Fun with lawyers, politicians and copyright

Like a lot of software developers I take an interest in copyright issues.  I read the odd article, watch Linus and Richard debate GPL3, and was even once motivated enough to make a submission on another recent NZ copyright bill.

The New Zealand government has a bill on the table looking at file sharing.  One I really should have read already, but had not.

Serendipitously this Friday afternoon I got an email from an Auckland law firm on this very topic.

The email has given me that necessary focus to take a bit of time to familiarize myself with that bill.  And to also try to illuminate, in this post, some of the issues that exist in this area via a nice concrete example of a copyright infringement report.  And how a good framework (perhaps via legislation) can help improve the ease of enforcement of copy right holder rights, and reduce the uncertainty people accused of copyright infringement face.

Sadly, this post is pretty long.  In summary: we got a grumpy letter from some lawyers saying a client of ours was infringing some copyright (which we do not think is the case).  The lawyers make some false assertions and make pretty unacceptable demands.  And I take a look at some new legislation being proposed in NZ and try to figure out if there is a better way to protect copyrights in an of reduced legal, financial and personal privacy uncertainty.

The letter

The letter was from an Auckland law firm, let me give then the fear-inspiring pseudonym of 'Jaws'.  They assert they are acting on behalf of the RIANZ.

Jaws assert a site we host (correct) is hosting torrent files (correct right now, although the previous time I had checked they were actually just linking to torrent files hosted on a server or servers we did not host).  We prefer not to name that site (to respect their privacy).  Unless they care to step in here and 'out' themselves?

Torrent files are meta data files.  They contain information about other files.  A torrent file of an album does not contain a copy of the recording, rather it provides information about how to download the files.  An end user may use a torrent file in P2P client.  And the P2P program may then download that file.  And in the process it will typically also upload pieces of the files it is downloading.  If the end user does not have a right to share that file, then the uploading portion of that process would probably be a copyright violation.

Wikipedia talk about the controversy surrounding Torrents

Jaws assert we are well aware that the site is infringing copyright.  Incorrect.  IANAL but I do not believe the site is infringing.  So rather we are merely well aware that there are allegations of copyright infringement.

Jaws assert that they have contacted us alleging copyright infringement (correct); that we did not investigate (incorrect); that we did not disable access (correct); that we are therefore authorizing the copyright infringement.  The last assertion is curious.  Logically only the copyright holder can authorize copying.  And one cannot 'authorize' an illegal act.  We certainly never told our customer that we gave them any right pertaining to any content on any of the pages Jaws use as examples.

Jaws assert we are infringing rights (copy rights?  Trademarks?) by reproducing (showing on a web page) album cover art and artist names.  Note that they assert RimuHosting are infringing the rights.  Not the website we host, but us, directly.

Jaws seem to assert using an artist name on a web page is infringing someones right.  Note they are not referring to trademarks here.  Just someone's or some group's name.  I cannot think what legal framework would grant such a right.  Should I throw out an artist's name here just to tempt fate?  OK.  Here goes.  Peter Gabriel.  My day in court will be worth it just to meet the man.

The site Jaws are referring to includes album cover images on its web pages.  Small, thumbnail-ished size images.  IANAL but this appears to be fair use.  The situation is similar to sites like Wikipedia (e.g. that include album cover art.  They use the following rationale for asserting their usage is a fair use:

Jaws then begin to educate us on the Copyright Act 1994.  All good.  Copyright law is important.  And we are all better served when we better understand what those rights are.

Jaws assert that we (again, not our customer, but us personally) are likely (!) to have infringed and continue to infringe (presuming we infringing in the first place?) trademarks (not specified).  I am not aware of anywhere where we inappropriately use trademarks.  Was this a stab in the dark accusation?  Or is there an infringement I am not aware of that needs resolving?

The 'undertakings'

Jaws then set out a list of undertakings they require from us.  In exchange for Jaws not enforcing their clients' civil rights against us in relation to our alleged infringing (pretty sure we are not infringing anything) they require us to:

  • Remove offending links from our 'system'.  Effectively that'd mean shutting down that particular customer's server.
  • Provide them personal, private details of our customer.  We (obviously) have issues about providing (any) personal (or otherwise) customer details to some Auckland law firm (or anyone else for that matter, probably with the exception of a court order) unless our client permits that disclosure.
  • Provide information on how much we have charged our customer for hosting services.  None of your business Jaws, sorry.
  • Provide copies of any other document in our possession relating to dealings on that site.  That's asking a lot.  This customer goes back a few years.   Possibly longer than our email archives.  Plus disclosing some of those emails would be infringing customer privacy.
  • That we pay the record companies some amount of money (which seems perhaps related to how much profit we made from hosting the site, or depending on how you read the sentence, whatever number in damages the record companies would like to impose on us).
  • That we pay RIANZ the sum of NZD 1,750.  That amount would be a 'contribution' to the legal costs in this matter.  If that is just a 'contribution' then the Jaws partner billing the actual costs must be doing a great business.  And possibly having a real financial vested interested in fomenting a legal conflict.

It is true, some people get paid to surf

The legal costs to the RIANZ from Jaws would likely be pretty high.  And the NZD 1750 may indeed only be a contribution towards the total.  Since someone had the time to go and surf the web and read articles (including one written by a RimuHosting sysadmin) and reference them in their letter to us.  They use that article to infer RimuHosting are purposefully rights infringing (I assert that is a misinterpretation).

Knowing lawyer rates someone at Jaws probably got paid more for reading than Liz got for writing it.

PS Liz you say “Now, most people have heard of torrenting and downloading movies, music, images illegally from the internet, they may even do it.”

I think Jaws may take less exception to if it read more like “Now, most people have heard of torrenting.  Or had some experience downloading movies, music, or images from the internet, they may even do it.  And some of the things they download may be offered by someone without a copyright.  And in certain case if you then upload those files (for example though a P2P application) you may also be infringing someone's copyrights.  Which may result in the copyright holder having a court order you take some action or pay them some money.”

But my prose are less punchy than Liz's.  Which is may be one reason why is a lot more popular than Plus my inability to form complete arguments in a site imposed 140 characters limit.  Nay, even seven A4 pages like this post.

Too long, did not read?

Well then:

We receive copyright infringement allegations.  We investigate.  We pass on the allegations to our customer.  It does not seem to us that there is a copyright violation.  Standard IANAL proviso.

Jaws would now like us to pay RIANZ NZD 1750, plus some other amount (possibly much higher?), plus hand over a customer's private details, plus disable our customer's service.

If we do not take those steps then Jaws offer to take the matter further.  That statement sounds quite ominous when coming from a lawyer.

Copyright importance

Hopefully I am not leaving an impression that I am dismissing a copyright holder's rights to a creative work.

Just for the record: copyright is important.  Copyright protects creative works.

For example, copyright can be used to require money in exchange for a book or an album or film.  I personally benefit because while authors, directors and musicians get money which puts food on their table and a roof over their head they often get to continue making more books, albums and movies for me to enjoy.

Copyright is also used in open source licenses.  Where the rights holder can in some cases require a modifier of that software to disclose those changes.  I benefit because the computers I run have some great applications on them (often a result of volunteered or enforced code contributions), and it means that the hosting services RimuHosting provide cost less than if I had to pay money for a license to use that software.

RimuHosting will do all it can to prevent copyright violations.  Copyrights can be very good, and useful things.  Free and open source software is greatly assisted by copyright.  RimuHosting's business is based on FOSS.

Copyright is a tool that could improve human culture by fostering the creation of new creative works.  Creative works are a public good.  And while we live in a world of diminishing scarce resources we need all the public goods we can get.

So: Copyright, we're all good.  OK?  My fight is not with you.  I respect you.  It is the lawyers and processes I have the issue with...

Determining infringements

Copyright infringement is not always a cut and dried matter.  For every copyright holder's lawyer alleging infringement there will be another lawyer alleging fair use or non-violation (e.g. fair use; that the work is a set of facts, not a creative work; that they have first sale rights; good faith usage; that they have a special exemption; or that they are covered by a safe harbor rule).

Web hosts are a bit stuck in the middle.  Often it is difficult for rights holders to contact alleged infringers.  And web hosts will typically have that information (but not wish to disclose it for privacy reasons).

Web hosts are not equipped to be the best arbiters of copyright-infringing-or-not.

An infringement resolution process

I do not think Jaws have handled this incident very well.  There are better ways for copyright holders to enforce their rights.

Here are my suggestions to them:

By all means notify us of any infringements you think may be related to one of our servers.

We will pass that notice onto our customer.

In those cases where we think it is a cut and dried infringement (and we hate having to make those calls), we will take appropriate action.  Sometimes that'll mean parting ways with a customer.  Sometimes that will mean just having them remove the offending content.

Where the infringement is not a cut and dried matter and the issue is not resolved to your satisfaction, please get a court order if you require our customer's contact details.

You will also need to establish (through the court system if you wish) whether there is an infringement or not.  We will comply with any resulting court order (e.g. to remove content or disable an account).

The Infringing File Sharing bill

The NZ government is also taking an interest in this area.  In fact they would like to proscribe (in a lot of detail) the interaction between copyright holders (and their representatives like Jaws), ISPs (which perhaps includes hosting providers like RimuHosting) and alleged copyright infringers (like our customer).

The bill is the “Copyright (Infringing File Sharing) Amendment Bill” (Bill = not currently law, vs. Act = currently law).

The bill effectively makes the ISP an intermediary between the copyright holder and the ISPs account holder.

Here are some brief notes on the bill if you want to save a few pages of reading the bill (but then if you're already this far into this particular post you are oddly interested in copyright law already...)

  • The bill defines three classes of warning notice (detection, warning and enforcement).
  • The ISP issues notices.
  • If an account holder challenges the infringement the ISP forwards that challenge to the alleged copyright owner.
  • ISP forwards response.
  • If the copyright holder does not respond, it is taken that they accept (and withdraw) the infringement allegation.
  • Copyright holder can take an enforcement request to the Tribunal or District Court against the account holder.
  • The tribunal or court could impose a fine on the account holder up to NZD 15K and an court could order an ISP to suspend an account holder's service for 6 months (which implies the account holder would move to another ISP?  In which case does the government intend there to be a nationwide 'blacklist' of ex-account holders?).
  • A District Court (not the Tribunal?) can make an order that an ISP disclose their account holders details.  Note that with most of the notices and responses the ISP is acting as a middle man.  Forwarding complaints to the alleged infringer and forwarding responses to the alleged copyright holder.  And presumably not disclosing the account holders identity in those communications.
  • The ISP is obliged to maintain information on the 'Internet use' of each account holder.  Hmm. That seems pretty invasive.  A list associating an account holder and the IP allocated to them, I could understand.  But 'Internet use'.  That could mean every URL visited.  Or even the content of every data packet sent to/from the account holder's IP.  FWIW at our data center we're filling up TB of disk merely recording total bandwidth usage by Ips.
  • The ISP is obliged to maintain information on infringements and orders.  That requirement is fine.  But in order to meet some of the timeline requirements it is likely this information would need to be maintained and managed by a database/application targeted at helping ISPs remain compliant to the procedures set out in the act.  That is red tape and cost I would wish my business to not incur.
  • This ISP is obliged to not release the name or details of an account holder unless they have the authorization of the account holder or the Tribunal or court orders that.  This is fair.  And I see that this conflicts with the demands Jaws make of us.  A customer should expect businesses to not disclose personal details to anyone who asks for them.
  • The bill suggests most Tribunal proceedings will be on paper (not in a hearing).  This should streamline things and reduce costs a bit.
  • The Act permits the ISP to charge copyright owners a fee for the obligations the bill imposes on the ISPs.  The amount the ISP may charge may be limited by regulation.  To comply with the act I estimate it will cost us several weeks and a few tens of thousands of dollars to implement (staff training, getting systems and applications in place).  Plus a few hours and up to several hundred dollars per communication (possibly involving lawyers).  That is presuming we would not take Jaws' lead and also go around reading and (charging for the time spent on) account holder blogs to search for any indication of politically incorrect opinions.

Comments to the select committee considering the bill

The process as set out in the bill is going to be quite difficult for ISPs to follow.  The timelines are quite specific.  The content of the notices we send are very specific (it will be difficult to ensure that all the information required is present and accurate).
The Tribunal seems to be a good, practical measure.  There will likely be a lot of cases, so having an efficient,low cost, fair Tribunal making determinations will help ease the process.
Do not underestimate how costly the regime will be to enforce.  Particularly on some 'ISPs' (who are actually web hosts with predominantly overseas customers) who receive only a very small number of infringment alerts and then rarely (if ever?) for an NZ-based customer.
One of my biggest issues with the present situation is the uncertainty.  There is currently no clear process I can see in NZ for dealing with copyright issues.  In lieu of that it is lawyer vs. lawyer or court time.  Where they get to establish case law.  I am all for case law being established, but I am picking that the RIANZ is more motivated to spend the money and time on it than I am.

Comments to Jaws

I do not enjoy receiving threatening letters from lawyers.  It requires my attention and response.  I am a pretty busy person running a business and having a family.  For every legal letter I receive the expensive opportunity cost is less time spent with colleagues and customers, less time in my IDE writing code, and less time with my family (not necessarily in that particular order of cost).

Anyhow.  I'll be consulting with lawyers re: Jaws' demands.  And hopefully we'll be able to get a fair outcome.  One where any copyright issues are addressed and where my customer's rights are protected.

Why the Infringing File Sharing bill could be a good thing

Jaws' demands are a good reason why ISPs do need something like the Infringing File Sharing bill.  When that bill is in place I'd expect courts to be confirming actual copyright infringement (vs. just having to rely on a purported copyright holder's assertion).

It would be much plainer that ISPs do not just give out customer details to anyone who asks.  And instead of me having to pay for Jaws lawyers to surf around on TV3 blogs reading my staff member's blog posts I'd get to charge for my time acting as a go between copyright holders and my customers.  Would that fee also make copyright holders a bit more selective about which rights violations they target?

And perhaps our government can ensure their copyright legislation changes provide an easy, simple framework for copyright holders to protect their copyright with the least inconvenience and cost to ISPs.

Comments please...

Copyright is something most people do not think about.  But copyright affects us all the hours we all spend on the Internet, watching TV, reading books and being on our computers.

I'd really welcome comments here from copyright-issue-interested readers.

Are you an NZ internet user?  How do you think these new copyright laws could affect you?  Do you think they are fair?  What changes would you like to see?  Do you feel at 'risk' of being sued or fined currently?  What about after the law changes?

Any fellow ISPs or hosts out there?  Care to share some of your own copyright stories?  How do you see the new rules changing the way you work?

Any IP lawyers out there?  Do you think a better defined framework will reduce law firms making incorrect and unfounded claims and seemingly ridiculous demands?

About Peter Bryant

Peter founded RimuHosting in 2003
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4 Responses to Fun with lawyers, politicians and copyright

  1. Glenn Enright says:

    I especially like "And perhaps our government can ensure their copyright legislation changes provide an easy, simple framework for copyright holders to protect their copyright with the least inconvenience and cost to ISPs."

    Even internationally copyright law has struggled to keep up with innovation in technology, there are many precedents on that (eg from back in 1999

    Currently there is a movement by a group named ACTA, based in the US AFAIK which is working towards enforcing stringent laws (some say violating basic human rights) internationally. There is lots happening politically with that in NZ right now, see for a starting point.

    Creating clearly understood and useful legislation is a great idea. The popularity of plainly written licenses like the GPLv2 is a clear indicator that technically minded people (especially from the FLOSS community) have a unique investment in copyright law. Its important that we make sure our input on that is heard even/especially across national borders. As Peter has said, do keep the comments rolling in.

  2. john says:

    Last year we stopped section 92a in it's tracks, in part due to the "No Guilt By Association" campaign launched by Hopefully there will be a similar movement to stop this not quite as bad, but completely unworkable bill from going through. I hope to see Rimuhosting support that movement.

    There is already enough confusion about copyright, please don't say things like this:

    "For example, copyright can be used to require money in exchange for a book or an album or film."

    This is not an example, and at best a vague oversimplification. Copyright is not used to make money, and the importance of copyright is in protecting a creators "moral" or "natural" rights.

    Protecting these moral rights, having a good business plan and a unique product or service, earn you money, not holding a copyright in and of itself.

    Creative Freedom Foundation have a good page here explaining copyright:

    Copyright is a time limited monopoly, and is being abused by the third parties artist transfer their rights to. It's starting to not do, what it was originally intended to do, which is the things your arguing it does do, in creating new public goods. This has a lot to do with technology, which is why we see the FOSS licenses and Creative Commons licenses coming out of a technical community, since these are the people who understand their environment, and realized that copyright law has some flaws. So they amend these contracts to stipulate things like, needing human readable source code. In a world where copying is getting increasingly easier, "all rights reserved" in not always needed, and is not as necessary as people think for turning a profit.

  3. Peter says:

    What about the case where you are sued in NZ for something that is allowed by the laws in the jurisdiction where the server is located? Also what happens if you are sued in the US demanding information that is not allowed to be disclosed under NZ law and the records are in NZ but the server is in the US?

    Just trying to understand the ramifications here

  4. Glenn Enright says:

    That sure is a good question, one which lawyers get paid lots to wrangle over. From another perspective, would it be better to have an international agreement on where those sorts of disputes arise?

    This is not a simple thing to do mainly since underlying law can be so different. For example the US constitution provides quite a different legislative starting point from NZ's ( )

    Bearing in mind IANAL I suspect 99% of jurisdiction over server hardware falls under the laws of the land in which that is co-located. Which kinda makes it hard to argue about the data housed on that unless there are specific agreements in place between countries on the process to take.