Data in the Clouds - CJEU Accepts the Use of the Private Copying Exception in Relation to Cloud Storage

The use of cloud storage is near ubiquitous these days, with both companies and consumers using it at increasing amounts to store both their private data and even multimedia content, making it accessible without having all of the data copied onto a given device at all times. However, even though it's not something that most people will consider at the time (or at all), the copying of copyright protected content even onto cloud storage could potentially infringe on the rights of rightsholders, which could result in payments being due for the same. With that in mind as a starting point, could you use a private copying exception to avoid liability for such copying? Luckily, the CJEU has recently handed down its decision on the matter, clarifying the position for current and prospective copiers alike.

The case of Austro-Mechana Gesellschaft zur Wahrnehmung mechanisch-musikalischer Urheberrechte GmbH v Strato AG concerned Austro-Mechana, who is a copyright collecting society in Austria acting in a fiduciary capacity for the interests of its members and asserting the legal rights they have in their works on their behalf. Austro-Mechana made an application in court for the invoicing and taking payment for "storage media of any kind" from Strato, as they provide their customers a service called 'HiDrive', which allows for the storage of files through cloud computing. Strato contested this and the matter progressed through the Austrian courts, ultimately ending up with the CJEU.

The CJEU were faced with two questions on the matter, with the first one asking "...whether Article 5(2)(b) of Directive 2001/29 must be interpreted as meaning that the expression ‘reproductions on any medium’ referred to in that provision covers the saving, for private purposes, of copies of works protected by copyright on a server on which storage space is made available to a user by the provider of a cloud computing service". In short, does the exception under Article 5(2) include private copying onto cloud storage. 

The first consideration, according to the CJEU, was whether a 'reproduction' could include copying onto cloud storage. The Directive and its recitals make it amply clear that the phrase should be interpreted very broadly. The court noted that copying onto cloud storage includes both the reproduction through the uploading of a file for storage, and when a given file is accessed by the user subsequently and downloaded into any device. This means that copying onto cloud storage indeed constitutes 'reproduction' under Article 5(2). 

The second consideration is whether 'any medium' covers the provision of cloud computing servers for the storage of files in the cloud. In the broadest sense the phrase includes all media from which a protected work could be copied from, which includes cloud computing. 

Additionally, the Directive's purpose is to create a general and flexible framework at EU level in order to foster the development of the information society and to create new ways to exploit protected works. This is underpinned by technological neutrality. The same applies to the protection of copyright protected works, and the legislation is intended to not become obsolete and to apply to as much of new technology in the future as possible. 

The CJEU therefore concluded that the concept of ‘any medium’ includes a server on which storage space has been made available to a user by the provider of a cloud computing service. 

In summary, the CJEU set out their answer to the first question that "...Article 5(2)(b)… must be interpreted as meaning that the expression ‘reproductions on any medium’... covers the saving, for private purposes, of copies of works protected by copyright on a server on which storage space is made available to a user by the provider of a cloud computing service".

The second question posed to the CJEU asked "...whether Article 5(2)(b)… must be interpreted as precluding national legislation that has transposed the exception... and that does not make the providers of storage services in the context of cloud computing subject to the payment of fair compensation in respect of the unauthorised saving of copies of copyright-protected works by natural persons, who are users of those services, for private use and for ends that are neither directly nor indirectly commercial". In short, whether any national legislation that has transposes the exception, and doesn't impose a payment of royalties for the unauthorized copies, is excluded in relation to non-commercial private copying. 

This expressly refers to Article 2 of the Directive which provides an exception to reproductions made by people for a non-commercial purpose, provided that the rightsholder is fairly compensated. 

The CJEU notes that when Member States decide to transpose the exception to their national legislative framework they are required to provide for the payment of fair compensation to rightholders. They also note that the copying of copyright protected works by individuals can cause harm to rightsholders, which the compensation is attempting to remedy. 

As was already answered above, the phrase 'reproductions on any medium' includes cloud computing, but Member States still have wide discretion on the compensation of rightsholders in relation to copying that is covered by the exception. This includes who pays and how the monies are collected. Additionally, case law has set out that "...in principle, for the person carrying out private copying to make good the harm connected with that copying by financing the compensation that will be paid to the copyright holder", which in this case would be the users of the cloud storage systems.

However, there are practical difficulties in identifying individual users and obliging them to pay any requisite fees, especially since the potential harm suffered may be minimal and may therefore not give rise to an obligation for payment, so Member States can impose a private copying levy to cover this more broadly. Even so, this will have an impact on both the users and the fees for the cloud storage services they may be purchasing, impacting the 'fair balance' requirement as set out in the Directive. This is left to the national courts and the Member States to ensure it is in place. 

The CJEU therefore concluded that the answer to the second question is that "Article 5(2)(b)... must be interpreted as not precluding national legislation that has transposed the exception... and that does not make the providers of storage services in the context of cloud computing subject to the payment of fair compensation in respect of the unauthorised saving of copies of copyright-protected works by natural persons, who are users of those services, for private use and for ends that are neither directly nor indirectly commercial, in so far as that legislation provides for the payment of fair compensation to the rightholders". 

The decision gets cloud storage providers off the hook for any compensation that might be payable to rightsholders, and it is up to Member States to impose a levy, if any, for such copying by private individuals. This writer has never heard of such levies even being considered, and any such levies could deter innovation in this space due to the public's lack of desire for its implementation due to costs. If you are not a consumer of cloud storage services, you would undoubtedly not be happy to pay for them either. Nevertheless, this is the CJEU's proposed position which leaves the option very much on the table. 

Tunneling Through the Internet - VPNs and IP Law

Today's Internet users are more savvy and capable than ever before, and many users' desires for "free" content often leads them to find ways through which to attain that content, even if it's potentially skirting the law using a variety of technological means. Although piracy by itself is a hot topic these days, and often misunderstood (the discussion of piracy and theft on this blog here), the discussion revolving around the subject matter can lead to hyperbolic statements or even the misunderstanding of technological means and their legitimate uses in light of online copyright infringement. One such technology is what are called "Virtual Private Networks", or VPNs, which allow you to create a secure connection through a network service to the public Internet at large, masking who you are and where you are through that service. These connections are also often encrypted and secured through a number of ways, which can be used for both legitimate and questionable uses. Even so, whether the use of VPNs is against the law is not exactly clear-cut, and merits some discussion.

Although sometimes stigmatized, much like in a recent statement by the BBC to the Australian government stating that: "...[suspicious] behavior may include the illegitimate use by Internet users of IP obfuscation tools [such as VPNs] in combination with high download volumes", VPNs do serve a legitimate and arguably useful function. Should an individual wish to mask their Internet traffic from potential government surveillance or the monitoring by any other third parties (irrespective of the nature of your activities online), VPNs handle this quite well. Such an example lies just with are friends in Australia, where new laws have been discussed giving certain bodies potentially free roam in the monitoring of Australians' Internet usage. The proposed law has flared up interests in such services, and one can argue that given such broad tools some level of obfuscation can be said to be reasonable, whether you infringe copyright or not online.

But at the heart of this lies the question of legality, and as said above, this is not wholly straightforward. VPNs enable you to view content which is often not available due to licensing issues beyond certain borders, of which a great example is Netflix, which's offerings vary quite drastically depending on where you are. As such you would not imagine, as a paying subscriber, that accessing said content could infringe any laws, especially since you are paying your dues. Yet those licensing agreements are there for a reason, and weaseling your way to see that content can be a moral and legal grey area.

Some networks are probably not worth accessing  

An argument as to the moral side of things was put forth by Simon Haupt, who argued that "[p]aying for the... service means your money goes to whoever holds the [local] rights for the shows on Netflix. If you're watching [for example] the U.S. service, the rights holders... aren't getting their fair share". This can be argued to be slightly misleading, and as proved by Michael Geist, is indeed disingenuous to an extent, as Netflix for example, pays the same amount for the shows it provides no matter how many times or where they are watched from. Although certain licensing issues can be argued, such as if a show is licensed exclusively to a certain company in country A, but people in that country watch it through Netflix from country B, which was not intended due to the exclusivity of that agreement. This could potentially deprive that party of the commercialization of that work, but is still a hard thing to argue, especially against the users themselves.

Under the UK Copyright, Designs and Patents Act 1988 section 296ZA, a company with an exclusive right to the copying or communication to the public of a work has the same rights of enforcement against a person who circumvents, or attempts to do so, any technological means through which said works are protected. Although, at least prima facie, it is quite hard to argue in terms of geo-blocking, one could potentially argue that VPNs and their use in the viewing of restricted content might infringe copyright through section 296ZA. This can be easily countered by the simple fact that it would only apply to the circumvention of exclusion through non-payment of a subscription fee for example, and not so much regional restrictions.

Similar provisions exist elsewhere in the common law as well. The Australian Copyright Act 1968 prescribes under section 116AN that the circumvention of protection measures infringes copyright, potentially including regional locking. The Australian position on whether regional locking is truly a 'technological measure' is still up in the air, but not an entirely impossible inclusion. In the US the old Computer Fraud and Abuse Act protects content from being accessed from non-authorized computers, potentially including geo-blocked content, although no case law has taken that notion on as of yet.

But as one can see the use of VPNs is a true pickle, and has no clear and easy answer as to its legality. Although mounting pressure is being put on the enforcement of regional restrictions on companies such as Netflix, this writer for one highly doubts it will be a legal battle worth waging unless there is a drastic change in the tides of copyright legislation. As for now we're all able to enjoy our forbidden fruit across the pond through services we enjoy and pay for, but be warned: you might experience restrictions on through the companies themselves eventually.

Source: Lawyers Weekly

Irish Copyright Review: Modernizing Copyright

A wave of copyright modernization seems to be sweeping the common law system, with reviews being undertaken in both the United Kingdom and Australia at the moment. Not to be outdone by its common law brethren, Ireland launched its review of its copyright legislation in 2011, with the final report having been released late last month after almost a year's delay in its release. Although arguably a lesser force within the common law system, Ireland's review of copyright does still serve as an indication of where copyright will be potentially headed in the future; both in the common law and elsewhere. As the report's first sentence aptly states: "Copyright reform is in the air".

The report is very extensive, touching upon most contentious areas of copyright and attempting to suggest changes to the currently in-force Irish Copyright and Related Rights Act 2000. While all of the topics discussed merit further evaluation and offer much to the current discourse of copyright not just in Ireland, but also globally, discussion will be left to only parts of the report by this writer.

Fair Dealing

One of the biggest questions in copyright globally is the line where fair dealing (or fair use) should be drawn, and Ireland is no exception to this. Under the current Act Ireland has a very limited fair dealing scheme which allows for the use of copyrighted materials in research and private study and in criticism or review. The report does recognize the incredibly limited nature of the current regime and attempts to remedy its shortcomings under the recommendation "...that the existing exceptions be regarded as examples of fair use, that they must be exhausted before analysis reaches the question of fair use, and that the question of whether a use is fair on any given set of facts turns on the application of up to eight separate factors". These factors would include a very wide scope of consideration, varying from the purpose and nature of the copying to the possibility of obtaining the work legally; a lot of which resemble considerations already used in a number of other common law countries.

The report actively tried to distinguish its approach to fair use from the often used US fair use doctrine, which has been adopted in a number of nations even outside of the common law, but the suggested regime does not differ largely from its US counterpart as presented. It does go further in its considerations and presents Irish courts with more specific factors to use, but one can clearly see the connection with the American provisions. All in all the suggested changes are incredibly welcome, and showcase the importance of fair dealing in copyright; something which this author and others have advocated on a number of occasions. In addition very similar considerations were put forth in the Australian submissions for reform; however their final form is still pending the release of the final report by the Australian Law Review Commission.

Intermediaries

The report also deals with the role of intermediaries in potential infringement situations, considering more clear immunity provisions to the ones already provided under Irish law. The report proposes changes which would bring these immunities better in line with the European Union Copyright Directive.

After the tightening up of already existing provisions the report also suggests further protection of potential secondary infringers, especially as "...in the current regime, intermediaries bear a significant burden in implementing monitoring or “notice-and-action” procedures, and there are arguments as to whether this burden is a legitimate cost of doing business as an intermediary or an unjust cost of protecting rightsowners’ rights". This would be a EU matter to further legislate on and provide clarity, as the provisions relating to this are largely of EU origin.

In addition the report suggest a potentially more proactive approach by the Irish legislature to introduce immunity provisions specifically relating to search engines, immunity as a result of the sophistication of internet browsers (in other words, the displaying and caching of copyrighted content, causing the browser to being the primary infringer), and immunity provisions relating to cloud computing. As the report states: "...Irish law should await whatever legislative proposals emerge from the EU consultation. If nothing comes of it, then it may be appropriate at that stage to return to the question of Irish legislative immunities". Immunities over linking to content were also discussed, raising the recent UK Supreme Court decision of Public Relations Consultants Association Ltd v The Newspaper Licensing Agency Ltd as an example of taking these immunities in an express direction.

Users

The extent to which you can use your legally acquired content has been a contested issue in copyright for decades. The report poignantly raises the heart of the issue: "...the centrality of rightsowners in copyright law, but the law recognises other interests as well, and seeks to balance the interests of rightsowners in protecting their monopoly against other legitimate interests in diversity and expression". The balance between expression and creation by the end-user against the rightsowners' interests is paramount, but clearly there have been issues on the balance being swayed towards the rightsowners in recent years.

In addition to the aforementioned fair dealing considerations the report raises the potential to add new exceptions for private use. Private copying is largely supported by both sides, and in itself supports "...users’ reasonable assumptions and basic expectations" relating to the use of their legally acquired content. This has been suggested in the above EU Directive, and the report endorses its introduction into Irish law. Certain reproduction rights relating to different formats and back-ups were endorsed, again reflecting the reasonable assumptions made by users over their material.

An exception for parody, caricature and satire was also suggested, reflecting a much larger introduction of this exception in the common law; one which has been introduced in Australia a while ago. Following the recent changes in Canada the report also suggests the creation of a non-commercial user generated content exception. Although not expressly mentioned in the above EU Directive, the report still recognizes its inclusion in spirit and supports its express introduction into Irish law.

Conclusion

Even though the report is far more extensive than what is discussed above, it showcases a wave of change in copyright globally. This change has been late in its introduction, with still years till the potential changes would even be implemented, but shows a willingness to adapt and mold the law to modern users and spheres. This writer endorses this and highly awaits the final report here in Australia late this month in further assessing where things will go. Right now Ireland is paving the way in the wake of the change in the common law.

The United Kingdom Looking Ahead with new Copyright Exceptions

In a recent blog post I talked about the possible direction where Australian copyright was heading based on a Discussion Paper released by the Australian Law Review Commission. Well, it seems like the old motherland has awoken from its copyright hibernation in the wake of Australia's steps forward. In an effort to modernize copyright, the UK Intellectual Property Office is seeking opinions based on new potential exceptions which are under consideration: an exception for private copying, parody and quotations. I think each of these potential categories merits examination as to what their current formulation is, and where they could be headed.

Exception for Private Copying

In their plans, the UK Government plans to introduce "...a narrow private copying exception which will allow an individual to copy content they own, and which they acquired lawfully, to another medium or device for their own personal use". What this clearly is is an equivalent for something Australia has already had for some years; format shifting. Provisions such as this will allow you to copy your lawfully bought content, such as music or movies, to a different format - often from a CD onto your MP3 player for example. There is a distinct difference to what the UK approach, at least for now, is when compared to the Australian one. In further expanding on how the copying will extend, the IPO says that "...it would not allow them to make copies of their CDs and give them to other people". If this were to be looked at from a literal perspective, should you make a copy of a CD for your kids to listen to on their iPods, or give a copy of a DVD for your cousin to watch on a Saturday night, you would be infringing copyright. The Australian provision allows for copies to be given to family or people living in your household, but on the condition that those copies are of a temporary nature and not given to keep. If the IPO would only permit the copying for personal use in excluding family they would go against the very principle why they're enacting these additions to begin with: "The exception aims to align the law with behaviour most people consider to be reasonable, to remove unnecessary regulation, and to help build confidence in and respect for copyright". 

Steve hasn't quite gotten the hang of "private copying"

Arguably the exception should be shaped to be similar to that of Australia's approach. The Canadian provision only allows for the copying for the individual, much like the potential UK provision, so the direction where this could head is unclear. One could easily predict that the courts could potentially extend the provision to apply to family, but that would remain to be seen. A draft of the section can be found in the document discussing the exception. 

Exception for Parody

An exception that the UK has needed for the past several years, yet again lagging behind its Australian cousins, is the exception to allow for the use of works for parody, caricature or pastiche. As the IPO explained, this would "...give people in the UK’s creative industries greater freedom to use others’ works". If introduced the provision would be included with other fair dealing provisions, so the use would have to be 'fair', preventing the use of works in the veil of parody to purely abuse it for personal gain. A draft of the possible provision can be read in the IPO's documentation as well.

Exception for Quotation

The final exception being introduced is one which would amend the current exception for criticism and review to one allowing for the quotation of material, not merely restricting it to those uses. Broadening the existing fair dealing exception seems like a perfectly sensible option, and in the words of the IPO: "ensure[s] that copyright does not unduly restrict the use of quotations for reasonable purposes that cause minimal harm to copyright owners, such as academic citation or hyperlinking". Should the provision be enacted it would be the first of its kind, as both in Australia and Canada similar provisions relating to criticism and review, on the face of the provisions, would be much more restrictive.

Source: IP-Watch

Retrospective - All's Fair in Dealing and Education

Having just a few days ago written about the Canadian progression in the field of fair dealing and education in the new Copyright Modernization Act 2012, I thought it would be best to address a case that changed the way the old provisions of fair dealing applied to both study and education in newfangled ways, applying the principles set out in the mammoth of a case that was CCH, practically still hot from the oven (discussed on this blog as well and worth reading should you be unfamiliar with it).

The case of Alberta (Education) v Canadian Copyright Licensing Agency (Access Copyright) dealt with the copying of excerpts from textbooks and other materials by teachers to distribute to their students as a means to study only specific parts of texts. Some of the materials being copied were under the copyright of Access Copyright, for which various royalty payments were negotiated in the 1990s between the school boards and the company. After subsequent negotiations there was an agreement made for royalties to be paid on a volume basis, instead of the old per-student basis negotiated for most of the decade.

The use of the copies was tracked individually to ascertain the volume being copied; looking at their purpose, who made the copies, and who they were for. Most of the copying was done by teachers either for themselves or for students at their behest, which was agreed to fall under fair dealing by both parties. The contentious matter was the copying of materials for students by the teachers to take home and read. It was argued that this copying of materials did not fall under fair dealing for research or private study, as the copies were not requested by the students themselves, not meeting the requirements set out in CCH, at the initial hearing for the Copyright Board. The schools argued that they would fall under the provision thus being exempt from the tariffs set by Access Copyright. The Copyright Board decided the use did not fall under fair dealing, failing to meet the requirements under CCH; however the schools appealed the decision.

Private "study"

The case culminated in the Supreme Court of Canada in mid-2012 where the matter of whether the teachers' use fell under fair dealing, specifically the aforementioned provision of research or private study was finally decided. One has to note that the Canadian provision expressly mentions the possible use of materials for study as a private one, possibly indicating that a teacher could not act as a conveyor of material to the student, largely being Access Copyright's argument in the case; as the copies were not made at the request of students, it did not fall under fair dealing.

The courts gave an interesting argument, deciding that the teachers' use did indeed fall under fair dealing. To fully appreciate how the Court reached this conclusion, it is useful to look at what exactly was said in the judgment:

"...there is no such separate purpose on the part of the teacher.  Teachers have no ulterior motive when providing copies to students.  Nor can teachers be characterized as having the completely separate purpose of “instruction”; they are there to facilitate the students’ research and private study.  It seems to me to be axiomatic that most students lack the expertise to find or request the materials required for their own research and private study, and rely on the guidance of their teachers.  They study what they are told to study, and the teacher’s purpose in providing copies is to enable the students to have the material they need for the purpose of studying.  The teacher/copier therefore shares a symbiotic purpose with the student/user who is engaging in research or private study.  Instruction and research/private study are, in the school context, tautological."

Clearly the Court saw that the relationship between a student and their teacher is symbiotic; one where the teacher merely facilitates the students' private study by providing them with the material. Should the students be instructed to go and look for the material themselves, copy it, and use it for personal study, their learning would clearly be hindered significantly. Without the teacher being a sort of "middle-man", and being a part of that personal study, the students would suffer.

The Court didn't alter its position in the matter of personal study, firmly sticking to its prior interpretations, but did apply common sense in the relationship between a teacher and a student in that regard. The case didn't enable anyone to abuse the provision under the veil of providing materials for others for personal study. The decision was a 5-4 split decision, clearly showing a side of disdain even in the judiciary to accept this use of fair dealing as such, but nevertheless the decision seems to be a practical one and clearly makes sense. Without the option for teachers to copy and distribute reading materials for their students, the underlying matter of fairness would be skewed towards the copyright owner instead of the user, clearly going against what fair dealing stands for; the allowance of use of various copyright materials to improve yourself, your knowledge and to improve society as well without the shackles of copyright payments when clearly there is no competing interest.