Copyright for the Digital Era: New Act Legalizes Format Shifting

May 19 2008

The Copyright (New Technologies) Amendment Act 2008 came into force on April 12 2008 having
received royal assent the previous day. Its aim is to clarify the application of the Copyright Act 1994 to
digital technology, and to provide a technology-neutral framework to maintain the balance between the
protection afforded to owners of copyright works and the public's legitimate rights of access to such
works.

Among the more significant changes, the act:

• creates a new, technology-neutral category of 'communication works', thus extending the

protection previously afforded only to signals that carried programme content in broadcasts and
cable programmes;
• introduces new exceptions to allow for format shifting of sound recordings and time shifting
for private and domestic use;
• updates existing permitted acts, such as fair dealing, library, archival and educational use,
to apply to digital works;
• limits the circumstances in which internet service providers (ISPs) may face liability for
primary or secondary copyright infringement, but provides for a notice and take-down obligation in
respect of allegedly infringing material hosted by the ISP;
• amends the provisions relating to technological protection measures to expand the
prohibition against the manufacture, import, hiring and sale of devices, services or information
designed to circumvent copy protection - these provisions now cover devices, services and
information that circumvent all economic rights provided to copyright owners (including
communication rights) - and introduces offences for dealing in devices designed to circumvent
such protection measures; and
• introduces limited exceptions: (i) to the reproduction right for transient copying undertaken
by computers or communication networks as a result of an automatic or inevitable technical
process; and (ii) to allow for the decompilation, copying or adaptation of a computer program
where this is necessary for its lawful use in order to enable the independent creation of a program
that can be operated with the decompiled program, or if a properly functioning copy of the program
is unavailable.

The most controversial amendment - the legalization of the format shifting of sound recordings (eg, from
a purchased CD to an iPod) - has already been criticized by internet watchdog InternetNZ, which argues
that the act is based on an imperfect grasp of the nature of the new technologies it covers.

The exception allows the owner of a legitimately acquired sound recording to copy the recording to
another device that he or she also owns, provided that the recording is for personal or household use.
Although at first sight this provision seems reasonable and consistent with those in many other
jurisdictions, it was nonetheless the subject of many submissions during the select committee stage
because it fails to accord similar rights to owners who, for example, save a video recording from a
purchased DVD to their video iPod. There appears to be little justification for failing to grant a similar
exception in respect of the format shifting of recordings in this medium and others, which have become
commonplace and which are commonly saved to an increasingly wide and prevalent range of devices.
One must question whether the aim of technological neutrality has been achieved.

The exception has been further criticized because the copyright owner retains the ability to limit or
exclude format shifting in the terms of a contract. This appears to be inconsistent with the act’s implicit
recognition of a legitimate purchaser’s right to use a sound recording as he or she chooses within
reasonable bounds, on the basis that such a purchaser has paid a fair price levied for that right. It also
calls into question the utility of an exception if owners may simply contract out of it as a condition of
sale.

ISPs which merely provide the physical facilities to allow communication to take place (eg, by providing
storage and caching), rather than authorizing an infringement or playing a role in which they know or
should know of such an infringement, will be relieved that their position is now clear. The amendments
will allow them to take advantage of a limited copyright infringement exemption. However, some balance
is provided by the requirement that ISPs delete or prevent access to material when they are made
aware, through a prescribed form of notice, that it is likely to infringe copyright.
The toughening of the provisions designed to prevent the circumvention of technological protection
measures is part of a reaction to the increasing impact of copyright piracy in New Zealand, no doubt due
in part to the persistent lobbying of groups representing the film, DVD and sound-recording industries,
among others. The extension for five years of the prohibition on the parallel importation of films within
nine months of their international release date, which had been due to expire on October 31 2008,
seeks to encourage investment in New Zealand’s rapidly growing film production, distribution and
exhibition industries, as well as protecting cinema ticket sales.

http://www.internationallawoffice.com/newsletters/detail.aspx?
g=b359cd14-2182-4754-b331-99a3cbf50f5f

http://mpra.ub.uni-muenchen.de/8253/1/MPRA_paper_8253.pdf

http://www.kcoyle.net/sfpltalk.html

http://jcmc.indiana.edu/vol13/issue1/kim.html

http://books.google.co.uk/books?
id=MksDHSEJwGkC&pg=PA3&lpg=PA3&dq=Copyright+protection+i
n+the+Digital+Era&source=bl&ots=RLp1C135Df&sig=rNzyT_yz9w
9NEcmurrBzspI_ric&hl=en&ei=n0SeTfWTLMrx4Qb_ra2NAw&sa=X&o
i=book_result&ct=result&resnum=3&ved=0CDkQ6AEwAjgK#v=one
page&q=Copyright%20protection%20in%20the%20Digital
%20Era&f=false

http://apps.americanbar.org/litigation/committees/intellectual/round
tables/1108_outline.pdf
recent cases