Ariadne’s Thread – The Labyrinth of the Dotcom Extradition Case

Now, before Daedalus left Crete, he had given Ariadne a magic ball of thread, and instructed her how to enter the Labyrinth. She must open the entrance door and tie the loose thread to the lintel; the ball would then roll along, diminishing as it went and making, with devious turns and twists, for the corners where the Minotaur was lodged.[1]

 

Introduction

This post considers the appeal against the findings by Judge Dawson in the District Court that Mr Dotcom and his co-appellants were eligible for extradition. The article attempts to explain in plain terms some of the legal issues surrounding the case. One of the main issues was whether or not the offences alleged were extraditable. But a word of caution – perhaps an apologia. This article is not a full academic treatment of the decision. It is an overview and an attempt to explain in straightforward terms a part of a somewhat complex decision.

It was necessary for the Court to consider the indictment that had been proferred in the United States and the charges which the accused appellants were to face in that country and determine whether or not they amounted to extraditable offences for the purposes of the Extradition Act 1999.

There were a number of “overlays’ in that not only did the Court have to consider the Act but also the provisions of an Extradition Treaty between New Zealand and the United States which came into force in December 1970. Article II of that Treaty set out sets of offences which were extraditable and which were particularly relevant in this case. Throughout the decision the question of whether or not the conduct was sufficient to engage Article II.

A further overlay was in the provisions of section 101B of the Extradition Act. That section was inserted by the Extradition Amendment Act 2002 in response to the United Nations Convention Against Transnational Organised Crime (UNTOC). That section has the effect of deeming various offences to be extradition offences under existing treaties with foreign countries that are parties to UNTOC. This applies to the 1970 US/NZ Treaty. The deemed offences include an offence involving participation in an organised criminal group.

What the Court Had to Do

The Court had to determine whether the offences contained in the United States indictment were extradition offences under section 24(2)(c) of the Extradition Act.[2]

First, the Court had to identify the factual allegations that underpinned each count. Then it had to consider whether the totality of those alleged acts of omissions came within the description of an extradition offence for the purposes of the Treaty.

In such an exercise Gilbert J reminded himself that he should not take a narrow view by concentrating on nomenclature or the constituent elements of the offence. He recognised that generically offences may be similar although they may be articulated using different language.

Instead he noted that the Treaty was to be interpreted in accordance with cl 31(1) of the Vienna Convention on the Law of Treaties. This provides:

(1) … a treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.

Furthermore, he observed that it does not matter that the offence charged by the requesting State (in this case the United States) may contain additional elements beyond those implicit in an Article II offence so long as the additional elements do not substantively change the nature of the conduct alleged.

The Charges

The important counts in the indictment involved allegations of copyright infringement. Count 2 alleged conspiracy to commit copyright infringement. Counts 4 to 8 alleged specific instances of copyright infringement. These offences of criminal copyright infringement were the foundation for other charges. Without criminal copyright infringement these other charges could not be sustained. Thus in the decision the Judge considered these predicate criminal copyright allegations first.

The other counts were racketeering (count 1), money laundering (count 3), and the wire fraud charges (counts 9 to 13).

In the argument the United States contended that there were pathway offences in New Zealand law which could be followed to ascertain whether the acts or omissions constituting those offences amounted to an extradition offence. It is not necessary for the extradition offence to match the offence stated in the indictment of the requesting State. Rather there must be, as I have stated, generic similarity.

I shall now proceed to consider the counts in the indictment and how the Court determined whether or not there were qualifying extraditable offences or “pathways” to the Count in question[3].

COUNT 2 – Conspiracy to Commit Copyright Infringement[4]

Pathway Offences

The Court considered a number of different offences under New Zealand law which were pathways to the count in the indictment alleging conspiracy to commit copyright infringement. In doing so the Court considered the applicability of certain offences in the Crimes Act that did not directly address copyright infringement but where the behaviour might involve that include that activity.

Conspiracy to Defraud[5]

Conspiracy to defraud was an offence that was stated in Article II.16 of the Extradition Treaty.

The issue in considering this count was whether the crime of conspiracy to defraud could include behaviour that involved copyright infringement. The Court held that it could and cited considerable authority in support of its finding.[6] It was argued that the Copyright Act was a code but in light of the authority cited, the Court rejected that argument, although it should be noted that the authorities cited are quite nuanced on this point[7]. However, the issue becomes a contentious one when sections 228 and 249 of the Crimes Act come into play along with the foundation of Dixon v R[8] which is discussed below.

The Court considered whether the elements of conspiracy to defraud were present in this case[9] and stated that  wilful infringement of copyright can properly be characterised as a dishonest act. Such infringement deprives the copyright holder of something to which it might be entitled. The money obtained through participation in the alleged conspiracy to defraud any person – that is to cause the copyright holders economic loss by depriving them of something to which they might be entitled – by fraudulent means (intentional infringement of copyright) is the allegation in Count 2 which is sustained.

It was argued that the safe harbour provided by section 92B and 902C of the Copyright Act provided relief. Although the Court held that the safe harbour was not engaged in this case the discussion of the distinction between the scope of 92B and 92C and the general observations on the availability of the safe harbour provides a useful guide for the scope of these sections.

That would have been enough to dispose of the matter in that by using the conspiracy to defraud pathway it was found to be an extradition offence within Article II.16.

However, it was necessary to consider other pathways given the fact that the matter would go on appeal.

Dishonestly Taking or Using a Document – s. 228 Crimes Act[10]

In his discussion of Article II.16 and the state of the Crimes Act at the time of the Extradition Treaty, Gilbert J considered the applicability of the former section 257 of that Act. Section 257 has been replaced by section 228 which involves dishonestly taking or using a document with intent to obtain property, a service, pecuniary advantage or any other benefit.

The first consideration was whether a digital file can be a document. That is in fact the case and is clear from the definition in s. 217 Crimes Act and affirmed in Dixon[11]. This is not a contentious proposition.

The Court then restated the proposition that wilful infringement of copyright can amount to an act of dishonesty – that is an act done without a belief that there was express or implied consent to, or authority for, the act from a person entitled to give such consent or authority (the copyright owner).

It was argued that s.228 of the Crimes Act did not mention copyright but for the reasons given in the extensive discussion of the availability of the Crimes Act to encompass infringing behaviour in certain circumstances in support of the conspiracy argument it mattered[12]  not that copyright in a document (a digital file) is not singled out in the section.

The Court observed that although Megaupload was a cyberlocker it still made use of copyright infringing material in storing the files and making them available to generate advertising and subscription revenue. Use was not an essential element of the offence but obtaining a document for pecuniary advantage was, and the definition of “obtain” includes retaining. Therefore it was enough for Megaupload to retain the files on its servers the fulfil the requirement of “obtaining”

The particular conduct was undertaken for the purposes of pecuniary gain and thus the conduct in Count 2 is covered by s. 228 and is deemed to be included in the Treaty and the requirements of s. 101B(1)(c) are made out. In that section 228 is an offence punishable by a term of imprisonment of seven years.  Finally, it was noted in the interests of completeness that the appellants were in New Zealand.

The next associated issue was whether or not there was an organised criminal group.[13] This involved a consideration of the provisions of section 101B(1)(c)(ii) of the Extradition Act. The elements that are required – combining the UNTOC definitions of an “organised criminal group” and “serious crime” are as follows:

 

(a) a structured group;

(b) of three or more persons;

(c) existing for a period of time;

(d) acting in concert;

(e) with the aim of committing;

(i) offences established in accordance with UNTOC; or

(ii) a serious crime, being conduct constituting an offence punishable by imprisonment of four years or more;

(f) in order to obtain financial or material benefit directly or indirectly.[14]

The Court was satisfied that all these elements were fulfilled and there was sufficient evidence to support all the allegations together with the fact that copyright infringement in the US carried a maximum penalty of 5 years thus fulfilling that requirement and on that basis s. 228 provided an extradition pathway.[15]

Accessing a Computer for a Dishonest Purpose – s. 249[16]

Section 249 of the Crimes Act makes it an offence to access a computer and dishonestly or by deception and without colour of right obtain any property, privilege, service, pecuniary advantage, benefit, or valuable consideration or cause loss to any person. This section was considered as a pathway offence to Count 2 in the following way.

For the same reasons as those given in respect of s. 228, the allegation of dishonesty as an element of s. 249 was satisfied by wilful infringement of copyright.

It was argued that there was no access of a computer system – rather merely providing a computer facility for others which could be used lawfully or unlawfully. The issue of access was dealt with in this way. The data (the copyright infringing file) was received from the uploader onto Megaupload’s computer system, stored in that system and made available to others to access using the link provided by Megaupload using the computer system[17]. All of this involved making use of the resources of the Megaupload computer system. This fulfilled some of the elements of the definition in section 248 of the Crimes Act to which reference was made – “access, in relation to any computer system, means instruct, communicate with, store data in, receive data from, or otherwise make use of any of the resources of the computer system.”

It was also held that the purpose of such access was to obtain pecuniary advantage or financial gain, thus fulfilling that element of s. 249 and the penalties brought the offence within the 4 year definition of serious crime for the purposes of s. 101(B(1)(c).

It is important to note that the discussion of section 249 at this stage is very narrow indeed and suggests that the sectioncan be used as an alternative to commercial copyright infringement. There was no discussion of the nature of “property” and whether a computer file amounted to property as held in Dixon. Further use of section 249 and Dixon in the context of other sections of the Crimes Act is considered in the context of the wire fraud charges.

Section 131 Copyright Act[18]

Section 131 of the Copyright Act creates criminal liability for certain types of copyright infringement that have a commercial quality. The question was whether or not the appellants were involved in the exhibition in public or distribution of infringing copies.

At first glance it would seem that distribution would encompass the activities of Megaupload. The difficulty was that there was another specific form of infringement that covered digital material and that was what is known as the communication right.

The communication right and the distribution right are differentiated in the World Intellectual Property Organisation (WIPO) Copyright Treaty 1996. The Treaty recognises the important distinction between dissemination by the transfer of possession of a physical embodiment of a protected work (distribution) and dissemination through electronic transmission (communication). Fundamental to the distribution right is the necessity for a tangible object.

In New Zealand the communication right was incorporated into Statute by the Copyright (New Technologies) Amendment Act 2008. But the provisions of section 131 were not amended to include a breach of the communication right as a form of commercial criminal copyright infringement.

This was not accidental. There were submissions to Parliament that the communication right be incorporated into section 131 from Microsoft and the Motion Picture Association. Indeed the legislation in the United Kingdom incorporated such a provision but New Zealand chose not to follow.

In addition as a further indication that Parliament did not intend to criminalise the commercial infringement of the communication right, section 198 created a criminal offence of dealing in illicit recordings of performances rather than objects which were infringing copies of a copyright work.

The Copyright Act was again reviewed in 2011 when Parliament enacted the Copyright (File Sharing Infringing) Amendment Act 2011. It did not at that time take the opportunity to include a breach of the communication right in section 131.

Thus section 131 relates to tangible objects rather than communication of intangibles such as digital files and was thus not available as a pathway to Count 2 of the indictment.

This was not an unexpected outcome, at least to this commentator, but creates a contradiction. When the search and provisional search warrants were issued the offence alleged was against section 131 of the Copyright Act. Now it transpires that offence was not available. In a case that has not been without its legal controversies, this is one more.

However, the absence of section131 as a pathway does not end the matter. There were, as has been discussed,  other pathways to Count 2 and there were other counts which will be considered, all of which have their own pathways.

 

Count 4 – Copyright Infringement of the Movie “Taken”[19]

This count alleges that the appellants infringed copyright by distributing a work – the movie Taken) being prepared for commercial distribution in the US.

The Court concluded that neither this nor any of the specific infringement allegation contained in Counts 4 – 8 contained any other elements described in Article II.16 of the Treaty. They were not charged with obtaining property or money and the offending did not match the offending set out in Article II.16

However, the offence did correlate with sections 228 and 249 of the Crimes Act. The requirement of both sections that there be an element of commercial advantage or financial gain were both satisfied. They obtained and used a document – a digital file – dishonestly and without claim of right and this involved accessing a computer which is an element of section 249. In addition the Court considered that the appellants were acting as part of an organised criminal group and on that basis section 101B(1)(c)(ii) was satisfied

 

Counts 5 – 8 – Other Copyright Infringement[20]

In these counts the nature of the infringement alleged was different. Wilful reproduction and distribution of copyright protected works with a total retail value of more than $US2500 was alleged.

Once again section 131 was not available as a pathway and nor was Article II.16. However, the Judge held, for reasons already articulated, that sections 228 and 249 of the Crimes Act are available to fix the conduct alleged with the necessary criminality.

 

 Count 3 – Conspiracy to Commit Money Laundering[21]

Critical to this count was the necessity of a finding that there were pathways to the copyright allegations. Those pathways having been found the way was open to consider this count since it was predicated on the availability of copyright offences.

The Court analysed the elements, pointing out that money laundering was not an offence in New Zealand when the Treaty was signed in 1970. However, the Treaty did contain in Article II.19 the inclusion of any offence in addition to the listed offences that “transporting” or “transportation” was an element.

The Court observed that there were transfers of money – the proceeds of copyright infringement – by electronic funds transfer. This was in effect a wire transfer and the Court held that the conveying of funds electronically amounted to a transfer and thus Article 11.19 was engaged and thus the offence was an extradition offence.

Counts 9 – 13 – Wire Fraud[22]

There were a number of allegations made by the United States that supported an allegation that the appellants devised a scheme to defraud copyright owners and obtain money by means of false and fraudulent representations and promises. Some of these included misleading copyright owners that access to a file would be disable when in fact only the link was disabled; falsely representing that repeat  infringers had access terminated when in fact they were allowed to continue infringement and were rewarded for it and misrepresenting the Megaupload abuse tool and their notice and takedown procedure.

The US argued that Article II.16 and sections 228, 240 and 249 provided pathway offences for these counts.

 

Pathway Offences for Wire Fraud

Article II.16

The Judge found that the conduct alleged in these counts corresponded to Article II.16 of the Treaty. It was alleged that the appellants obtained money as a result of false representations. That is another way of saying they received money by false pretences . This allegation satisfied the causal nexus between obtaining money and false pretences.

In addition the counts alleged the money was obtained by a conspiracy to defraud the copyright holders, the essence being that they devised a scheme to defraud copyright holders. That is tantamount to an allegation of conspiracy to defraud and thus article II.16 provided an extradition pathway.[23]

Section 228 – Crimes Act[24]

It was conceded that the emails that were sent to copyright owners in furtherance of the allegedly fraudulent scheme were documents.  Although it was argued that it was necessary to establish that the document had to be used to obtain property or money and that the files were already on the Megaupload system – thus no obtaining. The Judge observed that the definition of obtain meant to obtain or retain. In addition the Judge found that the requirements of s. 101B(1)(c) were satisfied in that the offence was punishable by imprisonment of 4 years or more and involved an organised criminal group. Thus section 228 provided an extradition pathway.[25]

Section 240 Crimes Act[26]

Section 240 of the Crimes Act creates the offence of obtaining or causing loss by deception. There are four circumstances in which the offence may occur, all of them requiring elements of deception on the part of the perpetrator together with an absence of claim of right.

It was conceded that the element of deception could be made out by virtue of false representations that were contained in emails. The element of obtaining was satisfied by the extended definition of obtaining which included retaining, as discussed above.

For the offence to be complete, property had to be obtained. Gilbert J held that the copyright protected films in digital file format were property and cited as authority the case of Dixon v R[27] – a decision of the Supreme Court.

In this commentator’s respectful view Gilbert J read Dixon more widely than was available to him. Dixon was a case that centred around whether or not a digital file was property for the purposes of section 249 of the Crimes Act. The Supreme Court held that it was, and in doing so has introduced a level of uncertainty in the law surrounding the issue of whether or not there is a property right in information. It is my contention – and I have argued it in detail elsewhere – that Dixon was wrongly decided and is both legally and technologically unsound. Nevertheless, until the Supreme Court reconsiders its decision it must stand. However, the scope of the holding, on a strict reading of the decision, is that a digital file is property is limited to the provisions of section 249 of the Crimes Act.[28] The Supreme Court held thus, and to expand the scope of the finding to include digital files as property for offences other than under s. 249 is, in my respectful view, a misinterpretation of Dixon.

But the Court found that s. 240 of the Crimes Act provided an available pathway for the wire fraud counts.

Section 249 Crimes Act[29]

Section 249 of the Crimes Act provided an available pathway for some of the other counts. As far as counts 9 – 13 are concerned it was argued that the purpose of the section was to address computer hacking rather than to cover dishonest acts associated with copyright infringement.

The judge answered this by observing that the definition of a computer system was very broad and included using any of the resources of a computer system. Email plainly fell within that broad scope.

The Judge could also have observed that computer hacking was not the target of section 249 because it did not include unauthorised access to the system as an element of the offence. The important element associated with accessing the computer system is a dishonest or deceptive state of mind associated with certain activities such as obtaining property, a privilege, a service, a pecuniary advantage, a benefit or an advantage.

The behaviour of the appellants that brought them within the scope of section 249 was as follows:

  1. They caused knowingly false responses to be sent to copyright holders in response to takedown notices
  2. To do this they accessed the Megaupload computer system
  3. As a result of accessing the system in this way they thereby dishonestly and by deception and without claim of right obtained a benefit. The benefit was that it enabled Megaupload to retain copyright infringing files on its system. This met the causal connection of accessing the computer system and obtaining a benefit.

 

It is of interest that Gilbert J preferred to focus on the benefit aspect of section 249 rather than that of property, this invoking Dixon within the context of the Supreme Court finding of the fact that a digital file is property. His focus on the benefit aspect accords with the holding of the Court of Appeal in Dixon.

Count 1 – Conspiracy to Commit Racketeering[30]

Racketeering involves an enterprise – that is a group of individuals and entities associated in fact – engaged in interstate and foreign commerce where the members of the enterprise conspired to conduct its affairs for the purposes of enriching themselves through racketeering activity – in this case criminal copyright infringement, money laundering and wire fraud.

Pursuant to the decision of the Court of Appeal in US v Cullinane[31] racketeering was held not to be an offence under Article II of the Treaty. Racketeering was described as an “umbrella” crime and the Court warned against the use of allowing extradition for umbrella crimes where the offences, if charged separately, would not amount to extradition offences.

However, Cullinane was decided before the enactment of s. 98A of the Crimes Act which creates the crime of participating in an organised criminal group as well as s. 101B(1)(a) of the Extradition Act. This allowed the Court to reconsider whether or not racketeering could fall within the scope of an extraditable offence.

In essence the allegation was that the appellants were associated in fact and this amounted to an enterprise under US law. It was alleged that they continued as a functioning unit for the common purpose of achieving the objectives of the enterprise which was to enrich its members through criminal copyright infringement, money laundering and wire fraud. Furthermore they all actively participated in the enterprise.

The Judge found that the constituent offences – criminal copyright infringement and wire fraud – correlated to New Zealand offences punishable by at least 4 years imprisonment. The common purpose in the US indictment correlated with the requirements of section 98A of the Crimes Act which, if it had occurred in NZ, would be an extradition offence.

 

Extradition Offences – Conclusion

The result of the Judge’s analysis was that all the counts in the indictment were held to qualify as extradition offences.

One of the very significant aspects of the decision is the way in which provisions of the Crimes Act have been used to provide pathways to copyright infringement. This doesn’t mean that these offences are pathways to only extradition offences, although that it the way that they have been used in this case. The generalised holding means that there are alternatives means of criminalising copyright infringement apart from the provisions of section 131 of the Copyright Act 1994.

The citation of authority by Gilbert J to suggest that for some time criminal offences have been available to address copyright infringement cannot be displaced. In some cases these comments were speculative[32] –in others they were more direct.[33] The decision of Gilbert J now cements these comments into the structure of the law.

This means that copyright owners have different avenues by which they may pursue infringers in the criminal courts where section 131 is not available. Furthermore, while Dixon is still good law, copyright owners may use the provisions of the Crimes Act (given Gilbert J’s wide interpretation of that case) or at least section 249 to pursue infringers for what is effectively “on-line theft” of copyright material. I commented that when it was decided potentially the holding in Dixon could give truth to the mantra “copyright infringement is theft”. That potential has been realised.

Other Aspects of the Extradition Decision

The principle focus of this examination has been upon the identification of the extraditable offences. Given the focus upon the availability of criminal copyright infringement this analysis, although a summary of the decision without reference to the authorities cited, has been undertaken to understand the process by which the identification of extraditable offences was undertaken. However, as far as the case was concerned there were other issues which I shall tough upon briefly.

Evidence to Justify Trial on Each Count[34]

Because of the provision of the Extradition Treaty the United States was entitled to submit a record of the case (ROC) for the purposes of determining eligibility for surrender. There was considerable criticism of the ROC by the appellants. It was suggested, for example, that the ROC contained commentary that was opinion or hyperbole which the Court should ignore in determining sufficiency of evidence.

In the case of Dotcom v US (Disclosure)[35] the nature of the ROC was considered. Glazebrook J agreed that there were conclusory statements in the ROC but that the evidence that was relied upon was set out and that evidence supported the conclusions and inferences that the United States wanted to draw to support the existence of a prima facie case. There was a recognised risk in this process in that if insufficient material was provided, the extradition judge not be satisfied that a prima facie case had been made out.

The mere fact that the ROC and its supplements may contain material that cannot be relied on as evidence does not render the document inadmissible in its entirety. The Judge conducting the eligibility hearing  would have to ensure that there is sufficient summarised evidence to justify each appellant being committed for trial on each extradition offence. In carrying out this function, the Judge will differentiate between what qualifies as a summary of evidence and what does not. Gilbert J observed that The Court is required to determine whether the evidence that is summarised in the record of the case is sufficient to establish a prima facie case. The Court is not excused from this responsibility merely because some of the material in the record of the case does not qualify as summarised evidence[36].

Preservation of Evidence[37]

There was concern that the evidence that had been gathered and its availability might be in question. There was an additional concern about the possible deterioration of the electronic evidence. The Judge noted

“It is for the requesting State to decide what evidence it will rely on to support its request for extradition. The extradition Court is only concerned with whether this evidence is sufficient to justify a trial if the conduct constituting the offence had occurred within the jurisdiction of New Zealand. This will be the case if the Court is satisfied the summarised evidence is sufficient to establish a prima facie case and this evidence has been preserved for use at trial. “The evidence” in s 25(3)(a) plainly refers to the evidence summarised in the record of the case and not to every piece of evidence that has been reviewed in the course of the investigation or which could be relevant at trial. If the appellants’ argument was right, it would mean that if any of Megaupload’s data was lost, no matter how inconsequential for the purposes of a

committal hearing, the entire record of the case would become inadmissible. That

cannot have been what Parliament intended when enacting s 25(3).”[38]

 

No challenge had been made to the statements that the evidence summarised in the ROC had been preserved for use at trial. It was not a matter of concern for the extradition court to enquire as to whether other evidence had been preserved. That was something that would be evaluated in the context of fair trial issues in the requesting state and it would be contrary to the principle of comity upon which extradition is based for an extradition court to trespass into this domain.

Other Matters

There were a number of other matters of a somewhat technical nature that were raised on behalf of the Appellants. One involved the certification of the ROC by a representative of the US Attorney General’s office a Mr Prabhu.

The purpose of the ROC procedure was to summarise the evidence. Detail was not required. The ROC process is based on the Treaty and the comity and trust between the Treaty partners. In that regard the ROC need not contain briefs, “will say” statements or other documentary proof.

Because the ROC is received the Court requires an appropriate assurance that it discloses the existence of evidence sufficient to justify a trial in the exempted country and the evidence relied on for extradition purposes has been preserved for trial.  The Court observed:

“The purpose of the record of the case is to enable the extradition Court to

determine whether the evidence establishes a prima facie case if the conduct

constituting the offence had occurred within the jurisdiction of New Zealand. This

determination is made according to New Zealand law. The extradition Court in

New Zealand is not concerned with whether the evidence is sufficient to justify a

trial in the exempted country and it would be wholly inappropriate for it to enquire

into this. Parliament intended that the extradition Court would rely on a certificate in proper form from a person qualified to give it. Absent cogent evidence showing that such a certificate is a forgery or has been given in bad faith, the extradition Court cannot look behind it.”[39]

 

There was also concern expressed about the weight and sufficiency of evidence and the fact that there were a number of conclusory statements in the ROC. Although this matter had been earlier adverted to, it was conceded that such statements did not assist the Court in carrying out its fundamental obligation of weighing the evidence to determine whether the appropriate threshold had been reached. It was for the extradition court to carry out the evaluative process.[40]

Another argument arose about the question of transposition.[41] Transposition arises in extradition cases because the extradition Court is required to proceed on the basis of the fiction that the relevant conduct constituting the offence had occurred within its jurisdiction. But the focus of the extradition Court under the Act is on the conduct constituting the alleged offence, not the offence itself.[42]

Once the Court is satisfied that the request relates to an actual extradition offence there is no need to consider whether the conduct constituting the offence in the requesting state would be an offence under the law of New Zealand if the conduct had occurred here.[43] Thus the extradition Court should not have to determine whether or not conduct constituting the offence would have been an offence under New Zealand law if it had occurred in New Zealand at the relevant time. To do so would be to import a double criminality requirement and that was held not apply in Cullinane.

Within the context of the allegations relating to the movie Taken Gilbert J held that the extradition Court was solely concerned with the alleged conduct constituting the offence, namely that the appellants wilfully infringed those rights by making the film available to members of the public on a computer network.[44]

Thus for the purposes of its determination under s. 24(2)(d)(i) of the Extradition Act the Court had to concentrate on the acts or omissions of the requested person, being those acts or omissions identified for the purposes of s 24(2)(c) as constituting the extradition offence.

In a case involving alleged copyright infringement by making a copyright protected work available to members of the public without licence, the question of whether or not copyright subsisted in the relevant work in the United States at the relevant time is not an act or omission of the requested person and falls outside the scope of the enquiry. The extradition Court is not required to determine this issue, which would necessitate consideration of foreign law, a task it is ill-suited to undertake. The existence of copyright in the works at the time is a circumstance or “state of things” that is transposed to New Zealand as part of the relevant legal environment against which the evidence of the requested person’s conduct must be assessed.[45]

The Judge went on to consider in some detail the evidence as it related to each of the offences[46] and concluded that the evidence contained in the ROC disclosed a prima face case on each count. This effectively disposed of the extradition issue. It should be noted that there were a number of other technical arguments that were raised and which I will not discuss in this context. In addition there were applications that were made by the appellants for a stay of proceedings on the grounds of unfairness arising from lack of funds to properly mount an opposition to the application and for judicial review of the approach by the Judge in the District Court to the conduct of the proceedings. Those matters, although tied in with the original proceedings do not take the issue of extradition any further.

Conclusion

This case is a helpful one for those involved in extradition law. The Judge carefully articulated the principles and outlines and defined the processes by which extradition cases should be approached and considered. Although the Law Commission has released a paper on Extradition and recommends possible changes that can be made to the law, it may well be some time before those recommendations, or any of them, find their way to the statute book. The methodical approach undertaken by Gilbert J provides Ariadne’s thread for judges who will have to consider extradition in the future.

The case is particularly significant for the way in which Gilbert J considers the conduct that is criminalised by the counts in the US indictment and then looks for various pathway offences in New Zealand law which mirror that conduct.

The problem was that the United States case was grounded primarily upon copyright infringement. It tried to invoke section 131 of the Copyright Act as a corresponding offence at New Zealand law. But for the reason that a particular type of infringement was not specified in s. 131 – the communication right – that section was not available. So the judge went looking for other pathways which could incorporate the behaviour or conduct that reflected the count in the indictment. In so doing he held that the provisions of sections 228, 240 and 249 of the Crimes Act could, in cases involving certain types of behaviour, provide alternative pathways to what is effectively copyright offending.

This is somewhat curious because notwithstanding the invocation by the Judge of a number of authorities that supported the extension of the criminal law to include certain types of infringing behaviour, the issue is by no means uncontroversial and there are those who argue that the Copyright Act is a code, dealing with interference with a statutorily created property right, and one should not go beyond that legislation to seek a remedy.

Indeed, in his consideration of the applicability of section 131 the Judge gave a detailed analysis of the history of the legislation to demonstrate that the omission from section 131 of the communication right was deliberate and not an accidental oversight. Thus it was clearly a policy decision made by the Legislature.

Yet this case judicially extends the scope of the Crimes Act to include behaviour that would otherwise be caught by the civil infringement provisions and which is not caught by section 131. With respect, this seems to fly in the face of his careful analysis of Legislative intent in terms of criminal copyright infringement.

In Stevens v Kabushiki Kaisha Sony Computer Entertainment Ltd[47]  at issue was the question of the interpretation of a provision of Australian copyright legislation. The High Court cautioned against Courts getting involved in making policy decisions about legislation which was properly the bailiwick of Parliament. The Court observed

“The Parliament having chosen such an elaborate and specific definition for the key provision of the legislative scheme, a court should pause before stretching the highly specific language in order to overcome a supposed practical problem.”[48]

 

Although that comment is directed towards a particular provision of legislation and the scope thereof, it is suggested that the argument can be extended to address the criminalisation of infringing behaviour that does not fall within the scope of the Copyright Act. Using the Judge’s own reasoning path, if Parliament had intended such behaviour to be criminalised, it would have said so, and indeed had ample opportunity to do so from 1998 onwards.

The difficulty is this. It appears that the law of unintended consequences has resulted in the criminalisation of certain types of infringing behaviour. Factor in the use of a computer and s. 249 of the Crimes Act comes in to play. I doubt it was intended that this section would be used to criminalise copyright infringement. Nor is it my view that the Supreme Court in its expedient decision in Dixon expected that its definition of “property” as a digital file could have criminal copyright infringement consequences. This is what I have called else where a Collision in the Digital paradigm.

The collision assumes  greater proportions when one realises that, although Gilbert J’s findings were within the context of developing pathways for the purposes of identifying an extraditable offence, his interpretation applies with equal force to domestic law. The question now becomes one of whether copyright owners will pick their way through the collision and seek Police assistance in prosecuting individual acts of copyright infringement that fall outside s. 131. The matter requires legislative consideration.

Gilbert J’s decision will not be the final word on the subject – indeed he acknowledges this and it explains why the decision is so detailed, complex and voluminous. He is writing for the appeal court as well as for the parties. But the appeal pathways are not that straightforward. A strict approach to the appellate process means that not all these cases will automatically end up in the Supreme Court. As matters stand the Court of Appeal is the final court for the extradition matter. However, the judicial review proceedings do still have an appeal pathway to the Supreme Court. Whether or not the Supreme Court, for the sake of convenience, decides to grant special leave to appeal the extradition side of the case, remains to be seen.

But wait – do I hear you say? Aren’t you assuming something here and that is that there WILL be appeals. Given the past conduct of the parties, I suggest that it is inevitable that the appeal process will go as far as it possibly can. Although the US effectively “won” before Gilbert J there remains the issue of the applicability of section 131. My view is that path was never available but I have no doubt that the US will cross-appeal that aspect of the decision. The Dotcom case has further contributions to make to the development of legal principle in the Digital Paradigm.

 

[1] Robert Graves The Greek Myths “Theseus in Crete”

[2] Ortmann & Ors v US [2017] NZHC 189 at paras [37] – [45].

[3] The “Ariadne’s Thread” of the title.

[4] Ortmann above n. 2 at paras [57] – [192].

[5] Ibid. at paras [77] – [133].

[6] Ibid. at paras [87] – [112].

[7] See for example World TV Ltd v Best TV Ltd (2005) 11 TCLR 247.

[8] [2015] NZSC 147; [2016] 1 NZLR 678.

[9] Ortmann above n 2 at para [132].

[10] Ibid. at paras [134] – [160].

[11] Above n. 8.

[12] Ortmann above n.3 at para [143].

[13] Extradition Act s. 101B(1)(c)(ii) as defined in the Transnational Organised Crime Convention (TOC).

[14] Ortmann above n. 3 para [150].

[15] Ibid. para [160]. The full analysis is contained in paras [147] – [160].

[16] Ibid. paras [161] – [168].

[17] Ibid. at para [166].

[18] Ibid para [169] – [192].

[19] Ibid. para [193] – [199].

[20] Ibid. para [200] – [201].

[21] Ibid. para [202] – [212].

[22] Ibid. paras [213] – [230]

[23] Ibid. para [217] – [219].

[24] Ibid. para [220] – [222].

[25] Ibid. para [220] – [222].

[26] Ibid. para [223] – [225].

[27] Above n. 8.

[28] Dixon above n. 8 para [50] – [51].

[29] Ortmann above n. 3 para [226] – [230].

[30] Ibid. para [231] – [238].

[31] [2003] 2 NZLR 1 (CA).

[32] See Cooke P in Busby v Thorn EMI Video Programmes Ltd [1984] 1 NZLR 461

[33] See Scott v Metropolitan Police Commissioner [1975] AC 819 (HL)

[34] Ortmann above n. 3 at paras [239] – [245]

[35] Dotcom v US (Disclosure) [2014] NZSC 24; [2014] 2 NZLR 629.

[36] Ortmann above n 3 at para [253].

[37] Ibid. para [254] – [259].

[38] Ibid at para [258].

[39] Ibid. at para [263].

[40] Ibid at para [273].

[41] Ibid at paras [274] – [294].

[42] Ibid at para [277].

[43] Ibid at para [279].

[44] Ibid at para [291].

[45] Ibid at para [294].

[46] Ibid at paras [302] – [386].

[47] [2005] HCA 58.

[48] Stevens v Sony at para [204].

Technology for Lawyers: A competence requirement?

There has been a bit of publicity of late about the difficulties that some law firms are having in adapting to the continuing disruptive change that characterises the Digital Paradigm. The introduction and use of information technologies provides one example.

A lawyer’s stock in trade is not time, as has been suggested in the past. It is, in fact, information. The law office is an information hub with information flows coming in and out in the form of instructions, advice, the provision of information necessary to complete transactions, the preparation of materials to inform the Court of the nature of a dispute and the like. Information technologies must be a part of everyday legal practice. Technology enables law firms to do better in the provision of their services, and can assist in providing clients with cheaper, high-quality and nimble services.

Smaller law firms face a real challenge. There is not the division of labour in a smaller form, tuned to fulfilling client needs, to step back and take a deep perspective view of the future. Big law firms are able to attend to this aspect of practice management and often have internal teams working on little else. The smaller firms and the sole practitioners need to focus on things like websites, digital marketing, social media, e-discovery and cloud-based tools for practice and case management—hopefully giving them a competitive advantage in job market and spurring the use of new technology in every day legal practice. Cloud technology, for example, “is removing many obstacles by reducing hardware and in-house IT investments, quelling cybersecurity concerns, easing the complexity of scaling and updating software, and providing better overall access to general computing power. Additionally, as vendors continue to place more of a premium on providing online training modules for their products, the last great barrier to remain will simply be motivation” according to Mike Susong of Legaltech News.

At a recent forum titled “The Future of Legal Services in the United States: The ABA Issues a Clarion Call for Change” discussions centred on the problems citizens faced getting access to legal services. William Hubbard, immediate past-president of the American Bar Association suggested lawyers think more creatively about how they deliver legal services meaning that lawyers should “embrace technology and the benefits technology can bring to provide new avenues to provide legal services to those in need.”

There is a significant recognition, especially by the ABA, of the importance of technological knowledge and understanding as part of professional competence requirements. Four years ago, in 2012 the ABA Model Rules of Professional Conduct required, as part of the commentary to Rule 1.1, that lawyers have a duty to keep abreast of the benefits and risks associated with technology.

In September 2016 the Florida Supreme Court took the matter one step further, issuing an opinion adopting the Florida Bar Association’s proposal for mandatory technology Continuing Legal Education (CLE).

“In addition to adding the three-hour requirement, the court also amended a comment to its rule on lawyer competence to say that lawyers could retain non-lawyer advisers with “established technological competence in the relevant field.”

The court added that competent representation may also involve cybersecurity and safeguarding confidential information. “In order to maintain the requisite knowledge and skill, a lawyer should engage in continuing study and education, including an understanding of the risks and benefits associated with the use of technology,” the court held.”

It will be interesting to see if this move catches on. There can be no doubt that CLE programmes contain technology oriented modules, but the Florida move now makes it mandatory. This must be viewed as a necessary step as we move further and further into the Digital Paradigm and more and more aspects of technology permeate the legal landscape.

I have argued in the past that lawyers who argue technology related cases need to understand the technology and how it works. There is no point arguing a case about publication of material on social media without knowing how the platform operates, what its parameters and settings are, what the settings were at the relevant time and, importantly, how those settings can be located and examined. There is not really a “one size fits all” approach that can be adopted to social media and it would be unwise to make generalised assumptions about the qualities and operation of a platform.

There is little point in attending a case management conference about e-discovery unless the lawyers are aware of the various technologies that are available and, as importantly, how they work so that a reasonable and proportionate discovery proposal can be reached.

The nature of digital information, in and of itself, is paradigmatically different from that which is recorded on paper. Lawyers must understand this and recognise that although content is king most of the time, what lies beneath the content can be as informative, if not more so, than the content on the face of the document.

There are many more examples but the message is clear. Lawyers cannot be resistant to the Digital winds of change that are blowing. Bend, adapt, adopt must be the message for lawyers in the Digital Paradigm.

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.

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.”

Interesting Times

I recently read an entertaining book. It was entitled “History Play”, written by Rodney Bolt. It had an interesting argument. Christopher Marlowe did not die in the tavern brawl in Deptford. In fact he staged his own death so that he could “disappear” and in the following years travelled extensively around the Continent and to the New World. And how do  we know this? There are two sources of evidence. The plays attributed to an ambitious but talentless playwright by the name of William Shakespeare which were in fact written by Marlowe, and from a number of “recently discovered” documentary sources that give us possible links to Marlowe’s activities both before and after the “Deptford Incident”. I should say at the outset that the book should not be taken seriously, at least for the argument it advances. But there are other issues that arise that underlie Bolt’s very entertaining and, at times, erudite piece.

The plays, according to Bolt, contain all sorts of minor clues that nestle in the detail of speeches or actions that could only have come from an intimate acquaintance with the subject matter possessed by Marlowe but not by Shakespeare. For example, Marlowe visited his grandparents in Dover and would have been familiar with the view from the cliffs described in King Lear IV vi 11 – 23. In addition there are phrasing similarities that appear in Marlowe’s plays that are duplicated in “Shakespeare”. Marlowe, according to Bolt, travelled widely on the Continent during and after his time as a student at Cambridge. The observations of those he met appear in his plays . The detail of military fortifications described in 2 Tamburlaine are almost verbatim from a military manual written by one Paul Ives, but which was not printed until 1589, thus precluding the possibility of plagiarism. The detail of Danish drinking habits could have been acquired by Marlowe on a visit to Elsinore and are recorded in Hamlet V ii 267-70.

But perhaps most interesting of the sources which provide the evidence are the written and printed materials that have been located in archives or recently discovered collections that connect Marlowe with others after his “death” or which provide background or context for what he wrote either as Marlowe or Shakespeare. It is not for me to question these “sources” although I should note that they do not appear in the bibliography and some of the manuscript sources come only from “private collections” and therefore are incapable of independent verification. What is important is that printed, written or transcribed sources provide valuable and,at times, critical evidence for the historian.

And this leads me to the point of this post. How will the historians of tomorrow fare when most, if not all, of the “documentary” evidence is in digital form, dispersed across cloud servers or retained in locally located hard drives. Will there be a digital equivalent of the Harley, Cotton or Sloane collections of manuscripts held by the British Library that have provided a vital resource for historians. In passing I should note that the British Library is digitising some of its manuscript collection and in my own researches into the early history of legal printing I was aided by Chadwyck-Healey’s invaluable Early English Books Online.

But will there be a modern equivalent of Robert and Edward Harley or Robert Cotton or Hans Sloane, gathering together the digital documents and manuscripts and retaining them for posterity? Are there individuals, even now, salvaging the discarded hard drives and other storage devices against the day when they will provide invaluable evidence for historians? And if so, how and where will these be located. Will the historian, with access to a private library of hard drives serendipitously uncover the trove on information that he or she need to complete the picture?

Of course, the future historian, once the digital archive has been located, should have little difficulty locating the information needed. The use of what lawyers recognise as e-discovery tools will assist in processing and locating the relevant information. The only problem of course is that the future historian will have to have some skill in the use of such tools – unless he or she wishes to pay a highly skilled “e-discovery” analyst.

It may well be that such digital treasure troves will be seen as highly authentic sources. What of the “archived web” do I hear you say? This assumes that the capacity of web archives in the various libraries and on-line archives contain a comprehensive dataset. And the next question is whether that dataset is sufficiently complete. The rise of the so-called “right to be forgotten” will compromise web archives significantly and may well relegate them the the status of secondary authority for digital historians.

“May you live in interesting times” is, I understand, a form of curse. The question is whether, with an absence of stable source material, historians of the future will be able to ascertain if the twenty-first century was an interesting time at all.

Facebook Friends on Appeal – Murray v Wishart

In an earlier post I discussed the decision of Courtney J in Wishart v Murray and dealt specifically with the issue of whether the “owner” of a Facebook page was the “publisher” of defamatory comments made on that page by third parties. The case was appealed to the Court of Appeal (Murray v Wishart [2014] NZCA 461). The judges unanimously held that a third party publisher – that is the owner of the Facebook page that contains comments by others – was not liable as publisher of those comments. They rejected the suggestion liability should attach because the owner of the page “ought to have known” that there was defamatory material, even if he or she was unaware of the actual content of the comment. The Court adopted a more restrictive approach, holding that the host of a Facebook page would only be liable as a publisher if there was actual knowledge of the comments and that there was a failure to remove them in a reasonable time in circumstances which could give rise to an inference that responsibility was being taken for the comments.

However, the approach of the Court, and its apparent recognition of some of the problems posed by the new Digital Paradigm, is of particular interest. In addition the decision leaves open other aspects of publication on platforms other than Facebook such as blogs.

The Background to the Case

Mr Wishart was the author of a book called Breaking Silence, about a woman named Macsyna King. Ms King collaborated with him on the book. Ms King was the mother of Chris and Cru Kahui, who were twins. They died at the age of three months in 2006 from non-accidental injuries. Their father, Chris Kahui, was charged with their murder but acquitted. During his trial, he suggested that Ms King had inflicted the fatal injuries. A subsequent coroner’s report found that the twins had died while in Mr Kahui’s sole care. Nevertheless, suggestions implicating Ms King retained some currency in the public arena. The trial of Chris Kahui for the murder of the twins generated considerable public interest.

Mr Murray learned of the impending publication of Mr Wishart’s book in June 2011. He established a Facebook page called “Boycott the Macsyna King book.”  He used his Twitter account to publicise the Facebook page. He posted comments on Twitter and on the Facebook page criticising both Mr Wishart and Ms King. Mrs Murray posted comments on the Facebook page, as did numerous other people.

Mr Wishart commenced proceedings for defamation. He alleged a number of instances but one cause of action related to a claim against Mr Murray in relation to third party statements made by persons posting comments on the Facebook page. This post will be restricted to the way in which the Court dealt with that cause of action.

In the High Court Mr. Murray applied to strike out this cause of action. He was unsuccessful for the extensive reasons and analysis given by Courtney J and discussed in an earlier post. Hence, he appealed.

The Approach of the Court

The Court started by considering the following test applied by Courtney J and articulated by her as follows:

Those who host Facebook pages or similar are not passive instruments or mere conduits of content posted on their Facebook page. They will [be] regarded as publishers of postings made by anonymous users in two circumstances. The first is if they know of the defamatory statement and fail to remove it within a reasonable time in circumstances that give rise to an inference that they are taking responsibility for it. A request by the person affected is not necessary. The second is where they do not know of the defamatory posting but ought, in the circumstances, to know that postings are being made that are likely to be defamatory. (Para 117)

This holding identified two tests – the “actual knowledge” test and the “ought to know” test. It was argued for Mr Murray that the actual knowledge test should be the only test for publication. As a first stet the Court considered how the Facebook page worked. This is an important and necessary first step in determining the proper application of existing rules. The Court said (at para 84)

An analysis of the positions taken by the parties requires a careful consideration of exactly what happened in relation to the Facebook page and on what basis it is pleaded that Mr Murray became the publisher of the statements made by third parties on the Facebook page. Although Courtney J described those posting messages on the Facebook page as “anonymous users”, that was not correct on the evidence. In fact, most of the users who posted allegedly defamatory statements identified themselves by name, are named in the statement of claim and could be traced by Mr Wishart if he wished to take action against them. So his action against Mr Murray is not the only potential avenue for redress available to him, though it was obviously more practical to sue Mr Murray for all the offending comments rather than sue many of those commenting for their respective comments.

The Court went on to discuss the way in which the page was set up and operated by Mr Murray. It noted that Courtney J had noted that Mr Murray not only could, but did, take frequent and active steps to remove postings that he considered defamatory or otherwise inappropriate, and also blocked particular individuals whose views he considered unacceptable. She found that he could not, therefore, be perceived as a “passive instrument”. Furthermore, Courtney J found that Mr Murray blocked Mr Wishart and his supporters from the Facebook page, which made it more difficult for Mr Wishart to identify and complain about potentially defamatory material. This impacted upon whether Mr Murray ought to have known of the defamatory postings.

The Use of Analogy

After considering the factual background to Courtney J’s finding, the Court went on to consider the legal path by which she reached her conclusion, her reliance upon the decision in Emmens v Pottle (1885) 16 QBD 354 (CA) and discussed at length the various decisions to which she referred. The Court then made the following significant comment  (para 99):

The analysis of the cases requires the Court to apply reasoning by strained analogy, because the old cases do not, of course, deal with publication on the internet. There is a question of the extent to which these analogies are helpful. However, we will consider the existing case law, bearing in mind that the old cases are concerned with starkly different facts.

The Court then went on to consider the factual background to a number of cases that had been discussed by Courtney J. (paras 100 – 123) and the decision in Oriental Press Group Ltd v Fevaworks Solutions Ltd [2013] HKCFA 47 which was decided after Courtney J’s decision. That case considered whether a host of an internet discussion forum is a publisher of defamatory statements posted by users of the forum. Although the main focus of the decision was on the availability of the innocent dissemination defence, the Court also considered whether the forum host was a publisher. It rejected the analogy with the notice board or graffiti cases, because in those cases the person posting or writing the defamatory comment was a trespasser. Since the forum host played an active role in encouraging and facilitating the postings on its forum, they were participants in the publication of postings by forum users and thus publishers.

The Court of Appeal then considered the various authorities that had been referred to by Courtney J and found that they provided limited guidance because the particular factual situation before the Court had to be the subject of focus. The reason for this was that the Court’s analysis of the authorities showed how sensitive the outcome may be to the particular circumstances of publication, and the fact that many of the authorities related to publication in one form or another on the internet did not provide any form of common theme, because of the different roles taken by the alleged publisher in each case.

The Court went on to examine the drawing of analogies , especially from authorities which did not involve the Internet. While noting that analogy is a helpful form of reasoning they may not be useful in particular cases. The Court observed that it was being asked to consider third party Facebook comments as analagous with:

  1. the posting of a notice on a notice board (or a wall on which notices can be affixed) without the knowledge of the owner of the notice board/wall;
  2. the writing of a defamatory statement on a wall of a building without the knowledge of the building owner;
  3. a defamatory comment made at a public meeting without the prior knowledge or subsequent endorsement or adoption by the organiser of the meeting

The Court then considered the circumstances in Emmens v Pottle which established that a party can be a publisher even if they did not know of the defamatory material. The holding in that case was that a news vendor who does not know of the defamatory statement in a paper he or she sells is a publisher, and must rely on the innocent dissemination defence to avoid liability.

The Court of Appeal considered that news vendor in Emmens v Pottle did not provide an apposite analogy with a Facebook page host. It observed that a news vendor is a publisher only because of the role taken in distributing the primary vehicle of publication, the newspaper itself. This contrasts with the host of a Facebook page which is providing the actual medium of publication, and whose role in the publication is completed before publication occurs. The Facebook page is in fact set up before any third party comments are posted.

So was the Facebook page more like the “notice on the wall” situation described in Byrne v Deane [1937] 1 KB 818 (CA)? This analogy was not perfect either. In Oriental Press Group the Court found that posting a notice on a wall on the facts in Byrne v Deane  was a breach of club rules and therefore amounted to a trespass. The Court of Appeal did not consider that the breach of the club rules was a factor affecting the outcome but rather that the club and its owners had not posted the defamatory notice and, until they became aware of it, were in no position to prevent or bring to an end the publication of the defamatory message. If a case arose where the defamatory message was posted on a community notice board on which postings were welcomed from anyone, the same analysis would apply. Furthermore, in Byrne v Deane the post was truly anonymous. There was no way by which the person posting the notice could be identified. In the case of the Facebook host, posting messages in response to an invitation to do so is lawful; and solicited by the host. Similarly, the Facebook host is not the only potential defendant whereas in Byrne v Deane, as has been observed, the poster of the notice could not be identified.

The Court also considered that drawing an analogy between a Facebook page and graffiti on a wall was also unhelpful. The owner of the wall on which the graffiti is written is not intending that the wall be used for posting messages. A Facebook host is.

One argument that had been advanced was that an analogy could be drawn with a public meeting – although there is a danger in equating the physical world with the virtual. It was argued that if Mr Murray had convened a public meeting on the subject of Mr Wishart’s book, Mr Murray would have been liable for his own statements at the meeting but not for those of others who spoke at the meeting, unless he adopted others’ statements himself. The court felt the analogy was useful because it incorporated a factor that neither of the other two analogies do: the fact that Mr Murray solicited third party comments about Mr Wishart’s book. In addition speakers at a public meeting could be identified (and sued) if they made defamatory statements just as many contributors to the Facebook page could be. However, the public meeting analogy is not a perfect one in that statements at a meeting would be oral and therefore ephemeral unlike the written comments on the Facebook page but it did illustrate a situation where even if a person incites defamation, he or she will not necessarily be liable for defamatory statements made by others. That is the case even if he or she ought to have known that defamatory comments could be made by those present at the meeting.

Problems with the “Ought to Know” Test

The Court then expressed its concerns about the “ought to know” test and Facebook hosts. First, an “ought to know” test put the host in a worse position than the “actual knowledge” test. In the “actual knowledge” situation the host has an opportunity to remove the content within a reasonable time and will not be a publisher if this is done. In the “ought to know” case publication commences the moment the comment is posted.

What happens when a Facebook page host who ought to know of a defamatory comment on the page actually becomes aware of the comment? On the “actual knowledge” test, he or she can avoid being a publisher by removing the comment in a reasonable time. But removal of the comment in a reasonable time after becoming aware of it will not avail him or her if, before becoming aware of the comment, he or she ought to have known about it, because on the “ought to know” test he or she is a publisher as soon as the comment is posted.

Another concern was that the “ought to know” test makes a Facebook page host liable on a strict liability basis, solely on the existence of the defamatory comment. Once the comment is posted the host cannot do anything to avoid being treated as a publisher.

A further concern involved the need to balance the right of freedom of expression affirmed in s 14 of the NZ Bill of Rights Act 1990 against the interests of a person whose reputation is damaged by another. The Court considered that the imposition of the “ought to know” test in relation to a Facebook page host gives undue preference to the latter over the former.

A fourth issue concerning the Court was that of the uncertainty of the test in its application. Given the widespread use of Facebook, it is desirable that the law defines the boundaries with clarity and in a manner that Facebook page hosts can regulate their activities to avoid unanticipated risk.

Finally the innocent dissemination test provided in s. 21 of the Defamation Act would be difficult to apply to a Facebook page host, because the language of the section and the defined terms used in it are all aimed at old media and appear to be inapplicable to internet publishers.

Thus the Court concluded that the actual knowledge test should be the only test to determine whether a Facebook page host is a publisher.

Thus the decision clarifies the position for Facebook page hosts and the test that should be applied in determining whether such an individual will be a publisher of third party comments. But there are deeper aspects to the case that are important in approaching cases involving new technologies and new communications technologies in particular.

The Deeper Aspects of the Case

The first is the recognition by the Court of the importance of understanding how the technology actually works. It is necessary to go below the “content layer” and look at the medium itself and how it operates within the various taxonomies of communication methods. In this regard, it is not possible to make generalisations about all communications protocols or applications that utilise the backbone that is the Internet.

Similarly it would be incorrect to refer to defamation by Facebook or using a blog or a Google snippet as “Internet defamation” because the only common factor that these application have is that they bolt on to and utilise the transport layer provided by the Internet. An example in the intellectual property field where an understanding of the technology behind Google adwords was critical to the case was Intercity Group (NZ) Limited v Nakedbus NZ Limited [2014] NZHC 124.. Thus, when confronted with a potentially defamatory communication on a blog, the Court will have to consider the way in which a blog works and also consider the particular blogging platform, for there may well be differences between platforms and their operation.

The second major aspect of the case – and a very important one for lawyers – is the care that must be employed in drawing analogies particularly with earlier communications paradigms. The Court did not entirely discount the use of analogy when dealing with communication applications utilising the Internet. However it is clear that the use of analogies must be approached with considerable care. The Digital Paradigm introduces new and different means of communication that often have no parallel with the earlier paradigm other than that a form of content is communicated. What needs to be considered is how  that content is communicated and the case demonstrates the danger of looking for parallels in earlier methods of communication. While a Facebook page may “look like” a noticeboard upon which “posts” are placed, or has a “wall” which may be susceptible to scrawling graffiti it is important not to be seduced by the language parallels of the earlier paradigm. A Facebook “page” or a “web page” are not pages at all. Neither have the physical properties of a “page”. It is in fact a mixture of coded electronic impulses rendered on a screen using a software and hardware interface. The word “page” is used because in the transition between paradigms we tend to use language that encodes our conceptual understanding of the way in which information is presented. A “website” is a convenient linguistic encoding for the complex way in which information is dispersed across a storage medium which may be accessible to a user. A website is not in fact a discrete physical space like a “building site”. It has no separate identifiable physical existence.

The use of comfortable encoding for paradigmatically different concepts; the resort often to a form of functional equivalence with an earlier paradigm means that we may be lured in considering other analogous equivalencies as we attempt to try to make rules which applied to an old paradigm fit into a new one.

The real deeper subtext to Murray v Wishart is that we must all be careful to avoid what appears to be the comfortable route and carefully examine and understand the reality of the technology before we start to determine the applicable rule.