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Who Owns What? Why the Internet Means Our Copyright Laws Need Reform - Synopsis

Who Owns What? Why the Internet Means Our Copyright Laws Need Reform - Synopsis

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Published by Aaron Magner
Synopsis for essay on file sharing and the need for broader ‘fair dealing’ defences in the Copyright Act.
Synopsis for essay on file sharing and the need for broader ‘fair dealing’ defences in the Copyright Act.

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Published by: Aaron Magner on Aug 26, 2009
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Who owns what?
Why the Internet means our Copyright laws need reformLAWS 3039 - Law and the culture industriesAaron Magner
Laws that only a handful of people obey and governments don’t enforce are bad laws. In thelong term bad laws are unsustainable. A large contingent of people routinely share copyrightdigital media over the Internet without the authorisation of the copyright holders.
Publicdefiance, or at best ignorance, of existing copyright laws, particularly in relation to contentaccessible via the Internet, suggests the existing approaches to regulation are no longer effective.The Internet has amplified tensions between the rights of copyright owners and those whowant the freedom and right to use these works. The digitisation of literary, artistic and musicalworks coinciding with advances in ‘Web 2.0’,
 increasing broadband speeds, growingnumbers of connected devices and improvements in file compression technologies, all meancopyright works can be and are enthusiastically copied and distributed with greater speed andin vaster quantities than ever before.
The Internet is a powerful disruptive technology that provides a platform for new disruptiveinnovations, such as peer-to-peer (‘P2P’) file sharing of digital media.
 Digitisation of music,video and other media became mainstream after the introduction and widespread adoption of the CD and DVD formats.
Over time advances in file compression technologies such as theMP3 format for music and a range of digital video formats including AVI, MPEG4 and
A recent survey conducted for the Australian Record Industry Association (ARIA) reported 91 percentof respondents admitted they had downloaded music illegally via file share or peer-to-peer. See<http://www.themusic.com.au/survey.php> (22 August 2009). Thirteen percent either exclusively or frequently downloaded their music this way, 15% did it moderately, 20% rarely, while 13% claimed tohave done it previously but don’t anymore. Only 9% said they had never downloaded content this way.The Pew Internet survey from the US reported 75% of teen music downloaders ages 12-17 agree that“file-sharing is so easy to do, it’s unrealistic to expect people not to do it,” Lenhart, Amanda and MaryMadden, “Teen Content Creators and Consumers,” The Pew Internet & American Life Project, November 2, 2005, Available at: <http://www.pewinternet.org/~/media/Files/Reports/2005/PIP_Teens_Content_Creation.pdf.pdf> (22 August 2009).
Web 2.0 refers to the second generation of web services available on the Internet that enable users tocollaborate and disseminate information online and contribute to a more interactive and rudimentarysocial network. See Tim O’Reilly
What is Web 2.0
? <http://www.oreillynet.com/pub/a/oreilly/tim/news/2005/09/30/what-is-web-20.html> (22 August 2009.)
According to Internet World Stats as at June 2009 there are more than 1.7 billion people connected tothe Internet. It is humbling for those of us in the developed world to keep in mind that this is still just24.5% of the world’s population. In Australia as at December 2007 there were 15,300,000 Internetusers making 74.3% of the population. In the US Internet penetration was reported to be at 75% as at31 March 2009 <http://www.internetworldstats.com/stats.htm> (23 August 2009).
Disruptive technology is a term coined by Harvard Business School Professor Clayton M. Christensento describe a new technology that unexpectedly displaces an established technology. See “TheInnovator's Dilemma,” Bower, Joseph L. & Christensen, Clayton M. (1995). ‘Disruptive Technologies:Catching the Wave’,
 Harvard Business Review
, January-February 1995. BitTorrent and Limewire, andthe iTunes Music Store are examples of file distribution and sharing technologies with low enddisruption that has undermined the sales of physical, high-cost CDs. See Knopper, Steve (2009)
 Appetite for self-destruction: the spectacular crash of the record industry in the digital age
, New York:Free Press.
CD players and discs were first released in the US and Australia in 198. The DVD format was firstintroduced in Australia in March 1999. <http://en.wikipedia.org/wiki/Compact_Disc> and<http://en.wikipedia.org/wiki/DVD> (22 August 2009).
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others, enabled copyright works to be easily and perfectly copied and then shared via theInternet.
 The ever-widening availability of  broadbandand continual advances in P2P technology has made file sharing easier, faster and more prevalent, with increasing downloadspeeds making the distribution of movies, TV series, albums and other copyright worksincreasingly popular.
The disruptive impact of file sharing digital media has destabilised the business models of thedominant copyright owners and undermined the efficacy of our existing copyright laws.While copyright owners have aggressively pursued litigation in an attempt to prevent theunauthorised distribution of their intellectual property via the Internet, they have had limitedsuccess.
The Internet has meant it is no longer feasible to control distribution, yet copyrightlaw is premised on enabling exclusive distribution privileges. Copyright enforcement wasmore effective when there were a finite number of publishers, but the Internet has broughtabout a paradigm shift whereby every consumer can also be a creator and distributor of digitalmedia. In this context attempts at enforcement are like shooting fish, unlucky for the fish thatget shot, but the fish population remains unaffected.
Copyright holders’ attempts to policethe duplication of binary digits in the digital domain has become increasingly nonsensical andhad little effect.
These failings point to the need for reform of our copyright regime. The global economyincreasingly depends on effective mechanisms for the generation, protection and exploitationof intellectual property. Inappropriate, defective or dated copyright laws will only stiflefurther innovation, productivity, technology, growth and our quality of life. This essay willconsider the case for reform of our copyright laws to better balance the protection of thelegitimate interests of copyright owners vis-à-vis the collective benefits that flow fromcollaboration and the free flow of knowledge and expression of ideas with particular reference to the disruptive impact and potential benefits for society brought about by theInternet.
Regulatory context
MP3 is abbreviation for “Moving Picture Experts Group-1 Audio Layer 3”, AVI is abbreviation for “Audio Video Interleave” and MPEG4 is abbreviation for Moving Picture Experts Group 4. SeeBuskirk, V. (2005) “Top five ways MP3 has changed the world? <http://reviews.cnet.com/4520-6450_7-6266276-1.html?tag=txt> (22 August 2009).
The ARIA Survey (Footnote 1) reported that in Australia the primary software used for file sharingwere Bit Torrent; 37%, Limewire; 33%, Kazaa; 2%, BearShare; 1% and a variety of others; 27%.
The significant copyright cases will be examined including
Sony Corporation v Universal City Studios Inc
464 US 417; 104 S Ct 774; 78 L Ed 2d 574 (‘
 Australian Tape Manufacturers Association Ltd v Cth
(1993) 176 CLR 480,
University of New South Wales v Moorhouse
[1975] HCA26,
Metro-Goldwyn-Mayer Studios, Inc v Grokster, Ltd 
(04-480) 545 U.S. 913 (2005) 380 F.3d 1154,
Universal Music Australia Pty Ltd. v Sharman License Holdings Ltd 
[2005] FCA 1242,
Universal Music Australia Pty Ltd v Cooper 
[2005] FCA 972, and
 Roadshow Films & Ors v iiNet (Nov 2008).
Critics largely view the litigation as ineffective.
Intellectual property expert Alan J. Hartnick offers onesuch negative assessment, stating: “The lawsuits had little effect, as unlawful downloading continues.”Sarah McBride and Ethan Smith, “Music Industry to Abandon Mass Suits,” The Wall Street Journal,December 19, 2008. <http://online.wsj.com/article/SB122966038836021137.html.> (23 August 2009).Also Alan J. Hartnick, “Has the Recording Industry Really Abandoned Unlawful Downloaders?” NewYork Law Journal, April 9, 2009.
There appears to be an arbitrary element to the prosecutions, for example the case of the Minnesota32-year-old mother of four ordered to pay $1.92 million to the four major labels after downloading andsharing 24 songs. See Majors Welcome P2P Win, But $1.92M Award Could Make For Bad PR, BenSheffner, 18 June 2009 <http://www.billboard.biz/bbbiz/content_display/industry/e3i6c3a49109c5609 b6bcd108368c36b406> (23 August 2009).
The record industry continues to pursue Digital Rights Management, digital fingerprinting and other tracking technologies to monitor copyrighted content and is counting on partnerships with ISPs tomonitor file sharing activity and potentially cut off service to offenders. They are also pursuing partnerships with universities to incorporate music subscription fees (of about $5 per student) intostudent tuition bills. If successful, a similar ISP-based fee could be implemented for the general public.See Eliot Van Buskirk, “Three Major Record Labels Join the ‘Chorus,’” Wired Epicenter.<http://blog.wired.com/business/2008/12/warner-music-gr.html> (24 August 2009).
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While the Australian parliament, the courts and the bureaucracy all have a central role in howcopyright laws are applied, the framework and a fair amount of the detail in Australia’scopyright law is determined at the international level. There is a strong propensity towardsglobalisation of intellectual property law with Australia having implemented all relevantinternational treaties.
The US is the world’s largest exporter of intellectual property andcopyright works and has had a significant influence on the framework of intellectual propertylaw and regulation in Australia and internationally.
 Most recently the United States-Australia Free Trade Agreement included a number of provisions relating to intellectual property law, all driven by the US, which required a range of amendments to the AustralianCopyright Act. These amendments included changes to the period of copyright protection,when a technological protection measure may be circumvented, penalties for copyrightinfringement and the responsibilities of carriage service providers for infringements by peopleusing their services.
While debate over the value of the US Free Trade Agreement to Australia is extraneous, itremains significant to an examination of Australian copyright law.
Australia, unlike the US,does not have a broad constitutional principle to uphold, there is no general fair useexemption to copyright infringement, and no free speech principles that might function toensure important works remain in the public domain.
In the US fair use exceptions apply toa broader range of uses than in Australia where the ‘fair dealing’ exemptions that are strictly
Australia is a signatory to The Berne Convention for the Protection of Literary and Artistic Works of 1886, (the Berne Convention), the Agreement on Trade Related Aspects of Intellectual Property Rights(TRIPS Agreement) aninternational agreementadministered by theWorld Trade Organizationthat sets down minimum standards for many forms of intellectual propertyregulation. The World IntellectualProperty Organization Copyright Treaty (WCT) and the World Intellectual Property OrganizationPerformances and Phonograms Treaty (WPPT). The treaties allow countries to limit the rights of copyright owners provided the limitation or exception: applies in special cases; does not conflict with anormal exploitation of the work; and does not unreasonably prejudice the legitimate interests of thecreator/rights holder.
The United States, unlike Australia, is a net exporter of intellectual property, primarily inmanufacturing technology know-how and licensing of computer software, and of course its movie andmusic recording industry. US companies received $33 billion in net revenues generated by intellectual property from affiliated and unaffiliated foreign companies in 2005.<http://www.nsf.gov/statistics/seind08/c6/c6h.htm>. By contrast Australia Australia is a large netimporter of technology and other intellectual property material (including copyright material). TheAustralian Copyright Council Report, “Copyright: an economic perspective” by Hans Hoegh Guldberg,cites the level of imports for 1992-3 to be four times the level of Australian copyright exports.
Chapter 17 of the US Free Trade Agreement dealt with Intellectual Property and the AustralianParliament implemented its obligations in the
US Free Trade Agreement Implementation Act 2004
andamended the Copyright Act to comply. Amendments included bringing the period of copyright protection in Australia into line with that provided in the US by the
Copyright Term Extension Act 
of 1998 in general, from author’s life plus 50 years to life plus 70 years. This is pejoratively known as theMickey Mouse Protection Act because of extensive lobbying in support of a time extension from theWalt Disney Limited as wellMary Bono(Sonny Bono's widow and Congressional successor) and the estate of composer George Gershwin.
For an analysis of the US Australia Free Trade Agreement see: Capling, Ann;
 All the Way with theUSA: Australia, the US and Free Trade
, Sydney, University of New South Wales Press, 2004.
The constitutional power for the federal Government to legislate in relation to intellectual propertymatters lies in s51(xviii) of the Constitution which confers exclusive power on the Commonwealth tomake laws with respect to ‘
copyrights, patents of inventions and designs and trade marks
”. This power has been given a wide interpretation by the High Court. See for example
 Attorney General (NSW) v Brewery Employees Union of NSW 
(1908) 6 CLR 469 (the Union Label case). Other aspects of theConstitution to have an indirect impact on intellectual property law is Section 92 which was consideredin
 Australian Tape Manufacturers Association Ltd v Commonwealth of Australia
(1993) 176 CLR 480where the High Court struck down legislation providing for the imposition of a levy on blank cassettetapes, relying on an interpretation of the Commonwealth’s taxation power rather than the intellectual property power. By contrast, there is, in effect, a statement in the US Constitution of the purpose of copyright law: “
The Congress shall have the Power … To promote the Progress of Science and useful  Arts, by securing, for limited Times to Authors and Inventors the exclusive Right to their respectiveWritings and Discoveries.
” US Constitution, Article 1, § 8.
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