Hon Christopher Finlayson

Part 1 Amendments to Parts 1 to 5 of Copyright Act 1994

CHRISTOPHER FINLAYSON (National) : There are five issues I want to consider in Part 1, which deals with a number of very important matters. The first issue will be the meaning of the term “communication work”, the second issue will be the position of persons known as “educational resource suppliers”, the third issue will be the parallel importation of films, the fourth issue will be the position of Internet service providers, and the fifth issue is known as the “section 88” issue. Earlier in the day the Minister very kindly provided me with the Supplementary Order Paper on which she has set out the amendments she proposes. What I will do, as I go through the various issues I wish to discuss, is touch on the amendments that she wishes to make.

The first issue is the new definition of “communication work”. I refer back to my first reading speech in which I talked about the development of the Copyright Act since the first Statute of Anne in 1712. The first type of work that was protected was literary work, and over the years different types of works have been given protection; for example, dramatic works, musical works, film, and, most recently—many years ago, actually—the introduction of provisions to deal with protection of broadcasts and cable programmes.

In a sense this bill is very important because it tries to pick up terminology that is appropriate to the Internet age. When the Copyright Act 1994 was passed it was either the dawn of the Internet or just before it, and, of course, in the 14 years since, the Internet has become established as a fundamental part of the way we all do business. So the issue the Commerce Committee was faced with was to try to look for a term that would be—[Interruption]

The CHAIRPERSON (H V Ross Robertson): Would the member who has a cellphone on please turn it off.

CHRISTOPHER FINLAYSON: I will go back to the dawn of the Internet age and simply say that the aim—and it is a perfectly reasonable thing to do—has been to find a term that is technology-neutral, because, as far as possible, copyright needs to be expressed in broad terms, to take into account the march of technology. That is what has happened here. It is proposed that the terms “broadcast” and “cable programmes” will be deleted, and throughout the Copyright Act there will be reference to the new term, “communication work”. The verb “to communicate” is also defined. I have never been totally convinced that the move to this particular terminology is necessarily the best move, but I have to advise the Committee that National will not oppose this change. It is one of the many matters that will need to be looked at again when there is, hopefully, a full review of copyright law in a few years’ time.

The concern I have had—and I acknowledge that the Supplementary Order Paper tries to address this issue—is what appears to be the creation of a new property right to reward the making available of a work. Under the previous law, and for various categories of copyright work, some level of creative activity was required before copyright protection could be conferred. As I said, I think the Supplementary Order Paper tries to address this issue by deleting the phrase “making available by a communication technology”, so that “communication work” will now mean the transmission of sounds, visual images, or other information. If the changes introduced by the Minister’s Supplementary Order Paper address my concern, then so much the better, but I just have my doubts about whether it will.

I would point out one other minor point on this issue to the Minister. I do not know whether the Supplementary Order Paper actually changes the meaning of the word “communicate”, which will still mean “to transmit or make available by means of a communication technology”, and for good order and consistency perhaps that needs to be altered, as well.

The second issue I wish to discuss concerns the new definition of “educational resource supplier”, and perhaps the best way of dealing with this issue is to talk about section 48 of the Copyright Act, which provides the educational exemption in relation to certain categories of work—in this case, broadcasts and cable programmes. As I said, when the amendments are passed, we will be dealing with recording by educational establishments of communication works. Clause 28 will change section 48 to provide for that, but it also introduces this additional term of providing some protection for educational resource suppliers as well as for educational establishments. This was a matter that I do not think was looked at by the Commerce Committee, but I can say that the National Party understands why the Minister is seeking this amendment through her Supplementary Order Paper and we will support that; it seems to make perfect sense.

So, moving along then, I come to the next issue, which is that of parallel importation. This is a rather important one. Section 35 of the Copyright Act deals with the issue of secondary infringement of copyright, and one way in which one can infringe copyright is by importation. So, for example, if one brings in a film, that can be called parallel importation and can attract copyright infringement.

Clause 18(2), as amended by the Minister’s Supplementary Order Paper, attempts to amend section 35 so that there will be infringement of copyright in a film to which subsection (6) applies—that is, the existing subsection (6)—if a person imports a copy of a film into New Zealand within 9 months of its first being made available to the public, and knows that the film is imported into New Zealand and is being made available to the public; if the person seeking to import the film is not the licensee of the copyright in New Zealand; and if that person imports the film into New Zealand other than for that person’s private and domestic use. That is the proposal that has been put forward in the Minister’s Supplementary Order Paper. The National party understands that and will support it. Section 35(6)(b) of the principal Act refers to films that are “produced principally for the cinematic release, or copy of that film,”, so that is the category of work one is dealing with. So that matter can be resolved satisfactorily.

The next issue is a very important one and was the subject, as I understand it, of extensive submissions to the Commerce Committee and of extensive debate in that committee. It concerns the position of Internet service providers. I am referring to the amendments contained in clause 53 of the bill.

Perhaps a little background is required, and I hope that people do not think I am going on and on. But the point is that there needs to be the provision of what are often referred to as Internet service provider safe harbours. Some jurisdictions have made it plain that safe harbours for Internet service providers were meant to ensure that development of Internet-based business would not necessarily be chilled by the threat of liability for copyright infringement; it was done in various ways in the United States, for example, prior to the implementation in 1988 of the equivalent US statute. Case law had established a number of broad principles confirming Internet service providers’ immunity from secondary forms of copyright infringement, and I think that the same applied basically to the European Union commerce directive.

We have taken a slightly different route from other jurisdictions. It seems to me that the new regime, created by clause 53, has created a new statutory tort, and that is quite a different way of dealing with the issue. In the United States, Australia, and the European Union, equivalent provisions limit the scope of liability. In contrast, what we have here—and I refer particularly to new section 92C(2), inserted by clause 53—is a provision stating that the Internet service provider does not infringe copyright in the work by storing the material unless certain things occur, which are set out in the bill.

Again, I do not know whether this is necessarily the right model, but the National Party has had a good close look at it. We will not oppose what the department has come up with for the purpose of this bill. I still do not think that new subsection 92C(4), in clause 53, is required. It seems to preserve the right of the copyright owner to seek injunctive relief against the Internet service provider. In my opinion—and I have always maintained that this is largely redundant—there is no need for this provision if the Internet service provider is already to be liable for copyright infringement.

So that is the regime that has been established. I have my doubts as to whether it is the right regime but we will go along with it.

There have been a number of amendments. The Minister knows, and I certainly know, that we have all had approaches from various commercial entities, as a result of which the Minister has come up with a number of amendments. We will support those. The first makes some changes to new section 92A, and I need not go into that in any great detail. We support what is being done there. Essentially, it is putting back into place what had been there before the bill went to the select committee.

The second issue concerns section 92C, where there is to be the addition of new subsection (2A) about the sorts of things that a court may take into account when determining whether there will be liability for the Internet service provider. I think that that amounts to an improvement over what the select committee said, so we will support that. The third issue concerns the requirements of the notice of infringement, in section 92CA, and I think those changes are fine. The amendment means that a notice to be served must—“(a) contain the information prescribed by regulations made under this Act;”—and of course that has not yet happened—“and (b) be signed by the copyright owner …”. So we can understand that those improvements will be desirable.

We also agree that section 92CB should be deleted, because I always thought that it was rather heavy-handed and went too far. So they are the changes for Internet service providers, and I can advise the minister that we will support her Supplementary Order Paper because we think those changes are quite helpful.

The final issue I want to touch on—and I know that Mr Copeland will wish to speak about this—concerns section 88 of the Copyright Act, which deals with the reception and transmission of broadcast in a cable service programme. There are three positions before the Committee. The first, as I understand it, is the Government’s position, which is to repeal section 88 in its entirety. The second, as evidenced by the majority of the select committee, is to keep section 88 as it is at least until there can be a full review of the Act. The third is Mr Copeland’s amendment, which deals with cable television operators’ right to rebroadcast free-to-air television. As I understand it, Mr Copeland’s amendment seeks to extend section 88 to satellite broadcasters like Sky.

National supports the status quo and believes that the various operators can probably come to a commercial arrangement once their existing contracts expire in a couple of years, so I do not think that we are too happy with that amendment, and we will not be supporting it. I know that the amendments proposed in the Minister’s Supplementary Order Paper are of a technical nature, but I think that they improve the legislation, and that is why the National Party will support them. I have a couple of things to say about various aspects of Part 2, and I thank you, Mr Chairman, for the opportunity to have one call on these issues. I will leave it there.