The popular conception is that developments in technology have led to widespread copying and a dramatic increase in copyright infringement. Historically, rights holders have focussed the fight against unlawful copying at organised commercial piracy. In the early 1980s the potential for individuals to pursue home copying seemed to pose the greatest threat to copyright holders. The digital age has made domestic copying easier with the law struggling to draw a distinction between what is fair and what is unlawful. Whilst cases involving copyright protection have been widely reported in the US, Sony Computer Entertainment Inc v Edmunds T/a Channel Technology and Others [2002] EWHC 45, [2002] All ER (D) 170 (Jan) is the first in the UK. This case demonstrates that rights holders are in a stronger position than was once feared with greater protection and control against those who facilitate domestic copyright infringement.
The Rise of Domestic Copying
How has copyright law reacted to advances in technology over the last 20 years? The first modern case of technology challenging rights holders protection concerned the lending of records. In CBS Inc and others v Ames Records and Tapes Ltd [1981] 2 All ER 812 a subscription scheme was offered by Ames Records which allowed members to hire records at 20% of the purchase price. Although notices were displayed in the record shops warning customers that the home taping of the hired records was unlawful, CBS argued that Ames Records were encouraging the growth of the black market in unlawful copies. Under the Copyright Act 1956, s1(2), the issue was whether Ames Records unlawfully ‘authorised’ the home taping of records. Whilst not denying that there was potential for the scheme to lead to the home taping of records, Ames Records argued that their scheme was not designed to profit from the home taping. The decision rested on the influence that Ames Records had on the unlawful copying. As Ames Records could not control or prevent the home taping they did not ‘authorise’ the infringement.
In CBS v Ames Records the influence of new technology was pronounced as record-to-tape recording facilities were cheaper and more widely available. The threat to the record companies was that as sales of the recording equipment grew the sales of original records would fall. It is interesting to note that the evidence of Mr Ames was that the popularity of the scheme actually led to increased album sales. Notwithstanding this, CBS regarded the lending service as encouraging unlawful copying and a dilution of their rights and potential revenue.
The difficulty for rights holders was and remains that they are unable to effectively police domestic copyright infringement. It is not possible to detect every instance of the private copying of an original record to a blank tape as in the Ames Records case. With the exception of the UK, Ireland and Luxembourg, the members of the EU charge a levy upon the sale of all blank tapes. The proceeds of the levy are distributed to the rights holders effectively recognising that a significant number of the tapes are used to infringe copyright. In the UK, however, CBS v Ames Records marked the beginning of an attack upon manufacturers of equipment that facilitated private copyright infringement.
CBS Songs Limited and Others v Amstrad Consumer Electronics plc and another [1988] 2 All ER 490 concerned Amstrad’s twin-deck tape recorder that had been launched with great commercial success. The machines were targeted by CBS because they not only had a tape-to-tape recording facility but also had the ability to record at high speed. It was said that ‘it is statistically certain that most but not all consoles are used for the purpose of home copying in breach of copyright’ and ‘. Amstrad . provoked BPI [the British Phonographic Industry] by hypocritical and disingenuous forms of advertising’.
As in CBS v Ames Records the key question was whether Amstrad were ‘authorising’ the public to make infringing copies. As neither a manufacturer nor a machine can in themselves give a purchaser authority to copy, the selling of a twin-deck tape recorder may facilitate unlawful copying but it does not ‘authorise’ it. There was no question that Amstrad were aware that purchasers used the machines so as to infringe copyright but this fell short of ‘authorising’ and as such was not unlawful.
Copyright, Designs and Patents Act 1988
How would Amstrad fair under the CDPA? Presumably the claim would be brought against Amstrad that the tape-to-tape recorder was ‘an article specifically designed or adapted . knowing or having reason to believe that it is to be used to make infringing copies’ (CDPA, s 24). Amstrad would no doubt argue that the tape-to-tape recorder has many other uses and therefore is not specifically designed to make infringing copies.
Parallels with US Copyright Law
In the US a case concerning videocassette recorders or VCRs had already been decided in favour of the manufacturers. In Sony Corporation v Universal City Studios, Inc 464 US 417 (1984) it was accepted that VCRs were used to copy television programmes and yet the manufacturers and retailers were not liable for copyright infringement. Sony was successful despite the fact that the users of the VCRs were in some cases directly infringing Universal’s copyright in the programmes. Universal had to show that Sony had constructive knowledge that the equipment sold would be used to make unauthorised copies of original works. The VCRs were used to record programmes so that they could be viewed at another time, (time-shifting), and this was considered a fair use. Time-shifting was widespread and had the effect of increasing the rights holders’ audience. In recognising that there were ‘substantial non-infringing uses’ for the VCRs, the court would not impute constructive knowledge in the manufacturers or retailers.
Copyright Infringement in the Computer Age
Advances in digital technology and the rise of information technology systems and networks have presented fresh problems for copyright holders. On both sides of the Atlantic, copyright law is essentially a restriction on the user’s right to copy without the authority of the owner. Computer software (programs are expressly made works of copyright under the Copyright (Computer Software) Amendment Act 1985), compact disks (CDs) and digital video disks (DVDs) must be copied to be used, ie for software to run it must be copied from its stored format to the user’s hard drive.
The Copyright (Computer Programs) Regulations 1992 set out the lawful purposes for which copies may be made. These include the right to load and run software, to correct errors(CDPA, s 50C(2)), to make back-up copies (s 50A(1)) and a right to decompile to secure interoperability (s 50C).
In the United States, section 107 of the Copyright Act 17 USC codified the factors to be considered in determining the fair use of copyright works including software:
- whether the use was of a commercial nature
- the form of the copyright work
- whether the copying was of a substantial part of the original
- the effect upon the market value of the copyright work.
In general terms the ‘fair use’ of a software program includes those things permitted under UK law.
Digital products are much simpler to copy with little discernible reduction of quality compared to the home copying of records or tapes. Whilst the nature of the technology requires the rights holders to permit limited forms of copying, it also carries an inherent threat to their rights. In responding to this threat the rights holders have focussed upon those who facilitate unlawful copying.
Napster
The case of A&M Records Inc v Napster D.C. No CV-99-05183-MHP concerns a file-sharing software application. By employing MP3 technology individual computer owners are able to copy and store the data held on the CD. The MP3 format compresses the data into a file that can be stored and transferred easily. The Napster system incorporates a browser that allows users to identify files made available by other users. The files are held on the user’s server. When a user requests that a file is downloaded it is transmitted directly from one user to another.
The district court of the Northern Circuit of California granted an injunction against Napster on the grounds that it was engaged in contributory and vicarious copyright infringement. Napster appealed to the Ninth Circuit but the injunction remains in place and it appears that that the matter will be settled without going to full trial.
The copying and distribution of music files was held to be a direct infringement of the rights holders’ copyright and therefore the users of Napster were not ‘fair users’ within the meaning of section 107 of the Copyright Act 17 USC. Clearly individuals were infringing the record companies copyright but how was Napster acting unlawfully in facilitating the infringement? To prove contributory infringement the record companies had to show that Napster knew or had reason to know of the end users’ infringement. The overwhelming evidence was that Napster was aware of this. However, the court was bound to follow the decision in Sony v Universal, that where the equipment in question was also capable of producing substantial non-infringing uses constructive knowledge would not be found. Whilst this door is still open to Napster, the injunction remains in place as evidence of substantial non-infringing uses of its music share system has not been provided.
To prove that Napster was engaged in vicarious copyright infringement the record companies had to show that Napster supervised the copyright infringement as well as having a direct financial interest in it. The fact that users of Napster’s system could access free music files was considered a draw that was in itself a financial benefit to Napster. In addition, Napster had reserved the right to refuse access and cancel the accounts of users which demonstrated an ability to supervise. Liability could not be avoided by ignoring the infringements that Napster was profiting from.
Napster confirms that where the infringement is flagrant and it is difficult to make out non-infringing uses the Sony defence will not be available to those who facilitate digital copying.
Copy Protection in the Digital Age
Digital technology brings with it huge potential for domestic and commercial piracy but the very same technology is providing rights holders with tools to protect their works. The introduction of ‘stealth’ CDs and DVDs is the latest copy protection method employed by rights holders. One such system involves the scrambling of the song directory on the CD which defeats software designed to search and copy such information. Other methods involve the introduction of noises which are not audible when played on a stereo but impair the quality sound of the music when played on a computer.
Faced with concerns that even the most sophisticated copy protection systems are capable of being defeated, rights holders lobbied for tougher regulation and the result was the 1996 WIPO Copyright Treaty. The Treaty sought to recognise ‘the significance of copy protection as an incentive for literary creation’.
Protection in the US: Digital Millennium Copyright Act (DMCA)
In the US the WIPO Copyright Treaty was introduced by the Digital Millennium Copyright Act (DMCA). The DMCA states that ‘no person shall circumvent a technological measure that effectively controls access to a work protected under this title’. Moreover, anything that is ‘primarily designed or produced for the purpose of circumventing protection afforded by a technological measure’ is unlawful.
The DMCA has been used by rights holders against those who undermine copy protection. One example is the Motion Picture Association of America who sued 2006: The Hacker Quarterly. The Hacker Quarterly published software source codes that provided information allowing readers to unravel encryption devices and copy DVDs. The information contained in the magazine was primarily designed to circumvent the encryption and was therefore unlawful. In the US the DMCA has raised a constitutional debate. Commentators argue that the DMCA is incompatible with the constitutionally protected right of free speech.
Another case in the US concerned the Russian company, ElcomSoft Co, who produced a piece of software that allowed the copyright protection measures in Adobe’s eBook to be bypassed. The computer program manufactured by ElcomSoft Co allowed the eBooks to be copied and used on any normal PC. Did the software supplied by ElcomSoft Co merely allow users to make back-up copies under the fair use principles of US copyright law? Thus far defences based on free speech and fair use have proved unsuccessful.
Protection in the UK: CDPA
In the UK, protection for rights holders comes under the CDPA 1998, s 296(2). To circumvent a device of copy protection knowing or having reason to believe that it will lead to infringing copies is unlawful.
What is a device of copy protection under the CDPA? A device or measure need not be entirely reliable or effective to be a copyright protecting device. The test is satisfied if there is an intention to restrict copying or to impair the quality of copies made.
Playstation v Messiah
The copyright holder’s intention was one issue considered in Sony Computer Entertainment v Edmunds T/a Channel Technology. Sony, manufacturers of Playstation 2, designed the games console to search for a specific piece of code which was embedded within the computer programs on the DVDs they supplied. The embedded code was so arranged that it could not be read or copied by a normal computer. Therefore, if anyone other than Sony or one if its licensees were to make a copy of the DVD, it would not play on the console. As Sony had the required intention, the embedded code was a copy protection device under the CDPA.
Channel Technology imported a computer chip from Russia known as ‘The Messiah’. The chip was capable of being inserted within the Playstation 2 console and allowed the embedded codes to be bypassed. The court emphasised that there were a great number of legitimate copies and the Messiah would lead to widespread ‘swapping’ in the market. Comparisons were drawn with the great number of infringements produced with blank tapes.
Channel Technology argued that Messiah had non-infringing uses and that the proper construction of the CDPA was that a device was only unlawful where its only use was the circumvention of copy protection devices that led to infringing copies.
What lawful uses did Channel technology contend Messiah could be put to? The defence was based upon the way that Sony chose to market the Playstation 2 console. It had divided the market into geographical areas: Japan, the US and the PAL countries. The embedded codes were different in each jurisdiction ensuring that the computer games sold in one area would not operate on consoles sold in other areas and vice versa. Channel Technology argued that a purchaser had the right to import games for private and domestic use under the CDPA, s 22 and that the use of Messiah was a ‘lawful use’ under s 50C. But s 50C does not exhaustively list the ‘lawful uses’ and the court found that Sony had a right to impose copyright licences on a territorial basis. By importing the DVDs, users were breaching Sony’s license and therefore any subsequent use was not lawful.
Channel Technology also claimed that the Messiah allowed users to exercise their right to make back-up copies under s50A. The court found that the normal user of a computer game does not include a licence to make a back-up copy. A distinction was drawn between music and computer games and applications software such as word processing packages. In the latter case it was held that a separate licence is granted to produce a back-up copy. It may be that ‘lawful use’ in the UK is more successful than ‘fair use’ in the US in establishing a right to circumvent copy protection in some cases.
Channel Technology’s arguments based on the lawful use of the Messiah are compatible with the Software Directive(91/250/EEC) which allows circumvention of copy protection where that circumvention is not exclusively intended to make infringing copies. However, under the CDPA it was sufficient for Sony to show that one use for the Messiah was the making of infringing copies and that Channel Technology knew or had reason to believe that was the case.
The Copyright Directive
What is the future for copyright protection? The Copyright Directive is designed to provide a framework of rights across the EU minimising variations between national provisions on copyright not least in the area of copy protection.
Article 6 of the Directive requires Member States to provide legal protection against the circumvention of effective technological measures. The Directive makes unlawful ‘devices, products or components’ whose primary purpose is to circumvent the technological measures, or where they have limited commercial purpose save to circumvent or are marketed for the purpose of circumvention.
It should be noted that the Directive does not apply to computer programs that continue to be dealt with under the Software Directive. Article 7 of the Software Directive provides that Member States must make unlawful ‘any means the sole intended purpose of which is to facilitate the unauthorised removal or circumvention of any technical device . to protect a computer program’. The protection afforded by the Software Directive is less strict than that provided by the Copyright Directive. A device that also has a lawful purpose may be permitted under the Software Directive but not under the Copyright Directive.
Conclusion
The Copyright Directive does not raise the level of copyright protection in the UK beyond that provided by the CDPA, s 296. The government is under no obligation to introduce enabling legislation in this regard. Present legislation in the UK and the US provides rights holders with an effective tool against domestic copyright infringement and the use of copy protection systems seems likely to increase.
Paul Randle is a solictor in the IP/IT Team of Pictons. Paul may be contacted at paul@pictons.co.uk. Paul Randle 2002 ©.
