Facebook and the Printing Press

A recent article in the New Zealand Herald cites historian Niall Ferguson as drawing comparisons between the early days of the printing press and the current free wheeling Digital Paradigm. The argument is that we should learn from the lessons of history

There is no comparison between the technologies.

To suggest that the printing press enjoyed the “permissionless innovation” afforded by internet and digital technologies ignores that fact that in England the press was under the control of the Stationers Guild (later Company after 1556) who licensed what printers could print and kept a very close eye on what printers did. Indeed, their control was such that only the Universities of Oxford and Cambridge were the sites of presses outside of London.
Then there was state regulation of printing that took a number of forms. The Royal Stationer – later the Royal Printer – was responsible for printing the King’s view on things – statutes, proclamations and other such. Thomas Cromwell used the press to great effect during the English Reformation. It was he who used preambles in Statutes to identify the “mischief” that the statute was intended to remedy.
After the incorporation of the Stationers (during the reign of Mary I) it was anticipated that the Company would aid the State using its newly granted search powers to root out the printers of heretical tracts. However the power was deployed to root out unlicensed printers who were not members of the Stationers.
There were also many other efforts by the State to regulate content, some more successful than others. The Star Chamber Decrees of 1587 and 1634 were rather dramatic examples. The Decrees were in fact judgments of the Court in cases involving printing disputes.
Just prior to the Civil War that power of Star Chamber was nullified and printers enjoyed considerable freedom and lack of regulation but it did not last once Oliver Cromwell and the Puritans gathered strength.
After the Restoration there was significant regulation both of printers and the content of the Press by means of Licensing Acts the first of which was in 1662 and which was renewed regularly thereafter until 1694. Charles II’s enforcer as far as print was concerned was a phanatick (to use the spelling adopted by Neal Stephenson in his Baroque Quartet) by the name of Roger L’Estrange – a very nasty piece of work both by the standards of his time and ours.
In 1694 the Licensing Acts came to an end, primarily as a result of political strife within a greater context, and until 1710 there was a lack of restriction on printing. This all changed when the focus moved from the printer to the author who should have control of content and the Statute of Anne was the first Copyright Act.
So to say that there is a parallel between Silicon Valley’s freedom to develop platforms and bolt them on to the Internet and the early history of the printing press is wrong. Indeed, the whole structure of the communications technologies is different. The printing press was the technology and essentially books, magazines, pamphlets and papers were the medium. Today the Internet is the communications technology and Facebook, Twitter, blogs etc etc are platforms bolted on to it. The absence of red tape (what I call permissionless innovation) is what has enabled the growth of the Internet and the proliferation of platforms.
The call is for regulation, but regulation of what. Better to have a regulatory plan in place that we can discuss rather than disembodied pleas to “do something”. Perhaps we could turn to history but I think we have moved on from the semi-absolutist model of the Tudors and Stuarts.
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Fearing Technology Giants

On 15 January 2018 opinion writer Deborah Hill Cone penned a piece entitled “Why tech giants need a kick in the software”

Not a lot of it is very original and echoes many of the arguments in Jonathan Taplin’s “Move Fast and Break Things.” I have already critiqued some of Taplin’s propositions in my earlier post Misunderstanding the Internet . Over the Christmas break I revisited Mr. Taplin’s book. It is certainly not a work of scholarship, rather it is a perjorative filled polemic that in essence calls for regulation of Internet platforms to preserve certain business and economic models that are challenged by the new paradigm. Mr. Taplin comes from a background of involvement primarily in the music industry and the realities of the digital paradigm have hit that industry very hard. But, as was the case with the film industry, music took an inordinate amount of time to adapt to the new paradigm and develop new business models. It seems that is now happening with iTunes and Spotify and the movie industry seems to have recognised other models of online distribution such as Netflix, Hulu and other on-demand streaming services.

For Mr. Taplin these new business models are not enough. His argument is that artists should have an expectation that they should draw the same level of income that they enjoyed in the pre-digital age. And that ignores the fact that the whole paradigm has changed.

But Mr. Taplin directs most of his argument against the Internet giants – Facebook, Google, Amazon and the like and singles out their creators and financiers as members of a libertarian conspiracy dedicated to eliminating competition – although to conflate monopolism with libertarianism has its own problems.

Much of Mr. Taplin’s argument uses labels and generalisations which do not stand up to scrutiny. For example he frequently cites one of the philosophical foundations for the direction travelled by the Internet Giants as Ayn Rand whom he describes as a libertarian. In fact Ms. Rand’s philosophy was that of objectivism rather than libertarianism. Indeed, libertarianism has its own subsets. In using the term does Mr. Taplin refer to Thomas Jefferson’s flavour of libertarianism or that advocated by John Stuart Mill in his classic “On Liberty”?  It is difficult to say.

Another problem for Mr Taplin is his brief discussion on the right to be forgotten He says (at page 98) “In Europe, Google continues to challenge the “right to be forgotten” – customers’ ability to eliminate false articles written about them from Google’s search engine.” (The emphasis is mine).

The Google Spain Case which gave rise the the right to be forgotten discussion was not a case about a false article or false information. In fact the article that Sr Costeja-Gonzales wished to deindex was true. It was an advertisement regarding his financial that was published in La Vanguardia newspaper in Barcelona some years before. The reason why deindexing was sought was because the article was no longer relevant to Sr Consteja-Gonzales improved fortunes. To characterise the desire by Google to resist attempts to remove false information misunderstands the nuances of the right to be forgotten.

One thing is clear. Mr. Taplin wants regulation and the nature of the regulation that he seeks is considerable and of such a nature that it might stifle much of the stimulus to creativity that the Internet allows. I have already discussed some of these concepts in other posts but in summary there must be an understanding not of the content that is delivered via Internet platforms but rather of the underlying properties or affordances of digital technologies.

One of these is the fact that digital technologies cannot operate without copying. From the moment a user switches on a computer or a digital device to the moment that device is shut down, copying takes place. Quite simply, the device won’t work without copying. This is a challenge to concepts of intellectual property that developed after the first information technology – the printing press. The press allowed for mechanised copying and challenged the earlier manual copying processes that characterised the scribal paradigm of information communication.

Now we have a digital system that challenges the assumptions that content “owners” have had about control of their product. And the digital horse has bolted and a new paradigm is in place that has altered behaviours, attitudes, expectations and values surrounding information. And can regulation hold back the flood? One need only look at the file sharing provisions of the Copyright Act 1994 in New Zealand. These provisions were put in place, as the name suggests, to combat file sharing. They are now out of date and were little used when introduced. Technology has overtaken them. The provisions were used sporadically by the music industry and, despite extensive lobbying, not at all by the movie industry.

Two other affordances that underlie digital technologies are linked. The first is that of permissionless innovation which is interlinked with the second – continuing disruptive change.  Indeed it could be argued that permissionless innovation is what drives continuing disruptive change.

Permissionless innovation is the quality that allows entrepreneurs, developers and programmers to develop protocols using standards that are available and that have been provided by Internet developers to “bolt‑on” a new utility to the Internet.

Thus we see the rise of Tim Berners-Lee’s World Wide Web which, in the minds of many, represents the Internet as a whole.  Permissionless innovation enabled Shawn Fanning to develop Napster; Larry Page and Sergey Brin to develop Google; Mark Zuckerberg to develop Facebook and Jack Dorsey, Evan Williams, Biz Stone and Noah Glass to develop Twitter along with dozens of other utilities and business models that proliferate the Internet.  There is no need to seek permission to develop these utilities.  Using the theory “if you build it, they will come”[1] new means of communicating information are made available on the Internet.  Some succeed but many fail[2].  No regulatory criteria need to be met other than that the particular utility complies with basic Internet standards.

What permissionless innovation does allow is a constantly developing system of communication tools that change in sophistication and the various levels of utility that they enable.  It is also important to recognize that permissionless innovation underlies changing means of content delivery.

So are these the aspects of the Internet and its associated platforms that are to be regulated? If the Internet Giants are to be reined in the affordances of the Internet that give them sustenance must be denied them. But in doing that, it may well be that the advantages of the Internet may be lost. So the answer I would give to Mr Taplin is to be careful what you wish for.

This rather long introduction leads me to a consideration of Ms. Hill Cone’s slightly less detailed analysis that nevertheless seizes upon Mr Taplin’s themes. Her list of “things to loathe” follow along with some of my own observations

1.) These companies (Apple, Alphabet, Facebook, Amazon) have simply been allowed to get unhealthily large and dominant with barely any checks or balances. The tech firms are more powerful than the telco AT&T ever was, yet regulators do nothing (AT&T was split up). In this country the Commerce Commission spent millions fighting to stop one firm, NZME (publisher of the New Zealand Herald) from merging with another Fairfax (Now called Stuff), a sideshow, while they appear stubbornly uninterested in tackling the real media dominance battle: how Facebook broke the media. I know we’re just little old New Zealand, but we still have sovereignty over our nation, surely? [Commerce Commission chairman] Mark Berry? Can’t you do something? The EU at least managed to fine Google a couple of lazy bill.

Taplin deals with this argument in an extensive analysis of the way in which antitrust law in the United States has become somewhat toothless. He attributes this to the teachings of Robert Bork and the Chicago School of law and economics.

Ms Hill Cones critique suggests that there is something wrong with large corporate conglomerates and that simply because something has become too big it must be bad and therefore should be regulated rather than identifying a particular mischief and then deciding whether regulation is necessary – and I emphasise the word necessary.

2.) Some of these tech companies have got richer and richer exploiting the creative content of writers and artists who create things of real value and who can no longer earn a living from doing so.

This is straight out of the Taplin playbook which I have discussed above. I don’t think its has been suggested that artists are not earning. They are – perhaps not to the level that they used to and perhaps not from sales of remuneration from Spotify tracks. But what Taplin points out – and this is how paradigmatic change drives behavioural change – is that artists are moving back to live performance to earn an income. Gone are the days when the artist could rely on recorded performances. So Ms Hill Cone’s critique may be partially correct as it applies to the earlier expectation of making an income.

3.) Mark Zuckerberg’s mea culpa, announced in the last few days that Facebook is going to focus on what he called “meaningful interaction”, is like a drug dealer offering a cut-down dose of its drug, hoping addicts won’t give up the drug completely. Even Zuckerberg’s former mentor, investor Robert McNamee said in the Guardian that all Zuckerberg is doing is deflecting criticism and leaving users “in peril.”

The perjorative analogy of the drug dealer ignores the fact that no one is required to sign up to Facebook. It is, after all, a choice. And in some respects, Zuckerberg’s announcement is an example of continuing disruptive change that affects Internet Giants as much as it does a startup.

4.) These companies have created technology and thrown it out there, without any sense of responsibility for its potential impact. It’s time for them to be held accountable. Last week Jana Partners, a Wall Street investment firm, wrote to Apple pushing it to look at its products’ health effects, especially on children. Even Facebook founder Sean Parker has recently admitted “God knows what [technology) is doing to our children’s brains.”

The target here is that of permissionless innovation. Upon what basis is it necessary to regulate permissionless innovation. Or does Ms Hill Cone wish to wrap up the Internet with regulatory red tape. Aa far as the effects of social media are concern, I think what worries may digital immigrants and indeed digital deniers is that all social media does is to enable communication – which is what people do. It is an alternative to face to face, telephone, snail mail, email, smoke signals etc. We need to accept that new technologies drive behavioural change.

5.) While it’s funny when the bong-sucking entrepreneur Erlich Bachman says in the HBO comedy Silicon Valley: “We’re walking in there with three foot c**ks covered in Elvis dust!” in reality, many of these firms have a repugnant, arrogant and ignorant culture. In the upcoming Vanity Fair story “Oh. My god, this is so f***ed up: inside Silicon Valley’s secretive orgiastic dark side” insiders talked about the creepy tech parties in which young women are exploited and harassed by tech guys who are still making up for getting bullied at school. (Just as bad, they use the revolting term “cuddle puddles”) The romantic image of scrappy, visionary nerds inventing the future in a garage has evolved into a culture of entitled frat boys behaving badly. “Too much swagger and not enough self-awareness,” as one investor said.

I somehow don’t think that the bad behaviours described here is limited to tech companies. I am sure that in her days as a business journalist (and a very good one too) Ms Hill Cone saw examples of the behaviours she condemns in any number of enterprises.

6.) These giant companies suck millions in profits out of our country but do little to participate as good corporate citizens. If they even have an office here at all, it is tiny. And don’t get started on how much tax they pay. A few years ago Google’s New Zealand operation consisted of three people who would fly back and forth from Sydney to manage sales over here. Apparently, Apple has opened a Wellington office and lured “several employees” from Weta Digital. But there is little transparency about how or where these companies do business or how to hold them accountable. There is no local number to call, there is no local door to knock on. And don’t hold your breath that our children might get good jobs working for any of these corporations.

This criticism goes to the tax problem and probably has underneath it a much larger debate about the purposes and morality of the tax system. The classic statement, since modified, is stated in the case of Inland Revenue Commissioners v Duke of Westminster [1936] AC 1 where it was stated:

“Every man is entitled if he can to order his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure this result, then, however unappreciative the Commissioners of Inland Revenue or his fellow tax-payers may be of his ingenuity, he cannot be compelled to pay an increased tax.”

There can be no doubt that the tax laws will be changed to close the loophole that exists whereby the relationship between the income derived by Google and Apple from their NZ activites will be subject to NZ tax. But Ms Hill Cone goes further and suggests that these companies should have a physical presence – a local door to knock on. This is the digital paradigm. It is no longer necessary to have a suite of offices in a CBD building paying rent.

7.) Mark Zuckerberg preaches that Facebook’s mission is to connect people. But Johann Hari’s new book Lost Connections: Uncovering the real causes of depression and the unexpected solutions, out this week, provides convincing evidence that in the digital age people are more lonely than ever. Hari argues the very companies which are trying to “fix” loneliness – Facebook, for example – are the ones which have made people feel more disconnected and depressed in the first place.

The book cited by Ms Cone is by a journalist writing about depression. Apparently the diagnosis for hsi depression was supposedly from a chemical imbalance in his brain whereas he discovered after investigating some of the social science evidence that depression and anxiety are caused by key problems with the way that we live. He uncovered nine causes of depression and anxiety and offers seven solutions to the problems. Much of the book is about the author and the problems that he had with the treatment he received. His book is as much a critique of the pharmaceutical industry as much as anything. It is described in the Guardian as a flawed study.  Certainly it cannot be said that Hari’s argument is directed towards the suggestion that social media platforms are causative of depression.

8.) Is all this technology really making the world a better place? At this week’s CES (Consumer Electronics Show) in Las Vegas some of the innovations were positive but a lot of them were really, quite dumb. Do you really need a robot that will fold your laundry or a suitcase that will follow you? Or a virtual reality headset that will make you feel like you are flying on a dinosaur (Okay, maybe that one would be fun.)

Point taken. A lot of inventions are not going to make the world a better place. On the other hand many do. Think Thomas Alva Edison and then think about the Edsel motor vehicle. Ms Hill Cone accepts that some of the innovations were positive and the positive ones will probably survive the “Dragon’s Den” of funding rounds and the market.

These eight points were advanced by Ms Hill Cone as reasons why tech companies should get their comeuppance as she puts it. It is difficult to decide whether the article is merely a rant or a restatement of some deeper concerns about Tech Giants. If it should be the latter there should be more thorough analysis. But unless it is absolutely necessary and identifies and addresses a particular mischief in my view regulation is not the answer.

But Ms Hill-Cone is not alone. Later in January a significant beneficiary of Silicon Valley, Marc Benioff compares the crisis of trust facing tech giants to the financial crisis of a decade ago. He suggest that Google, Facebook and other dominant forms pose a threat and he made these comments at the World Economic Forum in Davos. He suggested that what is needed is more regulation and his call was backed by Sir Martin Sorrell who suggested that Apple, Facebook, Amazon, Google, Microsoft, and China’s Alibaba and Tencent had become too big. Sir Martin compared Amazon founder Jeff Bezos to a modern John D. Rockefeller.

One of the suggestions by Sir Martin was that Google and Facebook were media companies, echoing concerns that had been expressed by Rupert Murdoch. The argument is that as the Internet Giants get bigger, it is not a fair fight. And then, of course, there were the criticisms that the Internet Giants had become so big that they were unaware of the nefarious use of their services by those who would spread fake news.

George Soros added his voice to the calls for regulation in two pieces here and here. At the Davos forum he suggested that Facebook and Google have become “obstacles to innovation” and are a “menace” to society whose “days are numbered”. As mining companies exploited the physical environment, so social media companies exploited the social environment.

“This is particularly nefarious because social media companies influence how people think and behave without them even being aware of it. This has far-reaching adverse consequences on the functioning of democracy, particularly on the integrity of elections.”

In addition to skewing democracy, social media companies “deceive their users by manipulating their attention and directing it towards their own commercial purposes” and “deliberately engineer addiction to the services they provide”. The latter, he said, “can be very harmful, particularly for adolescents”.

He considers that the Internet Giants are unlikely to change without regulation. He compared social media companies to casinos, accusing them of deceiving users “by manipulating their attention” and “deliberately engineering addiction” to their services, arguing that they should be broken up. The basis for following a model that was applied in the break up of AT & T Soros suggested that the fact that the Internet Giants are near-monopoly distributors makes them public utilities and should subject them to more stringent regulation, aimed at preserving competition, innovation and fair and open access.

Soros pointed to steps that had been taken in Europe where he described regulators as more farsighted than those in the US when it comes to social policies, referring to the work done by EU Competition Commissioner Margrethe Vestager, who hit Google with a 2.4 billion euro fine ($3 billion) in 2017 after the search giant was found in violation of antitrust rules.

Even more recently, in light of the indictments proferred by Spevial Prosecutor Mueller against a number of Russians who attempted to interfere with the US election of 2016 and who used social media to do so, a call has gone up to regulate social media so that this does not happen again. Of course that is a knee jerk reaction that seems to forget the rights of freedom of expression enshrined in both international convention and domestic legislation and the First Amendment to the US Constitution which protects freedom of speech and where political speech is given the highest level of protection in subsequent cases. But nevertheless, the call goes out to regulate.

Facebook has responded to these concerns by reducing the news feeds that may be provided and more recently in New Zealand Google has restructured its tax arrangements. Both of these steps represent a response by the Internet Giants to public concern – perhaps an indication of a willingness to self-regulate

The urge to regulate is a strong one especially on the part of those who favour the status quo. There can be little doubt that ultimately what is sought is control of the digital environment. The content deliverers like Facebook and Google will be first, but thereafter the architecture – the delivery system that is the Internet that must be free and open – will increasingly come under a form of regulatory control that will have little to do with operational efficiency.

Of course, content is a low-hanging fruit. Marshall McLuhan recognised that when he called the “content” of a medium is like the juicy piece of meat carried by the burglar to distract the watchdog of the mind.” I doubt very much that content is the real target. Nicholas Sarkozy called for regulation of the Internet in 2012 so that urge to regulate is not new by any means.

At the risk of being labelled a technological determinist, I suggest that trying to impose regulatory structures that preserve the status quo inhibits innovation and creativity as much if not more than the suggestion that such an outcome will happen if we leave the Internet Giants alone. Rather I suggest that we should recognise that the changes that are being wrought are paradigmatic. There will be a transformation of the way in which we use communication systems after the current disruption that is being experienced. That means that what comes out the other end may not be immediately recognisable to those of us whose values and predispositions were formed during the analog or pre-digital paradigm.

On the other hand those who reject technological determinism still recognise the inevitability of change. Mark Kurlansky in his excellent book “Paper: Paging through history” argues that technologies have arisen to meet societal needs. It is futile to denounce the technology itself. Rather you have to change the operation of society for which the technology was created.  For every new technology there are detractors, those who see the new invention destroying everything that is good in the old.

To suggest that regulation will preserve the present – if indeed it is worth preserving – is rear view mirror thinking at its worst. Rather we should be looking at the opportunities and advantages that the new paradigm presents. And this isn’t going to be done by wishing for a world that used to be, because that is what regulation will do – it will freeze the inevitable development of the new paradigm.

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[1] In fact a misquote that has fallen into common usage from the movie Field of Dreams (Director and Screenplay by Phil Alden Robinson 1989). The correct quote is “If you build it he will come” (my emphasis) http://www.imdb.com/title/tt0097351/quotes (last accessed 3 February 2015).

[2] See for example  Andrew Keen The Internet is Not the Answer (Atlantic Books, London 2015)

Memory Illusions and Cybernannies

A while back I read a couple of very interesting books. One was Dr Julia Shaw’s The Memory Illusion. Dr. Shaw describes herself as a “memory hacker” and has a You Tube presence where she explains a number of the issues that arise in her book.

The other book was The Cyber Effect by Dr Mary Aiken who reminds us on a number of occasions in every chapter that she is a trained cyberpsychologist and cyberbehavioural specialist and who was a consultant for CSI-Cyber which, having watched a few episodes, I abandoned. Regrettably I don’t see that qualification as a recommendation, but that is a subjective view and I put it to one side.

Both books were fascinating. Julia Shaw’s book in my view should be required reading for lawyers and judges. We place a considerable amount of emphasis upon memory assisted by the way in which a witness presents him or herself -what we call demeanour. Demeanour has been well and truly discredited by Robert Fisher QC in an article entitled “The Demeanour Fallacy” [2014] NZ Law Review 575. The issue has already been covered by  Chris Gallavin in a piece entitled “Demeanour Evidence as the backbone of the adversarial process” Lawtalk Issue 834 14 March 2014 http://www.lawsociety.org.nz/lawtalk/issue-837/demeanour-evidence-as-the-backbone-of-the-adversarial-process

A careful reading of The Memory Illusion is rewarding although worrisome. The chapter on false memories, evidence and the way in which investigators may conclude that “where there is smoke there is fire” along with suggestive interviewing techniques is quite disturbing and horrifying at times.

But the book is more than that, although the chapter on false memories, particularly the discussions about memory retrieval techniques, was very interesting. The book examines the nature of memory and how memories develop and shift over time, often in a deceptive way. The book also emphasises how the power of suggestion can influence memory. What does this mean – that everyone is a liar to some degree? Of course not. A liar is a person who tells a falsehood knowing it to be false. Slippery memory, as Sir Edward Coke described it, means that what we are saying we believe to be true even although, objectively it is not.

A skilful cross-examiner knows how to work on memory and highlight its fallibility. If the lawyer can get the witness in a criminal trial to acknowledge that he or she cannot be sure, the battle is pretty well won. But even the most skilful cross-examiner will benefit from a reading of The Memory Illusion. It will add a number of additional arrows to the forensic armoury. For me the book emphasises the risks of determining criminal liability on memory or recalled facts alone. A healthy amount of scepticism and a reluctance to take an account simply and uncritically at face value is a lessor I draw from the book.

The Cyber Effect is about how technology is changing human behaviour. Although Dr Aiken starts out by stating the advantages of the Internet and new communications technologies, I fear that within a few pages the problems start with the suggestion that cyberspace is an actual place. Although Dr Aiken answers unequivocally in the affirmative it clearly is not. I am not sure that it would be helpful to try and define cyberspace – it is many things to many people. The term was coined by William Gibson in his astonishingly insightful Neuromancer and in subsequent books Gibson imagines the network (I use the term generically) as a place. But it isn’t. The Internet is no more and no less than a transport system to which a number of platforms and applications have been bolted. Its purpose –  Communication. But it is communication plus interactivity and it is that upon which Aiken relies to support her argument. If that gives rise to a “place” then may I congratulate her imagination. The printing press – a form of mechanised writing that revolutionised intellectual activity in Early-modern Europe – didn’t create a new “place”. It enabled alternative means of communication. The Printing Press was the first Information Technology. And it was roundly criticised as well.

Although the book purports to explain how new technologies influence human behaviour it doesn’t really offer a convincing argument. I have often quoted the phrase attributed to McLuhan – we shape our tools and thereafter our tools shape us – and I was hoping for a rational expansion of that theory. It was not to be. Instead it was a collection of horror stories about how people and technology have had problems. And so we get stories of kids with technology, the problems of cyberbullying, the issues of on-line relationships, the misnamed Deep Web when she really means the Dark Web – all the familiar tales attributing all sorts of bizarre behaviours to technology – which is correct – and suggesting that this could become the norm.

What Dr Aiken fails to see is that by the time we recognise the problems with the technology it is too late. I assume that Dr Aiken is a Digital Immigrant, and she certainly espouses the cause that our established values are slipping away in the face of an unrelenting onslaught of cyber-bad stuff. But as I say, the changes have already taken place. By the end of the book she makes her position clear (although she misquotes the comments Robert Bolt attributed to Thomas More in A Man for All Seasons which the historical More would never have said). She is pro-social order in cyberspace, even if that means governance or regulation and she makes no apology for that.

Dr Aiken is free to hold her position and to advocate it and she argues her case well in her book. But it is all a bit unrelenting, all a bit tiresome these tales of Internet woe. It is clear that if Dr Aiken had her way the very qualities that distinguish the Digital Paradigm from what has gone before, including continuous disruptive and transformative change and permissionless innovation, will be hobbled and restricted in a Nanny Net.

For another review of The Cyber Effect see here

All Data is Created Equal

 

I must acknowledge the assistance I have received from an excellent unpublished dissertation by Reuel Baptista whose insights into and examinations of potential regulatory outcomes for Net Neutrality are worthy of consideration.

Net Neutrality is an emotive subject for many who are involved in the workings of the Internet and the provision of Internet services and access. It essentially asserts that the transport layer of the Internet – the means by which data moves across the Internet – should be non-discriminatory as to content and treat all data packets equally regardless of nature or origin.

It is a concept that has been developed primarily by Internet engineers but since the Internet went public in the 1990’s it is a concept that has been the subject of challenge, primarily from commercial entities. There are examples, particularly from the US, of data discrimination and preferential treatment of data in certain circumstances.

The location of the concept of Net Neutrality in Internet legal theory has been generally considered as a governance issue  and so it is. Yet despite opportunities to review or address issues of Net neutrality, in the Government’s recent consultation paper on the shape of the delivery of Telecommunications services post 2019 no mention was made of Net Neutrality.

This state of affairs was also referred to by the Commerce Commission in its determination of the application for merger between Sky and Vodafone where it said at para 90:

Unlike in a number of other jurisdictions, New Zealand does not have any specific laws requiring TSPs to treat all internet traffic equally (known as ‘net neutrality’). This means that TSPs can discriminate between different types of traffic,either by:

90.1 not carrying certain types of content; or

90.2 limiting the speed at which certain content is carried (known as ‘throttling’), which impacts the quality of the content.

Despite this for New Zealand providers Net Neutrality is not really as issue – at least not yet.  This doesn’t mean that it won’t become an issue some way down the track and the concern must be, when ISPs start discriminating between content and allocating preferential bandwidth, that by then it will be too late to do anything about it.

But the reality is that there is more to Net Neutrality than treating data equally. It helps address the negative effects of discriminatory practices such as blocking, paid prioritization and zero rating. Competition within the fixed line broadband and content markets, recognition of human rights and a country’s standing in the online economy are all affected by network neutrality. The tension is that there is a need to prevent big or monolithic ISPs from abusing their power but allow them to optimise the Internet for subsequent waves of innovation and efficiency. Other counties have had this debate and have introduced network neutrality into their telecommunications regulatory framework.

It is therefore interesting to read Juha Saarinen’s piece in this morning’s Herald where he suggests that net neutrality no longer matters. He locates his discussion against a background of developing content delivery systems which use geography to enhance speedy delivery. He points out that big services providers can afford to put data centres near customers and cache content there. Others use content delivery networks such as Akamai, Amazon Web Service, and Cloudflare that sit between the customer and the service provider. This, he says, violates Net Neutrality as it makes some sites seem to perform better than others.

With respect, I disagree. That argument is not based on the non-discriminatory treatment of data packets across the Internet but rather is based upon geography and location of data.

Saarinen goes on to dismiss Net Neutrality as an important idea a few years ago but today “we’re probably better off expending our energy elsewhere, like how to keep a diverse and competitive internet provider and Telco market alive in New Zealand.”

So does Saarinen suggest that we kick Net Neutrality to the kerb?

The reality is that in fact, as I have already suggested, it is an essential part of the regulatory and governance processes necessary to ensure a competitive internet provider and Telco market. Net neutrality is an integral part of that activity.

With the Telecommunications Act review in progress, this is the right time for New Zealand to formally adopt network neutrality as part of our telecommunications regulatory framework. Susan Chalmers said in 2015 at a Law Conference

“The thicket of commercial agreements between content and applications providers and ISPs must not be allowed to develop to such an extent that there will be no political will left to clear a path for [network] neutrality.”

The rapid pace of change in the online world means there may not be another opportunity to discuss network neutrality regulation for some time.

Memory Illusions and Cybernannies

Over the last week I read a couple of very interesting books. One was Dr Julia Shaw’s The Memory Illusion. Dr. Shaw describes herself as a “memory hacker” and has a You Tube presence where she explains a number of the issues that arise in her book.

The other book was The Cyber Effect by Dr Mary Aiken who reminds us on a number of occasions in every chapter that she is a trained cyberpsychologist and cyberbehavioural specialist and who was a consultant for CSI-Cyber which, having watched a few episodes, I abandoned. Regrettably I don’t see that qualification as a recommendation, but that is a subjective view and I put it to one side.

Both books were fascinating. Julia Shaw’s book in my view should be required reading for lawyers and judges. We place a considerable amount of emphasis upon memory assisted by the way in which a witness presents him or herself -what we call demeanour. Demeanour has been well and truly discredited by Robert Fisher QC in an article entitled “The Demeanour Fallacy” [2014] NZ Law Review 575. The issue has also been covered by  Chris Gallavin in a piece entitled “Demeanour Evidence as the backbone of the adversarial process” Lawtalk Issue 834 14 March 2014 http://www.lawsociety.org.nz/lawtalk/issue-837/demeanour-evidence-as-the-backbone-of-the-adversarial-process

A careful reading of The Memory Illusion is rewarding although worrisome. The chapter on false memories, evidence and the way in which investigators may conclude that “where there is smoke there is fire” along with suggestive interviewing techniques is quite disturbing and horrifying at times.

But the book is more than that, although the chapter on false memories, particularly the discussions about memory retrieval techniques, was very interesting. The book examines the nature of memory and how memories develop and shift over time, often in a deceptive way. The book also emphasises how the power of suggestion can influence memory. What does this mean – that everyone is a liar to some degree? Of course not. A liar is a person who tells a falsehood knowing it to be false. Slippery memory, as Sir Edward Coke described it, means that what we are saying we believe to be true even although, objectively, it is not.

A skilful cross-examiner knows how to work on memory and highlight its fallibility. If the lawyer can get the witness in a criminal trial to acknowledge that he or she cannot be sure, the battle is pretty well won. But even the most skilful cross-examiner will benefit from a reading of The Memory Illusion. It will add a number of additional arrows to the forensic armoury. For me the book emphasises the risks of determining criminal liability on memory or recalled facts alone. A healthy amount of scepticism and a reluctance to take an account simply and uncritically at face value is a lesson I draw from the book.

The Cyber Effect is about how technology is changing human behaviour. Although Dr Aiken starts out by stating the advantages of the Internet and new communications technologies, I fear that within a few pages the problems start with the suggestion that cyberspace is an actual place. Although Dr Aiken answers unequivocally in the affirmative it clearly is not. I am not sure that it would be helpful to try and define cyberspace – it is many things to many people. The term was coined by William Gibson in his astonishingly insightful Neuromancer and in subsequent books Gibson imagines the network (I use the term generically) as a place. But it isn’t. The Internet is no more and no less than a transport system to which a number of platforms and applications have been bolted. Its purpose –  Communication. But it is communication plus interactivity and it is that upon which Aiken relies to support her argument. If that gives rise to a “place” then may I congratulate her imagination. The printing press – a form of mechanised writing that revolutionised intellectual activity in Early-modern Europe – didn’t create a new “place”. It enabled alternative means of communication. The Printing Press was the first Information Technology. And it was roundly criticised as well.

Although the book purports to explain how new technologies influence human behaviour it doesn’t really offer a convincing argument. I have often quoted the phrase attributed to McLuhan – we shape our tools and thereafter our tools shape us – and I was hoping for a rational expansion of that theory. It was not to be. Instead it was a collection of horror stories about how people and technology have had problems. And so we get stories of kids with technology, the problems of cyberbullying, the issues of on-line relationships, the misnamed Deep Web when she really means the Dark Web – all the familiar tales attributing all sorts of bizarre behaviours to technology – which is correct – and suggesting that this could become the norm.

What Dr Aiken fails to see is that by the time we recognise the problems with the technology it is too late. I assume that Dr Aiken is a Digital Immigrant, and she certainly espouses the cause that our established values are slipping away in the face of an unrelenting onslaught of cyber-bad stuff. But as I say, the changes have already taken place. By the end of the book she makes her position clear (although she misquotes the comments Robert Bolt attributed to Thomas More in A Man for All Seasons which the historical More would never have said). She is pro-social order in cyberspace, even if that means governance or regulation and she makes no apology for that.

Dr Aiken is free to hold her position and to advocate it and she argues her case well in her book. But it is all a bit unrelenting, all a bit tiresome these tales of Internet woe. It is clear that if Dr Aiken had her way the very qualities that distinguish the Digital Paradigm from what has gone before, including continuous disruptive and transformative change and permissionless innovation, will be hobbled and restricted in a Nanny Net.

For another review of The Cyber Effect see here

Further Obscurity on the Internet – Collisions in the Digital Paradigm VIII

 

Introduction

Yet again a Court of law has made an order against Google, requiring it to deindex search results in a particular case. This example does not deal with the so-called “right to be forgotten” but with issues surrounding efforts by one company to infringe the intellectual property rights of another. But Google’s involvement in this case as not as a party to the action. They were not involved. No wrongdoing by them was alleged. All they did was provide index links via their automated processes. These links were to the infringers. An injunction was sought to compel de-indexing not just in the country where the case was heard but world wide.

Equustek v Jack

Equustek v Jack came before the British Columbia Supreme Court in 2014. The circumstances of the case were these.

Equustek manufactured electronic networking devices for industrial use.  A company named Datalink created a competing product. Equustek claimed that one of its former employees conspired with Datalink, and the competing product used Equustek’s trade secrets and trademarks.

Equustek commenced proceedings against Datalink and a number of individual defendants.  The Datalink defendants did not play any part in the litigation and their defences were struck out but they continued to sell products from a number of websites.

Pending trial the Supreme Court made a number of interlocutory orders against the defendants including an  order prohibiting the defendants from dealing with Equustek’s intellectual property. Even the issue of a criminal arrest warrant against one of the defendants did not stop the sale of the disputed products on the web from undisclosed locations.

So far the case is procedurally unremarkable. But what happened next is quite extraordinary. Equustek turned to Google and asked it to stop indexing the defendant’s websites worldwide. Google voluntarily removed 345 URLs from search results on Google.ca. But the problem remained. Almost all the infringing material was still available online. So Equustek took the matter a step further.

Remember, Google was not a party to the original suit. They had not been involved in the allegations of intellectual property infringement . Google’s response to Equustek’s approach was a co-operative one. They did not have to comply with Equustek’s request.

Equustek sought an order from the Court restraining Google from  displaying any part of the websites with which it was concerned on any search results worldwide. The order was in the nature of an interlocutory injunction. The grounds for the application were that Google’s search engine facilitated the defendants’ ongoing breach of court orders.

Google argued that the court did not have jurisdiction over Google or should decline jurisdiction, In any event it should not issue the requested injunction. The Court observed that the application raised  novel questions about the Court’s authority to make such an order against a global internet service provider.

The court held that it had jurisdiction over Google because Google, through its search engine and advertising business, carried on business in British Columbia. This in itself is not remarkable. It is consistent with the theory of connection with the forum jurisdiction and the concept of the grounding of activities in the forum state that gives rise to  a Court’s jurisdictional competence. Cases abound arising from e-commerce and Internet based business activities.

The court considered that Google’s search engine websites were not passive information sites, but rather were interactive and displayed targeted advertisements. The court noted that this rationale might give every state in the world jurisdiction over Google’s search services, but noted that was a consequence of a multinational doing business on a global scale rather than from a flaw in the territorial competence analysis.

Again this is a reality of jurisdictional theory. In the Australian defamation case of Dow Jones v Gutnick it was observed that a cause of action might lie in every country where publication of the defamatory article had taken place. Mr Gutnick undertook to commence only in Australia because that is where his reputation lay and needed to be vindicated.

The court also refused to decline jurisdiction over Google, because Google failed to establish that another jurisdiction (California) was a more appropriate forum and the court could effectively enforce its order against Google outside Canada. This is what is called a forum conveniens argument – it will arise in the context not of whether or not a court has jurisdiction but where jurisdiction may lie in two states (in this case British Columbia, Canada and California, United States of America) which court should properly hear the case.

The Court found that it had authority to grant an injunction with extra-territorial effect against a non-party resident in a foreign jurisdiction if it is just or convenient to do so.

The judge observed that new circumstances require adaptation of existing remedies  – an aspect of the reality of e-commerce with its potential for abuse. This would be especially so if there was to be any credibility and integrity of Court orders.

The court then considered the test for ordering an injunction against a third party. The standard test was modified.

 (1) a good arguable case or fair question to be tried (which relates to the plaintiff’s claim against defendant); and

 (2) a balancing of the interests (irreparable harm and convenience) of the plaintiff and the non-party to whom the injunction would apply.

The court identified a number of relevant considerations, including

  1. whether the third party is somehow involved in the defendant’s wrongful acts;
  2. whether the order against the third party is the only practicable means to obtain the relief sought;
  3. whether the third party can be indemnified for the costs to which it will be exposed by the order;
  4. whether the interests of justice favour the granting of the order; and
  5. the degree to which the interests of persons other than the applicant and the non-party could be affected.

The court granted the injunction against Google requiring Google to block the defendants’ websites (identified in the court order) from Google’s search engine results worldwide finding that Google was unwittingly facilitating the defendants’ ongoing breaches of court orders, and there was no other practical way to stop the defendants.

Google appealed to the British Columbia Court of Appeal who upheld the order issued at first instance.

Equustek v Google

The Court of Appeal observed that it is unusual for courts to grant remedies against persons who are not parties to an action. The reasons for this are obvious – most civil claims are concerned with the vindication of a right, and the remedial focus will be on that right. Further, notions of justice demand that procedural protections be afforded to a person against whom a remedy is sought. The usual method of providing such protections is to require the claimant to bring an action against the respondent, giving the respondent the rights of a party.

However, this does not mean that the Courts are powerless to issue orders against non-parties. What is known as a Norwich Pharmcal order was cited as an example. There are, in fact, many types of orders that are routinely made against non-parties – subpoenas to witnesses, summonses for jury duty and garnishing orders are common examples. Many of these orders have a statutory basis or are purely procedural, but others derive from the inherent powers of the court or are more substantive in nature.

The Appeal Court observed that Canadian courts have jurisdiction to grant injunctions in cases where there is a justiciable right, even if the court is not, itself, the forum where the right will be determined. Canadian courts have also long recognized that injunctions aimed at maintaining order need not be directed solely to the parties to the litigation.

Google argued that the Court should not grant an injunction with extraterritorial effect. It submitted

As a matter of law, the court is not competent to regulate the activities of non-residents in foreign jurisdictions. This competence-limiting rule is dictated both by judicial pragmatism and considerations of comity. The pragmatic consideration is that the court should not make an order that it cannot enforce. The comity consideration is that the court refrains from purporting to direct the activities of persons in other jurisdictions and expects courts in other jurisdictions to reciprocate.

The Court did not accept that the case law establishes the broad proposition that the court is not competent to regulate the activities of non-residents in foreign jurisdictions.

The Court noted that the case exhibited a sufficient real and substantial connection to British Columbia to be properly within the jurisdiction of the Province’s courts.

From a comity perspective, the question must be whether, in taking jurisdiction over the matter, British Columbia courts have failed to pay due respect to the right of other courts or nations. The only comity concern that was articulated in this case was the concern that the order made by the trial judge could interfere with freedom of expression in other countries. For that reason, there had to be considerable caution in making orders that might place limits on expression in another country. The Court stated that where there is a realistic possibility that an order with extraterritorial effect may offend another state’s core values, the order should not be made.

In considering the issue of freedom of expression the Court noted that there was no realistic assertion that the judge’s order would offend the sensibilities of any other nation.

It was not suggested that the order prohibiting the defendants from advertising wares that violate the intellectual property rights of the plaintiffs offended the core values of any nation. The Court noted that the order made against Google is a very limited ancillary order designed to ensure that the plaintiffs’ core rights are respected.

The Court also noted that there were a number of cases where orders had been made with international implications. Cases such as APC v. Auchan Telecom, 11/60013, Judgment (28 November 2013) (Tribunal de Grand Instance de Paris); McKeogh v. Doe (Irish High Court, case no. 20121254P); Mosley v. Google, 11/07970, Judgment (6 November 2013) (Tribunal de Grand Instance de Paris); Max Mosley v. Google (see “Case Law, Hamburg District Court: Max Mosley v. Google Inc. online: Inform’s Blog Moserly v Crossley – Hamburg) and ECJ Google Spain SL, Google Inc. v. Agencia Española de Protecciób de Datos, Mario Costeja González, C-131/12 [2014], CURIA are well known to Internet lawyers.

Some of the cases involving extraterritorial implications have been controversial, such as La Ligue contre le racisme et l’antisémitisme c. La Société YAHOO!Inc., Tribunal de Grande Instance de Paris (May 22, 2000 and November 20, 2000), Court File No. 00/05308 and YAHOO! INC. v. La Ligue contre le racisme et l’antisémitisme, 169 F.Supp. 2d 1181 (N. Dist. Cal., 2001) rev’d 379 F.3d 1120 (9th Cir., 2004) and 433 F.3d 1199 (9th Cir. en banc, 2006)).

This extensive case law does indicates that courts in other countries do not see extraterritorial orders as being unnecessarily intrusive or contrary to the interests of comity.

Commentary

Google appealed to the Supreme Court of Canada and leave to appeal has been granted. Thus, there is one more act to this drama to be played out.

One issue that will need to be resolved is whether the order that was made can be even be granted against a third party not involved in any wrongful activity. If so, the test to obtain such an order will need to be determined, as well as its geographic and temporal scope.

What about the issue of access to justice? In many areas of law, courts have expressed concern that effective remedies should not be limited to individuals or companies with deep pockets. The type of order granted against Google is certainly an effective additional remedy from a plaintiff’s perspective. But are only large corporates expected to be the sole parties in cases such as these simply because they are large corporates with a high profile. Only Google seems to be a party in this case – no other search engine features.

Furthermore what are the boundaries of a Canadian court’s territorial jurisdiction. May a Canadian court order a search engine company in California to prevent users in other countries from viewing entire websites? It is also expected that Google will raise constitutional issues, specifically whether blocking search results limits access to information or freedom of expression on the Internet.

But there is more to the case than this. It involves the ability to locate Internet based information that is facilitated by search engines. This case has the same impact on the Internet as Google Spain  – its consequence is de-indexing of information.

The decision is unremarkable for its application of conflict of laws theory. But having said that, the issue of extraterritorialty is a complex one, and because other jurisdictions and Courts have made extraterritorial orders that may or may not be enforceable does not mean that such an order is correct of justified in law. The anti-Nazi organisations LICRA and UEJEF found this out when Yahoo, having had extraterritorial orders made against it in France came to the US Courts seeking a declaration that they were unenforceable. Would Google be on less firm ground if it adopts a similar course of action against Equustek – assuming that a US Court has jurisdiction?

Throttling the Web

The development of the World Wide Web was, in the vision of Tim Berners-Lee, to assist in making information available and, creating a method of accessing stored information and sharing it.  Yet it had already become clear, even pre-Web, that locating information was a problem and the solution lay in developing search engines of means of locating a specific piece or pieces of information. Search engines such as Gopher provided a form of a solution in the pre-graphical interface, pre-Web environment, and there were a number of search engines such as Altavista, Lycos, Find-What, GoTo, Excite, Infoseek, RankDex, WebCrawler Yahoo, Hotbot, Inktomi and AskJeeves that provided assistance in locating elusive content. However, the entry of Google into the marketplace, and the development of innovative search algorithms meant that Google became the default source for locating information.

What must be remembered is that Google is a search and indexing engine. It does not store the source information, other than in cached form. Using some advanced mathematics, founders Larry Page and Sergey Brin developed a method for measuring the links across websites by ranking a website more highly when other sites linked to it. Putting it very simply, the algorithm measured the popularity of a webpage. Utilising the hypertext link of Berners-Lee, Google locates content and enables a user to access it.

As a lawyer\technologist, I see Equustek v Google in the same way as I saw Google Spain – as a clog on progress that may slow the development and promise of information systems that depend upon a reliable search facility to locate information on the greatest central source of information that the world has ever known. The propositions that underlie Google Spain and Equustek and the application of law in this area amounts to a real and significant collision in the Digital Paradigm. Perhaps it is time for the Courts to understand that an automated indexing system that is completely content neutral and involves no human input into the way that it identifies and indexes should be seen as simply an intermediary and no more. Google is able to monetise its search engine  but to suggest that its search engine is not a passive information system, but rather is interactive and displays targeted advertisements in and of itself is, in my respectful view, insufficient justification to require a de-indexing of search results.

Linking and the Law – Part 2 – A Diversion to TPMs

Linking and the Law

PART 2

7    The New Zealand position — Technological Protection Measures, Anti-circumvention and communication

7.1             Introduction

The Digital Millennium Copyright Act came into force in the US in October 1998 as a response to the 1996 WIPO Copyright Treaty. Updated copyright legislation, including provisions relating to anti-circumvention of copy protection were enacted in the UK in 1988[54] and in New Zealand in 1994.[55]  In this section I shall consider the provisions of the Copyright Act that deal with Technological Protection Measures or TPMs.[56] It will become clear as the discussion progresses that the New Zealand legislation as amended by the Copyright (New Technologies)Amendment Act 2008 addresses the issues that were raised in Reimerdes and Corley.

The discussion in this section is admittedly lengthy but necessary to understand the approach to TPMs and the way that the Legislature has attempted to address  the problem. It is helpful within the context of linking because the decision in Reimerdes and Carley centreed around providing access to TPMs. A consideration of the New Zealand position, especially following the 2008 amendments to the Copyright Act will show significant differences in approach to TPMs from that in the DMCA and which would mean that the approach to linking in Reimerdes and Corley need not necessarily be applicable in New Zealand.

7.2             The Former Section 226 of the Copyright Act 1994

The provisions of the former s 226 of the Copyright Act 1994 created a right in favour of a person issuing copies (effectively a publisher). That person has the same rights as a copyright owner and the remedies that are available are provided.

Subsection (2) of s 226 defined how a person “infringes” the new right. The elements of the prohibited activity were:

•   Making, selling, offering or exposing for sale or hire; or

•   Advertising for sale or hire;

•   Any device or means;

•   Specifically designed or adapted to circumvent the form of copy protection employed; or

•   Publishing information;

•   With the intention to enable or assist persons to circumvent that form of copy protection;

•   Knowing or having reason to believe that the devices, means, or information will be used to make infringing copies.

State of mind is significant. For the publishing of information there were two states of mind involved. First, there had to be an intention to enable or assist persons to circumvent copy protection — the specific intention. Secondly, it had to be proven that the publisher knew, or had reason to believe, that the information would be used to make infringing copies.

The prohibition on the distribution of circumvention devices involved proof of the same state of mind relating to the use of devices. There had to be knowledge (or reason to believe) that the device would be used to make infringing copies. In addition, the device had to be specifically designed or adapted to circumvent the copy protection employed. Knowledge would seem to follow from the specific design or adaptation of the device. One would hardly distribute a circumvention device specifically designed for that purpose if one did not know or have reason to believe that the device would be used for circumvention purposes.

As far as devices or means were concerned it appeared that the use of those words extended not only to hardware devices that prevented copyright infringement taking place but the software devices such as DECSS.[57] As far as devices that have substantial non-infringing uses but incidentally include a circumvention device the situation is a little more difficult. At present DVD and Blu-Ray players have a built device that decrypts the CSS copy protection system. Imagine a DVD player/recorder that could not only play back material, but could record from a DVD as well. The CSS decoding system would be present for legitimate and authorised playback provisions. Thus the machine would be specifically designed to circumvent copy protection. But such a use would be authorised. Then there is the recording use. For liability to follow there would have to be specific knowledge on the part of the distributor of such a device that it would be used to make infringing copies. The mere presence of a circumvention means or device is not enough. It must be accompanied by the requisite knowledge or reason to believe.

The provision of information about circumvention means or devices was limited by two state of mind requirements that, arguably, would mean that the publication of, for example, academic research regarding circumvention technologies would not be caught by the section if:

•    the intention to enable or assist circumvention were absent; and/or

•    there was an absence of knowledge or reason to believe that the publication would be used to make infringing copies.

Thus, when we consider the examples the scope of the former section was somewhat narrower than it first appeared.

7.3              The 2008 Amendment

The 2008 Amendment of s 226 and following amendments have made a number of changes. The first is that definitions have been provided. The second is that the essence of the former s 226 is retained in s 226A.

The focus of the new s 226 continues to be on the link between circumvention and copyright infringement and on the making, sale and hire of devices or information rather than on the act of actual circumvention. Actual circumvention is not prohibited, but any unauthorised use of the material that is facilitated by circumvention continues to be an infringement of copyright.

The new amendments recognise that consumers should be able to make use of materials under the permitted acts, or view or execute a non-infringing copy of a work. This is consistent with New Zealand’s position on parallel importation of legitimate goods; for example, genuine DVDs from other jurisdictions. New provisions have also been introduced to enable the actual exercise of permitted acts where TPMs have been applied.

What the new TPM provisions do is two-fold — broadly they prohibit and criminalise.

There is a prohibition of commercial conduct that undermines the TPM by putting a circumvention device into circulation or providing a service including the publication of information which relates to overriding TPM protection. Contravention has civil consequences — specifically the issue of the work protected by a TPM is protected as if the conduct was an infringement of copyright. The second leg is to make the prohibited conduct a criminal offence.[58]

There is a knowledge element for both the prohibition and the offence — the knowledge of the use to which the circumvention device or the service or published information will, or is likely to, be put.

There are however some limits on the prohibition when circumvention device has a legitimate use.

7.3.1           The Definitions

There are three definitions which are applicable to ss 226A–226E. The first is a technological protection measure or TPM:[59]

TPM or technological protection measure

(a)    means any process, treatment, mechanism, device, or system that in the normal course of its operation prevents or inhibits the infringement of copyright in a TPM work; but

(b)   for the avoidance of doubt, does not include a process, treatment, mechanism, device, or system to the extent that, in the normal course of operation, it only controls any 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)

Significantly, the legislature differentiated between a TPM for the purposes of the prevention of infringement and one that relates to access to a work for non-infringing purposes. The example is given of the control of “geographic market segmentation”, which clearly relates to a region protection in games or DVDs. Thus, if a person legitimately acquired a DVD that was coded for region 1, the region coding device or process in the DVD player which would otherwise prevent the use of the DVD may be circumvented so that the non-infringing purpose of viewing the DVD could be carried out.

The second definition relates to a TPM circumvention device:[60]

TPM circumvention device means a device or means that—

(a)    is primarily designed, produced, or adapted for the purpose of enabling or facilitating the circumvention of a technological protection measure; and

(b)   has only limited commercially significant application except for its use in circumventing a technological protection measure

The primary purpose of the circumvention device must be to circumvent a TPM — taking into account that the TPM must prevent infringement rather than access for non-infringing purposes and as well as its primary design production or adaptation it must have limited commercially significant application other than for its use in circumventing a TPM.

Both paras (a) and (b) are conjunctive; it may well be that a TPM circumvention device may have other commercially significant applications or, as the Americans put it, substantial non-infringing uses.

The third definition relates to a TPM work which is defined as a copyright work that is protected by a TPM. A TPM work must be a copyright work but it may well be that this cannot prevent a entrepreneur locking up a public domain work with a TPM if there is some significance in the way in which the work has been typographically arranged.

7.3.2      The Operative Sections

Section 226A sets out the prohibited conduct in relation to a TPM, stating:

226A Prohibited conduct in relation to technological protection measure

(1) A person (A) must not make, import, sell, distribute, let for hire, offer or expose for sale or hire, or advertise for sale or hire, a TPM circumvention device that applies to a technological protection measure if A knows or has reason to believe that it will, or is likely to, be used to infringe copyright in a TPM work.

(2) A person (A) must not provide a service to another person (B) if—

(a)    A intends the service to enable or assist B to circumvent a technological protection measure; and

(b)   A knows or has reason to believe that the service will, or is likely to, be used to infringe copyright in a TPM work.

(3) A person (A) must not publish information enabling or assisting another person to circumvent a technological protection measure if A intends that the information will be used to infringe copyright in a TPM work.

Section 226A provides a useful example of modern statutory drafting techniques by clarifying the behaviours of the certain actors that the section addresses.

Section 226A(1) is identical in scope to the former s 226(1), with the exception that the definitions contained in the new s 226 impact upon the scope. Whereas the previous legislation referred to a form of copy protection, the definition of a TPM work, a TPM and a TPM circumvention device now govern.

Section 226A(2) relates to the publishing information limb of the former s 226, except that a new term (“service”) is used. This is undefined but clearly encompasses information.

Once again there are two limbs underlying the prohibition: the intention that the service enable or assists circumvention of TPM; and specific knowledge that the service will or is likely to be used to infringe copyright in a TPM work.

If the service is for the purposes of university research, it is difficult to imagine that B could be satisfied, thus the prohibitive conduct is not complete.

The use of the word “service” in s. 226A(2) is new. The earlier iteration used the words “device” or “means”. Service is a very wide concept and although s. 226A(3) refers to the publication of information to enable or assist another person to circumvent a TPM, service extends the scope of s. 226A(1) and in essence addresses any form of assistance enabling circumvention of a TPM accompanied by knowledge or reason to believe that the assistance or service will be used to infringe copyright. There seems to be little doubt that a “service” could concveivably encompass a computer program or code.

Section 226A(3) relates specifically to the publication of information, and although the behaviour could be encompassed by a service, the legislature saw fit to make publication of information about TPM circumvention a discreet behaviour.

There is only one knowledge element in s 226A(3), as opposed to the two in s 226A(2). That knowledge element is that person A must know that the provider of the information must intend that the information is to be used to infringe copyright in a TPM work. Thus s 226A prohibits:

•    the making or distribution of a TPM;

•    the provision of a service with the two limbs of intention to assist circumvention and knowledge that the service will be or likely to be used to circumvent; and

•    publication of information enabling circumvention if it is intended that information will be used to circumvent.

Unlike the original  s.226, which was restricted in the language to commercial activity (sells, lets for hire, offers or exposes for sale or hire or advertises for sale or hire) s. 226A prohibits not only the making, selling, letting for hire, offering or exposing for sake, but also prohibits importing or distributing a TPM circumvention device. These terms can encompass an individual who downloads a TPM circumvention device from an off-shore site. This was not thje case in the earlier legislation. Distibution is also prohibite3d. Thus if one makes a TPM circumvention device available for download from a website, and uses a link to facilitate delivery, such an action could fall within the ambit or “distribution”.

However, the provision of information has a commercial aspect to it, for the provision of such information must be “in the course of business” and is therefore of a narrower scope that had those words been omitted.

Section 226B sets out the rights that accrue to the issuer of a TPM work. These rights are what Kirby J referred to as para copyright in Stevens v Kabushiki Kaisha Sony Computer Entertainment.[61] Essentially, the issue of a TPM work has the same rights against a person who contravenes s 226A as the copyright owner has in respect of infringement. The provisions of the Copyright Act relating to delivery up in civil or criminal proceedings is available to the issuer of a TPM work as are certain presumptions that are contained in ss 126–129 of the Copyright Act. The provisions of s 134 relating to disposing of infringing copies or objects applies as well with the necessary modifications.

Absent from the 1994 version of s 226 was the offence of contravening s 226A. Section 226C creates that offence:

226C Offence of contravening section 226A

(1) A person (A) commits an offence who, in the course of business, makes, imports, sells, distributes, lets for hire, offers or exposes for sale or hire, or advertises for sale or hire, a TPM circumvention device that applies to a technological protection measure if A knows that it will, or is likely to, be used to infringe copyright in a TPM work.

(2) A person (A) commits an offence who, in the course of business, provides a service to another person (B) if—

(a)    A intends the service to enable or assist B to circumvent a technological protection measure; and

(b)   A knows that the service will, or is likely to, be used to infringe copyright in a TPM work.

(3) A person (A) commits an offence who, in the course of business, publishes information enabling or assisting another person to circumvent a technological protection measure if A intends that the information will be used to infringe copyright in a TPM work.

(4) A person who commits an offence under this section is liable on conviction on indictment to a fine not exceeding $150,000 or a term of imprisonment not exceeding 5 years or both.

The first important thing to note is that subs (4) requires the conviction to be on indictment, so the matter must be dealt with in the jury jurisdiction and cannot be dealt with summarily although the position may well be altered by the provisions of the Criminal Procedure Act 2011..

Section 226C mirrors the prohibitions in s 226A, but the critical matter for an offence is that there is a commercial element — “in the course of business”.

Similarly, the provision of the service in subs (2) of 226C must have a commercial element as must the publication of information in subs (3).

This then brings the criminalisation of para-copyright in line with the provisions of s 135 of the Copyright Act which relates to piracy or commercial infringement. Clearly, s 226D considers that the offence should relate to commercial activity involving TPMs. In this way the rather wider prohibitions contained in s. 226A  do not automatically lead to potential liability under s. 226C

Section 226D clarifies the position relating to the scope of the rights of the issuer of a TPM work. The operative part states:

226D When rights of issuer of TPM work do not apply

(1) The rights that the issuer of a TPM work has under section 226B do not prevent or restrict the exercise of a permitted act.

(2) The rights that the issuer of a TPM work has under section 226B do not prevent or restrict the making, importation, sale, or letting for hire of a TPM circumvention device to enable—

(a)    a qualified person to exercise a permitted act under Part 3 using a TPM circumvention device on behalf of the user of a TPM work; or

(b)   a person referred to in section 226E(3) to undertake encryption research.

(3) In this section and in section 226E, qualified person means—

(a)    the librarian of a prescribed library; or

(b)   the archivist of an archive; or

(c)    an educational establishment; or

(d)   any other person specified by the Governor-General by Order in Council on the recommendation of the Minister.

(4) A qualified person must not be supplied with a TPM circumvention device on behalf of a user unless the qualified person has first made a declaration to the supplier in the prescribed form.

The issuer of a TPM work cannot prevent or restrict the exercise of a permitted act. Nor can the prohibition prevent or restrict the making, importation, sale or letting for hire of a TPM circumvention device to enable encryption research under s 226E(3), or to enable a qualified person to exercise a permitted act using a TPM circumvention device.

The legislation goes on to define “qualified person”, who, in this case, is required to make a declaration relating to certain matters.

On their own the provisions of s 226D seem confusing, although the provisions of s 226 and following do not prohibit the act of circumvention. Subsection (1) of 226D makes it clear that circumvention may be permissible for the purposes of the exercise of a permitted act.

Section 226E takes the matter further.

226E User’s options if prevented from exercising permitted act by TPM

(1) Nothing in this Act prevents any person from using a TPM circumvention device to exercise a permitted act under Part 3.

(2) The user of a TPM work who wishes to exercise a permitted act under Part 3 but cannot practically do so because of a TPM may do either or both of the following:

(a)    apply to the copyright owner or the exclusive licensee for assistance enabling the user to exercise the permitted act:

(b)   engage a qualified person (see section 226D(3)) to exercise the permitted act on the user’s behalf using a TPM circumvention device, but only if the copyright owner or the exclusive licensee has refused the user’s request for assistance or has failed to respond to it within a reasonable time.

(3) Nothing in this Act prevents any person from using a TPM circumvention device to undertake encryption research if that person—

(a)    is either—

(i)     engaged in a course of study at an educational establishment in the field of encryption technology; or

(ii)    employed, trained, or experienced in the field of encryption technology; and

(b)   has either—

(i)     obtained permission from the copyright owner or exclusive licensee of the copyright to the use of a TPM circumvention device for the purpose of the research; or

(ii)    has taken, or will take, all reasonable steps to obtain that permission.

(4) A qualified person who exercises a permitted act on behalf of the user of a TPM work must not charge the user more than a sum consisting of the total of the cost of the provision of the service and a reasonable contribution to the qualified person’s general expenses.

Once again the section makes it clear that the act of circumvention to exercise a permitted act is not prohibited. Thus a person may use a circumvention device to copy a selection from a TPM work for the purposes of review, a comment or inclusion (with attribution) in an academic work.

Subsection (2) glosses over that, however. If the user of a TPM work wishes to exercise a permitted act, he or she may use a TPM circumvention device to do so, but the subsection includes the words “but cannot practically do so because of a TPM”. It is unclear what this means. If a person whose access to a work to carry out a permitted act is prevented by a TPM, does subs (2) automatically apply? Or, if a circumvention device is available, is the user able to use that circumvention device to exercise the permitted act? Does subs (2) relate to the situation where there is no circumvention device available? Subsection (2), in providing certain options for the person who is stymied by a TPM, challenges the market failure theory of fair use.

A person wishing to do one of the permitted acts may apply to the copyright owner or licensee for assistance. The alternative is to engage a qualified person (see s 226D(3)) to exercise a permitted act on the user’s behalf using a circumvention device. But that can only apply if the copyright owner exclusive licensee refuses the user’s request for assistance or fail to respond within a reasonable time.

A sensible interpretation of s 226E suggests that subs (2) must be followed if there is no readily available circumvention device enabling the user to exercise a permitted act.

It is also important to note that s 226E makes a specific exception for the use of circumvention devices to undertake encryption research in certain circumstances.

7.4              Comment

The new provisions of s 226 and following are indeed helpful. The incorporation of clear definitions, that make it clear that TPMs are for the purposes of prevention of infringement rather than access, are to be welcomed (although s 226E seems to introduce a somewhat unnecessary level of complexity).

Underlying the whole issue of para-copyright is the fact that, in reality, TPMs are a somewhat blunt instrument for the purposes of copyright protection, presenting an “all or nothing” level of protection. TPMs cannot discriminate between a permitted or prohibited use. They are international and are applied internationally, whereas copyright law is territorial. TPMs place the control in the hands of the copyright owner of a technological rather than a legal nature and, as already observed, provide a potential for market failure. Essentially, TPMs do not provide an absolute protection, rather they impose another layer of protection that sits on top of the balance of interests created by statute, and muddy the waters between what is and is not allowed. The various options relating to behaviour regarding TPMs contained in ss 226B, 226D and 226E suggest that certain behaviours may be permissible while others are not. Clearly, the legislature did not want to impose a prohibition on the act of circumvention, but the various alternatives given in ss 226D and 226E seem to suggest prohibition.

The legislation, while addressing the issue of circumvention of TPMs, and restricting prohibited conduct to the means by which copyright protection (rather than access prevention) may be circumvented therefore makes it clear that the provisions of means by which access controls may be circumvented is not within the scope of prohibited conduct. This means that one may provide services, information and programs that assist in circumventing access protections. In this way the legislation addresses its target – the copy right – rather than allowing the engraftment of another “para-copyright” – the “prevention of access” right. This is eminently justifiable. Region coding is a means by which copyright owners facilitate distribution of their products. The only issue is obne of market segmentation and a release strategy that copyright owners may have in place. There is no reason, in terms of copyright, why a person who legitimately acquires content in one geographical area should be prohibited from accessing it in another.

However, unlike the New Zealand legislation the DMCA prohibits thje circumvention of access control systems, despite there being no copyright implications and, to further complicate matters, criminalises such behaviour.  It should be a matter of concern that should international trade treaty negotiations result in the application of a DMCA style of anti-TPM circumvention regime, the results will be:

a) the imposition of a foreign marketing system that goes far beyond those chosen say for the release of non-digital product such as movies and CDs

b) the end of the parallel importing regime insofar as geographically segmented digital product is concerned

c) the criminalisation of behaviour that has nothing to do with copyright infringement and has no economic implications for content owners whatsoever.

Finally, it is still not clear whether licence terms or conditions of sale may override the way in which circumvention devices may be used in the limited situations provided in s 226. Unlike s 84, which statutorily negates such conditions, the matter is left open. The legislature has gone to considerable lengths to ensure the balance of interests that underlies copyright law is maintained. It seems unusual that those rights may be subverted by contractual arrangements.


[54]      The Copyright, Designs and Patents Act 1988.

[55]      The Copyright Act 1994 as amended by the Copyright (New Technologies) Amendment Act 2008

[56]      Section 226 – 226E

[57]      CSS is the DVD content scrambling system that prohibits the copying of the files on a DVD movie disk. DECSS is the system that circumvents the content scrambling system.

[58]      The offence of contravening s 226A is set out in s 226C.

[59]      See the new s 226.

[60]      See the new s 226.

[61]      Stevens v Kabushiki Kaisha Sony Computer Entertainment [2005] HCA 58, (2005) 224 CLR 193, (2005) 221 ALR 448.