Power Simon: Copyright (Infringing File Sharing) Amendment Bill — First Reading 
Power Simon: Copyright (Infringing File Sharing) Amendment Bill — First Reading 
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Hon SIMON POWER (Minister of Justice) 
: 
 I move  
That the Copyright (Infringing File Sharing) Amendment Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be referred to the Commerce Committee for consideration. 
This bill repeals section 92A of the Copyright Act 1994 and amends Part 6 of the Act to provide a fair and effective regime for the enforcement of copyright against illegal file sharers. The Copyright Act facilitates the earning of revenue from creative works in turn encouraging the investment of that revenue into the production of more creative content. Copyright owners are granted exclusive rights to exploit their creative works for a limited period of time. Ensuring strong legal frameworks for intellectual property rights contributes to achieving this Government’s goals of fostering economic growth and encouraging our creative industries to provide new and innovative products to New Zealand consumers and abroad. However copyright owners currently lack an effective enforcement measure against illegal file-sharing. 
File-sharing technologies link together Internet users who have access to copyright works and they facilitate the quick and easy transfer of a copy of a work such as music films and software to many other users. A 2009 study commissioned by the Recording Industry Association of New Zealand identified an average of 5000 potential infringements a day using a limited list of sound recordings. The Copyright Act provides that the communication of a work and the copying of a work without the authorisation of the copyright owner is a breach of copyright. Many file sharers communicate or copy a work without seeking permission from or paying the copyright owner. This sort of activity can therefore constitute a breach of copyright under the Act. 
As I am sure that everybody in the House this afternoon is aware New Zealand’s creative industries are a significant part of our economy. The advice I have is that in the 2008 financial year the New Zealand screen industry recorded gross revenue of $2.7 billion. However the creative industries have experienced significant declines in revenue as file sharing has become more prevalent. This Government wants to ensure that our creative industries can derive maximum economic benefit from the investment they put into the production of new copyright works. Current enforcement measures in the Copyright Act are ineffective at remedying the problem as the cost of legal proceedings outweighs the amount a copyright owner may be awarded by a court for file-sharing infringements. Court proceedings are further complicated by the requirement for copyright owners to obtain an order requiring the file sharer’s Internet service provider—or ISP—to release the file sharer’s contact details to the copyright owner before being able to take court action. 
In 2008 the previous Government amended the Copyright Act to include measures to address repeat copyright infringement over the Internet. The Copyright (New Technologies) Amendment Act inserted section 92A into the principal Act. It required Internet service providers to adopt and reasonably implement a policy to terminate the accounts of repeat infringers. In March 2009 this Government ordered a review of section 92A as it became clear that that section would not be workable. This bill proposes amending the Copyright Act to provide a fairer and more effective means for copyright owners to enforce their rights against file sharers. 
The bill provides that Internet account holders who are matched with evidence of alleged copyright infringement must receive a detection notice from their Internet service provider. After a second alleged infringement a warning notice is sent to the account holder. A third alleged infringement will result in an enforcement notice. It is only at that point that a copyright owner may take enforcement action by seeking a compensation award at the Copyright Tribunal or by seeking the suspension of an infringer’s Internet account for up to 6 months in the District Court. The bill provides time frames between notices to allow Internet account holders a reasonable opportunity to stop the infringing activity. Account holders who ignore warnings and continue infringing between notices will be liable for those infringements if enforcement action is taken against them at the Copyright Tribunal. There will be opportunities at all stages of the notice regime for an account holder to dispute notices and there will be an opportunity for a repeat infringer to request a hearing if enforcement action is taken against him or her at the Copyright Tribunal. Notices must also contain information to educate the recipient about illegal file-sharing to deter further infringing activity. The bill ensures that where a copyright owner seeks suspension of an Internet account for up to 6 months in the District Court an account will be suspended only after the account holder has received a third notice and in appropriate circumstances. The factors a court must consider when determining whether to order an Internet account suspension include the account holder’s reliance on access to the Internet and the seriousness of the infringement. 
The bill also includes a separate definition of “Internet service provider” specifically for the new regime. This definition covers only traditional Internet service providers—like Telecom—that are technically capable of performing the evidence-matching and notice-sending requirements in the bill. Universities libraries businesses and providers of transient Internet access such as Internet cafes are not considered Internet service providers under the new definition. As account holders however they will still be required to address infringing activity occurring on their networks. 
The proposals in this bill were formed by the Ministry of Economic Development in consultation with the Ministry of Justice Treasury the Ministry of Foreign Affairs and Trade and the Privacy Commissioner. Stakeholders from the creative and telecommunications industries have also been consulted closely on the new regime and the public were invited to comment on proposals. 
It is fair to say that the impending commencement of the original version of section 92A just over a year ago aroused some very passionate responses particularly from the Internet community. By taking the time to stop and listen to stakeholders and members of the public and then to act I am of the view that the Government has arrived at a more broadly acceptable solution. I commend this bill to the House.