Have you recently received a letter regarding an audit of your Software Licences? If so, the letter likely came from the Business Software Alliance (BSA).
The BSA is a non-profit trade association created to advance the goals of the software industry and its hardware partners. The BSA is currently targeting SMEs in Perth (with the other States and Territories of Australia to follow) with between 10 to 150 employees in the architecture, construction, engineering, creative and automobile industries. These industries will be sent a letter with a link to an online questionnaire which will help them to check their software licences.
The BSA Members participating in this campaign are Adobe, Autodesk, Microsoft and Symantec. According to news reports the online compliance check connects to the back-end systems of Adobe, Autodesk, Microsoft and Symantec and the SMEs are able to see their registered and active software licences with those four companies.
The BSA claim that the aim of the compliance check is about education and awareness to ensure compliance and that it is not about prosecution or generating a settlement out of non-compliance. However, as reported by Mr Stephen Withers on ITWire (http://www.itwire.com/it-industry-news/strategy/49921-bsa-licence-check-offers-limited-guarantees-for-participants) Mr Clayton Noble, co-chair of the BSA commented that “damages will not be sought from any business that gets back into compliance…but would not guarantee that information entered on the system would not be used to the detriment of the company involved.”
So what should you do if you receive a BSA Compliance Check letter?
Do you need to comply with the request? There is no legal obligation to comply with the request, however, details of companies that do not comply will be passed to the relevant BSA Members and those Members may wish to enforce their rights to audit software kept on the company’s system. These rights are available to the Members under their various licence agreements and end user licence agreements for the relevant software.
If you are concerned about completing the online questionnaire, the BSA recently advised us that the same questionnaire is also available in hard copy format by request to the BSA.
In the first instance we recommend that you carry out a self-audit of the computer software on the computers within your organisation. There are a number of software tools that can automate the process for you or you can carry out the audit manually yourself.
If after carrying out the self-audit, you are concerned or find any discrepancies you should seek advice from a lawyer as to your options. If the self audit does not reveal any discrepancies there may not be any fallback from completing and lodging the questionnaire, however, we would recommend requesting a hard copy to avoid the risk of the BSA members accessing any electronic information you do not want them to have access to.
If you have received a letter from the BSA or require advice regarding software licences and compliance please contact Russell Morley, Senior Lawyer, on 08 9420 7100 or rmorley@talbotolivier.com.au.
After several weeks of hearings, on 4 February 2010, the Federal Court handed down a landmark decision concerning internet piracy and the liability of iiNet, an Internet Service Provider to the film industry (iiNet Decision).
Justice Cowdroy of the Federal Court decided that iiNet did not authorise copyright infringement on its network, despite finding that iiNet’s customers had downloaded pirated material.
Facts
For a more detailed background of the case please see our previous article by clicking here.
In the proceedings, AFACT, (on behalf of the film and television studios), alleged that iiNet had authorised copyright infringement by failing to take reasonable steps to prevent sharing and downloading of movies and television shows via the BitTorrent system.
AFACT had collected evidence (whilst posing as an iiNet customer) showing that iiNet’s customers were using the BitTorrent system to download copyrighted movies and television programmes. AFACT sent multiple emails to iiNet informing it of the copyright infringement and asked it to take steps to prevent its customers from continuing to download such material. AFACT’s notices also required iiNet to cancel its infringing customers’ subscriptions. iiNet refused to comply with AFACT’s requests and in fact did not take any steps at all to stop the infringing conduct.
Decision
The Court found that the conduct of iiNet’s individual customers in downloading the pirated material amounted to copyright infringement. However, the critical question was:- did iiNet authorise the copyright infringement of these iiNet customers by failing to take any steps to stop that infringing conduct?
Under the Copyright Act 1968 (Copyright Act) a person who authorises the infringement of copyright is treated as if they have infringed copyright directly.
The Court commented that while iiNet had knowledge of the infringements occurring, and it did not act to stop them, that fact did not necessarily mean that it had authorised those infringements.
In deciding whether iiNet had authorised the infringement, the Court considered the following:
- the distinction between providing the “means” of infringement in contrast to providing merely a precondition to infringement occurring;
- the power to prevent the infringements; and
- the extent to which iiNet approved the infringement.
The Court distinguished providing the “means” of infringement, such as a website dedicated to peer-to-peer file sharing (such as in Cooper) or a series of photocopying machines, which could amount to authorisation, with providing a precondition to the infringement occurring. It found that merely providing access to the Internet did not amount to providing the “means” of infringement. It found that the “means” of infringement was the use of the BitTorrent system and iiNet had no control over such use.
The Court considered iiNet’s power to prevent the infringements and because iiNet had no control over the BitTorrent system itself, it found that the measures requested in the AFACT notices would not, if iiNet had taken those measures, have been considered to be a relevant power to prevent the infringement nor would they be considered reasonable steps to prevent it.
Consequently, the Court found that iiNet, by doing no more than provide the Internet to its customers could not be seen to be approving the infringement. The Court again compared the current circumstance with those set out in the Cooper and Kazaa decisions where the parties intended copyright infringements to occur.
Rather helpfully, although not required to do so, the Court also considered the following issues:
- Telco defence: Under the Telecommunications Act (Telco Act), ISPs, such as iiNet, must protect the confidentiality of information of its customers. iiNet argued that if it had adhered to AFACT’s requests it would have breached the Telco Act. The Court disagreed with iiNet and found that the information could be disclosed in accordance with one of the exceptions to the Telco Act.
- Safe harbour provisions for repeat infringers:
(a) Under the Copyright Act, if a service provider, such as iiNet satisfies certain conditions, the Court cannot impose damages, account of profits or other monetary relief against that provider (Safe Harbour provisions).
(b) In order to take advantage of the Safe Harbour provisions, the service provider must have a repeat infringer policy. Such a policy was in dispute and AFACT argued that iiNet did not have such a policy.
(c) The Court found iiNet’s policy of requiring a Court to find that an infringer had repeatedly infringed copyright was appropriate in this case and formed the basis of a repeat infringer policy in the context of the Safe Harbour provisions.
(d) Therefore, had the Court found that iiNet had authorised the infringement, it would have been able to rely on the Safe Harbour provisions to reduce its liability.
Practical Implications
This is a significant development in the decisions concerning internet piracy and copyright infringement. Importantly, the Court has confirmed that there is no legal obligation or duty on any person to protect the copyright of a third party. The extent of the obligation is a legal prohibition on doing an act comprised in the copyright or authorising another to do that copyright infringing act.
In addition, it is one of only few Australian decisions to have considered the impact of the Safe Harbour provisions. Although the comments do not form part of the Court’s decision, it will be useful as a starting point to achieve compliance with those provisions.
Future
Whilst the Court recognised the legitimate interests of the industry to prevent what it acknowledged was widespread infringement through the use of the BitTorrent system, this interest does not make ISPs, such as iiNet, responsible for protecting and enforcing the industry’s rights.
Despite the comprehensive judgement, we expect that this matter has only just begun. It is likely, that AFACT (on behalf of the film and television studios) will appeal the decision to the Full Federal Court.
Senator Stephen Conroy’s recent comments may also increase the chance of an appeal by AFACT, as he would prefer that the ISPs and the movie industry have discussions rather than introducing new laws regarding illegal file sharing. A full report of Senator Conroy’s comments is available by clicking here.
The decision is no doubt a significant development in clarifying the law as it relates to ISPs. However, for all the individuals who may think this decision gives them free reign to download as much copyrighted material as possible, they should consider the recent Australian who was fined $1.5million in damages and ordered to pay $100,000 in legal costs for illegally downloading from and uploading to, the Internet, a popular game for the Nintendo Wii. It is important to note that the infringer here went beyond a mere downloader when he uploaded the game to the Internet for download using the BitTorrent system. A full report of the story is available by clicking here.
In November 2009, we reported on the case that will likely change the Internet as we know it. For a refresher please click here .
Several weeks of hearings finished in late December 2009 and many legal experts and analysts believed that there would not be a decision for at least 6 months.
However, the Australian newspaper has reported that Justice Cowdroy will release his decision much earlier than expected. The Australian’s report can be accessed here.
According to the Federal Court’s online court record, the judgement is due on 4 February 2010. We along with many others will be following the decision closely.
We will have a full report of the case and what it means for the industry in the coming weeks after the decision.
There have been some interesting developments in a legal action that could be the end of the Internet as we know it.
The case is the Australian Federation against Copyright Theft (AFACT) against iiNet. The case concerns copyright piracy through the use of peer-to-peer technology known as BitTorrent.
The case will be the first in Australia, to test the scope of an ISP’s liability for copyright infringement by its customers under the provisions of the Copyright Act 1968.
Background
Briefly, AFACT, (on behalf of the film and television studios), are alleging that iiNet has authorised copyright infringement by failing to take adequate steps to prevent sharing and downloading of movies and television shows via BitTorrent.
The BitTorrent protocol is a peer-to-peer file sharing protocol used to distribute large amounts of data in portions from multiple locations. The main idea behind the protocol is sharing. Users upload files while they are downloading, allowing files to be distributed evenly and efficiently. Unlike other file-sharing protocols the more users transmitting the file the more efficient the process.
The BitTorrent protocol has made it possible to upload and download large files such as movies, video games and music videos. All of these downloads are potentially in breach of the owner’s copyright.
Copyright explained
Copyright is regulated by the Copyright Act 1968 and is a set of exclusive rights given to the owner of a piece of work, whether it be a sound recording, book, movie, computer program etc. The rights include the right to reproduce or copy the work, broadcast the work or communicate the work in public.
If a person infringes these rights, without the owner’s permission, the owner may bring an action for breach of copyright. There are a number of exceptions, however, it is not necessary to outline them for the purposes of this article.
In this case, AFACT are alleging that iiNet knew that copyright breaches were going on but did nothing to prevent copyright infringements by its customers. In effect, iiNet authorised the infringements, because it:
- knew or had reason to suspect that the iiNet customers were infringing copyright;
- took no action in response to notifications sent by or on behalf of AFACT which identified that the iiNet customers were engaging in copyright infringement;
- offered encouragement to its iiNet customers to engage in copyright infringement;
- failed to enforce its own terms of service;
- continued to offer internet service to iiNet customers who were engaging in copyright infringement or whose iiNet services were being used by other iiNet customers to do so’;
- through its own inactivity permitted a situation to develop and continue where iiNet customers engaged in, or continued to engage in, copyright infringement.
Major issues of the case
This case poses a number of interesting questions:
- What, exactly, are ISPs required to do when they become aware that users are potentially infringing copyright?
- How much responsibility will Australian courts put on intermediaries (in this case ISPs) for taking action against copyright infringement?
- What does the requirement that an ISP ‘adopt and reasonably implement a policy that provides for termination, in appropriate circumstances, of the accounts of repeat infringers’ really mean?
We have seen through cases such a as Kazaa and more recently, Cooper, that the Australian courts have been ready to impose liability on people it thought were profiting from copyright infringement.
Potential impacts on the Internet and ISPs
Whether AFACT succeeds or fails in this case, the affect on the Australian’s use of the Internet will be enormous.
Potentially:
- ISPs will disconnect individual users accused of copyright infringement, without proper investigation, for fear of being sued.
- Individuals will not have any avenue of reply or ability to contest or disprove the allegations made by the copyright owners. The only avenue would be to sue their ISP.
- Thousands of individual users are likely to be severely punished for small-scale copyright infringement.
Further, whatever happens, the Federal Government will be considering the current laws regarding copyright infringement for ISPs and will likely change them.
The case is currently in the Federal Court and whoever wins, it will probably be appealed to the High Court, so there is still a while to go before there is clarity. The case is receiving wide media attention, but I have found that http://www.itnews.com.au/ is the most comprehensive.
For further information or advice on this topic, please contact Russell Morley, Senior Lawyer, by email at rmorley@talbotolivier.com.au.
