Copyright, fair dealing and educational use in the Internet age

Aaron MagnerLegal Counsel UNSW

SYNOPSIS

The Internet has revolutionised the way we communicate, educate and manage our lives. Our educational institutions are in a flurry of digital and online change. Despite rapid advances in digital technology our copyright laws have been relatively stagnant, stuck in the analogue era. As a result there are significant barriers to getting educational content online and available to a wider audience. Educational institutions seeking to improve access to knowledge and offer new ways of learning are too often hampered by regulation that thwarts collaboration, the free flow of knowledge and expression of ideas. The impact of the Internet necessitates major reform to the scope of fair dealing for educational use in the Copyright Act. Copyright holder initiated litigation is likely to force legislative change.

CONTENTS

I. INTRODUCTION

II. COPYRIGHT LAW AND FAIR DEALING FOR EDUCATIONAL USE a. The analogue erab. The digital erac. The digital era – Copyright Act reforms

III. THE CASE FOR REFORM OF THE COPYRIGHT ACT IV. RECENT LITIGATION – LESSONS FOR EDUCATIONAL INSTITUTIONS

V. CONCLUSION

Page 1

I. INTRODUCTION

During this first decade of the 21st century we have moved from an analogue world of print media, books, photocopiers, videocassettes, blackboards, analogue television and radio, into the digital world of the Internet, podcasts, vodcasts, video and audio streaming, wikis, blogs, iPhones and WiFi. Those fortunate enough to have an Internet connection can access and share knowledge in a way never imagined just 20 years ago. The capacity for sharing ideas and collaboration between academics and students, business and consumers, government and citizen, locally, nationally and internationally, is unprecedented.

These technological developments bring exciting opportunities for teachers and students with educational institutions embracing the Internet and tools like YouTube, iTunesU and other web based platforms for teaching, learning and research.1 Australian copyright law, however, is not well equipped for the Internet with significant legal obstacles and costs associated with getting educational content online and available to a wider audience. To be fair, new Internet technologies are developing so rapidly it is difficult for copyright law to keep abreast. The Australian Copyright Act 1968 (Cth) (Copyright Act) has constantly played catch-up with amendments made some time after technological developments. We may require a landmark judgement in resolution of a copyright dispute to force further reforms to the Copyright Act to accommodate the impact of the Internet.

This essay will focus on the educational use exceptions in the Copyright Act and their evolution in response to landmark judgments concerning the use of photocopiers, videocassette recorders and peer-to-peer file sharing networks. These decisions have been instrumental to the development of the Copyright Act and remain relevant in recent copyright disputes involving the Internet Service Providers (ISPs) iiNet.2 Copyright judgments from Australian and United States (US) courts also give an indication of the liability of educational institutions, students and teachers when using copyright material from the Internet for teaching and learning or when facilitating the copying and distribution of material not covered under the educational statutory licences in Parts VA and VB of the Copyright Act. This essay also considers the case for reform of the Copyright Act and looks at some possible Internet copyright collection schemes.

II. COPYRIGHT LAW AND FAIR DEALING FOR EDUCATIONAL USE a. The Analogue eraThe photocopier and the videocassette are the two most significant technological advances from the 20th Century that lead directly to changes in the Copyright Act. Photocopiers enable the distribution of multiple copies of extracts from textbooks, journals and other publications for distribution to students, yet this infringes copyright in the original material, and deprives the copyright owners of revenue from sales and

1 All Australian Universities use one or more of the Internet based e-learning platforms including My eLearning Vista, eLIMS and Lectopia. UNSW’s YouTube channel <www.youtube.com/user/unsw> has had more than 1.5 million views since its launch in October 2007. UNSW’s iTunesU portal has had 180,000 podcast downloads since its launch in July 2008. Access to iTunesU is generally password protected and therefore within the scope of the educational use licence in Part VA of the Copyright Act, while YouTube is open to the world at large and therefore not covered by the Part VA. 2 The Federal Court of Australia is currently hearing the case of Roadshow Films Pty Ltd & Ors v iiNet Ltd (“AFACT v iiNet Ltd”), discussed below.

Page 2

licensing. The landmark judgment in UNSW v Moorhouse (1975)3 determined a claim from the Australian Copyright Council that UNSW had authorised photocopying of pages of books in the UNSW library thereby infringing the copyright of Australian author Frank Moorhouse. The High Court of Australia found that photocopying Moorhouse’s book in this way was not permitted under the Copyright Act.

The Australian government dealt with the consequences of UNSW v Moorhouse in 1980 introducing a compulsory statutory licensing scheme in Part VB of the Copyright Act to allow the copying of literary and artistic works for educational purposes.4 The Part VB statutory licence is administered by the Copyright Agency Limited (CAL) a non-profit statutory collection society.5 CAL conducts a sample survey requiring educational institution staff to record their use of copyright material. Based on survey results universities, education departments and other educational institutions negotiate the payment of an annual licence fee as equitable remuneration for the use of copyright material.6 The money paid to CAL under the licence is then distributed to copyright owners. The policy objective behind Part VB is to compensate copyright owners for the loss of sales of commercially published materials when education institutions make multiple copies of extracts or whole works for educational purposes. In this respect the Part VB statutory licence and the establishment of CAL are intended to protect an existing market threatened by technological change.7

The videocassette recorder enables the recording of television programs for viewing at a later more convenient time and was, like the photocopier, a technological development that lead to litigation and further Copyright Act amendments. Typical educational uses for the videocassette recorder include taping news, documentaries and other programs to show in classrooms, lectures and tutorials or make available in the library. As Moorhouse v UNSW did for Australia, the decision in Sony Corporation v Universal City Studios Inc8 (Betamax) set the scope of indirect copyright infringement in the US. In Betamax the US Supreme Court refused to hold Sony Corporation, the manufacturer of the Betamax videocassette recorder, liable for either contributory or vicarious copyright infringement despite prima facie evidence that the Betamax video machines could, and were, used to infringe Sony’s copyright in television programs.9 The Court determined that for Sony to be liable for the 3 University of New South Wales v Moorhouse [1975] HCA 26, where Justice Gibbs held that a person who has under their control the means by which an infringement of copyright could be committed (such as a photocopying machine) and who made it available to other persons, knowing, or having reason to suspect, that it is likely to be used to infringe copyright, and omitting to take reasonable steps to limit its use for lawful purposes, would authorise any infringement from that use.4 Browne, Delia; Educational Use and the Internet – Does Australian, Copyright Law Work in the Web Environment?, Volume 6, Issue 2, August 2009, <www.law.ed.ac.uk/ahrc/SCRIPT-ed/vol6-2/browne.doc> (22 October 2009).5 The Copyright Agency Limited (“CAL”) is recognised under Part VB of the Copyright Act as the declared society that administers the scheme on behalf of copyright owners.6 In 2009 UNSW, for example, paid just under $1million to CAL under Park VB licence. The University receives approximately $255,000 from CAL of which approximately $141,000 is redistributed by the University to copyright owners.7 Jennifer Wilson, “The Digital Deadlock: How Clearance and Copyright Issues are Keeping Australian Content Offline”, Screenrights and AFRTS White Paper 2009, p.2.8 Sony Corporation v Universal City Studios Inc 464 US 417 (1984); 104 S Ct 774; 78 L Ed 2d 574; 1984 US LEXIS 19.9 Rimmer, Matthew (2006) “Robbery Under Arms: Copyright Law and the Australia-United States Free Trade Agreement”, First Monday (3). <http://firstmonday.org/issues/issue11_3/rimmer

Page 3

copyright infringements of the users of this technology, actual knowledge of specific breaches was required, rather than a general knowledge that infringement could, and likely would, take place.10

The Australian Government, following Betamax, introduced further reforms in 1989 to set up a Part VA statutory licence to permit educational institutions to make off-air copies of broadcasts for educational purposes.11 The Part VA licence is administered by Screenrights a collection society that, like CAL, requires educational institutions to pay equitable remuneration for all licensed copying and communication of radio or television. Part VA applies to previously or simultaneously broadcast programmes available on an Australian free-to-air broadcaster’s website but does not extend to similar broadcast material available on international broadcasters’ websites or to online audio-visual material in general.12

Together the Part VA and VB statutory licences enable educational institutions to legally use photocopiers, videocassette recorders and other analogue copying technologies while ensuring that the author and/or copyright owner is remunerated for their work.13

b. The Digital EraPhotocopiers and videocassettes were typical analogue technologies from the pre-digital era. The dawn of the digital era began with the introduction of the CD and DVD formats allowing the digitisation of music, video and other media, followed by the rapid development and widespread use of the Internet.14 Internet use in Australia took off from about the year 2000.15 Until then, ownership and access to computers was not common in the average household and computer use as a mainstream tool for learning and teaching was still in its infancy. In Australian schools and universities computers were usually confined to computer labs, and Internet speeds were slow and limited in bandwidth.16

By 2009 however all Australian University students and a large majority of Australian school students have access to a computer with broadband Internet.17 Advances in technologies such as file compression and MP3 for music and a range of digital video

/index.html> (26 October 2009).10 Betamax was approved in the High Court of Australia in Australian Tape Manufacturers Association Ltd v Cth (1993) 176 CLR 480.11 Copyright Act Amendment Act 1989 (Cth).12 Jennifer Wilson, “The Digital Deadlock: How Clearance and Copyright Issues are Keeping Australian Content Offline”, Screenrights and AFRTS White Paper 2009, p.2.13 For a history of the evolution of Copyright in Australia see: Atkinson, Benedict, The True History of Copyright: The Australian Experience 1905-2005, 2007, Sydney University Press.14 CD players and discs were first released in the US and Australia in 1988. The DVD format was first introduced in Australia in March 1999. <http://en.wikipedia.org/wiki/Compact_Disc> and <http://en.wikipedia.org/wiki/DVD> (22 August 2009).15 Between 1998 to 2007-08, household access to the Internet at home has more than quadrupled from 16% to 67%, while access to computers has increased by 31 percentage points to 75%. See Australian Bureau of Statistics - Household Use of Information Technology, Australia, 2007-08 <http://www.abs.gov.au/AUSSTATS/abs@.nsf/mf/8146.0> (accessed 25 October 2009).16 Browne, Delia; Educational Use and the Internet – Does Australian, Copyright Law Work in the Web Environment?, Volume 6, Issue 2, August 2009, <www.law.ed.ac.uk/ahrc/SCRIPT-ed/vol6-2/browne.doc> (22 October 2009).17 See Australian Bureau of Statistics - Household Use of Information Technology, Australia, 2007-08 <http://www.abs.gov.au/AUSSTATS/abs@.nsf/mf/8146.0> (25 October 2009).

Page 4

formats including AVI, MPEG4 and others enable copyright works to be perfectly copied and then shared via the Internet.18 The availability of broadband and continual advances make file sharing easier, faster and more prevalent, with increasing download speeds making the distribution of entire movies, TV series, albums and other copyright works fast, free and increasingly popular.19 The digitisation of education content; from textbooks, journals, lectures and tutorials to medical, scientific and research data, means that students can access educational material on the Internet via podcasts, vodcasts, YouTube, iTunesU, from their desktop computers, laptops and mobile phones. These developments present untold opportunities to enhance teaching and learning, facilitating educators and students to create, modify and share educational and research resources.

The rapid development of these Internet tools for learning and teaching raises a range of copyright conundrums. There is a degree of uncertainty regarding the liability of educational institutions when using copyright material from the Internet or authorising and facilitating the copying and distribution of material not covered under the educational Parts VA and VB statutory licences. Despite rapid technological change there have been only limited reforms to the Copyright Act in response.

c. The digital era - Copyright Act reformsIn 2000 changes to the Part VB and Part VA statutory licences were made to extend cover to electronic reproductions, communications of literary and artistic works, and television and radio broadcasts.20 The Part VA licence now allows educational institutions to make digital copies in any format of radio and television programmes and place these on an intranet, provided that access is password protected and it is used only for educational purposes.21 These amendments mirror the hard copy photocopying provisions with the focus on the type of electronic materials used, or likely to be used, being the already dated technological platforms of CD ROMs and eBooks, rather than Internet material.22

In 2007 the Part VA licence was further extended to cover podcasts, vodcasts and other free downloads of online programs of Australian free-to-air broadcasters.23 Significantly for education providers, section 28 was extended to allow them to communicate material for free in the classroom for educational purposes24 and a new stand-alone exception, section 200AB, allowing so-called ‘flexible dealing’ was 18 MP3 is an abbreviation for “Moving Picture Experts Group-1 Audio Layer 3”, AVI is an abbreviation for “Audio Video Interleave” and MPEG4 is an abbreviation for Moving Picture Experts Group 4. See also Buskirk, V. (2005) “Top five ways MP3 has changed the world? <http://reviews.cnet.com/4520-6450_7-6266276-1.html?tag=txt> (25 October 2009).19 In Australia the ARIA Survey, referred to in footnote 1, reports that the primary software used for file sharing were Bit Torrent; 37%, Limewire; 33%, Kazaa; 2%, BearShare; 1% and a variety of others; 27%. See < http://www.themusic.com.au/survey.php > (22 August 2009). See also The State of Music Online: Ten Years After Napster <http://www.pewinternet.org/Reports/2009/9-The-State-of-Music-Online-Ten-Years-After-Napster.aspx?r=1> (22 October 2009).20 Copyright Amendment (Digital Agenda) Act 2000.21 Delia Browne, Educational Use and the Internet – Does Australian Copyright Law Work in the Web Environment?, (2009) 6:2 SCRIPTed <www.law.ed.ac.uk/ahrc/SCRIPT-ed/vol6-2/browne.doc> (25 October 2009).22 According to a recent survey approximately 90% of the pages copied and communicated by Universities are from free and publicly available websites. Jennifer Wilson, “The Digital Deadlock: How Clearance and Copyright Issues are Keeping Australian Content Offline”, Screenrights and AFRTS White Paper 2009, p.2.23 Copyright Amendment Act 2006. Copyright Act, section 135C.

Page 5

introduced.25 Section 200AB enables teachers and students to communicate literary, dramatic and musical works, film and sound recordings, television and radio broadcasts, including works embodied in those broadcasts, and artistic works in a classroom, including a virtual classroom. It also allows education providers and students to display material from an interactive whiteboard or data projector, stream content from the Internet, or play a DVD through a centralised system for education purposes.26

Section 200AB includes guidelines for teachers to apply when deciding whether a particular use of material will be allowed with some flexibility for the online environment. Significantly however section 200AB only applies where no statutory licence is in place and where the use complies with a three-step test.27 The implications of this are significant in light of the blanket nature of the Part VB licence, which treats the educational use of all online literary and artistic material as potentially remunerable. Part VB is a broad compulsory licence that applies to all literary, musical, dramatic and artistic works, including works of very low originality.28 It is effective for copyright materials offered for sale, such as eBooks, CD ROMs and other discrete digital products, but is not well adapted for free and publicly available Internet material.

III. THE CASE FOR REFORM OF THE COPYRIGHT ACT The existing approach of our copyright law is premised on enabling exclusive distribution privileges, however to date it has not proven feasible to properly control the distribution of copyright material over the Internet. While the existing approach of copyright enforcement was effective when there were a finite number of publishers, the Internet has brought about a paradigm shift whereby every consumer could also be a creator and distributor of digital media. The Part VA and VB statutory licences and the collection agencies were devised to protect an existing market threatened by technological change but the extension of Part VB to content available on the Internet creates a market for Internet material that is free, publicly available and not offered for sale.29

24 Copyright Act sections 28 (5)-(7). A communication means making copyright material available online or electronically transmitting copyright material. “Making available” can include putting material on an intranet. “Electronic transmission” includes email, streaming or electronic reticulation.25 Copyright Amendment Act 2006 commencing 1 January 2007. Previously, section 28 allowed a literary, dramatic or musical work to be performed, or a film or sound recording to be played in class for the purposes of educational instruction.26 Delia Browne, Educational Use and the Internet – Does Australian Copyright Law Work in the Web Environment?, (2009) 6:2 SCRIPTed <www.law.ed.ac.uk/ahrc/SCRIPT-ed/vol6-2/browne.doc> (25 October 2009).27 In order to comply, the use must be non-commercial and limited to “certain special cases”; not conflict with “normal exploitation” of the work; and not “unreasonably prejudice” the interests of the copyright owner. In section 36(1A). They are: the extent (if any) of the person’s power to prevent the doing of the act concerned; the nature of any relationship existing between the person and the person who did the act concerned; whether the person took any reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice.28 Delia Browne, Educational Use and the Internet – Does Australian Copyright Law Work in the Web Environment?, (2009) 6:2 SCRIPTed <www.law.ed.ac.uk/ahrc/SCRIPT-ed/vol6-2/browne.doc> (accessed 25 October 2009).29 Jennifer Wilson, “The Digital Deadlock: How Clearance and Copyright Issues are Keeping Australian Content Offline”, Screenrights and AFRTS White Paper 2009, p.2.

Page 6

Electronic use surveys from CAL and Screenrights record activities such as a teacher printing, saving, downloading, displaying, projecting or emailing Internet material for educational purposes, or telling a student to print, save, or download Internet material for educational purposes.30 Requiring payment for this kind of educational use of free and publicly available material from the Internet is akin to a copyright tax on access to educational knowledge for otherwise free, publicly available material that is not offered for sale.31

Websites increasingly incorporate social media functions that encourage the use of their material in ways that are effectively an exercise of their copyright rights. For example having buttons like ‘Print this’, ‘Email this’ or ‘Share this’; on Facebook, Twitter, Digg and other social networking sites. For free publicly available websites to fall within the scope of Part VB therefore does not make sense. Non-subscription websites that do not require payment for access and use of material are not likely to expect or rely on receiving equitable income from educational use as currently required under the Copyright Act.32 Urgent consideration should be given to removing free and publicly available material on the Internet from the scope of the Part VA and VB statutory licence and introducing a new exception allowing educational institutions to copy and communicate free and publicly available material from the Internet for non-commercial educational purposes.

To place educational content online educational institutions need permission to adapt, copy, perform and communicate to the public all the elements of the copyrighted work need to be obtained from, for example, the producer, the owner of the source material, owners of any artistic works, literary works, sound recordings, underlying musical works, and performances. If one copyright owner refuses permission or cannot be found then the process stalls. Producers may be unwilling to grant online rights, or there may be complex industry agreements (blanket licences offered by music collecting societies for example), actors agreements, and contracts that did not contemplate online use. Moral rights standard consents that do not deal with online use or segmentation of the work. If the archive material is an orphan work, or the copyright owner cannot be found or contacted, the process stalls.33 In this digital age there is still no centralised register for owners of copyright works. To efficiently operate in this digital era our copyright law needs a more efficient legal clearance regime with Copyright Act exceptions allowing copyright material to be put online for educational use. In this digital age there is still no centralised register for owners of copyright works. The alternative is that educational institutions assume a greater risk of copyright infringement litigation.

30 In 1999 Australian universities paid around $9.1 million under the Part VB licence. In 2008, they paid around $50 million.31 In practice, education pays where a website has no terms and conditions of use or no terms or conditions but a standard © notice, and the following words are contained in a website’s terms of use: personal use; personal, non-commercial use; personal and non-commercial; private or individual use; copying is not permitted; or any reference to copyright protection such as ©, i.e. most websites.32 Jennifer Wilson, “The Digital Deadlock: How Clearance and Copyright Issues are Keeping Australian Content Offline”, Screenrights and AFRTS White Paper 2009, p.2.33 Giles, Katherine; Lawyer, Australian Broadcasting Corporation, Current Issues in Broadcasting & Publishing: user-generated content and unlocking public broadcaster archives, presentation at the 14th Biennial Copyright Law and Practice Symposium, hosted by the Australian Copyright Council and the Copyright Society of Australia, 15 & 16 October 2009.

Page 7

It is in Australia’s best interests to ensure that our students and teachers are digitally literate, able to live and work in a digital world and able to participate in a digital economy. A more sophisticated system is needed gives enables copyright owners and creators the ability to be paid for online exploitation but which also allows educational institutions to use free and publicly available material with no expectation of payment. It is important to get the copyright law right as soon as possible, as the educational use of the Internet materials will only increase with time. If education institutions have to pay licence fees for copying and communicating website material intended to be freely available the costs to the education sector will rise.

The fair dealing for educational use provisions in the Copyright Act needs to be broadened to allow the use of copyright material for legitimate activities that advance education and are in the collective good.34 The law also needs to find ways to make it easier for education providers and students to navigate the minefield of copyright clearances, music rights and performer fees and accommodate transformative, non-commercial derivatives of copyright content for education use.

The education sector, and the entire global economy, increasingly depends on effective mechanisms for the generation, protection and exploitation of intellectual property. Inappropriate, defective or dated copyright laws will only stifle creativity, productivity, technology, growth and our quality of life. The disruptive impact of the Internet and copyright controversies, conundrums and confusion present a strong case for reform of the Copyright Act.

III. RECENT LITIGATION – LESSONS FOR EDUCATIONAL INSTITUTIONS While there have been some well publicised private prosecutions, rather than sue individual users for breach of copyright, the large copyright owners are primarily seeking to protect their revenue streams by shutting down the means by which individuals share copyrighted material.35 The large copyright owners have shifted their focus to aggressively targeting ISPs and peer-to-peer networks rather than end users.

The US is seen as the world leader in both Internet innovation and legal jurisprudence surrounding copyright and the Internet. While the Australian parliament, the courts and the bureaucracy all have a central role in determining how copyright laws are applied, both the framework and a large amount of the detail in Australia’s copyright laws is determined at the international level.36 These international copyright law forums are driven and dominated by the US, which as the world’s leading producer and exporter of commercial creative products, sought and obtained strong protection

34 Rimmer, Dr Matthew, 'Digital Copyright and the Consumer Revolution: Hands off my iPod'. Cheltenham, UK; Northampton, MA: Edward Elgar, 2007.35 The copyright owners often do not have the resources to chase down individual who downloads music subject to copyright. For example, in 2009 it was estimated that almost 20 billion tracks were illegally swapped or downloaded. 36 Australia has implemented all the relevant international treaties including the Berne Convention for the Protection of Literary and Artistic Works of 1886, the Agreement on Trade Related Aspects of Intellectual Property Rights, the World Intellectual Property Organization Copyright Treaty and the World Intellectual Property Organization Performances and Phonograms Treaty. The treaties allow countries to limit the rights of copyright owners provided the limitation or exception: applies in special cases; does not conflict with a normal exploitation of the work; and does not unreasonably prejudice the legitimate interests of the creator/rights holder.

Page 8

of intellectual property.37 This makes some appreciation of US law and copyright litigation concerning the Internet and relevant to an understanding of the area from an Australia perspective.

Napster was the early trailblazer of peer-to-peer file sharing. Its enormous, albeit brief popularity attracted claims from record companies that Napster was responsible for the copyright breaches of its users.38 The US Supreme Court concluded that Napster’s future revenue was directly dependent upon “increases in userbase” and that it could have, and should have, done more than it claimed it did to restrict users from sharing copyrighted material.39 Napster was shut down after the court found it was both vicariously and contributory liable for the copyright infringement its users.40 The central servers used by Napster made it a convenient legal target41 but in its wake new peer-to-peer networks, designed to be more decentralised, emerged to fill the void.42

The US Supreme Court dealt with a more decentralised peer-to-peer network in Metro Goldwyn Mayer Studios Inc v Grokster Ltd ( MGM v Grokster )43 where it was undisputed that at least some of the users of the Grokster software were engaged in direct infringement of copyrighted works.44 It was subsequently successfully argued by MGM (and others) that the defendant companies did not attempt to develop filtering tools or other mechanisms to diminish the infringing copyright activity by users of Grokster’s peer-to-peer software.45

37 The TRIPS Agreement, the WIPO agenda and the AUSFTA. Peter Drahos and John Braithwaite, Information Feudalism: Who Owns the Knowledge Economy (2002); Susan Sell, ‘Intellectual Property Rights’, in D Held and A McGrew (eds), GoverningGlobalization: Power, Authority and Global Governance (2002) referred to in Terry Flew, Creative commons and the creative Industries (2005) 10 Media & Arts Law Review 257 at 258.38 Verified Napster use peaked with 26.4 million users worldwide in February 2001. Jupiter Media Metrix (July 20, 2001). Global Napster Usage Plummets, But New File-Sharing Alternatives Gaining Ground. Press Release. <http://www.comscore.com/press/release.asp?id=249>. For a short historical background note on Napster see <http://en.wikipedia.org/wiki/Napster >. (accessed 25 October 2009).39 A & M Records Inc v Napster Inc, 239 F 3d 1004 (9th Cir, 2001), 102140 Silverthorne, Sean. Music Downloads: Pirates- or Customers?. Harvard Business School Working Knowledge, 2004. <http://hbswk.hbs.edu/item/4206.html> Napster shut down its entire network in July 2001 in order to comply with the injunction. In September 2001, the case was partially settled. Napster agreed to pay music creators and copyright owners a $26 million settlement for past, unauthorized uses of music, as well as an advance against future licensing royalties of $10 million. In order to pay those fees, Napster attempted to convert their free service to a subscription system, but it had significant trouble obtaining licenses to distribute major-label music.41 Napster's use of a central server distinguishes it, from the next generation P2P technology, in which the communication of files is truly P2P. 42 Among P2P networks there are both “centralised” networks (such as Napster) from “decentralised” ones (such as Kazaa, Gnutella, Morpheus and Limewire). 43 Metro-Goldwyn-Mayer Studios, Inc v Grokster, Ltd; Jerry Lieber v Consumer Empowerment Bv259 F Supp 2d 1029; 2003 US Dist LEXIS 6994; 66 USPQ 2D (BNA) 1579 (23 April 2003) (Wilson J,Overview, http://www.eff.org/IP/P2P/MGM_v_Grokster/030425_order_on_motions.pdf (Grokster) viewed 6 June 2004.44 Metro-Goldwyn-Mayer Studios Inc v Grokster Ltd (Cal, 25 April 2003, Wilson J) 9.45 Grokster 259 F Supp 2d 1029 at 1039 (2003). One of the defendants, Streamcast, the maker of Morpheus, was found to be liable for Copyright Infringements under the standards enunciated by the Supreme Court in MGM v. Grokster, Round 2. Grokster “distributes a branded version of theKaZaa Media Desktop” – that is, it is not the proprietary owner of the source code that runs the platform. Contributory liability requires that the secondary infringer know or have reason to know of direct infringement, mere constructive knowledge is not enough. In other words, evidence of actual knowledge or specific acts of infringement is required for contributory infringement liability. Traditionally, under US law, to be held liable as a contributory infringer, one must ‘with knowledge of

Page 9

There is disagreement over whether the MGM v Grokster is substantially different from Betamax, and whether the precedent established by Betamax should be modified.46 The court accepted MGM’s argument that, unlike Sony’s promotion of the Betamax videocassette recorder, Grokster “acted with a purpose to cause copyright violations by use of software suitable for illegal use.”47 The test that emerges from MGM v Grokster to determine whether the peer-to-peer software is protected by the Betamax ruling requires it to be shown that the distributors of the peer-to-peer software neither advertised and/or otherwise induced its use for copyright infringement.48

Around the time that MGM v Grokster was litigated, the Australian based peer-to-peer network, Kazaa,49 owned by Sharman Networks, attracted simultaneous law suits in the US and Australia.50 The Australian Record Industry Association took Sharman to the Federal Court of Australia alleging breaches of their copyright.51 The Federal Court ruled that Sharman and the other defendants, though not guilty of copyright infringement themselves, had “authorized” Kazaa users to illegally share copyrighted songs. The company was ordered to modify the software within two months to prevent further copyright infringements by Kazza users and the Federal Court later ceased all downloads of Kazaa after Sharman failed to modify the software by the deadline set by the Court.52 Sharman ultimately settled both the US and Australian cases as part of its global settlement with the record labels and studios in the United States.53

the infringing activity, induce, cause or materially contribute to the infringing conduct of another’.46 On one hand, Justice Ginsburg, joined by Kennedy and Rehnquist, claim that "[t]his case differs markedly from Sony" based on insufficient evidence of non-infringing uses. On the other hand, Justice Breyer, joined by Stevens and O'Connor, claims "a strong demonstrated need for modifying Sony (or for interpreting Sony's standard more strictly) has not yet been shown," primarily because "the nature of ... lawfully swapped files is such that it is reasonable to infer quantities of current lawful use roughly approximate to those at issue in Sony."47 These non-infringing uses include sending open source software, public domain files and out of copyright works. The entertainment industry submitted a massive volume of evidence to show that both Grokster and StreamCast clearly knew that many, if not most, of those individuals who download their software subsequently use it to infringe copyrights.48 For example, MGM et al. had asserted that the defendants' refusal to incorporate protocols that would filter copyrighted materials from the file-sharing network constitutes intent to promote copyright infringement.49 Kazaa was once one of the world’s most popular P2P networks and had a peak audience of 4.2 million simultaneous users. In early 2003, Sharman claimed that it had 239 million downloads.  50 For a background account to the litigation over Kazaa, see Matthew Rimmer, 2005. “Hail To The Thief: A Tribute To Kazaa,” University of Ottawa Law and Technology Journal, volume 2, number 1, pp. 173–218, at <http://www.uoltj.ca/articles/vol2.1/2005.2.1.uoltj.Rimmer.173-218.pdf.>51 See Universal Music Australia Pty Ltd v Sharman License Holdings Ltd (with Corrigendum dated 22 September 2005) [2005] FCA 1242 (5 September 2005). Kazaa was created by the inventors of Skype

who sold it to a complicated mesh of offshore companies, including Sharman Networks, headquartered in Australia. Sharman was initially sued in Los Angeles by the major record labels, motion pictures studios and music publishers. While the other defendants initially prevailed the decision was unanimously reversed by the US Supreme Court.52 See Needham, Kristy, “Kazaa end on a sour note” Sydney Morning Herald, 7 December 2005 < http://www.smh.com.au/news/technology/kazaa-music-ends-on-a-sour-note/2005/12/06/1133829597895.html> (25 October 2009).53 Sharman Networks settled with the record companies for between US$20 million and US$50 million. The amount of the settlement was significant, albeit less than what the recording studios had originally hoped for through litigation. Further, in a move that may prove equally valuable to the recording industry, Sharman also undertook in the settlement to use all reasonable means to discourage

Page 10

Both the website operators and ISP’s may be liable for authorising copyright infringement by the users of their services according to the Full Federal Court in Cooper v Universal Music Australia Pty Ltd [2006] FCAFC 187 (Cooper). Cooper also provided guidance as to what amounts to ‘authorising’ an infringement of copyright clarifying that website operators can be liable for authorising copyright infringement via their websites, and ISPs can also be liable for authorising infringement of copyright on websites they host.54 Mr Cooper structured his mp3s4free website so that hyperlinks to music files on other Web sites could be automatically added to the site. The Federal Court held that Mr Cooper had not taken any reasonable steps to prevent copyright infringement occurring as a result of his site and was therefore liable for authorising copyright infringement in the sense of permitting or sanctioning and facilitating the infringements by the Internet users who accessed the Web site as well as the owners and operators of the remote Web sites from which the infringing recordings were downloaded.55

Cooper may be of particular relevance to education providers if students or staff are found to be using university owned facilities to infringe copyright, the courts are likely to look expect that they demonstrate having taken reasonable and practical steps to prevent their IT systems from being used in this way. Also of note is that Cooper considered whether the safe harbour scheme introduced by the US-Australia Free Trade Agreement, although the Court found that they did not apply to the Web site’s ISP.56 The US-Australia Free Trade Agreement included a number of provisions relating to intellectual property law, driven by the US, required a range of amendments to the Copyright Act.57 These amendments included changes to the period of copyright protection, when a technological protection measure may be

online piracy, and to find robust and secure ways to prevent users from using the software to infringe copyright. See Sharman cuts off Kazaa downloads in Australia, 5 December 2005 <http://news.com.com/Sharman+cuts+off+Kazaa+downloads+in+Australia/2100-1027_3-5983455.html> (25 October 2009).54 The Full Federal Court’s decision addressed two main issues: what amounts to authorisation of copyright infringement in a sound recording, and the extent of protection of the carrier exclusion in section 112E of the Copyright Act. The Copyright Act provides that copyright in a sound recording will be infringed by a person who, not being the copyright owner, and without the licence of the copyright owner, authorises the making of a copy of a sound recording in Australia or the communication of a sound recording to the public in Australia. The Copyright Act lists the following three factors as being relevant to consider when determining whether a person has authorised the infringement of copyright in a sound recording: the extent (if any) of the person’s power to prevent the copyright infringement the nature of any relationship existing between the person and the person who infringed copyright, and whether the person took any other reasonable steps to prevent or avoid the copyright infringement, including whether the person complied with any relevant codes of practice.55 Universal Music Australia Pty Ltd v Cooper [2005] FCA 972.56 For a discussion see Rimmer, Matthew (2006). "Robbery Under Arms: Copyright Law and the Australia-United States Free Trade Agreement". First Monday (3). SSRN 855805. Amendments did not have a retrospective application in Cooper, however the court observed that the ISP would not have been able to take advantage of the “safe harbour” scheme. His Honour observed that there was a failure to adopt and reasonably implement a policy that provides for termination, in appropriate circumstances, of the accounts of repeated infringers: “The evidence indicates that despite the respondents’ awareness that copyright material was likely to be infringed, they have not taken any steps to implement such a policy.” The judge noted that the ISP received a financial benefit directly attributable to the infringing activity if the service provider has the right and ability to control the activity.57 Intellectual Property was covered in Chapter 17 of the US Free Trade Agreement and the Australian Parliament implemented its obligations in the US Free Trade Agreement Implementation Act 2004.

Page 11

circumvented, penalties for copyright infringement and the responsibilities of carriage service providers for infringements by people using their services.58

The Federal Court of Australia is currently hearing the case Roadshow Films Pty Ltd & Ors v iiNet Ltd (AFACT v iiNet Ltd) where a key argument of the Australian Federation Against Copyright Theft (AFACT) and film studios is that iiNet authorises its users to breach copyright as it is in control if its network, similar to the university’s control over use of the photocopy machines in the UNSW library. Interestingly the AFACT’s tactics, revealed in opening arguments of the case of becoming an iiNet customer and using BitTorrent to share copyrighted files,59 are similar to those of the ACC who engaged a UNSW graduate to make photocopies of pages of Moorhouse’s books in the UNSW library.60

Some of the legal issues at stake and the tactics employed by the AFACT in its civil case against iiNet have their origins in a landmark copyright case UNSW v Moorhouse in 1975. In UNSW v Moorhouse the source of control was the fact the university owned the photocopier and the library where the book and the photocopier were located, so it was argued UNSW had a high level of control because they owned the physical property. A similar argument is being made by the AFACT. It claims iiNet has a high degree of control over what a person using their carriage facility can do. Just as UNSW could evict somebody from its Library AFACT argues, iiNet can disconnect a user accessing the Internet.61

As was the case following UNSW v Moorhouse if the case of AFACT v iiNet Ltd goes to judgement it is likely to trigger reforms to the Copyright Act, whichever side wins. If iiNet is found liable there will need to be a system to manage the liability and responsibilities of ISPs similar to when UNSW was found liable and the Australian Government introduced statutory licences and copyright collection agencies. If iiNet is not found liable there could still be reforms to the Copyright Act to introduce some form of Internet copyright collection society.

Options being canvassed include an industry-supported collection society or industry building and administer a peer-to-peer network for content sharing.62 Three of the four major music labels, lead by Warner Music, are proposing a blanket licence scheme to Universities in the US which would allow peer-to-peer sharing and downloading for the payment of a small annual fee for each student. The proposal includes setting up a

58 The AVCC recommends Universities act as if covered by the safe harbour.Bringing the period in Australia into line with the period provided after the US 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 the Mickey Mouse Protection Act, because of the extensive lobbying in support of the time extension from the Walt Disney company, Mary Bono (Sonny Bono's widow and Congressional successor) and the estate of composer George Gershwin.59 Van Buskirk, Eliot, Three Major Record Labels Join the ‘Choruss’, Wired, 8 December 2008 <http://www.wired.com/epicenter/2008/12/warner-music-gr/> (Accessed 25 October 2009).60 Moorhouse did not know Brennan was asked to make copies of sections of his work, but later joined with the Australian Copyright Council to bring a test case against the university after he was informed of the breach of his copyrighted books. 61 Crozier, Ry, “Revealed: iiNet's film copyright defence” ITnews 2 October 2009 < http://www.itnews.com.au/News/157336,revealed-iinets-film-copyright-defence.aspx> (accessed 26 October 2009)62 Jennifer Wilson, “The Digital Deadlock: How Clearance and Copyright Issues are Keeping Australian Content Offline”, Screenrights and AFRTS White Paper 2009, p.2.

Page 12

non-profit collection society, referred to as ‘Choruss’, which would collect the funds and distribute them to the rights holder.63 If successful such a model could be expanded to require that ISPs collect these payments. The large copyright owners are changing their business models but have not given up on technologies like Digital Rights Management and digital fingerprinting technology to prevent copyright infringement.64

The decision in AFACT v iiNet Ltd will impact on educational institutions who could also be found liable for authorising the infringing conduct of staff and/or students where they have provided access to the equipment used to carry out the infringing conduct, such as servers providing Internet access or personal computers, and if it is proven they have not taken reasonable steps to ensure that this equipment is not used to infringe copyright. A difference between UNSW v Moorhouse and AFACT v iiNet Ltd is that the US-Australia Free Trade Agreement signed in 2005 brought in Safe Harbour provisions aimed to reduce liability of ISPs.65 The sparse case law relating to authorisation liability does not, unfortunately, provide much assistance in determining what steps an education institution should take to minimise its risk of being found liable for copyright infringement.66

IV. CONCLUSION

For educational institutions the framework of our copyright law has wide ranging impacts. The significant legal barriers to getting educational content online, confusion about the existing copyright law, particularly in relation to content available on the Internet, and the absurdity of educational institutions having to pay for content that is freely available, all suggest that the existing approaches to copyright regulation are no longer effective. Clearly authors and artists need to be protected from copyright theft of their work by competitors and from its use for commercial profit without permission. Yet it is undesirable for the laws to result in education providers, teachers or students, innocently or otherwise, using copyrighted work for educational use being dragged into court or having to pay for public and freely available material.

The difficult public policy objective of the law is balancing the interests of copyright owners and those of the society in an optimum way. An ideal copyright regime should strive to strike a balance between private incentives for copyright owners and the legitimate public interest in maximising access to knowledge, the free flow of information and transfer of ideas. Government and the courts also need to acknowledge the significant imbalances in market power between content creators, users and re-users on the one hand, and the large-scale distributors and publishers which constitute the copyright industries on the other. Laws and policies that impose a

63 Van Buskirk, Eliot, Three Major Record Labels Join the ‘Choruss’, Wired, 8 December 2008 <http://www.wired.com/epicenter/2008/12/warner-music-gr/> (Accessed 25 October 2009).64 See for example discussion from Hsiang-Cheh Huang ,Yueh-Hong Chen; Genetic fingerprinting for copyright protection of multicast media, Soft Comput (2009) 13:383–391 65 These can be found in Division 2AA of Part V of the Copyright Act 1968 (Cth) and Part 3A of the Copyright Regulations.66 Universities Australia, formerly the Australian Vice Chancellors Committee (AVCC), suggest a conservative approach of implementing strong access policies, Clear terms of use, Take down notice procedures, Permission templates, Citations and attributions for all material, update Copyright policies and procedures, Enforce copyright policy, communication and training students and staff to minimise risk of liability for copyright infringement. In other words act as if they were covered by the safe harbour provisions.

Page 13

strict oppressive system of regulating copyright create the danger of a culture in which creators get to create only with the permission of the powerful, or of the creators of the past.67

A coherent resolution to all of the issues raised in this area is, unfortunately, beyond the scope of this essay; in part because the issues and challenges raised by copyright law are vast, complex and continually evolving. More research and consultation must occur to ensure our copyright laws are effective in the digital era if we are to realise the full potential that the Internet can have for education providers and society.To ensure our copyright laws have the right balance will require continuous and vigilant examination with continuous fine-tuning and regular reviews.

67 Lessig, Lawrence, Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity (2004). Available under Creative Commons licence at <http://www.free-culture.cc/> (22 October 2009).

Page 14

BIBLIOGRAPHY

Atkinson, Benedict, The True History of Copyright: The Australian Experience 1905-2005, 2007, Sydney University Press.

Bettig, Ronald V. Copyrighting Culture: The Political Economy of Intellectual Property, Westview Press, New York, 1996.

Bowrey, Kathy, Law and Internet Cultures, Cambridge UP, 2005.

Bowrey, Kathy and Rimmer, Matthew; ‘Rip, Mix, Burn: The Politics of Peer to Peer and Copyright Law’, 7(8) First Monday <http://www.firstmonday.dk/issues/issue7_8/bowrey/.>

Browne, Delia; Educational Use and the Internet – Does Australian, Copyright Law Work in the Web Environment?, Volume 6, Issue 2, August 2009, <www.law.ed.ac.uk/ahrc/SCRIPT-ed/vol6-2/browne.doc> (22 October 2009).

Freedman, Thomas, The World is Flat, Allen Lane, 2005.

Giles, Katherine, Current Issues in Broadcasting & Publishing: user-generated content and unlocking public broadcaster archives, presentation at 14th Biennial Copyright Law and Practice Symposium, 15 & 16 October 2009.

Howkins, John, The Creative Economy: How People Make Money from Ideas (2001); Terry Flew, New Media: An Introduction (2nd ed,) 2005.

Kenyon, Andrew and Hudson, Emily, ‘Copyright, Digitisation and Cultural Institutions’ (2004) 31(1) Australian Journal of Communication 89.

Knopper, Steve (2009), Appetite for self-destruction: the spectacular crash of the record industry in the digital age, New York: Free Press

Lee, Catherine, Peer-to-peer technology on Trial Again: the Grokster and StreamCast cases (2003) 8 Media & Arts Law Review 249.

Lessig, Lawrence, Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity (2004). Available under a Creative Commons licence from <http://www.free-culture.cc/> (22 October 2009).

Litman. Jessica, Digital Copyright. New York: Prometheus, 2001

Loughlan, P. Intellectual Property: Creative and Marketing Rights, Law Book Co. 1998.

McClutchen, J., “The Registration of Sounds and Scents as Trade Marks under Australian law” [2004] 21 Intellectual Property Quarterly 138.

Page 15

McKeogh, Jill; Stewart, Andrew; and Griffith, Philip; Intellectual Property in Australia (3rd ed, 2004).

O'Brien, Damien S. and Fitzgerald, Brian F. (2006) Digital copyright law in a YouTube world. Internet Law Bulletin, 9(6 & 7).

Patry, William, Moral Panics and the Copyright Wars, Oxford University Press, 2009.

Richardson, Megan l., "Downloading Music off the Internet: Copyright and Privacy in Conflict?" Journal of Law and Information Science, Vol. 13, 2002.

Rietjens, Bob, "Give and Ye Shall Receive! The Copyright Implications of BitTorrent", 2:3 SCRIPT-ed 364 <www.law.ed.ac.uk/ahrc/script-ed/> (2005)

Rimmer, Dr Matthew, 'Digital Copyright and the Consumer Revolution: Hands off my iPod', Cheltenham, UK; Northampton, MA: Edward Elgar, 2007.

Rimmer, Matthew (2006). "Robbery Under Arms: Copyright Law and the Australia-United States Free Trade Agreement". First Monday (3). SSRN 855805.

Reynolds, Rocque and Stoianoff, Natalie, Intellectual Property Text and essential cases, 2nd edition, Federation Press, 2005

Sherman, Brad, "Digital Property And The Digital Commons" in C. Heath and A.K. Saunders (ed.) Intellectual Property In The Digital Age. Kluwer Law International, 2001.

Solov, Daniel, The Future of Reputation: Gossip, Rumour, and Privacy on the Internet. Yale University Press, 2007.

Van Caenegem, W.; Butterworths Tutorial Series: Intellectual Property (2d ed.), Butterworths, 2006.

Venturelli, Shalini, ‘Culture and the Creative Economy in the Information Age’, in John Hartley (ed), Creative Industries (2005) 391.

Wilson, Jennifer; “The Digital Deadlock: How Clearance and Copyright Issues are Keeping Australian Content Offline”, Screenrights and AFRTS White Paper 2009.

Zittrain, Jonathon; The Future of the Internet and how to stop it, Allen Lane, 2008.

Page 16