Digital Copyright Bill – Questions & Answers

  • Judith Tizard

Digital Copyright Bill – Questions & Answers

Legislation has been introduced into Parliament which will amend the Copyright Act 1994 (the Act) to clarify the application of existing rights and exceptions in the digital environment and to take account of international developments. It also seeks to create a more technology-neutral framework for the Act.

The Copyright (New Technologies and Performers' Rights) Amendment Bill has had its first reading.

The Commerce Committee is currently inviting public submissions on the Bill. The closing date for submissions is Friday, 16 February 2007. For further information see

The Bill aims to provide more clarity and transparency of how the Copyright Act works. In particular, the Bill will provide certainty around format shifting - it will allow New Zealanders to make one copy of a sound recording for private or domestic use, for each type of device used eg MP3, iPod. It will also allow users of copyright material, including libraries and educational institutions, to use digital technology with confidence.

Key amendments include:
-a technology-neutral right of communication to the public;

-A range of provisions limiting Internet service providers’ liability for copyright infringement in appropriate circumstances;

-An updated provision relating to technological protection measures offering a means to combat the ease of unauthorised reproduction, distribution and communication of works digital technology provides;

- new provisions to enable the actual exercise of permitted acts where technical protection measures have been applied;

-protections for copyright management information identifying content protected by copyright and the terms and conditions of use; and

-new exceptions for format-shifting of sound recordings for private and domestic use, and for decompilation and error correction of software.


Q1What is the Bill about and why is it needed?

The Bill amends the Copyright Act 1994 to take account of the impact of new technology, such as digital music and film. It seeks to create more general copyright laws that are not tied to specific technologies, while maintaining a careful balance between the often-competing interests of creators, owners and users of copyright works.

The Bill is part of a wider reform process that was developed to ensure New Zealand’s intellectual property legislation is up-to-date, takes account of international developments and is relevant in the 21st century. It incorporates many aspects of two treaties negotiated by the members of the World Intellectual Property Organisation (WIPO): the WIPO Copyright Treaty and the WIPO Performers and Phonograms Treaty. These treaties update international copyright standards to take account of developments in digital technologies.

Q2What are the main changes made by the Bill?

a. Reproduction

The Bill addresses concerns about clarity of the definition of “copying”, and its application to digital reproduction, by amending it to clearly apply to digital copying of works in all forms.

Copying is central to the operation of digital technology. Computers, email services, DVD players and even the anti-skip function on a portable CD player all work by making temporary copies of material. The status of these copies, which are technically covered by the Copyright Act, is currently unclear.

The Bill addresses this by introducing a limited exception relating to transient copying in certain circumstances. In other words, the necessary copying taking place automatically in the operation of a computer or communication system will not amount to an infringement of copyright.

b. Communication

The Bill recognises that in a digital world of almost instantaneous communication, the ability to control communication of copyright works is as significant as the ability to control copying. The increasing popularity of legitimate online music services such as Coke Tunes, Digirama and Amplifier shows digital distribution of copyright works is core to developments in the creative industries.

To address the issues associated with digital communication, the Bill replaces existing rights which are specifically tied to distribution through broadcasting and cable programme services, with a broader right which applies to all forms of communication of copyright works to the public. This includes email, peer-to-peer file sharing and other digital forms of communication.

Consistent with the technology-neutral communication right, the Bill provides copyright protection for all communication works (for example, transmission via the Internet), not just the signals carrying content in broadcasts and cable programmes.

The Bill also repeals the exemption for cable programme services to retransmit free-to-air broadcasts without the permission of the broadcaster. The provision was inserted to encourage competition and investment in the cable network and service industry, and to improve the quality of television reception in areas where signal quality was inadequate. The provision is no longer suitable to achieve those original policy objectives.

c. Internet service liability

Copying is central to the functioning of the Internet and the services provided by Internet service providers (ISPs). Web site content may be reproduced at many stages during the course of a transmission and it may be virtually impossible to identify when and where many of these copies are made.

Where the material being copied is subject to copyright protection, an ISP could potentially face liability for copyright infringement by its subscribers. The Bill introduces a definition of ISP and a range of provisions limiting ISP liability for copyright infringement in certain circumstances to address this concern.

ISPs will not be liable if they are simply providing the physical facilities for a communication to take place. The Bill also limits liability of ISPs where an ISP stores infringing copyright material on its servers, but does not know or have reason to believe that the material is infringing, and acts within a reasonable time to delete it or prevent access to it once it becomes aware.

d. Technological protection measures

Technological protection measures (TPMs) are a means to combat the ease of unauthorised reproduction and distribution digital technology provides. Examples of TPMs include the “Content Scrambling System” used by DVDs to control the types of devices and software that can access the DVD’s content, and the digital rights management systems (DRMs) used in software to control copying and distribution of content files.

Currently, the Act allows copyright owners to take action against people who supply or manufacture devices, means, or information specifically designed to circumvent TPMs. This applies only to TPMs that prevent copyrighted material from being copied. The Bill extends this right by allowing copyright owners to take action in respect of devices, means, or information where circumvention could enable infringement of all exclusive rights, not just copying. For example, it will include infringement of the communication right, which extends to web-casting. The act of circumventing the TPM is not, itself, prohibited.

The Bill introduces an offence provision where there has been large scale commercial dealing in circumvention devices, means and information. This is consistent with international practice.

New provisions are also introduced to enable the actual exercise of permitted acts where TPMs have been applied.

e. Copyright management information

The Bill introduces new provisions regarding the intentional removal and alteration of copyright management information that identifies content protected by copyright and the terms and conditions of use. This would, for example, include technology such as digital watermarks. This technology is distinct from TPMs in that it identifies copyrighted material rather than providing technological barriers to copyright infringement.

Criminal penalties are introduced for large-scale commercial dealing in copyright material, where the dealer knows that electronic rights management information has been removed or altered.

f. Permitted acts, including format shifting

The ‘‘permitted acts’’, or exceptions to the exclusive rights of copyright owners contained in the Act, provide an important balance between protection of copyright and access for users. The Bill clarifies and amends the exceptions to copyright owners’ exclusive rights, particularly in relation to fair dealing, library, archival, and educational use, and time shifting. An example of time shifting is taping a TV programme to watch later at a more convenient time.

It also introduces new exceptions for format-shifting of sound recordings for private and domestic use, and for correcting software errors. Format shifting is a term used to describe the practice of copying a sound recording from one format to another, for example from a CD to a portable MP3 player.

The exception does not legitimise clearly damaging behaviour like copying CDs for friends or unauthorised on-line file sharing of music.

g. Performers’ rights

The Copyright Act also provides a range of rights to performers, enabling them to exercise control over the recording of their performances and the distribution of those recordings. This practice of making illegal copies, known as “boot legging”, can have a major impact on the ability of performers’ to obtain a fair commercial return for their efforts.

In keeping with the changes to the main copyright provision in the Act, the Bill will update the technology-specific language currently used and will introduce a communication right for performers.

Q3Is the Copyright Bill the same as the American Digital Millennium Copyright Act (DMCA) and the new Australian copyright legislation?

The Copyright Amendment Bill, the DMCA and the new Australian copyright legislation are all concerned with copyright in the digital environment. However, the Copyright Bill addresses situations unique to New Zealand and seeks to achieve outcomes benefiting New Zealand’s society as a whole.

The key differences between the New Zealand, US and Australian legislation in the areas of format shifting, TPMs and Internet Service Providers are outlined in the appendix.

Technological Protection Measures

Q4Why do we need new provisions relating to technical protection measures, including the introduction of a criminal offence provision?

With digital technology, it has become easier to plagiarise and make illegal copies of copyrighted work. This is resulting in increased losses for copyright owners. The Bill addresses this by providing copyright owners with a more comprehensive right to protect their works against increased piracy.
It also introduces a limited criminal offence provision that will apply where there has been large-scale commercial dealing in devices, means and information enabling people to circumvent copyright.

Q5Are the TPM provisions similar to those in the US DMCA?

The proposed TPM provisions only apply where circumvention devices facilitate the infringement of copyright. The Bill does not intend to protect technology seeking to limit activities not infringing copyright - such as regional zone access protection on DVD players.

Also, in contrast to the US (and Australian) approach, the Bill does not extend liability to the act of circumvention itself, for example, the act of downloading an encrypted movie by using a decrypting device. The focus continues to be on the manufacture of devices or means, and publication of information which enables circumvention.

Q6Does the Bill make anyone who deals with circumvention devices a criminal?

No. The Bill introduces a very narrow criminal offence provision. Criminal liability is limited to cases of large-scale commercial dealings. Only people who deal with circumvention devices in the course of business AND know the device is intended for a copyright infringing activity can be liable under the offence provision.

The ordinary New Zealander who incidentally supplies these devices to other people, or who provides information about how to circumvent TPMs would not be subject to the criminal offence provision. They might, however, be subject to civil liability.

Q7Do the TPM provisions shift the current balance between protection of copyright owners and the access for users to the benefit of copyright owners?

The Bill is not intended to change the current balance, but to ensure the balance continues in the digital environment. None of the TPM provisions are intended to stop people undertaking activities unless those activities are prohibited by the Copyright Act.

Consumers should be able to continue to make use of the “permitted acts” under the Copyright Act (such as the fair dealing provisions) and continue to be able to view non-infringing copies of a copyrighted work.

Q8How will consumers be able to exercise any of the permitted acts where TPMs have been applied to a work?

The Bill introduces new provisions to enable people to exercise permitted acts where TPMs have been applied. Consumers will continue to be able to circumvent a TPM to undertake a permitted act because there is no prohibition on possessing and using a circumvention device.

If a consumer cannot practically undertake a permitted act, they can approach the copyright owner for assistance. If the owner fails to take voluntary steps to enable the permitted act, the Bill allows for the engagement of a library, archive or educational establishment to exercise the permitted act on the behalf of the user. This process picks up on aspects of both the EU and Australian legislation.

Q9Does the proposed bill outlaw things like multi-zone DVD players, which can bypass region encoding?

No, it does not. The focus of section 226, which relates to TPMs, will continue to link circumvention to copyright infringement. This means copyright users continue to be able to view or use legitimate non-infringing copies of works, such as DVDs or computer games.

The supply and use of devices allowing the circumvention of regional zone access protection would not infringe the TPM provisions. If, however, a circumvention device directly facilitated the infringement of copyright, that would be a breach of section 226.

Format shifting

Q10Why is there a format shifting provision and why is it limited to sound recordings?

The new format shifting provision responds to the concern that people want to transfer music they have legitimately bought onto different devices to take advantage of new technology. It also recognises this has been common practice for a long time.

There are other emerging trends, such as format shifting of films, which may become increasingly more commonplace in New Zealand. The government recognises it is important to monitor these emerging trends, so the law can continue to be responsive to the development and implications of new technologies.

Q11Why does the provision have a two-year sunset clause?

The sunset clause has been included because the format shifting provision responds to particular problems identified with copying of sound recordings. The clause is designed to ensure the scope of the provision continues to be appropriate in light of technological developments, industry practice and the interests of both copyright holders and copyright users.

Q12Why doesn’t the Bill introduce a “fair use” exception similar to the US?

A ‘fair use’ exception is a general exception to copyright infringement for activities that are determined to be ‘fair’, allowing people to use or copy copyrighted material without needing permission from the copyright owner. The US copyright law contains a “fair use” exception.

While the fair use exception contains principles of ‘fairness’ for the court to consider, essentially the exception is open-ended. The court has to determine in each case whether an activity would fall under the ‘fair use’ exception.

New Zealand, along with the UK and Australia, has preferred an approach where more specific exceptions are tied to a particular activity, for example time-shifting or format-shifting. This approach provides greater certainty for copyright users.

Q13If I download a song from a digital music store, can I break the DRM on it to format shift it to play on any device I own (one copy for each device)?

Generally, if the music is bought subject to conditions, for example, the number of copies that can be made for personal and domestic use, then those conditions will override the format shifting exemption in the Bill.

If there are no conditions attached to the music purchase, the consumer would be allowed to circumvent any TPMs for the exercise of a permitted act, including format-shifting.

Internet Service Providers (ISPs)

Q14Why was it necessary to introduce provisions relating to the liability of ISPs?

Currently, there are no provisions in the Copyright Act relating to ISPs. ISPs, therefore, face potential liability for any copyright infringement involving the services provided by ISPs.

Q15Do the proposed ISP provisions make an ISP subject to the same take-down notice system as the US counterpart for hosting third party infringing materials?

No. The US take-down notice system requires an ISP to take down material upon notification. There is no requirement in the US law for the ISP to know about the infringement. This system is detailed and prescriptive and requires the copyright owner to follow a formalised notification process.

The New Zealand Bill proposes a more flexible approach and requires the ISP to delete material or prevent access to it only if it obtains knowledge or becomes aware that the material is infringing. The ISP is also required to inform the user of the service that the material has been deleted.