Hon Simon Power
Minister of Commerce

16 December 2009 Media Statement

Govt favours three-notice procedure for s92A
The Government favours a three-notice procedure to deal with illegal copying of material over computer networks, Commerce Minister Simon Power said today.

Mr Power announced the release of a Cabinet Paper that outlines the basis of new legislation, which will be introduced to Parliament early next year. This follows a review of section 92A of the Copyright Act 1994.

The main points of the proposal are:

• Right holders will be able to request that internet service providers (ISPs) give alleged infringers notice to stop infringing activity.
• The first notice will inform the account holder that infringing has occurred and is illegal. Two further notices may be sent.
• If infringing continues after three notices, the right holder may seek a penalty of up to $15,000 at the Copyright Tribunal. The amount will be based on the damage to the copyright owner.
• Where serious and continued breaches occur, right holders will be able to go to court to seek a range of remedies, including the suspension of accounts for up to six months.
• Account holders will be able to issue counter notices, and can request a hearing if they feel they should not be penalised.

Mr Power said the three-notice procedure was the key to the process.

"The procedure will both educate and warn file-sharers that unauthorised sharing of copyright works is illegal, and in turn stop a large proportion of illegal file sharing.

"A great deal of work has gone into finding a fair, effective, and credible process for the enforcement of copyright against illegal peer-to-peer file-sharers.

Mr Power said though right holders will be able to seek suspension of accounts through the courts, he expected that would happen only in cases of serious offending.

"I want to stress that account holders will have the opportunity during each of these processes to defend claims by right holders."

"This was a complex issue to work through, and industry groups, intellectual property experts, and officials worked hard to ensure the issues raised in the submissions were addressed.

"I'm confident we now have a workable solution."

The public will be able to make further submissions at the select committee stage.

A copy of the Cabinet Paper is available at http://www.med.govt.nz/s92a-cabinet-paper-p2p [Scoop copy: S92ACabinetPaper.PDF]

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Questions and Answers on the review of Section 92A of the Copyright Act.

Why are we reviewing section 92A of the Copyright Act?

Peer-to-Peer file sharing involves the sharing of music, video, and game files over computer networks such as the internet. Often this sort of sharing is without authorisation from the copyright owner, breaches their copyright, and denies them revenue they might otherwise earn if they sold these creative works.

Current enforcement measures under the Copyright Act are not considered effective. The original version of section 92A was intended to provide enforcement measures for copyright owners to stop this problem but was met with a lot of public concern.

The revised section 92A will address these issues and provide an effective and credible process for copyright owners to enforce their copyright against illegal peer-to-peer file sharers.

What does the proposal say?

Section 92A will now provide an enforcement process that involves a three-notice regime and the possibility of a penalty awarded by the Copyright Tribunal.

Right holders who can provide evidence of an infringement will be able to request Internet Service Providers (ISPs) give alleged infringers notice to stop infringing activity.

The first notice will inform the account holder that infringing activity has occurred and that it is illegal. A second and third notice may then be sent if the account holder ignores notices and continues infringing.

Account holders will also be able to issue counter notices, either via ISPs or directly to the right holder.

If the person continues to infringe the right holder may seek a penalty at the Copyright Tribunal. The amount of the penalty will be up to $15,000 based on the amount of damage caused to the copyright owner.

Account holders will be able to request a hearing if they feel they should not be penalised.

Why is it up to ISPs to issue notices rather than right holders?

The responsibility for issuing notices is with ISPs because only they have access to account holders’ personal information. Accordingly, only they can match evidence of peer-to-peer infringement with that account holder.

Why is there a new ISP definition?

A new definition of ISP will be added into the Copyright Act, specifically for section 92A, because public submissions demonstrated a concern that some organisations that aren’t traditional ISPs, including businesses and universities, could be required to send notices to infringers under the current definition.

Will the new regulations allow the suspension of internet accounts?

Yes, but right holders must seek suspension of an internet account through the courts and it will only be ordered under specific and appropriate circumstances. It is expected this remedy will be used only for serious cases of infringement. Suspension will be for only up to six months.

Why is this remedy up to the courts?

The decision to suspend an internet account will be up to the courts because only the courts can adequately consider both parties arguments and take into account natural justice issues.

How much will it cost copyright owners to pursue a claim?

The fees have not been set yet and will require further consultation with stakeholders. These will be included in the regulations that will go with the new legislation. However, it is expected that right holders will pay a fee per notice to ensure ISPs recoup the costs of administering the system.

Right holders will also pay a fee to take a claim to the Copyright Tribunal. At this stage the application fee will be similar to the fee charged by the Disputes Tribunal which is between $30 and $100.

Account holders intending to defend a claim before the tribunal will not be charged a fee.

Will this new process cost the taxpayer and if so, how much?

Yes, the Crown will need to cover the costs of setting up the Copyright Tribunal for its extended jurisdiction. Some of the cost will be recouped by the fee necessary to take a claim to the tribunal. The cost will depend on the number of cases taken to the tribunal which should decrease as the public become familiar with the new notice regime. Work around this is ongoing.

This seems to have taken a long time. Has it?

No. Officials and the Government have been moving this process along as quickly as possible. However, there was a large volume of submissions received and they all needed to be addressed. Also, section 92A affects several ministries so adequate inter-departmental consultation was important.

It has been a complex issue and the focus has been to provide the best possible solution that is workable and effective.

How does the Anti-Counterfeiting Trade Agreement relate to the review of section 92A?

It doesn’t. The review of section 92A is on a separate track from the Anti-Counterfeiting Trade Agreement discussions.

What is the process from here?

The new provisions of the Copyright Act can now be drafted. It will be introduced into the House and following its first reading it will be referred to select committee. It is at this stage the public will have another opportunity to make further submissions on the legislation. The Ministry of Economic Development will continue to consult with stakeholders on certain parts of the regulations that confirm how the system will work and the related fees.

It is expected that the legislation will become law next year.

ENDS

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