DIXON v R –Game Over for Digital Property? I Think Not.


On 20 October 2015, the Supreme Court of New Zealand delivered its decision in the matter of an appeal by Jonathan Dixon against a conviction on a charge of accessing a computer for a dishonest purpose pursuant to s 249 Crimes Act[1].  It was alleged that Mr Dixon had accessed a computer system and dishonestly and without claim of right obtained any property.  In short, what Mr Dixon had done was to copy some digital footage from a CCTV security system operated by a bar in Queenstown.  Mr Dixon obtained the footage from a receptionist for the company and transferred the files onto a USB stick, deleting them from a desktop computer where they resided.

The Judge at first instance considered that the digital CCTV files were property within the meaning of the definition of that word in s 2 Crimes Act.  When the matter went before the Court of Appeal, the Court disagreed[2].  It concluded that digital information or a data file did not fall within the definition of property.

The Court of Appeal’s decision was the subject of considerable critical comment.  It was even suggested that the provisions of s 249 Crimes Act were “unfit for the purpose”.  Yet the decision should not have come as any surprise for there is a substantial body of authority, primarily in the civil arena, that supports the Court’s conclusion.  Subsequently the Court made  similar finding was reached in the case of Watchorn v R[3].

What the Court of Appeal did in Dixon however, was to substitute another charge which could have been proffered against Mr Dixon – that he accessed a computer and dishonestly and without claim of right obtained a benefit.  In its decision the Court of Appeal went to some pains to consider the nature of a benefit and substitute it at charge.

Mr Dixon appealed against that conclusion to the Supreme Court of New Zealand.  In its decision, the Supreme Court concluded that the Court of Appeal’s conclusion that a digital file did not amount to property was wrong.  It quashed Mr Dixon’s conviction for obtaining a benefit contrary to s 249(1)(a) and it reinstated his original conviction for obtaining property by accessing a computer system for a dishonest purpose. Phyrric victory does not adequately describe the outcome from Mr. Dixon’s point of view.

The Court started by considering the provisions of s 249(1) of the Crimes Act.

249 Accessing computer system for dishonest purpose

(1)        Every one is liable to imprisonment for a term not exceeding 7 years who, directly or indirectly, accesses any computer system and thereby, dishonestly or by deception, and without claim of right,—

(a)          obtains any property, privilege, service, pecuniary advantage, benefit, or valuable consideration; or

(b)          causes loss to any other person.


It then went on to consider the definitions of “access” and “computer system” contained in s 248 Crimes Act.  The Court observed that a relevant feature of the definitions was that “computer system” included “stored data” and “access” included receiving data from a computer system. The Court later observed that the definition of a computer system included “software” of which more later.

The Court then went on to consider the definition of “property” contained in s 2 of the Crimes Act.

property includes real and personal property, and any estate or interest in any real or personal property, money, electricity, and any debt, and any thing in action, and any other right or interest

Arnold J, writing for the Court, noted that the definition is:

(a)        inclusive rather than exclusive;

(b)        circular in that the property is defined as including real and personal property; and

(c)        in wide terms and, in particular, includes tangible and intangible property.

The Court went on to observe that within the broader statutory context the term “goods” in the Commerce Act 1986, the Consumer Guarantees Act 1993, the Fair Trading Act 1986 and the Sale of Goods Act 1908 is defined, to avoid doubt, to include computer software. It observed that, when considering the inclusion of software in consumer legislation the Commerce Committee stated:

The interest in the software the consumer receives does not differ significantly from other goods involving the transfer as an interest in intellectual property, and for which the guarantees and remedies relating to goods are more relevant and applicable to the guarantees and remedies related to services.  We recommend that computer software be added to the definition of goods for the avoidance of doubt.[4]


In reading the decision in a linear fashion, it was not immediately apparent at this stage of the Court’s reasoning what relevance software as goods might have to the issue of whether data was property but the issue becomes clear later in the Supreme Court’s decision.

The Court went on to consider the Judge’s finding that the definition of “property” in the Crimes Act was wide and, indeed, sufficiently wide to cover a digital file.  It then went on to consider the decision of the Court of Appeal.  The Court of Appeal’s starting point was that digital files were not property within the meaning of the definition of the Crimes Act because they were pure information.  The Court of Appeal had adopted what it described as an “orthodox” view that information, whether confidential or not, was not property.  It observed that the medium upon which information could be stored would be property but the information upon it would not.  Therefore, the digital footing could not be distinguished from information on this basis. The Court of Appeal observed that it was problematic to treat computer data as being analogous to information recorded in physical form.  It observed that a Microsoft Word document may appear to be the same as a visible sheet of paper containing text but in fact was simply a stored sequence of bytes.

The Court of Appeal considered whether or not it should depart from this orthodox view, observing that the distinction drawn between information which was not property and the medium upon which it was contained had been criticised as illogical and unprincipled.  The Court of Appeal’s view was that there were certain policy reasons militating against the recognition of information as property particularly in that such a decision could impact detrimentally upon the free flow of information and the freedom of speech.

The Court noted that when it enacted the computer crime sections of the Crimes Act there were also amendments to the definition of “property” but that these were limited.  The taking of confidential information or trade secrets was encompassed by s 230 Crimes Act. It considered that the provisions in s 249 relating to property were aimed at situations where a person accessed a computer and used, for example, a false or purloined credit card details to obtain goods unlawfully.

Before the Supreme Court counsel for the Crown stepped away from arguing that pure information was property.  Rather, the argument was focused upon the fact that digital files were property because they could be owned and dealt with in the same way as other items of personal property.  Thus the Court was able to sidestep dealing with the major finding of the Court of Appeal and could approach the problem from a different angle.

Another reason for the Court not considering the “pure information as property” issue was that Mr Dixon had dismissed his lawyer prior to the hearing and, accordingly, the point was not fully argued, and therefore it was considered that it was not an appropriate occasion to reconsider what the Court of Appeal had referred to as the orthodox view.

The Supreme Court started with considering the issue of context and observed that the meaning of the word “property” varies with its context.  It referred to comment made by Gummow and Hayne JJ in Kennon v Spry [5]where they stated:

The term “property” is not a term …with one specific and precise meaning.  It is always necessary to pay close attention to any statutory context in which the term is used.

The Court then went on to observe that within the context of s 249(1)(a) and in light of the definition of “property” in s 2, there was no doubt that the digital files at issue were property and not simply information.  The Court considered that digital files are identifiable, have a value and are capable of being transferred to others.  They also have a physical presence although that cannot be detected by means of the unaided senses.  It may be that they could be classified as tangible or intangible but nevertheless the Court concluded that digital files were property for the purposes of s 249(1)(a). However, the Court omitted to discuss inconvenient issue of the necessity of exclusive possession as an element of property


The rationale for such a finding started with a consideration of the history of the amendments made to the Crimes Act in 2003.  In crafting a new suite of changes to modernise the criminal law in relation to crimes against rights and property, focus was upon the concept of being “deprived of property” rather than the concept of “things that were capable of being stolen”, for it was that latter concept that underpinned property crimes in the 1961 Crimes Act prior to its amendment in 2003.

When the amending bill was first proposed, there was a specific definition of “property” for the purposes of a new Part 10 relating to crimes against property.  That new definition arose as a result of the 1999 decision of the Court of Appeal in R v Wilkinson[6] where the Court held that the concept of things capable of being stolen did not cover intangible property.

The new definition for the purposes of Part 10 proposed:

Property includes real and personal property, and all things, animate or inanimate, to which any person has any interest or over which any person has any claim; and also includes money, things in action and electricity.

The Supreme Court considered that had this definition remained, digital files would have been included on the basis that they are things in which a person has an interest.

However, when the bill was reported back by the Law and Order Select Committee, it was observed that the definition of “property” and for the purposes of Part 10, differed from the definition of “property” in s 2 and concluded that there should be one definition for the Act as a whole.  The Law and Order Select Committee recommended that the definition be removed from Part 10 and the definition of “property” in s 2 be amended.  The problem is that the definition of “property” in s 2 is not as widely stated as the proposed definition for Part 10.

The Court then went on to consider the nature of a document which had an extended definition for the purposes of Part 10.  Quite clearly from the definition of a document material held in electronic form falls within such a definition and the Court of Appeal reached a similar conclusion in R v Misic[7] which was decided before the extended definition was enacted.

Anderson J, writing for the Court in Misic, said:

… we have no difficulty accepting that the computer program and computer disk in question are each a document for the purposes of s 229A. Essentially, a document is a thing which provides evidence or information or serves as a record. The fact that developments in technology may improve the way in which evidence or information is provided or a record is kept does not change the fundamental purpose of that technology, nor a conceptual appreciation of that function. Legislation must be interpreted with that in mind. …


He went on to say:

It is unarguable that a piece of papyrus containing information, a page of parchment with the same information, a copper plate or a tablet of clay, are all documents. Nor would they be otherwise if the method of notation were English, Morse code, or binary symbols. In every case there is a document because there is a material record of information. This feature, rather than the medium, is definitive.

The Supreme Court then turned to consider the provisions of ss 249-252 Crimes Act dealing with computer crimes and considered, contrary to the view of the Court of Appeal, that the word “property” included in s 249(1)(a) was included for a purpose that was broader than the mere use of credit card details used in conjunction with computer to unlawfully obtain goods.

The Court considered that the broader purpose could be justified by starting with the definition of a computer system which included items such as “software” and “stored data”, which is also referred to in s 250 which deals with damaging or interfering with a computer system.  The Court observed that there was no doubt that Parliament had stored data in mind when those provisions were drafted.  Similarly, “access” is defined to include receiving data from a computer and is received even although it is copied rather than permanently removed.

The Court observed[8]

Given that Parliament contemplated situations where a person copied stored data from a computer, which of the offences might apply where the person taking the data did so without authority?  There are three possibilities – ss 249, 250 and 252.  It is not obvious that s 250 would apply.  If someone simply took a copy of existing data, but did not damage, delete or modify it, could it be said that the person “interfered with” or “impaired” the data?  We rather doubt that it could.  Section 252 could apply.  It creates an offence of intentionally accessing the computer system without authority and provides for a maximum penalty of two years’ imprisonment.  However that offence focuses on unauthorised access implicit, it does not address the issue of dishonest purpose.  Where the access if for dishonest purpose, s 249 applies and there are significantly higher maximum penalties.


The Court then discussed the situation where a person without authority located, copied and dealt with valuable digital files contrary to the interests of the file’s owner.  The inclusion of that conduct is consistent with the features of the legislation to which reference had been made.

Looking at the issue conceptually, of those concepts identified in s 249(1)(a) – property, privilege, service, pecuniary advantage, benefit or valuable consideration – property seemed most apt to capture what was obtained by Mr Dixon as the result of the unauthorised access.  Thus from a conceptual view of what it was that the accused did and what he took, the word “property” seemed the most suitable word to encompass the situation.


The Supreme Court then referred to the fundamental characteristics of property as being something that was capable of being owned and transferred.  It observed that the digital files which were downloaded onto his USB stick and then deleted from the computer upon which they were stored, were a compilation of sequenced images.  This file had an economic value and was capable of being sold.  Although the files remained on the CCTV system, the compilation contained what was valuable in the full files.  The compilation had a material presence.  It altered the physical state of the medium upon which it was stored – the computer disk or USB stick – illustrated by the fact that electronic storage space can be fully utilised.

This aspect of material presence led to a discussion of some American cases where a different approach to computer files as property has been adopted.  The Court referred to the case of South Central Bell Telephone Company v Barthelemy[9] where the physical processes and characteristics of software were examined.  The response to the suggestion that software was merely knowledge or intelligence – perhaps another way of stating information – the Court observed that the software was knowledge recorded in a physical form which had a physical existence and which took up space on a tape, disk or hard drive and made physical things happen which could be perceived by the senses.  The software was ultimately recorded and stored in the physical form on a physical object.

The Court also referred to a number of other American cases, although noted that the US Courts had not been consistent on the point with some holding that software is intangible property. The decision of Ronald Young J in Erris Promotions Limited v CIR[10] where the argument was whether or not software code was tangible property.  The Judge held that it was intangible rather than tangible. The issue of tangibility or intangibility is something of a red herring, having regard to the fact that property can be tangible or intangible according to the definition of property in s.2 of the Crimes Act 1961

In considering the Court of Appeal’s approach in Dixon where it was noted that it was problematic to treat computer data as being analogous to information recorded in physical form, the Supreme Court made two comments.  It firstly observed that the definition of “document” of was broad enough to include electronic documents or files.  In this regard I observe that the word “document” is used probably for two reasons.  The first is the file extension .doc which infers that the file created is a document.  The second is that a word processing program is designed to create a file of information which resembles a paper document but which in reality is quite different, being in electronic form.  We use the word “document” because it is a word with which we are familiar.  Perhaps a better word would be “file” although the definition of “document” is really directed towards the result of a technological process.

In the United States, electronic records and databases had been treated as property capable of being converted although they were intangible.  The case of Thyroff v Nationwide Mutual Insurance Co[11] considered whether the tort of conversion could apply to the misappropriation of electronic records and data.  The Court’s approach was consistent with the overall view of computer or electronic files in the US – that being that there is an economic value to electronic information which should receive the protection of law.

The Court observed that the position in England was different, although the cases in England involved civil aspects of electronic information as property.  It observed that the case of Your Response Limited v Datateam Business Media Limited[12] concluded that it was not possible to exercise a common law possessory liens over an electronic database on the basis that it was not tangible property of a kind capable of forming subject matter of torts that are concerned with interference and with possession.  The Court in Your Response Limited followed the decision of OBG Limited v Allan[13].  What should be observed in those cases, and a matter which the Supreme Court seems to have sidestepped, is that possessory liens and some other torts involving interference with property are premised upon the concept of exclusivity of possession.  In the electronic environment it is capable for a person to obtain a copy of a data file by dishonestly accessing a computer, but by leaving the “original” upon the target computer.  In Dixon’s case, although the digital file that he took was a compilation of a larger CCTV record, nevertheless the original CCTV record remained in the possession of the “owner”.  Thus, two people had possession or control of the same data and the element of exclusivity was absent.

The issue of tangibility or intangibility of an electronic file is, as observed above, resolved by the provisions of s 2 Crimes Act which includes both tangible or intangible property.  The Court then went on to say that what emerged from the brief discussion of the US authorities is that although they differ as to whether software is tangible or intangible, there is general agreement that software is property.  The Court then encompassed data files as property by observing, “There seems no reason to treat data files differently from software in this respect”.

From a technological point of view, software files are operating instructions for a computer.  Data files are raw information which may be processed by a software program.  A .doc file created by the utilisation of the software Microsoft Word is rendered readable by the software.  Software does something within the computer environment.  Data is something that software manipulates.  This is recognised by the separation of “software” from “stored data” in the definition of a computer system in s. 248 of the Crimes Act 1961. The Supreme Court chose not to address this functional difference between software and data.  Although the Court had discussed the nature of software as goods, that merely heightens the distinction between software and data.  There can be no doubt that data can have a value, although it must be associated with some form of processing software to be rendered comprehensible.  But data is not protected by the Consumer Guarantees Act or other consumer protection legislation.

Finally, the Court made some observations about the decision in Watchorn, observing that the digital files that Mr Watchorn obtained were property for the purposes of s 249(1)(a) and that he should have been convicted.

In considering the Supreme Court’s decision, the first thing that should be noted is that the Court went to some pains to state that its definition of “property” was within the context of the legislation and particularly within the context of s 249(1) Crimes Act.  Given that limitation, it could well be argued that its holding that a digital file amounts to property is limited in application.

However, it may well be if the decision is utilised in a broader sense, that there will be certain unintended consequences and one comes to mind.  It involves the person who accesses a computer system dishonestly and without claim of right, and obtains a digital file containing embarrassing or damaging information.  That information, if published, could have significant consequences.  The “hacker” for so he is, puts the information onto a USB stick.  The information is delivered to a third party.  There are no criminal implications in the hacker giving the third party the USB stick.  Property in the USB stick itself and as a medium is validly transferred.  What of the digital file on the USB stick?  The third party is aware that it was obtained dishonestly and by unauthorised access to a computer system.  The question which may need to be asked and answered is whether or not the receipt of the digital file on the USB stick would be sufficient to constitute the offence of receiving by the third party.

What to do?  Clearly the information as property issue needs to be addressed and it may well be that the answer lies in considering adopting the American approach together with clarifying the fact that digital data to exist must be associated with a medium be it a hard drive, a USB drive or stored in the Cloud.  It is this aspect of a digital file that gives it its tangibility albeit limited.

The issue of virtual property remains an open question and must depend upon the nature of the terms and conditions that exist between the provider and the customer.  It may be that legislation will address this problem in the future, recognising that in a paradigm of continuing disruptive change, changes to perception of whether what may fall within the category of intangibles may have value needs to be recognised along with a further recognition that existing remedies under “traditional” fields of law, such as intellectual property and breach of confidence, may be too limited to accord sufficient protection.  The concept of no property in pure information could remain;  information that is not associated with a medium could remain as intangible and without property implications.  But the digital file associated with a medium could have a level of tangibility sufficient to attract the protection of the civil and criminal law.

But wait! There’s more! What proprietary interests does a subscriber have to that piece of virtual real estate in Second Life? And if it is “property” acquired during the course of a relationship, may it attract the attention of the Property (Relationships) Act 1976? What about that “amped up” magic sword that the player uses in Word of Warcraft. The game is not over. In fact, it has only just begun.


[1] [2015] NZSC 147

[2] [2014] 3 NZLR 504

[3] [2014] NZCA 493

[4] Consumer Protection (Definitions of Goods and Services) Bill 2001 (154–2) (select committee report) at 4.

[5] [2008] HCA 56, [2008] CLR 366 at [89]

[6] [1999] 1 NZLR 403 (CA).

[7] [2001] 3 NZLR 1 (CA).

[8] Above n 1 at [36]

[9] 643 So 2d 1240 (Lou 1994).

[10] [2004] 1 NZLR 811 (HC).

[11] 8 NY 3d 283 (NY 2007).

[12] [2014] EWCA Civ 281, [2015] QB 41.

[13] [2007] UKHL 21, [2008] AC 1.

Relationship Property and Discovery in the New Zealand Family Court

The discovery regime in the Family Court is governed by r 141(1) Family Courts Rules.  Rule 141 provides as follows:

141    Order for discovery after proceedings commenced

(1)     If a notice of defence or a notice of intention to appear has been filed, a party may apply to the court for an order for discovery of documents—

(a)        that are, or have been, in the possession of another party to the proceedings; and

(b)        that relate to a matter in question in the proceedings.

(2)     An application under subclause (1) must be accompanied by an affidavit specifying—

(a)        the extent of the discovery required; and

(b)        the reasons for the discovery.

(2A)   On receipt of an application made in accordance with subclauses (1) and (2), the court may order the party referred to in subclause (1)(a) to file an affidavit stating—

(a)        whether certain documents or classes of documents are or have been in that party’s possession, custody, or power; and

(b)        if the party had the documents or classes of documents but has now parted with the documents or classes of documents, when the party did so and what became of the documents or classes of documents.

(3)     An order for discovery—

(a)        must be in form G 15 (order for discovery of documents); and

(b)        must be served by the applicant on the party against whom the order is made.

(4)     A party against whom an order for discovery is made must, within 10 working days after the service of the order or any further time the court may allow on an interlocutory application for the purpose,—

(a)        file an affidavit of documents in form G 16 (affidavit of documents); and

(b)        serve a copy of the affidavit of documents on every other party to the proceeding who has filed an address for service.

(5)     If the proceedings are under the Child Support Act 1991, nothing in this rule limits the application of the secrecy provisions of that Act or the Tax Administration Act 1994.

Because of the way in which the rule is structured, discovery in the Family Court is something of an anomaly when compared with discovery in the High Court or in the District Court.  To put it simply, the Peruvian Guano approach is still applicable and the rule gives statutory validity to the Peruvian Guano “train of enquiry rule”.  Essentially, the “train of enquiry rule” is that documents must be discovered which may directly or indirectly enable a party to advance his or her own case or to damage the case for his or her adversary.  The Peruvian Guano case was decided in 1882 and the rule developed and has remained in place, at least as far as the Family Court is concerned, notwithstanding the development of electronic communications and copying and the digital transmission and retention of material that may be of marginal relevance.

The continued existence of the Peruvian Guano approach allows for potential abuses in the course of proceedings to take place.  Relationship property cases often involve efforts by a wealthier or better informed spouse to confine access to information by the poorer or more poorly informed spouse.  Wide ranging discovery obligations with associated opportunities for interlocutory proceedings and appeals may create a risk of injustice by precluding or limiting the prompt disposition of the substantive issue before the Court.  Discovery applications can be used by a “deep pockets” litigant to disadvantage one who is financially stretched, using a strategy of litigation by attrition. In addition, Peruvian Guano type obligations may be additionally onerous where the assets available are limited.

The Peruvian Guano approach, therefore, runs head to head with the discovery reforms that were incorporated into the High Court rules and subsequently into the District Court rules in 2012 and 2014 respectively.

These rules basically provide that initial disclosure must be given alongside pleadings.  Counsel must attempt to agree an appropriate discovery order prior to a first case management conference.  Cooperation between counsel is the order of the day.  The old tactic of holding one’s cards close to one’s chest are now over.  Two forms of discovery order may be made: standard or tailored.  A standard order for discover is narrower than the previous Peruvian Guano test.  The scope of disclosure is confined to documents which:

(1)        Are relied on by the party;

(2)        Adversely affect that party’s case;

(3)        Adversely affect another party’s case – which may be covered by the first category; or

(4)        Support another party’s case.

It is described as an “adverse documents” rule rather than a more wide ranging “relevance based” rule.

Tailored to discovery involves making specific or bespoke orders for discovery which may be wider or narrower than standard discovery.  There is a presumption in favour of tailored discovery in cases:

(1)        Involving allegations of fraud or dishonesty;

(2)        Where the total value of assets or sums in issue exceeds $2.5 million; or

(3)        If the cost of standard discovery would be disproportionately high in comparison to matters at issue in the proceeding.

The 2012 High Court Rules amounted to an overall reform of the entire discovery process.  Although the rules refer to the use of technology and there are provisions in the High Court rules relating to technology use and the definition of the various means by which technology assisted review may take place, the rules reform the entire approach to discovery.  In some jurisdictions discovery reforms, particularly in the field of electronic discovery, are governed by Court devised protocols or practice notes.  Discovery regimes in Australia, Singapore and Hong Kong provide examples.  Rule based changes to discovery regimes are present in England and Canada.

In a Dixon v Kingsley [2015] NZHC 2044 (27 August 2015), Kos J addressed the Family Court discovery regime.  He observed that the reforms provided in the High Court Rules have passed the Family Court by.  He observed that the Peruvian Guano approach “still holds court” under the Family Court Rules.  However, he did observe that the breadth of r 141(1) and the discretion imported by r 141(2A) allows for closer inquiry by the Family Court into the scope of discovery that should be ordered.  He focused upon the words “the Court may order”.  He then considered that because of this it does not follow that a broad relevance based Peruvian Guano type discovery should be ordered and that a tailored approach is permissible and desirable.

He then went on to observe that in the case of J v P [2013] NZHC 557 three qualifying principles for discovery in relationship property cases were identified:

(a)        Relevance to the issue in the proceeding;

(b)        Reasonable discovery;

(c)        That discovery should not be unduly onerous.

Taking these general principles and utilising the wide discretion contained in r 141, Kos J articulated some essential principles governing discovery in relationship property litigation:

(1)        He considered that a robust approach should be taken to discovery consistent with the purposes and principles of the Act.  Those purposes and principles include the need for a just decision but, importantly, require an inexpensive and efficient access to justice.

(2)        That discovery should not be unduly onerous.

(3)        That discovery should be reasonably necessary at the time sought.

(4)        That the scope of discovery should be tailored to the need of the Court to disclose, justly and efficiently, of relationship property issues under the Act.

(5)        More substantial discovery may well be ordered by the Court where it has reason to believe that a party has concealed information or otherwise sought to mislead either the other party or the Court as to the scope of relationship property.  But even in such a case scope of discovery should be limited only to what is required for the Court to fairly and justly determine relationship property rights.

Although the Judge did not specifically state that the principles of reasonableness and proportionality together with counsel cooperation that underpin the 2012 High Court Rules changes, it is clear that he was of the view that at least the spirit of those rules may apply in modified form in relationship property discovery cases.  Although the discovery process involving the development of a discovery plan prior to a case management conference and the utilisation of checklists is neither provided nor stated it seems, at least to this commentator, that such an approach would not be amiss if informally adopted by counsel.  It is recognised that difficulties could well arise given much of the emotional heat and adversarialism that accompanies relationship property cases.  The absence of a specific rule structure for discovery, such as is present in the High Court rules, would make it difficult for counsel to advise or persuade aggressive or contentious clients that a cooperative approach should be adopted, but the decision of Kos J does seem to dilute the potential difficulties accompanying what may appear to be at first glance a very wide and potentially oppressive Peruvian Guano approach.

In the case before him, Kos J had four classes of documents in respect of which discovery was sought.  In one class he made a tailored discovery order, limiting the nature of discovery sought to documents of specific relevance.  In the other cases what was sought were too wide or amounted to non-party discovery by stealth and in one case it was considered, because of difficulties underlying the pleadings, that it was not ripe to make a discovery order.

The decision is particularly helpful because it demonstrates the utilisation of discretionary powers to import a modern approach to discovery involving relevance, reasonableness and proportionality to override the wide scope of discovery that would otherwise be applicable arising from the Peruvian Guano rule.  The case, in the view of this commentator, will be an essential tool available in the Family Court to prevent the oppressive use of discovery in relationship property cases. What will be interesting in future will be the approach of the Court in cases where discovery of large amounts of electronic information is sought and whether Kos J’s “tailored order” approach will be modified to deal with relationship property e-discovery.

17 October 2015

Collisions in the Digital Paradigm VII – Answering the Internet

When the TV News show Campbell Live came to an end there was a tremendous amount of angst that condemned the network and saw this as another nail in the coffin of TV News. I wrote a piece about the demise of the show and the reaction, but didn’t push “Publish” and I still haven’t . I wasn’t satisfied with the piece. It didn’t properly capture what I wanted to say. So I left it. Until now. Some recent reading has caused me to revisit the piece and place it within a larger context.

A few weeks ago I came across a book by Ken Auletta entitled “Googled: The End of the World as We Know It. “ First written in 2009 and updated in 2010, despite the dystopian title, it is an interesting history of the Google within the context of other Silicon Valley Startups – and it doesn’t really live up to its title. Buit it does have some very interesting things to say about news media – especially print media – in a time of paradigmatic and disruptive change.

The second book was by Jon Ronson and is entitled “So You’ve Been Publicly Shamed” which looks at shaming, what drives it, how the Internet enhances it and what you can do about it – not using legal tools but “reputation management” facilities. The book is an interesting one because some of the situations it describes arise within the context of a “hivemind” that develops with social media applications. That means that often there is not just one bully, but a whole horde of them. And this poses some interesting issues for a legal tool like the Civil Enforcement regime of the Harmful Digital Communications Act 2015.

The third book is by Andrew Keen and is entitled “The Internet is Not the Answer”. If I were to critique this piece of work fully I would need as much space as the book itself and would find myself fisking every paragraph, and I am not going to do that. Rather I want to look at some of the themes present in Keen’s book and address them and then turn to the TV News theme about which I wrote before.

Lets look at the title. Is he critical of the Internet?  No he is not. He is critical of the way in which entrepreneurs have taken advantage of the quality of permissionless innovation that allows them to bolt applications on to the backbone that is the Internet. Because the Internet is merely the transport layer. It is content neutral. Keen’s critique is directed to those who have exploited permissionless innovation to develop applications, put them on the Internet and make large amounts of money in doing so.

One of his major criticisms is that there is an illusion that underlies the apparent “free” nature of these applications. Google, Facebook, Instagram, Uber all monetise our presence and by gathering data associated with our use of their services. Keen criticises this as “without our permission”. The way in which advertising also funds the apparent “free” nature of these applications is a striking theme in Auletta’s book and one to which he devotes a considerable amount of print.

But is this an “Internet” problem? Does the seat of the problem lie within the transport layer? Of course it doesn’t. But to characterise the Internet as the problem makes for a catchy title, and who is going to let a technical fact get in the way of a good line.

One of the stories that Ronson recounts in his book about shaming is the treatment handed out to Jonah Lehrer, a successful writer of “self-help” books and a drawcard on the speaking circuit. In one of his books Lehrer attributed a quote to Bob Dylan that to a journalist who was a Dylan fan didn’t ring true. And it wasn’t. The uncovering led to further investigations and discoveries that certain facts didn’t stack up. A similar thing happened to Mike Daisey who, shall we say, embellished or transplanted some facts to enhance his one-man show “The Agony and Ecstasy of Steve Jobs.”

Keen is not immune to a bit of misstatement of fact himself. There can be no doubt that Apple outsourced the manufacturing of its products to a Foxconn factory in Shenzen and that the use of unsafe products and unsafe work practices were appalling. Keen himself interviewed Daisey . In his book he cites that interview but overlooks the fact that Daisey manipulated the facts and he was exposed for doing so by Ira Glass on This American Life on 16 March 2012. Keen does not qualify his reference to Daisey. There is no doubt that other investigations revealed that the Shenzen plant was dreadful. I think Keen could have cited a more reliable source than an exposed fact manipulator who excused himself by suggesting that “we have different worldviews on some of these things”.

Another factual problem occurs when Keen, who was once in the Internet music business himself with a startup called Audiocafe, discusses the demise of the recorded music business which was part of his life when he lived in Soho in the 1980’s. He refers particularly to Kim Dotcom whom he describes as New Zealand based. I’m not sure I can excuse him the hyperbole of describing Dotcom as a criminal when he has not yet been convicted of criminal copyright infringement, but he does make the statement that Dotcom’s Megaupload platform generated the legal revenue to enable him to buy is 15 million pound Downton Abbey-style mansion in New Zealand. Clearly Keen is no connoisseur of architecture because there is little resemblance between the Chrisco mansion in Coatesville and Highclere Castle in Hampshire. But the suggestion that Dotcom purchased the house is completely wrong. He rents it.

The third factual problem with which I have some difficulty – but I am prepared to give Keen the benefit of the doubt – lies in his assertion about the demise of the HMV record retail outlet on Oxford St which he suggests closed down in 2014. I assume he means the one located at 363 Oxford St which in fact closed in 2013 but reopened later that year. But if that store did close in 2014 he is incorrect to suggest that an HMV music store is not on Oxford St because there is one at 150 Oxford St nearby to the Oxford Circus tube station. I know. I was there in September last year and made some purchases.

I guess that the problem that I have with three examples of factual spin, misuse or misinterpretation is – how many other errors are there. One is left with an uncomfortable feeling about the veracity of the book.

But it is not just a question of fact checking. If the title doesn’t give the away author’s perspective the first few pages do, and the further one reads, the clearer it becomes that this is not a true objective analysis but something of an hysterical polemic that harks back to a mythical Golden Age. Keen is very quick to use perjorative language to indicate his disapproval. For example, it is clear that he actively dislikes Travis Kalanick, the founder of Uber whom he describes as a “hard-core libertarian” who “paced relentlessly around the Failcon stage as if he’d just strode out of an Ayn Rand novel.” The whole book is critical of what he calls disruptive libertarianism and he even takes John Perry Barlow and the Declaration of Independence of Cyberspace as symptomatic of the problem. He says:

“According to Stanford University historian Fred Turner, the Internet borderless idealism, and its ahistorical disdain for hierarchy and authority, especially the tradition role of government, were inherited from the countercultural ideas of Internet pioneers like WELL founder Stewart Brand and the “Declaration of Independence of Cyberspace” author, John Perry Barlow.”

He decries what he calls the “winner take all” approach to the development of Internet startups, is highly critical of the way in which those who, having developed and managed startups to a successful outcome, use the money that they have made through their creativity, entrepreneurship and most of all risk. He overlooks those realities of business. They made it. They took the risk – a risk I might not have been prepared to take in similar circumstances. Surely they can spend it as they wish. For myself, I am unfamiliar with a sense of envy of a person who is better off that I am, nor do I resent them for it, nor seek to acquire that wealth or part of it by some form of “Robin Hood” wealth redistribution process.

Keen uses the demise of Rochester, New York and its once prime employer Kodak as a metaphor for the demise of traditional manufacturing and employment models and lays much of the blame at the feet of on-line startups like Instagram. According to Keen, Kevin Systrom, who had a deep interest in photography, thought about whether there could be an application that enabled users to manipulate photos by the application of filters to give the pictures a warm fuzzy glow or a sepia tinge.

“He spent the rest of the day lying on a hammock, a bottle of Modelo beer sweating by his side, as he typed away on his laptop researching and designing the first Instagram filter.

And so Instagram and its photos – what Systrom, shamelessly appropriating Kodack’s phrase, calls “Instagram moments – were born”

And so Systrom became what Keen prejoratively describes as “a star of the winner takes all economy.”

There are two major themes that underlie Keen’s book. One is that once upon a time – which is how all good fairy stories start – there was a “good time” when everyone was doing well, people were socially responsible, and where people made and sold tangible products like records and clothes and other things. In this golden age there were no great disparities between rich and poor, there was a certain egalitarianism and a relatively even distribution of wealth. He cites the music industry and photography as examples. Indeed when he speaks of Kodak his nostalgic yearning hearkens back to Kodachrome and the song by Paul Simon, but even before the digital era Kodachrome was falling away in the face of colour prints.

The decline of Kodak is probably far too complex to go into here, and I do not think that it was as simple as Keen would like to imagine. In a nutshell, Kodak did not forsee the way in which the digital camera would supplant film. And this is very strange because Kodak in fact invented the first digital camera. But it did not change its business model and by the time it realised what was happening, it was too late.

Keen expresses not concern but loathing for what he describes as the privileged few who are beginning to isolate and cocoon themselves and their communities in unusual buildings and workspaces and who have used their economic power to exclude others from neighbourhoods or beaches. Given his disparagement of the works of Ayn Rand I am surprised he didn’t draw the comparison with John Galt’s impenetrable and hidden mountain community in Atlas Shrugged.

The second theme lies in the solutions Keen proposes. As I have said the book is a polemic but it is not just directed towards the development of Internet based business models like Google, Uber, Instagram, Facebook and the like. Rather it is directed at free enterprise capitalism, successful entrepreneurship and innovation. By the time I was three-quarters of the way through the book I thought I was reading about America in the time of the Rail Barons, Leland Stanford and J.P. Morgan or the oil tycoons like Getty and Rockefeller and the steel magnates like Andrew Carnegie. Indeed, Keen refers to the lessons of history and these very examples. And the solution he poses?  Let the government do something about it. Government approaches are already happening, he says, in the EU with the development of the Right to be Forgotten and examining some of the consequences behind Uber and AirBnB although to be fair I hardly think that a person’s failure to pay tax on the income from a rented room can be laid at the feet of AirBnB.

The answer, he says, is to use the law and regulation to force the Internet out of its prolonged adolescence. He cites examples like the ECHR decision on the responsibility of website owners to police users’ comments, revenge porn laws in England and California and Piketty’s call for a global tax on plutocrats like Mark Zuckerberg or Larry Page. He then goes on to suggest that there are other methods available that do not involve government – in the form of self-regulatory steps like the decision by credit card companies to work with the Police to stop payment to websites that distribute stolen content as well as steps to cut off the flow of advertising revenue to websites profiting from illegal content. No wonder he doesn’t like Ayn Rand. His proposals are the stuff of a libertarian nightmare.

The funny thing is that Keen believes that external controls on the Internet will not undermine innovation, but suggests that future innovation will require partnering with government in areas such as education and healthcare. But the one of the strengths of the digital paradigm has been the quality of permissionless innovation. You don’t need regulatory approval to bolt an application on to the Internet and see if it attracts an audience. Once regulators step in, red tape inevitably follows.

The final theme that Keen develops, and one that he notes has been lacking since Netscape burst on to the scene as the first of many subsequent “killer apps”, is that of social responsibility – another issue with which he runs head to head with the libertarians. The digital elite has to become accountable for the most traumatic socioeconomic disruption since the industrial revolution. Really? That sounds very much like Dr Floyd Ferris, Dr Robert Stadler and Wesley Mouch from Atlas Shrugged.

I have written elsewhere about the issue of paradigm shifts especially in the area of communications technologies but the theory applies in other fields. Disruption is a fact of life. All new technologies have a disruptive effect. Generally their introduction has been a little more gradual than the pace of change that the digital paradigm allows. Who could have forseen urban sprawl, enabled by the motorcar, in the days when cars were “horseless carriages.” What Keen, and to an extent Nicholas Carr who is also something of an Internet dystopianist, fail to understand is the meaning of a quote that he frequently cites. We shape our buildings and thereafter our buildings shape us. Marshall McLuhan modified it a bit – we shape our tools and thereafter our tools shape us. What Keen wants is for the law to run interference on the way that either tools are shaped or the way in which they are going to shape us. Keen also quotes the famous “the medium is the message” but completely fails to undestand what it means – but I won’t go into that here.

I don’t have a quibble with Keen’s values, although they may be based to a large extent on nostalgia. He is quite entitled to hold them, and good luck to him. What I do quibble with is his unwillingness to understand that paradigmatic change is just that. The change will be revolutionary and although it won’t turn the whole world or society upside down it will change it significantly and the change will be dramatic and at times uncomfortable. Keen may seek comfort in his older past and the communitarian values that were formed within the technological context of those times. But change is inevitable and with those changes are going to come changes in behaviours and ultimately in values that underpin our society.

And this brings me to our understanding of broadcasting and TV news and a reflection of attitudes which, while not so expressed with such vitriol as those of Andrew Keen, nevertheless indicate a lack of understanding of paradigmatic change.

An interesting article appeared in the Sunday Star Times on 7 June 2015 entitled “The War on Seriousness” and posed the question “Was the death of Campbell Live the last nail in the coffin of prime time current affairs TV? Or are we on the brink of brave new ways of telling the stories that matter?” The article is an interesting if somewhat nostalgic piece, longing for the heyday or what it calls “serious” television news which has given way to “fluff over substance” observing  “for a decade the internet has been chewing away at the foundations, gobbling up the advertising revenues that sustain New Zealand’s commercial media, and now the foundations seem to be crumbling. ” As Auletta points out, advertising on the Internet is cheaper than on primetime and it can be more targetted too.

The article seems to have ignored the fact first of the plethora of new communications systems and secondly that public expectations of content have changed as a result of these media changes. It may well be that serious journalism is suffering as a result of this, but serious journalism developed in an entirely different paradigm – that of print – and as new methods of communication of information came along – broadcast radio and radio-with-pictures (TV) so too did journalism adapt.

The common feature between newspapers, radio and TV is that they are based on a monolithic one-to-many distribution system that is seriously challenged by the nature of the distributed many-to-many model that underlies the Internet. Even although TV has an impact that cannot be matched by other mainstream media like radio or newspapers I wonder if it is going a bit far to say that it is unmatched by the information distribution system enabled by the Internet. The immediacy in the living room, the ability to see the “whites of the eyes” (a phrase used by Justice Harrison in Aeromotive v Page when commenting on the value of face-to-face cross-examination) is easily available in content other than a main stream TV broadcast and although it is suggested by Paula Penfold of TV3 that TV is accessible, especially free-to-air, especially in primetime, especially on a major channel, such a statement relies on the assumption that in the twenty-first century people actually want to engage with appointment based news transmissions when other methods of acquiring news content at a time that is convenient are available. As Lord Neuberger said when announcing the UK Supreme Court “video on demand” service on 5 May 2015  “Now justice can be seen to be done at a time which suits you.”The same could apply to the consumption of news content.

Peter Thompson, a lecturer in media studies at Victoria University, is quoted in the article as saying:

“There’s a social contract between the state and the public, and it needs to be mediated. We need a fourth estate that holds these people to account. If the news media aren’t able to reflect the society that we live in such that we can identify our issues, moral concerns, political policies, economic policies, we’re impoverished.”

That may be so with a State broadcaster. But I wonder if the proposition overlooks the nature of commercial television, particularly if the channel is other than publicly owned. Thompson goes on to suggest that the government consider a levy on commercial broadcasters (a sort of “polluter pays” principle), a levy on telecom services such as cell phone and broadband fees, a good old-fashioned public licence fee, or other more complex overseas revenue models. Back to the future with a vengeance!! When all else fails bring in the law and the regulators. Andrew Keen would definitely approve.

Some of us remember the bad old days of compulsory licence fees if one owned a television. Given the dire nature of much of the content on free-to-air TV one wonders whether such a fee would be value for money. Perhaps an argument could be mounted that the state has an obligation to fund a free and independent news service under s. 14 of the New Zealand Bill of Rights Act although such an argument might be a bit of a stretch.

I think the problem seems to be how the Fourth Estate should undertake promulgation of information in the public interest in a new paradigm. To mourn the passage of lack of depth in current affairs and the like is to engage in an unhelpful, rear view mirror exercise in nostalgia. There is no entitlement by mainstream news media to a particular model of news dissemination but complaints by media pundits would suggest that it is so. Rather, news media should look for new opportunities that new communications technologies present. There can be no place for sclerotic communications systems in the face of continuing dynamic, disruptive and transformative change. One should recall (and I don’t want to sound like a determinist but it is hard not to) in this time of revolution and evolution of communications systems, the comment of the Borg –  “resistance is futile”.

Big Data and Implications for Information Governance and E-Discovery

This is a paper that I presented at the Singapore Academy of Law Technology Law Conference 2015: The Future of Money and Data.

It examines the phenomenon of Big Data and the contribution that will be made to that data by the Internet of Things. It is suggested that an understanding of Big Data will provide businesses and organisations with significant opportunities to use informational datasets in many aspects of their activities.  A significant contributor to already existing Big Data datasets will be the Internet of Things (IoT) allowing for information gathering on a hitherto unprecedented scale. The proper management of this data to make it meaningful and useful for an organisation is the purpose of Information Governance. It is argued that Information Governance is an essential business strategy that not only enables a business to use data effectively but also lays a significant preparatory foundation for compliance with e-discovery obligations in the event of litigation. It is suggested that rather than being viewed as a discrete process, e-discovery should be seen as a part of an overall Information Governance strategy.

The full paper can be seen here:

Information Governance and E-Discovery

In May of 2015 I had the pleasure and honour of sharing the stage with Chief Magistrate Judge Elizabeth Laporte at the IQPC 10th Anniversay Information Governance and eDiscovery Summit held at the Waldorf Hilton in London. The session was chaired by Chris Dale of the excellent and continually informative Edisclosure Information Project and addressed the Global Impact of eDiscovery and Information Governance within the context of data collection for cross border cases.

The session was allocated a generous ninety minutes of Conference time, starting shortly after 9:00 pm. This enabled the presenters to make a brief presentation on issues that appeared to be relevant to the general topic. My presentation addressed common themes present in the e-discovery regimes in the APAC region – Australia, Singapore, Hong Kong and New Zealand.

Following the presentations Chris led a discussion that covered a wide range of discovery and disclosure issues. The approach of the US Courts recently exemplified by the case of In the Matter of a Warrant to Search a Certain E-mail Account Controlled and Maintained by Microsoft (District Court SDNY M9-150/13-MJ-2814 29 August 2014 Judge Preska).

One of the common themes emerging from this discussion was that although a local court may purport to exercise “long arm” jurisdiction in the case of content located off-shore, compliance with local data disclosure requirements may come into play, rendering the disclosing party liable to possible sanctions if compliance is not forthcoming.

Another issue that we discussed was that of the need for lawyers to understand and appreciate the way in which technology is used in developing areas of law and in the ediscovery field in particular. In the United States an understanding of technology is a pre-requisite for competence to practice in some areas and as we move further and deeper into the Digital Paradigm, I consider this to be an absolute necessity. Not only lawyers. More and more cases involve aspects of technology either as the subject matter of the dispute or as an aspect of the evidence that is place before the Court. It is essential that Judges have a working knowledge of some of the more common information technologies. This is something of a contentious issue for there is a school of thought that suggests that judicial understanding of technology can be reached per medium of expert evidence. That proposition may have a limited degree of validity in the case of the subtle aspects of the workings of the technology, but should not extend to ocnstant and repetitious explanations of the general way which a packet switching network operates, or the nature of email metadata and how it operates.

The Conference was a valuable one. The sessions were extremely interesting and highly relevant, all of them presented by experts in the field. I am grateful to the organisers for inviting me and to Chris Dale for his excellent Chairmanship of our session and his insightful discussion management.

I prepared a paper for the Conference delegates and a copy is available on Scribd or may be perused here.

TV Content Delivery – Collisions in the Digital Paradigm VI

This article has been posted before but I have updated it in light of subsequent events like the settlement of the Global Plus Case. I had occasion to recall it as a result of a very interesting session at Nethui on 10 July about – you guessed it – copyright.

I have blogged before on the problems of market segmentation and regionalisation of content – especially in the context of access to downloadable content. Like many I am of the view that the Digital Paradigm has swept away many of the preconceptions that may once have existed about the distribution of music and video content. As services become available, more and more people are eschewing the covert downloading of material and opting for a paid service. Netflix is an example. Even so, some content distributors just haven’t got it right.

Take Television New Zealand and TV3 for example. They boast an “On-Demand Service” that really is not very satisfactory at all. All the content is available for a short term only and then it vanishes. The opportunity to watch a whole series of “back to back” episodes is just not available. To make matters worse, some of the content, such as “American Crime” is not available on “free to air” TV thus making it impossible to time shift using MySky and watching an episode or a number of episodes at a convenient time. Rather like broadcast TV, if you can’t make it in front of a screen when the network is prepared to make the content available, you miss out. To make matters even worse, if one is travelling within the “window of opportunity” that the networks allow us to view an episode or episodes, regional blocking means that the content is “not available” in the US, UK or the Continent and who wants to go through the proxy or VPN hassle when one is travelling. Hardly a satisfactory way of delivering content in a Global environment.

I understand that broadcast and screening rights are governed by licensing arrangements and it seems to me that these licensing arrangements contribute to the market segmentation-regionalisation problem. One would have thought that when Netflix arrived in New Zealand one of its big selling points would be the third series of “House of Cards”. But no. Netflix in New Zealand doesn’t have the rights. Nor, it would seem, does anyone else. Astonishing!

There are some that I know who resolve this problem by anonymisation or VPN and take out subscriptions to US based content providers like Hulu or Netflix. All perfectly legal (up to a point) in that the fees have been paid and there is no suggestion of downloading content for free via bit torrent. The only issue is a contractual one – misrepresentations have been made as to location. Yet no one loses, especially when the content (like “House of Cards Series 3) is simply not available in New Zealand.

The networks have put in place other measures to discourage piracy. Broadcast series like “The Walking Dead”, “Arrow” and “Game of Thrones” are broadcast simultaneously in New Zealand – whether this is to prevent piracy by downlaoding or to prevent fans from seeing “spoilers” on their Twitter feeds or Facebook pages I know not – there is already a spoiler out for “Game of Thrones” – a book in fact, but it is rather large and requires a considerable attention span not possessed of many in these days of instant on-line gratification.

But what has happened in recent times is a further move to cement in market segmentation and regionalisation of content delivery. Internet service providers who have made a “global” option available so that their subscribers can view overseas content via Hulu are in the firing line from the major players in the content delivery field in New Zealand. Lets just say that the legal position is an interesting one and will provide lawyers with some novel arguments in the area of copyright and copyright licensing. For those who desire certainty in the law, the fact that the case settled is a irritating

But to what avail. Should the major players be successful they will have shut down one way by which Digital Natives get their content. In the spirit of Michael Froomkin’s concept of regulatory arbitrage, those who seek content will find it via VPN or other anonymisation techniques. Perhaps it is time for the majors to realise that old style market segmentation and content delivery methods have had their day. Digital delivery has been adopted by most, but still with the tattered trappings of pre-digital thinking. A global approach to content delivery  should be adopted, together with a more meaningful local “on-demand” business model. All that is required is a shift in thinking.

The Ghost of Copyright Past – Collisions in the Digital Paradigm V

It is not too often that I have a personal experience of a Collision in the Digital Paradigm where the law becomes head to head with technological reality, but the following post is inspired by a recent occurrence.

When we were in London in late 2014 we saw a number of shows. We were spoilt for choice but one we wanted to see – and had missed on earlier occasions – was “Jersey Boys”, the musical about the Four Seasons. The experience in London was a good one. We walked from where we were staying at the East India Club to the heart of Piccadilly, had a quick meal and then on to the show. It was great – well staged, well acted, very slick and professional as one would expect. And then there was the music. That was always great but there is something extra special about hearing Sixties music with the sound technology that is available today. Other experiences include the music of the Beatles, remixed and remastered for the Cirque du Soleil show “Love” and the music of Elvis again for Cirque du Soleil’s “Viva Elvis”.  Those opening chords of “Jailhouse Rock” never sounded better. Both shows, incidentally, were at Las Vegas. But back to “Jersey Boys”. I missed the movie was well, so I was delighted to see that it was available on Bluray and DVD.

Time for a rewind. I have rather eclectic tastes in movies and have taken advantage of the DVD revolution (which would never have happened had the movie companies not been forced into the new market model of VHS [and subsequently DVD) as a result of format shifting and the case of Sony Corp of America v Universal City Studios 464 US 417 (1984)) to build up a collection. I encountered early problems with region coding. Many of the movies I wanted were not available in our Region 4 part of the world. It was necessary to obtain a region free DVD player or a software workaround for the DVD player on my computer to view DVDs sourced from Region 1 or 2 outlets. I had some concerns. The state of the law under our s.226 of the Copyright Act 1994 seemed to be ambivalent about circumventing technological protection measures like region coding where there were no infringement implications and the copy of the DVD had been legitimately acquired. There was a frisson of concern when the decision in Sony Computer Entertainment v Ball [2004] EWHC 1738 (Ch) was released with the suggestion in that case that content owners could set their own terms and conditions of sale of their product in addition to the statutory scheme of copyright – essentially allowing for copyright by contract. But as long as there was no copying there was no question of infringement.

With the passage of time more and more region-free DVD players became available and it seemed that distributor based market segmentation and regionalised markets were on the way out. Then along came Bluray and an even more rigorous form of region coding was instituted. Bluray players were not region free. And this was the position for a while. It was about 2102 that I heard of a region free Bluray player that was available in New Zealand, but it was pretty expensive. On the other hand it had a whole lot a features that made it very attractive. In addition, there were models available for a fraction of the cost of the NZ product but these could not be shipped to addresses outside the US. Fortunately NZ Post with its wonderful Youshop service with the provision of a US mailing address came to the rescue so welcome region free Bluray and DVD player with all sorts of additional goodies like 3D. The Bluray market became open slather.

And what about those copyright concerns. As a result of the 2008 amendments to the Copyright Act the definition of a technological protection measure does not include a device that controls access to a work for non-infringing purposes (for example, it does not include a process, treatment, mechanism, device, or system to the extent that it controls geographic market segmentation by preventing the playback in New Zealand of a non-infringing copy of a work) – see section 226 Copyright Act 1994. So circumventing access control mechanisms with  geographic implications – like region coding – is not viewed as any form of prohibited or infringing conduct. Thus, to circumvent a Region 1 (or A on Bluray) legitimately acquired disc to allow it to be viewed had no unlawful elements to it.

So back to the “Jersey Boys”. Having missed the movie and having enjoyed the stage show I purchased a Bluray version of the movie from Amazon. I addition to enjoying the show I was interested to see how Clint Eastwood made the transition from stage to screen. He is a fine director with some great credits. And the Bluray arrived. And inside was a little leaflet allowing me to add the movie to a Digital HD collection with Ultraviolet. This service, associated with an online retailer like Flixter enables access to movies in the collection on a number of devices. An advantage is that if one has a device like Chromecast a movie can be streamed via a computer or laptop and viewed on a TV screen. Great service and Chromecast is a great technology.

There is the leaflet with the code so that I can add “Jersey Boys” to my collection. I go to the Flixter site and enter the code, only to receive the message that the code is not valid for my region or territory. Once again it seems that region coding and market segmentation has hit the streaming video market. I am aware that this is a characteristic  or on-line content. Hulu and Netflix are available only to certain defined and regionally segmented IP addresses but it seemed to me that a legitimately acquired Bluray – that incidentally has NO region coding that was associated with an Ultraviolet code SHOULD be available world wide. I checked the fine print. Although I had obtained the copy from Amazon, there was a bold notice that the DVD was not for sale outside the USA or Canada. However, there was nothing on the Ultraviolet slip inside the case that suggested that the code was only valid for use inside the US or Canada.

I have always had difficulty with the idea of market segmentation. I have never supported the concept that content purchased from a particular geographical market could only be consumed within that geographical area. After all, a paperback book purchased in the US does not become “unreadable” as the plane leaves LAX. Why should DVDs or Blurays or Digital content be any different. The Internet has made markets global. The vendor from a suburb in Auckland who does business via the Web has a worldwide market – not just a local one. Similarly with those who sell and distribute on-line content. But the problem is that those most resistant to change in the Digital Paradigm are those who can benefit the most from it.

Why do I say that? Remember the case to which I referred earlier – Sony v Universal City Studios. That was a case where Sony, the developer of the Betamax videorecorder, sought relief from the US Supreme Court against the movie studios who sought to have the videorecorder banned because it was used for copyright infringement. Not so, held the USSC. There were substantial non-infringing uses, among them the concept of time shifting where one might record a show for viewing at a later time without engaging in infringement. The movie companies retired in disorder and then realised that the technology that they had tried to shut down could be used as an alternative means of movie distribution. In addition it meant that the back catalogue of the studios could be redistributed. This business model would have been lost if the Betamax case had been resolved in their favour. So the content distrbutors were – and to a degree still are – dragged kicking and screaming into the new Paradigm. DVD technology then replaced the videocasette and Bluray and streaming content will replace the DVD. But geographic segmentation remains the same – the ghost of copyright past.

When DVDs and digital content were in their early days, technological protection measures to guard against the wholesale copying of content were proposed. As Charles Clark said “the answer to the machine is in the machine”. In the same way there are work arounds to geographical restrictions – not only for region coded DVDs but also for streaming content. The legitimacy of such work arounds depends very much upon local law and the terms and conditions applicable to the product purchased.

It is not necessary to purchase the DVD or Bluray product to obtain the Ultra codes to add downloadable content to one’s library. Ultra codes are available for sale that allow this to be done. Once again the purchase of the code means that there are no infringement implications. So how does one avoid the “market segmentation” implications. As I say this depends on local law, but assuming that local law does not prohibit such workarounds, the use of a browser based anonymisation solution is probably the easiest and most user friendly way. Anonymox  is available both for Firefox and Chrome. The Firefox plugin works more effectively than the Chrome one, not the least because it showed the IP number and geographical location in the browser bar. But I emphasise, such a solution depends upon local law. It is not an offence in New Zealand to circumvent a TPM and a TPM does not include a device in place for market segmentation where the product has been legitimately acquired (although there may be contract implications). It is an offence under US law to circumvent a TPM. So one must be careful to comply with the law.

It is unfortunate that content owners are slow to recognise the new opportunities provided by the Digital Paradigm. It is unfortunate that content has not, until recently, been made available world-wide. This belated recognition now means that popular TV shows in the US are available within 24 hours of broadcast in the US – shows like “The Walking Dead”, “Arrow” “The Blacklist” and “Game of Thrones” come to mind. And what drove this? Piracy and content sharing. The content owners were reactive rather than proactive. And one can only wonder how long it will be before content owners wake up to the global market and get rid of this ridiculous hangover of region coding and market segmentation. It may have been understandable before the Internet Revolution. It has little if any relevance now.

But perhaps content owners prefer to adopt the well-known quote from Jean-Baptist Alphonse Karr – “plus ca change, plus c’est la meme chose.”