Modchipping the Australia-U.S. Free Trade Agreement

Today I went to a meeting at QUT's Gardens Point campus which was centred in particular around the recent case of Sony v Stevens in Australia, and its implications in light of the recent Australia-U.S. Free Trade Agreement (AUSFTA).

Brian Fitzgerald from the QUT Law School begins by outlining the case. Sony alleged that Stevens, who operated a computer shop, had sold a circumvention device for a technological protection measure - that is, mod chips for the Sony Playstation 2 console. These chips enabled the console to play games from regions other than Australia, as well as backup or unauthorised copies. Playstations are coded (similarly to DVD players) for regional access; this is controlled by a Boot ROM chip in the console. This allegation hinges on the definition of a technological protection measure as defined by WIPO and encoded into Australian law by the Copyright Act - TPMs prevent or inhibit the infringement of copyright.

Justice Sackville did not see region access coding (RAC) as a TPM as it did not prevent access to copyright content or act as a copy control mechanism, but rather simply prevented use of games in different regions (potentially after copying had occurred already). Sackville rejected the argument that RAC had the 'practical effect' of inhibiting or preventing copying.

Sony then argued that during playing a game, parts of it were copied into the console's RAM; therefore RAC did act as a TPM - however this was again rejected by Sackville as copying into RAM was so limited and temporary as not to be reproduction in material form as required by the Copyright Act.

However, Sackville's decision was overturned by the Full Federal Court of Australia, on a 'practical effect' argument - despite Sackville's objections about RAC not preventing copying in itself it was seen as acting in effect as a copyright protection measure. This in turn was overturned again by the High Court of Australia, which in the main agreed with Sackville's findings again.

Much of this argument centres around a definition of technological protection measure - whether it is designed to prevent, or more broadly to inhibit unauthorised access to copyright material. In the U.S. Digital Millennium Copyright Act, the broader definition (inhibit) is used; in Australia's Copyright Act, 'prevent' is the operative word, and this is designed to avoid overly wide operation of the Act. This can be seen in this case: 'inhibit' essentially provides Sony with the right not only to prevent unauthorised access, but also offers a means to regulate its global markets by preventing the unauthorised movement of goods across regions, regardless of whether games were bought legitimately or not. This would not be in the spirit of the Australian Copyright Act as it is currently understood.

However, in the wake of the Australia-US Free Trade Agreement (AUSFTA) such definitions may well change…

Peter Higgs from QUT's Institute for Creative Industries and Innovation now takes over to describe the various reasons publishers may want to implement TPM: copy protection, publishing protection (ensuring that the market is lucrative for licenced developers, and that only licenced developers can participate in the market - maintaining a monopoly of content provision for the console, in other words), and channel protection (enforcing distribution channel and format segmentation strategies).

In channel enforcement, of course, there are strong similarities with regional zoning in the film industry - both in the context of DVD region coding as well as in the cinema industry, where of course the digital distribution of movies is increasingly an issue as well. Peter also notes that regional zoning tends to be the cause of much copyright infringement in the first place, if it is used to create a staged rollout of product across different regions: rollout of new products in one key region tends to create (unmet) global demand, which (because it remains unmet in many regions) leads to keen customers accessing unauthorised copies and thereby infringing copyright.

In response Fred von Lohmann from the Electronic Frontiers Foundation now also notes that such distinctions between different forms of protection (copy, publishing, channel) are certainly there from an intellectual point of view, but that the same TPM might enforce all three forms of protection - this means that circumventing the TPM in order to break channel protection (possibly a legitimate or at least not illegal action by a consumer) would automatically also break copy protection, in turn making it illegal nonetheless.

Dilan Thampapillai now provides some more background to the Australia-U.S. Free Trade Agreement. He feels that the laws relating to the AUSFTA (including the provisions on TPMs) are likely to be pushed through the legislative process relatively quickly, considering the overall legislative agenda of the Australian government and its newly established control of both houses of parliament.

This may mean that access rights are now being elevated to the status of a neighbouring right to copyright; in turn it may further reduce the ability of users to circumvent TPMs without infringing the law, and ultimately this would make irrelevant the Sony v Stevens decision (which was purely about infringing copyright rather than more broadly about infringing access rights). While there are moves afoot to look closely at the implications of any such legal changes, failure to implement such aspects of the AUSFTA in Australian law might result in sharp penalties to Australian trade with the U.S. across the board.

Back now to Fred von Lohmann from the EFF, speaking via video link from the U.S.: he gives a short legal background to TPM legislation in the U.S. - while originally TPM protection was not implemented in U.S. law, its copyright industries had it implemented via the WIPO process; however, eventually U.S. legal changes responding to WIPO treaties ended up going beyond what WIPO had postulated. In turn, the terms of U.S. law then influenced the free trade agreements with countries like Australia. But Fred also notes that there remains some 'wiggle room' in the implementation of TPM provisions in the laws of Australia and other FTA signatories even without breaching the FTA rules - and many countries are currently looking to Australia for a smart legal implementation of FTA provisions. Indeed, there appears to be some momentum for a tight, conservative implementation rather than an unconditional copy of U.S. legal frameworks, as a number of people here now note.

The Australian parliament's Standing Committee on Legal and Constitutional Affairs has followed a relatively critical line of enquiry on the implications of the AUSFTA, and it remains to be hoped that this will resultin some amendments to the AUSFTA framework - however, it is possible that any such attempts could result in punitive action from the U.S. side if they delay the legal codification of the Agreement (that said, there exist some legal uncertainties on the U.S side as well - their legislation may not be entirely compatible with the AUSFTA either). Such threats could result in parliamentarians accepting a less than perfect legal framework because any delays to the AUSFTA would play badly in their home electorates.

Ultimately, however, it looks like one way or another aspects of the AUSFTA should be renegotiated in order to maintain user and consumer rights and to protect the ability of users to be creative and innovative in the context of existing copyrighted material. Modchipping, for example, is an act of innovation, and enables further innovation by opening up technological platforms for uses well beyond what manufacturers originally extended (running Linux on Xboxes, or using Playstations as cheap rendering engines); locking out such creative uses results in a criminalisation of users and a loss of innovative opportunities. Rather than demonising such uses, then, it looks like there's a strong need to modchip the AUSFTA itself!

(Finally, there's also a book on such issues in the Canadian legal context which sounds interesting: In the Public Interest. Available - of course - under a Creative Commons licence.)