Mega and the Sgt Schultz approach to copyright law


Sgt Schultz sees no copyright infringement

“I think Mega is using encryption not for the security of their users but their own personal legal protection,” Woodward added.  “I cannot imagine anyone who understands encryption would trust their precious data to Mega’s scheme as it currently stands. It would appear that Mega is after people who are looking for somewhere to store their data with a provider who wishes to adopt a position of ‘see no evil’.”

Alan Woodward, from the Department of Computing at the University of Surrey

The most touted aspect of Kim Dotcom’s new Mega site is its encryption – but this feature is said to be as much for Mega’s protection as for its users:

According to Dotcom, Mega has a sophisticated encryption system which will allow users to encode their files before they upload them onto the site’s servers, which Dotcom says are located both in New Zealand and overseas…

As a result, the site’s operators would have no access to the files, which they say would strip them from any possible liability for knowingly enabling users to distribute copyright-infringing content.

Any allegation of copyright infringement against Mega would presumably be met with a response along the lines of “I see nothing!” due to Mega’s claimed (and self-imposed) inability to access the user-encrypted files.

But is it that simple to avoid prosecution for copyright infringement – by simply “seeing no evil”? In a word, no: though a lack of actual knowledge can make prosecution more difficult, a person may still be liable on the basis of constructive knowledge of infringing material. For example, section 36(a) of the Copyright Act 1994 states:

Copyright in a work is infringed by a person who, in New Zealand, other than pursuant to a copyright licence … possesses in the course of a business … an object that is, and that the person knows or has reason to believe is, an infringing copy of the work.

On the issue of constructive knowledge in copyright cases, Justice Smellie said in Husqvarna Forest & Garden Ltd v Bridon NZ Ltd [1997] 3 NZLR 215:

Constructive knowledge is appropriately imputed in other areas of law, if a party wilfully closes its eyes to the obvious or wilfully fails to make those inquiries that an honest and reasonable person in the circumstances would have made.

Thus, adopting a “see no evil” approach does not provide a free ride over copyright law.

In some cases the inability to access stored files will actually make it harder to gain protection from “safe harbour” provisions designed to protect service providers. In New Zealand, section 92C of the Copyright Act 1994 provide such safe harbour protection. However, this protection does not apply where the website:

… does not, as soon as possible after becoming aware of the infringing material, delete the material or prevent access to it.

This requirement does not apply only where the website has actual knowledge of copyright infringement; it also applies where there is “reason to believe” (i.e. the constructive knowledge test mentioned above) that there is copyright infringement. In either case if, having received a complaint, the website does not delete or prevent access to the allegedly infringing material, they will potentially lose the legal protection the section affords.

The new Mega has a top legal team behind it – it claims to have “the most legally scrutinsed business plan in start-up history”, and the old saying about Telecom being a law firm with a large IT department comes to mind – and to be clear Mega is not, to my knowledge, betting the legitimacy of its site solely on the “see no evil” basis described by some media. Lead adviser Ira Rothken makes the comparison with the early legal challenges mounted against the VCR, in which Hollywood studios claimed that VCR’s facilitated copyright infringement:

Rothken responds that many technologies have dual uses, but on balance provide more public good. That’s how the VCR stayed on the market, despite facilitating video piracy. The same argument applies to cloud computing as a whole, he says.

Rothken is referring to the famous decision in which the US Supreme Court ruled (5-4) that VCRs were lawful because even though they could be used to break the law, they had significant non-infringing uses. It is perhaps a stretch to apply that to cloud computing as a whole, but certainly an argument can be made. In New Zealand there is also the availability of section 92B of the Copyright Act, which states (in part):

Merely because [a person] uses the Internet services of the Internet service provider in infringing the copyright, the Internet service provider, without more, does not infringe the copyright in the work…

The scope of this section, and what “without more” means in each case (including in relation to relatively new legal scenarios such as Mega raises), are the key questions and ones on which international case law and evidence will likely be relevant.

Ad blocking – a coming legal battleground?

My latest Computerworld article is online. It is on ad blocking – a subject that has had surprisingly little coverage:

Consider these two facts –

Fact 1: many of the world’s largest internet companies, including Google and Facebook, derive most of their revenue from serving up online advertisements.

Fact 2: one of the most popular browser add-ons is Adblock Plus, free software designed to eliminate online advertising from a user’s browser, with the Firefox version alone recording close to one million downloads per week.

Overall statistics on browser ad blocking are hard to come by, but Mozilla records over 178 million total downloads of Adblock Plus and over 14 million average daily users for its Firefox browser alone. Even when extrapolated over all browsers, this still only represents a small percentage of web traffic. Whether this will grow significantly remains to be seen.

There are also technical ways in which websites try to defeat ad-blockers, but this is somewhat of a cat-and-mouse game between developers, with dynamically-updated filter lists and other techniques giving ad-blockers the upper hand. There is also a growing trend of sites asking users (nicely) to not ad-block them.

The robust health of the online ad industry means that any legal battles over browser ad blocking are probably some years away – if they emerge at all. The attention at the moment seems to be on the nascent but potentially critical cases involving other forms of ad blocking – such as the Fox v Dish litigation currently underway in the US:

Also, browser ad blocking is a slipperier target (practically and legally) than what the likes of Dish are attempting.

Update: Slashdot has picked up the article, with lots of interesting comments.

Oracle v Google: API wars, contd

As I first blogged about some 18 months ago, a high-stakes though arcane copyright battle with potentially wide-ranging consequences including for New Zealand, is playing out in the US in a battle between Oracle and Google.

The case centres on whether or not copyright exists in an API – Application Programming Interface. APIs are a bit like the “rules of grammar” of modern programming languages and platforms, and are absolutely critical to writing code for everything from web browsers to mobile phones to desktop PCs. They specify function names and communication protocols to allow interaction and provide functionality to other programs.

Oracle, which owns Java – the world’s most widely used programming language – claims that Google has infringed its copyright by developing its own implementation of Java’s API for use with its Android operating system. The particular allegation is not that Google has actually copied the language, but has created a system that “mimicks” Java by implementing a compatible API.

Oracle claims, in rather “sweat of the brow” terms, that this has infringed its copyright:

Designing the APIs for a complex structure like the Java platform requires a great deal of creativity and skill… Many articles and books are dedicated to the techniques and considerations involved in writing APIs. If APIs are written well, they create a beneficial cycle. A well-designed API is easier to learn and use, so developers will be more likely to adopt the platform and write more applications, creating more appeal to the platform for end users, which in turn attracts more developers. …

Copying the core Java APIs saved Google “an enormous amount of time.” And Google’s expert opines that it would have been “very difficult for Google” to persuade developers to switch to different APIs. …

Google got down to work and began implementing not only the Java programming language and overall “write once, run anywhere” architecture, but also copying the core Java API specifications… When Google finished its copying, it proclaimed on the Android developer website: “Android includes a set of core libraries that provides most of the functionality available in the core libraries of the Java programming language.”

Google denies that copyright exists in the API in the manner asserted by Oracle. Broadly, one of its key arguments is premised on the fundamental principle that copyright protects only the expression of ideas, not the idea itself:

… the only similarities between the Accused Packages and the Java language API packages lie in the specifications for those APIs. But similarities in only “functional specifications,” as opposed to the program logic that performs the steps required by those specifications, are not copyright infringement. …

Oracle has alleged that Google “copied” the names of the Java language APIs at issue. But the names of the Java language API files, packages, classes, and methods are not protectable as a matter of law… Moreover, the names merely describe the functionality of the packages and methods, and/or otherwise are the result of customary programming practices.

As is to be expected with such a fight between two of the major tech heavyweights, there will be many rounds yet to go before this is finally sorted out. But a lot is potentially at stake if Oracle’s claim succeeds – it could claim billions of dollars of licensing fees from Google and other companies who have created or adapted languages based on Java.

Of broader reach, API owners could potentially attempt to prevent anyone else – including in New Zealand – from making or using a compatible “infringing” language or system, without obtaining a licence:

Should this come to pass, numerous products will suddenly find themselves on an uncertain legal standing in which the previously benign but now newly empowered copyright holders might assert punitive copyright claims. Chief among these would be any re-implementation of an existing language…

Essentially, every language implementation not issued forth by the copyright holder will be suspect until the copyright owners announce a permanent statement dispensing with any threats to enforce the copyrights.

A worst-case scenario like that makes even the worst software patent scenarios look positively innocuous, in particular given that copyright is (essentially) global whereas patents are territorial.

On the other hand, the final outcome could determine that copyright does not subsist in certain or all aspects of APIs (at least in that particular jurisdiction, and pending appeals, etc). This certainly would be vastly preferable to the uncertainty that could otherwise ensue.


Computerworld reports:

Europe’s top court ruled on Wednesday that the functionality of a computer program and the programming language it is written in cannot be protected by copyright…

The result is that the court finds that ideas and principles which underlie any element of a computer program are not protected by copyright under that directive, only the expression of those ideas and principles.

Submission on Copyright (File Sharing) regulations

Submissions on the Copyright (Infringing File Sharing) Regulations are due this week (27 May 2011). The key part of my submission as follows:

Response to Question 4: (“Should the suggested requirements be included in regulations? Should there be any other information requirements and why?”)

One of the most critical issues in determining whether IP infringement has occurred is proving the complainant’s rights to the IP in question. The suggested requirements do not adequately address this critical issue.

Sections 122D(2)(a) and 122E(2)(a) simply require a notice to “identify the rights owner”. Paragraph 13(e) simply proposes that a notice include “name of copyright work and name of owner of that work”. This is inadequate. Because there is no “register of copyright works”, and because of complex international IP rights management, it is generally impossible for an account holder or IPAP to confirm whether a complainant is in fact the rights owner of the relevant work.

For the complaint to have a desirable level of integrity, the complainant should be required to provide more than a mere “identification” or “description” of the work allegedly infringed. The complainant should be required to provide an affidavit confirming they are the owner of the identified work, or the duly authorised agent of the owner of the work, at the date of the alleged infringment.

This is a simple requirement, and would allow the IPAP, the account holder, and (if necessary) the Tribunal to proceed on the basis that the ostensible rights owner does in fact own (or have the necessary rights in) the work at the centre of the alleged infringing activity (in the absence of evidence to the contrary).

I therefore propose amending paragraph 13(h) of the Discussion Document requirements to read:

h. an affidavit from the rights owner that they are the owner of that work, or the duly authorised agent of the owner of the work, at the date of the alleged infringment, and to the best of their knowledge, the information provided to the IPAP is true and correct.

Copyright (Infringing File Sharing) Amendment Bill

Justice Minister Simon Power had a day of two halves yesterday. The good: he announced a crackdown on the legal aid system (the Criminal Bar Association is “appalled” at the changes, so they must be good). The bad: he announces that Parliament was to rush through the Copyright (Infringing File Sharing) Amendment Bill under urgency.

While the Bill is being passed under urgency  – with the reason for the indecent haste unexplained and unjustified – it will have an easy ride through, with 111 of 122 MPs voting for it. Only the Greens, Chris Carter and Hone Harawira opposed passing the Bill under urgency. The move was supported by National, ACT, the Maori Party, United Future, Labour and Progressives.

So the substance of the Bill was uncontroversial for most MPs, despite some semantic gymnastics from Labour MPs attempting to explain why they originally supported it in harsher form than present, then opposed a more reasonable version, and are now supporting it again.

There is no question that the use of urgency for this Bill is an abuse of process. The file sharing reforms have kicked around for several years, since controversy erupted after first being introduced (in more draconian form) by the previous Labour Government. There is no explanation for the sudden need to race it through now.

It is also clear that some MPs still have a poor understanding of the issues. For example, in the House last night National MP Katrina Shanks made bizzare comments suggesting that any file sharing was illegal, and that people who choose to install file-sharing software on their computers must be doing so to infringe copyright. I just so happened to be downloading the latest version of LibreOffice using µTorrent when she said that…

On the substance of the bill, there is no question that it is a substantial improvement over the original proposal. In particular, the original draconian termination provision is now only available to a Court, and only if the judge considers:

“suspension of the account holder’s account is justified and appropriate in the circumstances, given the seriousness of the infringing”

This and other changes mitigate much of the “guilt on accusation” stance of the original Bill (and I do wonder whether many of the Twitterati realise this, given some of the incorrect and alarmist comments flying around), although it remains less than ideal.

Copyright update

Copyright in compilations

Barrister Toby Futter recently wrote a handy update on originality, authorship, and copyright in compilations. He discusses the en banc Australian Federal Court appeal of last year’s Telstra ruling that there was no copyright in a White Pages or Yellow Pages telephone directory (see my post A Feisty copyright ruling on the original decision). The Court followed the Australian High Court IceTV decision and dismissed the appeal, meaning that the original finding of no copyright stands. As Toby says:

The big question in New Zealand is whether that approach will be adopted here, and, if so, in what form.

We may find out this year – as his article notes, Toby is involved in two cases currently before the High Court in which copyright in compilations is at issue.

My colleague Stuart Bradshaw also commented on the Telsra appeal here:

“‘The case is a reminder that copyright law does not protect everything you can’t put under lock and key and unless such a law comes along, and is actually enforceable, businesses will need to figure out how to add value to their directories and data-collections that cannot be duplicated.”

Aussie ISP liability

Another Federal Court decision has, in a 2-1 majority, dismissed the film industry’s appeal against last year’s ruling that Aussue ISP iiNet was liable for copyright infringment on its network. While the decision is welcome news for iiNet, which has spent over AUD$6m defending itself, the Court did rightly leave the door open for liability to exist:

It does not necessarily follow from the failure of the present proceeding that circumstances could not exist whereby iiNet might in the future be held to have authorised primary acts of infringement on the part of users of the services provided to its customers under its customer service agreements.

The case turned to a large extent on the process by which the studios notified iiNet of the alleged copyright infringment, and if further steps had been taken by the studios, iiNet may have been liable for failing to disconnect users. Also, it may not be the end of the road, with the movie studios fairly likely to appeal the decision to the High Court.

The full judgment is here.

Facebook photos fair game?

The Herald reports:

The Press Council has rejected a complaint against the Herald on Sunday by a man upset a picture off the social networking site Facebook was used in print… In its decision, the Press Council said using a photo off the website was not a breach of its rules.

While the Press Council was not making any comment about copyright, the situation does of course raise copyright issues.

It may be increasingly common for media organisations to reproduce social networking content without permission of the copyright owner. There is a copyright exception for news reporting, however this is limited to “current events”. Care must be taken when copying Facebook images (and other content) without permission. The copyright in material uploaded to Facebook remains with the owner. While users cannot expect privacy in social networking sites, using copyright material without permission is more black and white.