Category Archives: Updates

Tech law update 2 June 2010

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Legislation website upgrade

The excellent New Zealand Legislation website is to be upgraded over the next few years to improve search functions, among others. A welcome addition will be more historic legislation being made available online.

Aussie internet filter to go ahead

The Australian government is pushing on with its daft mandatory internet filter. New Zealand is currently trialling a similar scheme, but no plans have been announced to make it compulsory. Certainly, while IT-savvy Steven Joyce is ICT Minister this is unlikely to change. The good news is that we will have the benefit of watching how the Australian scheme goes before launching our own (which would have been a great approach for the ETS too…)

Software audits

A local report mentions “rumours” that Microsoft is taking a more aggressive stance on licence compliance audits. While some people typically react with alarm over such suggestions, basic auditing is quite reasonable, and Microsoft is within its rights to do so. It is important for commercial software firms whose revenue base can be substantially undermined otherwise. In my experience, Microsoft is very reasonable about how it approaches these things (a certain “licensing adviser / salesperson” I once dealt with was a different matter, although she was independent of Microsoft).

Turn left at “common sense”

In the US (of course) a woman is suing Google after she followed its maps into traffic:

When Google Maps’ walking directions instructed Lauren Rosenberg to walk along a very busy highway with no pedestrian walkway, she followed the directions exactly. Unfortunately, she was hit by a car in the process.

I wonder if she applies the same unquestioning adherence to her car navigation system?

Tech law update 19 May 2010

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Trade Me piracy prosecution

The NZ Herald reports:

An Auckland student has incurred the wrath of computer giant Microsoft after selling unlicensed versions of its products through online auctioneers Trade Me. Shaahil Ali of Papatoetoe was ordered by the Manukau District Court to pay the US-based multinational $22,176 [plus costs] after he admitted copying its programs, then selling them on.

Ali sold 21 pirated copies of Microsoft Office 2007, netting $6,400. That works out at about $304 per copy – $105 more than buying the Home version from Dick Smith (though he may have been selling a Pro version). The fact that an unsophisticated operation such as Ali’s was able to net several thousand dollars for essentially no outlay highlights the challenge of fighting piracy. It also provides a reminder that not all piracy is simply about losses to rights-holders, but also unjust / illegal enrichment of the infringers.

That said, New Zealand is not too bad in the piracy stakes. A new study by the Business Software Alliance shows New Zealand has the 4th lowest rate of software piracy world-wide. However, the Dominion Post reports that this low piracy rate has not been “rewarded” with lower prices for consumers.

More pay for play

Aussie gyms have been hit with a 1500% rise in music royalty charges, following a decision of the Australian Copyright Tribunal enabling the hike. This could have implications in New Zealand, with a fees revamp expected later this year. Which would seem likely, as the New Zealand organisation administering licensing fees – Phonographic Performances New Zealand – shares many of the same members as its Australian counterpart.

Privacy in a nutshell

Wellington barrister Stephen Price has won the Sir Geoffrey Palmer chocolate fish prize for best definition of “privacy”:

Privacy is what people believe they have lost when they complain about their privacy being infringed.

A good example of which is provided here:

A magazine did not intrude into a young woman’s privacy when it published photos that she had uploaded to social networking site Bebo when she was 15 because the images had already been widely circulated online… “The magazine had not taken the material from the complainant’s Bebo site; rather it had published a piece commenting on something that had widespread circulation online (having been taken from the Bebo page sometime ago by others) and was easily accessed by Google searches,” said the PCC’s ruling.

Tech law update 17 May 2010

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P2P operator personally liable for copyright infringement

A US court has ruled that LimeWire, one of the early popular file-sharing sites, induced copyright infringement (Eric Goldman has an excellent summary here of the “intention” issue). While this outcome was really inevitable, what is more relevant is that the Judge also ruled that the founder and sole director, Mark Gorton, is personally liable. This is a clear warning that peer-to-peer operators potentially face personal liability – which some say could have a chilling effect of P2P services.

In New Zealand, section 92B of the Copyright Act provides a limited safe harbour from copyright infringement (see my Computerworld article here) [Note: this part of the Copyright Act is due to be amended] . Whether this would protect a LimeWire-like operation in New Zealand is debatable – s92B does not protect intended infringement.

The US decision also involved liability under trade practices laws. In New Zealand, personal liability can attach to directors of companies under the Fair Trading Act 1986.

50,000 Hurt Locker downloaders to be sued

It is being reported that upwards of 50,000 people are in the process of being sued for pirating the Hurt Locker movie. The movie was leaked to the internet several months before its release, which potentially cost it dearly in ticket revenue. The lawsuits are aimed at generating settlements. Since the first lawsuits were filed in January 2010, about 40% have already settled.

There are no reports of proceedings outside of the US. Class actions in New Zealand are not facilitated by the legal system, and are very difficult to bring (a failing of our legal system) and it is therefore unlikely that proceedings will be brought against New Zealand users due to the high cost of doing so.

iiNet appeal set down

The legal appeal of iiNet’s total victory over anti-piracy group AFACT ‘s claims of copyright infringement liability in Australia has been set down for August this year. As with the first ruling, this appeal will be closely watched – enormous resources are being put into heavyweight IP litigation around the world to determine just where the line should lie for ISP / third-party liability for copyright infringement. Several decisions have recently gone against rights-holders, while others (such as the Newzbins case in the UK and the LimeWire case above) went the other way. The iiNet appeal will be heard in the Federal Court. If iiNet wins again, it is likely that AFACT will seek a further appeal to the High Court of Australia.

Tech law update 26 April 2010

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Rendering ACTA superfluous?

Australian law professor Michael Fraser suggests that ISPs could render ACTA “superfluous” by entering into commercial agreements with content providers:

“The best approach to these issues… is to do a commercial deal and bring the ISPs into the value chain,” he said. “Rather than litigate [content providers] should include ISPs in the supply chain and ensure they get a fair part of the reward and allow access to content via the ISPs.”

The suggestion does not, of course, imply that ISPs could “contract out” of copyright law altogether. But if a commercially acceptable deal with major rights-holders could be reached, that could at least provide a “market” solution to the possible uncertainty and other concerns ACTA may cause for ISPs, rights-holders and users.

Parody rights in IP law

The studio behind Downfall film has applied to have numerous parodies of its movies removed from YouTube on the grounds of copyright infringement. The clips of the film used in the short YouTube videos are the copyright of the studio, but the question is whether the parodies are permitted under the fair use doctrine of US law.

Now, YouTube has helpfully given instructions for users whose clips have been the subject of an infringement claim by the studio.

On the local front, Luke Appleby notes that New Zealand still does not have a parody right under our copyright law. In essence, a review was announced in 2008, but has not progressed since.

Privacy attitudes

A study has been published in the US entitled “How Different are Young Adults from Older Adults When it Comes to Information Privacy Attitudes and Policies?”. From the report:

An important part of the picture, though, must surely be our finding that higher proportions of 18-24 year olds believe incorrectly that the law protects their privacy online and offline more than it actually does. This lack of knowledge in a tempting environment, rather than a cavalier lack of concern regarding privacy, may be an important reason large numbers of them engage with the digital world in a seemingly unconcerned manner.

From the conclusion:

… we found that in large proportions young adults do care about privacy. … Public policy agendas should therefore not start with the proposition that young adults do not care about privacy and thus do not need regulations and other safeguards. Rather, policy discussions should acknowledge that the current business environment along with other factors sometimes encourages young adults to release personal data in order to enjoy social inclusion even while in their most rational moments they may espouse more conservative norms.

The wider issue for all age groups, though, is that people seem quite happy to exchange privacy for functionality (or other benefits). To what extent should governments intervene?

Tech law update 22 April 2010

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IT industry supports ban on software patents

InternetNZ, the New Zealand Computer Society and the New Zealand Open Source Society issued press releases yesterday in support of the ban on software patents:

The Labour Party also issued a press release supporting the decision and Minister Simon Power’s earlier endorsement:

Meanwhile law firm Chapman Tripp issued a press release criticising the decision:

Privacy Commissioner slams Google’s “experiment”

New Zealand’s Privacy Commissioner, Marie Shroff, has criticised Google Buzz as being a “commercial experimentation on New Zealanders and other internet users, involving the release of significant personal information”:

[Google's actions] violated the fundamental, globally accepted principle that people should be able to control the use of their personal information.

The comments follow Ms Shroff’s signing of a joint letter to Google, stating:

It is unacceptable to roll out a product that unilaterally renders personal information public, with the intention of repairing problems later as they arise. Privacy cannot be sidelined in the rush to introduce new technologies to online audiences around the world.

These comments, including constructive requests that organisaions collects and process “only the minimum amount of personal information necessary” and create “privacy-protective default settings”, are admirable. Ms Shroff does a great job in standing up for New Zealanders’ privacy rights.

The difficulty, as I have written previously, is that people happily trade privacy for functionality. Millions of people willingly pour personal information into different websites every day. To what extent can Google be criticised for finding new, creative uses of information it has been willingly given, in accordance with terms agreed to by users? And to what extent is it necessary or right for governments to intervene?

Open standards in Government procurement

Earlier this year I commented that “the Government must properly mandate open standards and multi-vendor capable solutions for future state-sector IT procurement”.

European Union ministers have now called for “the introduction of open standards and interoperability in government procurement of IT”. This comes as part of an ongoing development of procurement frameworks.

The report states that some groups claim the proposal has been “so watered down due to intense lobbying by the proprietary software makers, to such an extent that the document will have no impact on the market”. Other industry groups have praised the proposals as “well balanced”.

Tech law news 20 April 2010

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ACTA deal and 3-strikes disconnection

ACTA negotiators have issued a statement that the agreement will not require participant countries to implement 3-strike internet disconnection laws. As it happens, the Government’s revised s92A bill (currently before parliament) still provides for disconnection in limited circumstances, but only as a Court-sanctioned remedy.

ICT finance regulation

Computerworld has an article on the upcoming financial services reform and its possible impact on ICT finance providers:

It is not clear which financial providers in the IT industry will be affected. The MED says that, in general, if an organisation is providing credit under a credit contract, then they are offering a financial service and the registration requirement will apply, meaning they have to join a dispute resolution service.

Consumer finance customers (i.e. those obtaining finance for personal or domestic purposes) already receive a good measure of protection under the Credit Contracts and Consumer Finance Act 2003. The new reforms are still being refined; the extent to which they will affect finance operators remains to be seen.

Government indemnities

The Government recently amended clause 4 of the Public Finance (Departmental Guarantees and Indemnities) Regulations 2007 to permit Government departments to agree to:

any guarantee or indemnity contained in the standard terms and conditions for the purchase, licence, or use by the Crown of—

(i) an Internet site;
(ii) software;
(iii) information technology tools, products, or services.

Many websites include indemnities in their standard terms (for example, by even reading the New Zealand Herald you agree to an indemnity). This change makes it more practicable for the Government to use common online and software applications, without having to obtain internal sign-offs.

The “Immortal Soul” clause

On the subject of website terms, a website recently added an “immortal soul” clause to its terms and conditions:

By placing an order via this Web site on the first day of the fourth month of the year 2010 Anno Domini, you agree to grant Us a non transferable option to claim, for now and for ever more, your immortal soul.

While this was an April Fool’s Day prank, it’s purpose was to highlight the fact that very few people actually read website terms. In any case, something tells me this would not be an enforceable website term!

Tech law news 12 April 2010

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Government confirms ban on software patents

Commerce Minister Simon Power has confirmed that the Government will adopt the recommendation to ban software patents in New Zealand. The speed of this announcement is somewhat surprising, as lobbying against the ban had been signalled.

The Economist on shorter copyright terms

The Economist says it is “time to tip the balance back” on copyright terms:

Largely thanks to the entertainment industry’s lawyers and lobbyists, copyright’s scope and duration have vastly increased. In America, copyright holders get 95 years’ protection as a result of an extension granted in 1998, derided by critics as the “Mickey Mouse Protection Act”. They are now calling for even greater protection, and there have been efforts to introduce similar terms in Europe. Such arguments should be resisted.

In New Zealand, the copyright term is generally the life of the author plus 50 years – meaning that the period often cannot even be determined while the author is still alive.

Website operators: edit comments at your own risk

The Register reports on a recent case highlighting the defamation risk of editing website comments. A key issue in New Zealand is whether the website operator “assumes responsibility” for another person’s potentially defamatory comment. As I say in my article published here:

If your website publishes third-party content (e.g. forums, search results of other sites, user ratings, etc), ensure that you are not seen as “assuming responsibility” for that content. In practice, this can include not exercising editorial control over articles and comments. This will not always be possible or appropriate on some websites.

Tech law news 9 April 2010

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Proposal to ban software patents irks patent attorneys…

Two patent-specialist law firms have criticised the Commerce Committee’s recommendation to ban software patents in New Zealand (read here and here). Both express surprise that the Committee appears to have accepted submissions by open source proponents, as if that alone is reason not adopt the report. The articles do not accurately represent this arguments, in my view, and the New Zealand Open Source Society has now provided a response.

While another says “stop wasting money on patents”

US intellectual property lawyer Erik Heels writes:

In most cases, filing a patent application is a waste of time and energy. Especially for startups. Your money and time would be better spent hiring programmers, marketers, and a sales force.

This is good advice for New Zealand businesses, especially tech start-ups. As Erik says, it can make sense in some cases, but at least consider the definite immediate opportunity costs versus the possible future benefits (and hidden costs to attain those benefits) of seeking a patent.

Historical legislation online

The Parliamentary Counsel Office has begun digitising historical legislation dating back to 1841, to be provided free online. Historical legislation doesn’t only have historical interest value, it can also have practical uses – such as providing a comparison to assist interpretation of current laws. While the first step involves simply scanning the old legislation (including the “shattering statutes“), longer term the plan is to OCR the documents into the excellent New Zealand Legislation website.

Tech Law news 8 April 2010

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Global privacy regime mooted

New Zealand’s privacy commissioner, Marie Shroff,  has suggested that a United Nations treaty may be required to protect privacy.  She said:

“The reason for this is [a global regime] would bring legal certainty… We have to look at whether and how we can regulate to provide certainty for businesses and protections for individual citizens”

Legal certainty is a very good thing though as I said the other day, there is unlikely to be an “imposed” global regime, and Ms Shroff denied the proposal would be “some sort of a bureaucratic initiative to impose more regulation on business”. The continued development of international guidelines (also suggested by Ms Shroff), co-ordinated enforcement, and even UNCITRAL-type “model law” is more likely here (a TRIPS-like treaty could be a possibility). New Zealand’s “privacy principles” approach works well, and the Privacy Commissioner plays a good and efficient domestic role – could the New Zealand regime be a model template? Standards would also assist and reinforce the nascent “self-regulation” by the industry, such as the Digital Due Process Coalition launched recently.

New Zealand TV listings copyright row

Kiwiblog has commented on Sky TV’s recent attempts to prevent a software developer from distributing software that could be configured to copy its TV listing, claiming their listings are protected by copyright (more on this another day).

Net nuetrality setback

A US court has ruled that the Federal Communicationc Commission does not have the authority to stop an ISP prioritising traffic, meaning that the ISP can take steps such as choking file-sharing traffic. Some see this as a major setback for maintaining net nuetrality, while others are more sanguine. For the record, New Zealand does not have any internet nuetrality regulation.

Tech Law news 6 April 2010

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Don’t forget the domain names

Securing key domain names likely to be associated with a venture is business-101. Unfortunately for Tourism Australia, they launched their new “Nothing like Australia” campaign without registering www.nothinglikeaustralia.net, which has now been setup as a spoof site. They are now investigating legal action against the site for alleged misuse of a trade mark.

This raises the question of whether parody is a defense to trade mark infringement (for a local situation, see here). In New Zealand, there is no specific parody defence in the Trade Marks Act 2002, although a trade mark must generally be used “in the course of trade” for infringement to occur. A 2007 case, Solid Energy New Zealand Ltd v Mountier raised the question of whether use of a trade mark was use “in trade”. It found that the parody was not “in trade” for the purposes of the Fair Trading Act 1986, but did not reach a conclusion on the trade mark aspect. It also found that the trade mark owner had an arguable case for “exclusive use” of the trade mark, which (assuming a broad application what is “use”) would seem to prevent a parody defence. Whether or not the Bill of Rights Act 1990 (section 14) would override that is yet to be seen.

Cost of world-wide advertising campaign: AUD$150 million. Cost of not registering obvious domain names: $19.95. Parody site: priceless.

Gene patent ruled invalid

For the first time in the US, a judge has ruled that a human gene patent was invalid. This casts doubt on the validity in general of gene patenting in the US, the key market for biotechnology.

New Zealand’s in-progress Patents Bill (reported back from select committee last week) does not expressly exclude gene patents. It does exclude patents contrary to morality, which cover some biotechnology applications. However it does add a requirement for “usefulness”, which will prevent gene-related patents from being granted when no specific use has been discovered or disclosed (as has happened previously). But the value of a gene patent in a particular market is of questionable value, if it cannot be patented in key worldwide markets. The US case (which is sure to be appealed) is therefore of major importance to the biotechnology industry worldwide.

Online health records coming to New Zealand

2014 has been set as the target date for an online national health records system in New Zealand. Meanwhile, ISO (the International Standards Organisation) recently released new standards on electronic health records. From the press release:

Together, the two documents provide a powerful comprehensive solution to address e-health data integrity, including ethical and legal concerns, privacy protection, regulations concerning access and disclosing of records among other needs specific to the industry.

It will be interesting to see if the New Zealand programme achieves ISO compliance from the outset. The Privacy Act 1993 requires that reasonable safeguards be used to protect personal information, and in the case of service providers, that “everything reasonably within the power of the agency is done to prevent unauthorised use or unauthorised disclosure of the information”. It would be difficult to argue that failure to acheive “reasonable compliance” with an ISO standard (representing best, or at least good, practice) meets that standard.