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Copyright, culture, cops and cybercrime: address [to] Australian Publishers Association, Annual General Meeting, 15 March 2001



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  Australian Labor Party   National ALP

Duncan Kerr - Copyright, Culture, Cops And Cybercrime http://www.alp.org.au/media/0301/dkspapa150301.html Thursday, 29 March 2001

Copyright, Culture, Cops And Cybercrime Duncan Kerr - Shadow Minister for Justice

Address - Australian Publishers Association, Annual General Meeting - 15 March 2001

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Thank you very much for asking me to speak here today.

As I am sure you are all aware, I have a long history of involvement in a number of issues dear to the heart of those in the publishing business, most particularly the issues associated with copyright. In the former Keating Government I had direct portfolio responsibility for copyright law.

However we are now into the fifth year of the Howard Government. Today I speak in my capacity as Shadow Minister for Justice, as a member of the House of Representatives Legal and Constitutional Affairs Committee but also with the experience of having been the former Shadow Minister for the Arts.

I am very aware of the importance of a strong domestic book industry - and in the definition of book industry I include authors, editors, publishers, printers, publicists, retailers and consumers.

I would like to speak briefly today on two issues which directly impact upon the strength of our domestic book industry - parallel importation and the enforcement of copyright.

I know that the issue of parallel importation must be foremost in the minds of most people in the book industry, particularly now that the Attorney General has introduced Government legislation in the House of Representatives, the application of which would remove the 30/90 day rule as it currently applies to the book industry.

When introducing the Copyright Amendment (Parallel Importation) Bill 2001, the Attorney claimed that the central aim of the bill is to improve access to books on a fair, competitive

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basis. The Government's position is that improved access can be achieved by allowing the importation of copyright goods without the permission of the Australian rights holder.

The Government's claim is that the bill offers the prospect of cheaper prices and increased availability of products for all Australians -especially for small businesses, parents and the education sector. What evidence is used to support this claim is far from clear.

The Attorney General told the Parliament that the success of Australian music artists in the last 12 months is evidence that removing parallel importation is good for industry. I think that if the Government really stopped to look at the situation, it would see that Australian music artists have achieved despite a clear lack of support from the Government - not because the Government has opened the music industry up to cheap imports and pirated goods.

Even if there was any credibility to the Government's claims, and there is none, talk of the impact of parallel importation on the CD industry is not pertinent to the threats facing the book industry. What the Government has failed to acknowledge is the unique nature of the printing and publishing industries in Australia - their contributions to employment, to the economy, and, what I personally see as the book industry's most vital contribution, to Australian society as the vehicle for cultural growth, intellectual debate, and national expression.

In support of the Government's position, the Attorney General referred to the opinions of committees established by the Government, some of which have clearly demonstrated their compliance with the Government's ideological drive - for example, the Ergas committee, and the ACCC.

Meanwhile, these Committees, the Attorney General and the Government have rejected the opinions of industry. They have ignored the predictions and warnings of the damage which this drive to make Australia a free market for products from countries which protect their own domestic markets will cause.

I do not need to go through the arguments against the Government's ideologically driven policy for this audience. There is no need to lecture to the converted.

What I would like to do however is to re-iterate to you Labor's strong opposition to the Government's Bill, and to briefly outline our "use it or lose it" policy, which was announced last year and which we remain committed to.

Labor's vision is to make Australia a Knowledge Nation.

Our vision is that, as a Knowledge Nation, Australia will take its place in the world as a creator of new ideas and unique cultural content. For this vision to become a reality, we must have a regime which fosters new Australian ideas and unique cultural content.

Labor's parallel importation policy does this.

Labor will not support the complete removal of parallel importation restrictions. Such a move will not benefit Australian consumers. It will severely hurt our local industries, and in the long term it will deprive Australian consumers access to locally produced cultural

goods.

So, what will the copyright regime look like under a Labor government?

We will preserve the modified 'use it or lose it' parallel importation regime which you are familiar with, as it currently exist for the book industry. This regime will also be extended to apply to the video games, computer software and music industries.

Under Labor, the importation of a good for which there is a local copyright owner will only be permitted if:

the copyright owner does not release the good on the local market within 30 days after its publication or international release, or ●

the good, although released locally, is unavailable for purchase within Australia, or is unavailable within Australia at an internationally competitive price, within 90 days of that good being requested.

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Unlike the Government, we are committed to ensuring that Australians will continue to have access to Australian goods: goods which would not be developed without the competitive advantage which parallel importation restrictions give to the Australian industry.

We will retain the 30 and 90 day rules, because we are also committed to ensuring that the Australian market has access to the latest in international releases, at a competitive price.

The value of a strong domestic publishing and printing industry can not be overstated.

Australians are talented, intelligent, articulate and imaginative people, whose voices deserved to be heard, both at home and beyond our shores.

If the Government's plan to allow parallel importation is successful, it will lead to a reduction in investment in Australian content. It will become increasingly difficult to hear Australian voices amongst all of the international chatter.

Do not misunderstand me - the international chatter is important. It is essential that Australians are guaranteed access to international content. However, not at the expense of our own voices.

This is why Labor will retain the 'use it or lose it' regime for the book industry, and will extend it to other industries which rely on copyrighted goods. This position on parallel importation will encourage creative knowledge and skills, support Australian industries and benefit Australian consumers.

We already have a tax on knowledge, in the form of the GST. We do not need another burden in the form of a relaxation of parallel importation restrictions. The Democrats are now reaping what they sowed in doing the GST deal with the Government. Meg Lees is learning that she can not walk away from her share of the blame, from responsibility for helping the Government to place a tax on knowledge, where no such tax existed before. If the Democrats continue to play games with the devil then they will continue to feel electoral heat.

The other topic which I want to touch on briefly today, is the related topic of the enforcement of copyright.

As your industry becomes more involved with the Internet - both as a sales mechanism and as a publishing medium - and, if the Government succeeds in making another deal with the Democrats and removes the 30/90 day rule, the protection of copyright will become even more important to you, both economically and artistically.

One of the arguments that the Attorney General put to the Parliament in support of the removal of parallel importation was the following, and I quote:

Whilst copyright piracy is a serious and real problem in many countries, it is primarily a problem in countries where the enforcement of intellectual property laws is weak, and there are large informal retail sectors. By contrast, Australia provides a strong intellectual property regime backed by an effective court and general legal system...

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I would like to take issue with Mr Williams on this point.

As I mentioned in my introduction, I am a member of the House of Representatives Legal and Constitutional Affairs Committee, which, in November of last year, produced a unanimous report, entitled "Cracking down on Copycats: enforcement of copyright in Australia".

The Committee received 67 submissions and conducted hearings across the eastern seaboard. It was an extensive and enlightening process.

The Committee found that:

...copyright infringement is a real problem affecting Australia's economy... ● ...infringement of copyright on a commercial basis, including piracy and bootlegging, is a significant and costly burden to many Australian industries that rely on creative endeavour...

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...there is sufficient evidence from industry to support a finding [that organised crime has been linked to copyright infringement]... and ●

...infringement of copyright is likely to increase in the future." ●

The findings of the Committee, and the range of the recommendations made by the Committee in its report (which has yet to be responded to by the Government) are enough to put paid to the Attorney General's claim that our legal system as it stands provides adequate protection for copyright owners against infringement.

I would like to go through some of the major, although not all, of the Committee's recommendations, in order to give you a good idea of some of the reforms which we identified as necessary if Australia's copyright regime is to deserve the praise which the Attorney General has given it.

As you know, intellectual property offences, including copyright breaches, exist in both our civil and criminal law systems.

In relation to the criminal justice regime, the Cth DPP submitted to the Committee that:

There is a gap between the expectations of victims and bodies representing industries affected, and the ability to bring prosecutions and the effectiveness of criminal sanctions under the present arrangements.

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This comment is supported by the statistics: there were only 7 convictions recorded for copyright infringements in 1997-98, and only 6 in 98-99. The penalties imposed ranged from non-conviction bonds to fines of up to $4,800 - while the maximum penalty is $60,500 or 5 years in jail for individuals, and $302,500 for corporations.

In the Attorney General's speech he highlighted the penalties on the books as evidence of the strength of the criminal system in protecting copyright. In doing so he either ignored or disregarded the evidence given to the Committee, that merely having these offences and penalties on the books does not ensure that the offences are prosecuted or that the penalties are applied.

The Commercial Crime Agency of the NSW police service argued that the current penalties are insufficient and do not adequately reflect the criminality involved in copyright infringement. The Australian Federal Police submitted that the penalties are adequate, but that the sentences actually given are too low.

All witnesses suggested that the sentences awarded by Australian courts neither serve as effective deterrents nor reflect the effort and resources required to secure convictions.

The Committee also heard of the evidential difficulties often experienced during a trial, including the difficulties the prosecution often faces in having to prove that the infringing copies are in fact infringing and that the accused has no copyright ownership. At no point during a prosecution does the defendant bear the onus of proving that the copies in question are not infringing copies.

In summary, the Committee heard that the criminal law is neither an effective deterrent, nor an effective method of enforcement or punishment.

A question which arises at this juncture and which needs to be answered is: Does it really matter if the criminal law is inadequate? After all, intellectual property is all about economics and business. Copyright infringements are matters more fitting for the civil courts than the criminal system - aren't they?

The Australian Federal Police, which argued that the most appropriate avenue for pursuing copyright breaches is the civil, not the criminal law, put this argument to the Committee.

I believe that this argument can be dealt with fairly swiftly: Yes, it does matter if the criminal law is inadequate.

A copyright infringement is a theft - theft of ideas, theft of creativity and theft of economic gain. It should properly be treated as a criminal offence in the same way that theft of tangible objects and theft of money are criminal offences.

Furthermore, the unfortunate reality is that civil litigation alone is not a sufficient deterrent

against piracy. Monetary penalties, which are rarely awarded and which are relatively low even when they are given, can and are seen by those whose business is stealing the intellectual property of others, as a cost of doing business. A jail sentence is not.

The Committee made a number of recommendations aimed at strengthening the criminal law offences, increasing the deterrent effect and removing some of the barriers to conviction, including:

that the Federal Court be encouraged to adopt sentencing guidelines; ● reversing the onus of proof of ownership of copyright. In practice, this would mean that if the prosecution supplied the court with an affidavit of ownership, the accused would then bear the burden of establishing that the copies in question were not in fact an infringement of copyright; and

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amending the Copyright Act to extend the range of some criminal offences and provide for the introduction of others. ●

We need a credible criminal justice response to intellectual property theft. We also need a strong civil regime. Unfortunately, at the moment we have neither.

During the Committee's hearings, the civil law, as it relates to intellectual property offences, was described as a "paper tiger".

Why?

Many of the complaints are those that are levelled at the civil litigation system across the board. Copyright owners are often frustrated by the cost of mounting a civil action, and by the length of time it takes to get a matter heard before a court.

In addition, intellectual property matters are very difficult to run. The procedures are cumbersome, the law is complex, and it is often extremely difficult to secure the necessary evidence, or to discharge relevant evidentiary burdens.

For example, in order to seize goods which are alleged to breach copyright, a copyright owner must often apply for what is known as an Anton Piller order - which allows a party to enter the premises of another person and seize goods. Before a litigant can apply to a court for an Anton Piller order, they must usually undertake expensive surveillance, investigative and forensic activities in order to prove that the goods in question do in fact exist and are necessary evidence. Once an Anton Piller order is granted, it is expensive to execute, as there must be an independent team of lawyers present while the goods are seized.

In the end, the cost of mounting a case may exceed the value of the goods which were illegally copied.

This is just one indication of the barriers which exist to a successful civil paction for breach of copyright.

The Committee made a range of recommendations for reform and strengthening of the civil system for enforcing copyright, including:

that there be an civil power of seizure - similar to the one which exists in s100 of the Copyright Designs and Parents Act of the UK - which authorises a copyright owner to seize a copy of their work that is offered for sale from a place other than a regular or permanent place of business;

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that the privilege against self-incrimination in civil proceedings for the infringement of intellectual property be removed , with any evidence used in the civil proceedings prevented from being subsequently used in a criminal proceeding (again, similar to provisions which exist in the UK). This would enable plaintiffs to gain access to documents containing evidence of the number and source of infringing copies;

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that, as with the criminal offence, the onus of proof be reversed; ● that we introduce a system of statutory damages as an alternative to the normal award of damages currently available under the Copyright Act, giving a plaintiff a choice as to which type of damages they seek. Statutory damages would be

determined by reference to the licence fee that would have been payable for the exercise of the copyright right;

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lifting the corporate veil - making director's personally responsible for copyright breaches carried out by their company; and ●

establishing a small claims jurisdiction for copyright matters in the Federal Magistrates Court - to reduce delays and complexity of trials, and to increase judicial expertise in the area.

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As well as these (and many other) recommendations which go to amending the law as it is on the books and as it is applied in the courts, the Committee also made a number of recommendations which go to the law enforcement aspect of protecting copyright. These recommendations were necessary because it was clear that there is a real need for law enforcement agencies to take a much greater role in investigating and pursuing breaches of intellectual property law, particularly if these breaches are of an organised and substantial nature.

The Committee recommended that:

the Australian Customs Service set up a unit with dedicated staff to work on intellectual property issues - that is, the illegal importation of pirated goods; and ●

that a taskforce be established within Australian Federal Police, with representatives from AFP, Customs, Attorney General's department, Cth Law Reform Commission, DPP and industry policing bodies.

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This taskforce is to report to the Minister on investigation and enforcement activities.

This has been only a brief overview of the recommendations of the Committee. But even such a brief overview shows that the Attorney General's assertion that we have a strong intellectual property regime in Australia can not be substantiated. I look forward to seeing the Government's response to the Committee's report - because it does seem as though at this time the Attorney General is even aware of the reports existence, otherwise he would not be heaping such undeserved praise on our system of intellectual property rights.

The Government's only concession to the dangers of copyright infringements is that the

parallel importation Bill shifts the onus of establishing that a parallel imported copy is an infringing copy onto the Defendant in civil proceedings. This is a partial adoption of one of 22 important recommendations made by the Committee. It does not go anywhere near far enough in addressing the inadequacies of our intellectual property regime.

And it does not even come close to standing up as a justification for removing all parallel importation restrictions.

I would like to finish on this point, as I think that I have spoken for long enough. Let me just leave you with the clear and unequivocal statement that Labor will not be supporting the Government's legislation to remove the 30/90 day rule from the book industry. Back

Authorised by Geoff Walsh, 19 National Circuit, Barton ACT 2600.

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