alternative deterrent approaches such as fixed statutory amounts. 

Together, these amendments provide an effective and comprehensive package of legislative reforms on copyright enforcement.

FINANCIAL IMPACT STATEMENT

The proposed amendments are expected to have little impact on Commonwealth expenditure or revenue although there may be some savings in the prosecution of individual cases.



NOTES ON CLAUSES

 

Clause 1

1.       This Clause amends clause 2 of the Bill to provide for the commencement of Schedule 4.  Schedule 4 is to commence 28 days after the Act receives the Royal Assent.  This delay in commencement ensures that no person is made subject to a criminal sanction or to a changed evidentiary provision relating to criminal actions that is added by Schedule 4 without having a reasonable prior opportunity to be aware of that sanction or change.

 

Clause 2

2.       This clause adds Schedule 4 to the Bill. 

 



SCHEDULE 4 - ENFORCEMENT

 

Item 1            After subparagraph 115(4)(b)(i)

3.       This item adds 2 new subparagraphs to section 115.   New subparagraph 115(4)(b)(ia) provides for a court to take into account where it is proper to do so the need for deterrence of similar infringements of copyright in considering the amount of and whether or not to award, additional damages. The remedy of additional damages is not a compensatory remedy.  It is a remedy directed precisely towards infringements that have an additional element beyond simple infringement.  This amendment requires a court where it is satisfied that it  is proper to do so to consider whether to award additional damages having regard not only to the particular circumstances of the infringement but also in the context of the broader impact on similar conduct and the award of additional damages in relation to that conduct.

4.       New subparagraph 115(4)(b)(ib) directs the attention of the court where proper to do so to conduct by a defendant subsequent to infringement or after an allegation of a copyright infringement.  This amendment makes it clear that the court is entitled to look not only at the conduct of a defendant prior to the infringement but to the full course of the defendant's conduct in relation to the infringement.  Action by a defendant, for example, to hide or disguise infringements, or to take other action prejudicial to the copyright owner may be taken into account in determining whether to award additional damages and the amount of that award.

5.       Both of these additional factors more directly focus on the punitive aspects in the award of additional damages as appropriate.

Item 2                         After section 126

6.       This item adds two new evidentiary provisions to the Act.

7.       New s.126A provides for a number of new presumptions relating to subsistence of copyright in civil actions.

8.       Subsection (1) provides that the new section applies to an action under the Part where the defendant has put the subsistence of copyright in issue.  Existing s.126 of the Act already provides a presumption of copyright subsistence and corresponding ownership unless the defendant puts these in issue.  As such, these new provisions are not relevant unless the defendant challenges the subsistence of copyright, or the plaintiff's ownership of copyright.

9.       Subsection (2) provides a presumption in relation to a label or mark on a copyright work, or subject matter other than a work or on the packaging or container of the work or subject matter.  Where there is, on that packaging or container, or on the work or other subject matter, a label or mark stating the year and place of first publication, or the making of the work or other subject matter, that statement is to be admissible as prima facie evidence of those facts. 

10.     The year and place of first publication are key issues in determining the subsistence of copyright.  Copyright has a finite duration.  As such, proof of the year the material was first published or made when linked to the relevant provisions setting out the duration of the particular subject-matter in question provides a ready means of establishing that the copyright has not expired.  Similarly, evidence as to the place of first publication provides a means of establishing that the work was first published in a jurisdiction, including Australia, giving rise to the recognition of copyright in Australia.  Under international treaty, Australia recognises first publication in many other jurisdictions as giving rise to copyright in Australia - see s.184 of the Act and regulations made under the Act pursuant to s.184. The presumption is at the level of prima facie evidence.  Should a defendant have material to contradict or raise a reasonable possibility that the presumption is not correct then the presumption is displaced. A court must also be satisfied on the balance of probabilities, having heard the matter, including the evidence pursuant to the presumption, that the evidence is probative. 

11.     Subsection (3) provides that a certificate or other document issued in a qualifying country in accordance with the law of that country that states the year and place of first publication, or the making, of the work or other subject matter is admissible as prima facie evidence of those particular statements.  Australia does not have a system of copyright registration and, under the principal international treaties, neither copyright registration, nor compliance with formalities, is required for copyright protection of foreign-produced works.  However, a number of jurisdictions do maintain copyright registration on a voluntary basis. This provision addresses concern about the difficulty and/or expense of proving copyright subsistence and ownership  in infringement cases in Australia where evidence to the contrary is not provided.

12.     The form of the presumption provides that official certificates or documents may be relied on if issued in accordance with the law of the qualifying country. A definition of 'qualifying country' is inserted by Item 7 of Schedule 1 of the Bill.  Further, the presumption is at the level of prima facie evidence.  Should a defendant have material to contradict or raise a reasonable possibility that the presumption is incorrect then the presumption would be displaced.  A court must also be satisfied on the balance of probabilities, having heard the matter, that the evidence, including that pursuant to the presumption, is probative.

13.     Subsection (4) allows a certificate or document of the type that is provided for in subsection (3) to be accepted as such a certificate or document if, on its face, it appears to be such a document.  This provision avoids the need to have to independently prove the validity or authenticity of the certificate or other document.  This provision is subject to a contrary intention being established.  As such, should a defendant have evidence to contradict or raise a reasonable possibility that the presumption is not correct then the presumption would be displaced.

14.     New s.126B provides for various presumptions and evidentiary assistance in the same form as the presumptions in s.126A, but directed to proof of ownership of copyright.  The new section also contains two additional provisions for evidentiary presumptions and a related offence provision.

15.     Subsection (1) provides that the new section applies to an action under the Part where the defendant has put the plaintiff’s ownership of copyright in issue.  Existing s.126 of the Act already provides a presumption of copyright subsistence and corresponding ownership unless the defendant puts these in issue.  As such, the provisions of this new section are not relevant unless the defendant challenges the plaintiff's ownership of the relevant copyright.

16.     Subsection (2) provides a presumption in relation to a label or mark on a copyright work, or subject matter other than a work or on the packaging or container of the work or subject matter.  Where there is on that packaging or container or on the work or other subject matter a label or mark stating that a person was the owner of copyright in the work or other subject matter at a particular time, that statement is to be admissible as prima facie evidence of those facts.  For the presumption to be relied upon the statement must indicate the ownership at a particular time.  It is not expected that this would be a specific day but rather is likely be a year date.  The presumption is at the level of prima facie evidence.  Should a defendant have material to contradict or raise a reasonable possibility that the presumption is not correct then the presumption would be displaced.  A court would also have to be satisfied on the balance of probabilities, having heard all the evidence, that the evidence, including that pursuant to the presumption, was probative. 

17.     Subsection (3) provides a presumption for a statement of copyright ownership on a certificate or other document issued in a qualifying country in accordance with the law of that country.  Where such a document states a person was the owner of copyright in a work or in a subject matter other than works at a particular time, that certificate or other document is admissible as prima facie evidence of those facts.  Australia does not have a system of copyright registration and, under the principal international treaties, neither copyright registration, nor compliance with formalities, is required for copyright protection of foreign-produced works.  However, a number of jurisdictions do maintain copyright registration on a voluntary basis. This provision addresses concern about the difficulty and/or expense of proving copyright subsistence and ownership in infringement cases in Australia where evidence to the contrary is not provided.

18.     A statement of copyright ownership in a foreign certificate will only be evidence of copyright ownership in that jurisdiction.

19.     The form of the presumption provides that certificates or documents issued in accordance with the law of the qualifying country may be relied on. A definition of 'qualifying country' is inserted by Item 7 of Schedule 1 of the Bill. Further, the presumption is at the level of prima facie evidence.  Should a defendant have material to contradict or raise a reasonable possibility that the presumption is not correct then the presumption would be displaced.  A court must also be satisfied on the balance of probabilities, having heard the matter, that the evidence led, including evidence pursuant to the presumption, is probative.

20.     Subsection (4) allows a certificate or document of the type that is provided for in subsection (3) to be accepted as such a certificate or document if, on its face, it appears to be such a document.  This provision avoids the need to have to independently prove the validity or authenticity of the certificate or other document if it appears valid.  This provision is subject to the contrary intention being established.  As such, should a defendant have evidence to contradict or raise a reasonable possibility the presumption is not correct then the presumption would be displaced.

21.     Subsections (5) and (6) make additional provision for proof of ownership in relevant copyright material recognising that some copyright material is traded and the ownership may have been transferred on a number of occasions before reaching the ownership of the plaintiff.   Subsection (5) provides that the plaintiff may tender a document stating each subsequent owner of copyright to that identified pursuant to either subsection (2) or (3), identifying the date on which each subsequent owner became the owner and describing the transaction by which each subsequent owner became the owner.  Such a document so tendered is admissible as prima facie evidence of the facts so stated.

22.     Subsection (6) provides for the case where neither ss.(2) nor (3) applies, such as where there no label or a certificate to rely on, in seeking to establish ownership.  In that case the document tendered by the plaintiff must contain an element additional to those in subsection (5) - the original copyright owner must also be identified in addition to all subsequent owners and transactions as well as the dates of each of those transactions in the relevant chain of title. Such a document so tendered is admissible as prima facie evidence of the facts so stated.

23.     Subsection (7) makes it a criminal offence for a person to produce a document of the type provided for under subsections (5) and (6) where the person is reckless as to whether the document is false or misleading including production of a deliberately false or misleading document.  The evidentiary assistance provided under ss.(5) and (6) is significant. This clause protects against abuse by means of a clear and compelling criminal sanction.  The sanction is designed to ensure that plaintiffs exercise great care in properly utilising the provision to obtain the benefit of much simplified formal evidentiary requirements.  The recklessness standard of culpability is set out in the Criminal Code Act 1995 at s. 5.4.

24.     Subsection (8) is a clarifying provision relating to the mental element of the offence specifying that strict liability is applied in relation to whether the document was produced pursuant to either subsection (5) or (6).  It must still be shown that the person intended to supply that document.  The standard of recklessness remains applicable to whether the document is false or misleading.

Items 3-5       

25.     These items amend s.130 to add a new subsection (2) to the section and to make certain amendments to the existing section consistent with that new subsection. The form of the amended section is also included as a presumption that is available in prosecutions under section 132 - pursuant to proposed new s.132B inserted by Item 8.

Item 3                         Section 130

26.     Item 3 removes reference in the existing s.130 to first supply.   Section 130 was included in the Act when it was first enacted and has not been amended since.  It provides presumptions specific to statements on a label or other mark on a record embodying the recording or part of the recording.  Record is defined in s.10(1) of the Act to mean a disc, tape, paper or other device in which sounds are embodied.  While it appears that there is little if any reliance on the provision in the form of labelling used in the industry, the provision has been retained so as not to prejudice any person who may have been using specific labelling in order to take advantage of the provision.  The requirement that the relevant labelling be that provided when the records were first supplied, is however, generally inconsistent with the amendments made by items 2 and 8 of Schedule 4 and this requirement has therefore been removed.

Item 4             Section 130

27.     Item 4 amends the concluding words of the section to apply the presumption in a manner and with language consistent with the form of the new subsection (2) - namely to specify that the label or mark is admissible as prima facie evidence of the facts so stated. 

Item 5                         At the end of Section 130

28.     Item 5 adds new subsection 130(2) to s.130.  This new subsection adds two presumptions relating specifically to the form of labelling generally used on records embodying sound recordings. New subsection (2) provides for a presumption where there has been a supply to the public of records embodying the recording or a part of the recording and the records or their containers bear a label or other mark consisting of the letter “P” in a circle accompanied by a specified year and the name of a person.  Such a label or mark is admissible as prima facie evidence that the recording was first published in that specified year and that the person named was the owner of copyright in the recording in the place and at the time the label or mark was affixed to the records or their containers.  These presumptions provide assistance in proving the subsistence and ownership of copyright in Australia of the relevant sound recordings.  In their form and approach they are consistent with new subsections 126A and 126B added by Item 2 but provide additional certainty in their application to the specific form of labelling used on sound recordings.

Items 6, 11, 13 and 12  Jurisdiction of the Federal Magistrates Court

29.     These items add new sections131D, 135ARA and 248MA respectively and Item 12 amends s.195AZC to add a new subsection (5).  In each case the effect of the new provision is to confer jurisdiction on the Federal Magistrates Service in respect of civil matters.

30.     Item 6 inserts new s.131D to confer jurisdiction on the Federal Magistrates Service in respect of civil actions under Part V of the Act (Remedies and Offences). 

31.     Item 11 confers jurisdiction on the Federal Magistrates Service in relation to civil actions under Part VAA (Broadcast decoding devices)  

32.     Item 12 confers jurisdiction on the Federal Magistrates Service in relation to actions under Part IX (Moral Rights of authors of literary, dramatic, musical or artistic works and cinematograph films) through a conferral of such jurisdiction in new s.195AZC(5).  There is reference only to ‘actions’ in this provision because there is no criminal sanction for breach of that Part of the Act. 

33.     Item 13 confers jurisdiction on the Federal Magistrates Service in civil matters in relation to Part XIA (Performers’ protection).

Item 7                         Subsection 132(6AB)

34.     This Item repeals and re-enacts subsection 132(6AB) to increase by 100 penalty units ($11,000 for individuals and $55,000 for corporations) the maximum penalty for infringing copyright by importation.  The maximum monetary penalty for criminal importation will be 650 penalty units, currently representing $71,500 for individuals and $357,500 for corporations.  

35.     Subsection 132(6AB) provides for the respective maximum penalties applicable to the offences in s.132 of the Act  - other than those involving conversion from hard copy to digital form. The deterrence to criminal importation is thus made even greater than the already high penalties in the Act. 

Item 8                         After s.132

36.     This item adds new ss.132A and 132B to the Act.  These provisions provide for presumptions of subsistence and ownership applicable in criminal prosecutions.    These new provisions are substantially in the same form as the presumptions in civil actions provided for by new sections 126A and 126B and the amendments to s.130. They do not include analogous provisions to those in new subsections 126B(5) and (6) allowing the introduction of evidence of ownership based on documents prepared by or on behalf of a plaintiff.

37.     New s.132A provides presumptions in relation to subsistence and ownership of copyright generally. 

38.     Subsection (1) sets out that the provision is applicable to prosecutions under s.132. 

39.     Subsection (2) provides that a label or marks on a copyright work or other copyright subject matter or on the packaging or container of that work or subject matter stating the year and the first publication or making of the work or other subject matter is admissible as prima facie evidence of the facts so stated.  The relevance of this is set out in the notes to Item 2.

40.     Subsection (3) provides a label or marks on a copyright work or other copyright subject matter or on the packaging or container of that work or subject matter stating that a person was the owner of copyright in the work or other subject matter at a particular time is admissible as prima facie evidence of the facts so stated.  The relevance of this is set out in the notes to Item 2.

41.     Subsection (4) provides that a certificate or other document issued in a qualifying country in accordance with the law of that country that states the year and place of first publication, or the making, of the work or other subject matter is admissible as prima facie evidence of those statements. The relevance of this is set out in the notes to Item 2.

42.     Subsection (5) provides a presumption for a statement of copyright ownership on a certificate or other document issued in a qualifying country in accordance with the law of that country.  Where such a document states a person was the owner of copyright in a work or subject matter other than works at a particular time, that certificate or other document is admissible as prima facie evidence of those facts. The relevance of this is set out in the notes to Item 2.

43.     These presumptions are at the level of prima facie evidence.  Should a defendant have material to contradict or raise a reasonable possibility that the presumption is not correct then the presumption would be displaced.  A court must also be satisfied, having heard the matter, including evidence pursuant to the presumption, that the matter has been established beyond reasonable doubt.

44.     Subsection (6) allows a certificate or document of the type that is provided for in subsections (4) or (5) to be accepted as such a certificate or document if, on its face, it appears to be such a certificate or document.  This provision avoids the need to independently prove the validity or authenticity of the certificate or other document.  This provision is subject to the contrary intention being established.  As such, should a defendant have evidence to contradict or raise a reasonable possibility that the certificate or other document is not authentic or valid then the presumption would be displaced.  This is an evidential burden.  Paragraph 13.4(c) of the Criminal Code Act provides that a burden of proof that the law imposes on a defendant is the legal burden of proof if and only if the law expressly creates a presumption that a matter exists unless the contrary is proved.

45.     New s.132B provides for presumptions in criminal matters in relation to certain material appearing on labels or other marks on records embodying sound recordings or parts of sound recordings.  The form of the provision is equivalent to that in s.130 as amended by Items 3-5 of this Schedule.

46.     Subsection (1) has two conditions.  First, records embodying the sound recording have been supplied to the public, by sale or otherwise, for example, the sale of music CDs, and second, at the time of that supply there was on the record or its container a label or mark containing certain statements. If such a record or its container had a label or mark specifying a person as the maker of the recording, or stating that the record was first published in a specified year or that the recording was first published in a country specified on the label or mark, then the new provision specifies that the label or mark is admissible as prima facie evidence of the facts so stated.  

47.     Subsection (2) provides for presumptions of the year of first publication and of ownership of the sound recording embodied in the recording based on the statements as described in the notes to Items 3-5 and specifically in relation to Item 5. 

48.     These presumptions are at the level of prima facie evidence.  Should a defendant have material to contradict or raise a reasonable possibility that the presumption is not correct then the presumption would be displaced.  A court must also be satisfied, having heard the matter, including evidence pursuant to the presumption, that the matter has been established beyond reasonable doubt.

Item 9             Paragraph 133A(1)(a)

49.     This item amends s.133A(1)(a) to omit “computer program” and substitute “works or other subject matter”.  A note to the item also amends the heading to s.133A in the same fashion.   The effect of this change is to expand the application of the offence in subsection 133A(1) for advertising for supply to all works and other copyright protected subject matter. 

Item 10           Subsection 133A(2)

50.     This item makes a consequential amendment to subsection 133A(2) by repealing and substituting the provisions to expand its operation to cover all copyright protected material.  Additionally, the new subsection (2) amends the language of the former subsection so that the new provision makes provision to specify in relation to a “communication” of a work or other subject matter rather than a “transmission”.  This updates the language of the provision consistently with the amendments made by the Copyright Amendment (Digital Agenda) Act 2000.  New subsection (2) is a deeming provision to take account of the operation of computer technology.  It provides that a communication of a work or other subject matter that results in a copy being made is taken to constitute a supply of a copy of the relevant work or other subject matter at the place where the copy is created.

Items 11-13 

51.     See notes to Item 6

Item 14           Application

52.     Item 14 provides for the application of the amendments in the Schedule. 

53.     Subsection (1) provides that the amendments made by items 1, 2, 3, 4 and 5 apply to actions brought after the commencement of those items. 

54.     Subsection (2) provides that amendments made by Items 6, 11, 12 and 13 (the provisions concerned with the jurisdiction of the Federal Magistrates Service) apply in relation to matters or actions instituted after the commencement of those items. 

55.     Subsection (3) provides that the amendments made by Item 7 (change in level of penalties) applies to acts or omissions taking place after the commencement of that item. 

56.     Subsection (4) provides that the amendment made by Item 8 (new ss.132A and 132B) applies to prosecutions brought after the commencement of that item. 

57.     Subsection (5) provides that the amendments made by Items 9 and 10 (amendments of s.133A) apply in relation to publications after the commencement of those items.