Copyright (New Technologies and Performers’ Rights) Amendment Bill

Hon NANAIA MAHUTA (Minister of Customs) Link to this

I move, That the Copyright (New Technologies and Performers’ Rights) Amendment Bill be now read a second time. The Commerce Committee must be thanked for its thorough consideration of the bill, and also the many submitters who contributed their views to the select committee process. This is important legislation, which is designed to update and clarify the Copyright Act. This is particularly necessary in response to the introduction of the many new technologies that now impact on the development and use of the Internet, digital music, and film. The bill promotes a modern legal framework that guides the protection and use of copyright material, and it will provide greater clarity about how the Copyright Act applies in today’s digital environment. The bill maintains the balance between protection and access, already established in the Act, and ensures the effective operation of the Act in the face of emergent technologies.

Maintaining a current and contemporary intellectual property rights system promotes development of the economy and New Zealand’s identity, by encouraging investment in creativity and innovation. Copyright forms an integral part of the system by protecting our creative industries, as well as our information and communications technologies, by prohibiting unauthorised reproduction. For the system to remain fair and effective, it must evolve with the emerging needs of a dynamic and technology-supporting economy. The bill’s purpose is to update and clarify the Act in response to the introduction of new technology, such as the development and use of the Internet, digital music, and film. The bill creates a more flexible framework for technology to operate under by redefining certain terms contained in the Act to make them more technology neutral.

Several points were raised at the select committee, and they will be committed on briefly. The bill, as introduced, repealed section 88 of the Act, which currently allows cable programme services to retransmit free-to-air television broadcasts without the permission of the broadcaster. The select committee reinstated section 88 as a result of concern about the delivery of broadcasts to remote areas. Section 88 does not fulfil the objectives that it was originally put in place to achieve—namely, to encourage telecommunications investment. In the current environment there is limited likelihood of cable TV being extended, which is why a Supplementary Order Paper has sought to repeal this section of the Act.

The bill also clarifies the liabilities of Internet service providers—“ISPs”—when it comes to copyright infringement, particularly where infringing content is posted, using their services. Clarity is provided by modifying the law in two ways: firstly, by stating there is no liability for copying that takes place as a matter of course in Internet service provider services, and, secondly, by providing that there is no liability for an Internet service provider when storing infringing material, provided it deletes or prevents access to the material when it has reason to believe that it infringes copyright. That has been described as a “notice and take down regime”.

The select committee made some changes to the regime in the bill, as reported back. The requirement for Internet service providers to have a policy for the termination of the accounts of repeat infringers was removed, as the scope of that requirement was unclear, and Internet service providers’ standard terms and conditions generally already provided for that. A standard form for notice has been provided, giving Internet service providers more certainty about when information should be taken down. An Internet service provider will now be liable only if it is aware of infringing material and does not remove access to it. There is now a specific offence for providing notices that are misleading.

Technical protection measures, or “TPMs”, are mechanisms used by copyright holders to guard against the unauthorised reproduction and distribution of copyright works, which can easily occur with the use of digital technology. The bill gives a more comprehensive protection to technical protection measures in response to the increased risk of piracy. Currently the Act protects only copy protection measures. The bill gives copyright owners the ability to take action in respect of devices, means, or information where circumvention could enable infringements of all the copyright owner’s exclusive rights, and not just copying. In addition, the bill introduces criminal offence provisions in limited circumstances where there has been large-scale commercial dealing in copyright material.

The bill also introduces new provisions relating to the actual exercise of permitted acts where technical protection measures have been applied. Those would enable the beneficiary of a permitted act, who has not had the ability to circumvent, to have the option of seeking assistance from the copyright owner or a qualified person. In this instance, a qualified person means a prescribed library or archive, or an educational establishment. The select committee made changes in this area, which included a redefinition of technical protection measures to clarify that access control technologies are not protected where they do not prevent the infringement of copyright. The insertion of a new section will ensure that qualified persons cannot charge an unreasonably high fee for providing assistance, and the insertion of a new regulation-making power allows the Governor-General to specify persons as qualified persons by Order in Council.

The bill provides a limited exception for copying sound recordings for personal use. That exception has been clarified, so that the copy is to be used only for the owner’s personal use, for the personal use of a member of the household in which the owner lives, or for both. There is already widespread format shifting of music, and this amendment aligns the law with the public’s needs, although it still takes into account the protection afforded to the copyright owner. The select committee also stated that the original purchaser must retain both the original version of the sound recording and the new copy, and reiterated that the exception does not extend beyond sound recordings to any other works, such as films. This provision is not intended to legitimise CD copying for friends or online file-sharing, but rather reflects the realities of format shifting in a technology-changing world.

Permitted acts are exceptions to copyright infringement provided for in the Act. The bill updates the existing permitted acts for fair dealing, and for libraries, archives, and educational establishments, and clarifies how permitted acts should apply in the digital environment. The bill removed from libraries and archives a number of compliance costs that govern the supply of digital copies. The select committee added a number of amendments to the original bill. A number of the compliance costs for libraries and archives that governed the supply of digital copies were removed. For educational purposes, educational establishments can create a digital copy of a work, provided that certain conditions are met. Libraries and archives may make a digital copy, provided that a replacement for the original work is necessary for the benefit of research. Educational establishments that store copies on a website or on an electronic retrieval system need not identify authors in all situations, and material on the Internet or other electronic retrieval systems need not be removed before allowing authenticated users to access it.

The bill replaces copyright owners’ existing technology-specific rights to control distribution through broadcasting and cable programme services with a technology-neutral right that applies to all forms of communication of copyright works to the public. That includes information that is passed through the Internet, such as email, peer-to-peer file-sharing, and other digital forms of communication. The definition of “copying” has been amended so that it applies to the digital reproduction of all forms of works. Copying is often essential to the operation of digital technology, computers, email services, DVD players, and even the anti-skip function on a portable CD player. The bill amends the Act to introduce a limited exception for transient reproduction in certain circumstances, to allow for that copying. A lawful user of a computer programme may observe, study, or test the functioning of the programme under certain circumstances without infringing copyright.

Once passed, the bill will be reviewed within 5 years, to respond to technology advances and maintain its effective operation. This is a timely and necessary bill. Once again, I thank the select committee, its members, and the clerks of the committee. I commend the bill to the House.

Dr RICHARD WORTH (National) Link to this

I raise a point of order, Mr Speaker. In the course of the careful speech read to us so carefully by the Minister, she made reference to an issue concerning the effect of clause 49 of the bill, which repeals section 88 of the Copyright Act. My clear recollection of what she said was that an Supplementary Order Paper had been prepared, but I see no sign of that on the Table of the House. I think we need clarification, in the context of what will occur in this second reading debate, of whether that statement is accurate.

DARREN HUGHES (Junior Whip—Labour) Link to this

The member is fortunate that we are considering the second reading stage of the bill at the moment, so if a Supplementary Order Paper has to be considered and debated, that will be done in the Committee of the whole House. That will not be tonight, so the member can bone up on any material that is available in time for it. The earliest it could possibly be is on Thursday, because tomorrow, of course, is a member’s day. I hope that assists the diligent and hard-working Mr Worth.

Dr RICHARD WORTH (National) Link to this

I did not say that we have either been misled or not been misled. I just seek clarification of the position.

Hon NANAIA MAHUTA (Minister of Customs) Link to this

The matter has been clarified by the whip. The Supplementary Order Paper will be tabled at the appropriate stage for consideration, which is during the Committee stage. I would have thought the Opposition would be delighted to hear the foreshadowing of a Supplementary Order Paper that is aligned to what the Commerce Committee was wanting.

CHRISTOPHER FINLAYSON (National) Link to this

National will support the second reading of the Copyright (New Technologies and Performers’ Rights) Amendment Bill, although it is not entirely happy with the way in which the legislation has evolved. I was on the Commerce Committee on a number of occasions to work on this legislation. Unfortunately, I could not attend all the meetings of the committee when this legislation was being considered, because I was needed in the Justice and Electoral Committee to oppose the introduction of that dreadful creature the Sentencing Council. Perhaps if I had been able to be on the Commerce Committee the whole time, there could have been some more effective changes to this legislation.

But, putting that to one side, on listening to the Minister of Custom’s speech tonight I have to observe that if one were listening to the debate, one could possibly conclude that the Government was actually interested in intellectual property law reform. The reality of the matter is that it is not. This is piecemeal law reform, and it is piecemeal law reform of absolutely critical legislation. That approach to reform is not good enough.

The introduction to the report of the Commerce Committee states that the bill amends the Copyright Act 1994 to address the emergence of technology such as the Internet. But how long is it since the Internet was developed? Apparently, so Al Gore would say, it was developed by Al Gore; indeed, he was making that extraordinary assertion when he was Vice-President of the United States, and that was about 7 years ago. So we have had the Internet for almost 7 years and in 2007 in New Zealand we have the introduction of the Copyright (New Technologies and Performers’ Rights) Amendment Bill. Why has it taken so long? Why cannot this country move more quickly to adapt its intellectual property laws to the realities of the times?

Indeed, I indicated to the select committee that there should be mandatory post-legislative review of this copyright legislation, and I referred members to section 202 of the Evidence Act, which introduced a mandatory post-legislative requirement into that very fine piece of legislation. Post-legislative review is not always necessary, but it is necessary for intellectual property legislation and particularly for copyright legislation, where technology is changing so very rapidly. We cannot afford to allow the Copyright Act to get out of date. The Minister referred to what I have to say as very much a second-best proposal. She said that the Ministry of Economic Development has said there will be a review in 5 years’ time to ensure that copyright legislation keeps pace with technological advances. Well, it is not keeping pace with technological advances. Already it is said that this legislation deals with, in some respects, out-of-date technology, so for the foreseeable future we are going to continue to have to put up with piecemeal reform of the Act rather than a comprehensive, back to basics review of copyright.

It is interesting to observe, as the select committee report does, that already there are issues on the table that have not been addressed. I refer honourable members to page 10 of the select committee’s commentary. The first one concerns off-air recordings of television programmes to educational establishments. That could not be dealt with, but the ministry is intending to report to the Associate Minister of Commerce on that issue in September 2007.

A very important issue concerning directors’ rights arose because a submitter asserted that film directors should be defined as authors under the principal Act, and therefore be treated as the copyright owners of films. We are told that the Ministry of Economic Development is going to start looking at this issue in early 2008. That is not good enough.

The third issue, and it was a very important issue that arose time and time again before the select committee, was orphaned works. At least the Ministry of Economic Development is recorded as having given the committee an undertaking—and I record the undertaking given by the ministry in this House tonight—that it intends to conduct a review of this issue and report to the Minister later this year. Why it could not have dealt with it while this legislation was before the select committee I simply do not know.

The fourth issue that requires further review concerns access to works for print-disabled persons, and again that is another issue that the ministry intends to report on to the Associate Minister by September 2007.

So instead of taking the opportunity to have a comprehensive look at this legislation, what we have is more piecemeal, bitsy reform of a critically important piece of legislation. When this House comes to the Committee stage I intend to address the particular changes proposed by the select committee in some detail, and the Committee of the whole House will need to very carefully analyse what is proposed, because it will be necessary to ensure that the select committee has, in fact, got these issues right. In the time available to me I will briefly give an overview of at least some of the proposed changes.

The first set of proposed changes I wish to refer to concern amendments to Part 3 of the 1994 Act. Part 3 deals with certain acts that are permitted in relation to copyright works. For example, criticism, review, or news reporting may be permitted in terms of Part 3, but the particular ones where there have been changes relate to educational purposes and also the holding of works by libraries and archives. Certain exemptions are granted—for example, for educational establishments and librarians—and it will be for the Committee to decide whether those changes, as outlined by the Minister, are in fact acceptable.

A second major set of amendments concern Internet service provider liability, and this issue was summarised well by the Minister. These service providers play an important role in addressing online piracy. As is well known, Internet service providers, or ISPs, are the gatekeepers of the Internet. They have the ability to control communications over their networks, and over the years, in jurisdictions such as the United States, Australia, and the United Kingdom, principles and procedures have been developed to set out the roles and responsibilities of Internet service providers. The legislation that we are dealing with tonight also addresses those issues.

At the Committee stage, members may want to look at the proposed deletion of section 92A, in clause 53, and whether that is an appropriate approach to be taken for the reasons that are set out by the select committee in its report. Members will also want to pay very close attention to the proposed new section 92CB, which creates an offence for right-holders who provide notices that are intentionally or recklessly false or misleading. Indeed, in the case of an individual penalties up to $50,000 may have to be paid, or in the case of a body corporate a fine not exceeding $100,000. Members will wish to consider whether the Internet service provider provisions accurately reflect the law of other jurisdictions and whether what is proposed in the proposed new section 92CB is fair and reasonable.

The next issue concerns technological protection measures, and the Minister has accurately summarised the work of the select committee there. There have been some changes, but I do not have time to deal with them now and we will have to deal with them in the Committee stage. One of the issues will be whether the clauses, as expressed in our legislation, accurately reflect the practice in other jurisdictions. That will be an important question for the Committee of the whole House to consider.

Finally, there is the issue that Dr Worth touched on—the proposed repeal of section 88. This was something that concerned the majority of the committee, so we reinserted section 88 and we made some consequential amendments that are set out in clause 49.

As I say, these are major issues for consideration by the Committee of the whole House. This is a very important bill and I, for one, am particularly disappointed at the sloppy and piecemeal approach to law reform of this critical intellectual property statute, an approach which is, perhaps, typical of a Government that has lost interest in major issues.

MARYAN STREET (Labour) Link to this

I want to make a couple of comments about the Copyright (New Technologies and Performers’ Rights) Amendment Bill, which is before us for its second reading.

First of all, the Minister of Customs, in her introductory speech, referred to a Supplementary Order Paper that would seek to repeal “this section of the Act”—referring to section 88. This issue is covered by clause 49 of the bill as it stands. I would like to make it absolutely clear that the Minister was completely right in foreshadowing the Supplementary Order Paper, which will be presented at the appropriate moment—the Committee stage. It does not need to appear now, which is why it does not appear now. I recall the Minister saying that a Supplementary Order Paper would seek to repeal this section of the Act, and that is correct. At the appropriate moment, that Supplementary Order Paper will be produced.

I would like to make really clear to the House that the Supplementary Order Paper is necessary because the repeal of section 88 was put forward in the original bill, but the majority view of the Commerce Committee—not a unanimous view—was that that section should be reinstated and should not be deleted from the statute. The Government’s intention was, and remains, to delete that section, and let me explain why that is. I am happy to do so now, in this stage of the proceedings, and to do so again in the Committee stage—I am very happy to repeat it then for the members opposite, in order to make it clear. Section 88 of the Copyright Act 1994 permits the reception and immediate retransmission of a free-to-air broadcast by a cable programme service in certain circumstances, without infringing either the copyright in the broadcast or the copyright in any work contained in it.

As I have said, a majority of the Commerce Committee favoured retention of the current section 88, although it was notable from the previous speaker’s contribution that there was no justification for that. No rationale for the retention of that section was given. I am happy to give some rationale for the deletion of that section, in the absence of any cogent rationale to the contrary. The rationale is largely on the basis of submissions from TelstraClear and Sky television, which considered that if the section was retained, it would allow free-to-air broadcasts to be delivered in the most effective and convenient manner and at a higher quality. It would improve reception quality for consumers in isolated areas or urban areas with reception difficulties. Competition and choice for consumers would not be reduced, because the current provision ensures that broadcasters enter into reasonable commercial arrangements for the supply of free-to-air channels, and ensures that there is competition between broadcasters. Some of the select committee members also raised concerns that the repeal of section 88 would undermine the investment in cable networks that had already been made as a result of the provision, and noted that Australia and Canada both have similar provisions.

When the Supplementary Order Paper comes before the House at the appropriate moment, it will seek to reinsert the repeal of section 88. I do not know whether there are too many double negatives for the Opposition members to get their heads round, but the rationale for this—

Dr RICHARD WORTH (National) Link to this

Noting the passage of time, and because the House has made such excellent progress, I seek leave that the House lift early so that I am not faced with giving a broken speech. [ Interruption] Oh, I withdraw the request for leave that I have just sought. I seek the call.