1709 Blog: for all the copyright community

Tuesday, 24 May 2011

Unitary EU Copyright and other proposals


As our friends at the IPKat have pointed out, Tuesday saw what should have been some highly proclaimed announcements from Brussels sneaked out with very little coverage, at least in the UK.

Buried in the mass of paperwork, which you can find here and here are a number of interesting ideas. The press release only mentions a couple:

1 A commitment to introduce a proposal on collective management in H2 2011 (which is not a new announcement)

2. A commitment to launch a consultation on the online distribution of audiovisual works (which it appears will tackle some of the issues raised in the Murphy case, windowing and other issues)

3. Orphan works - where the Commission's publications today (linked above) include the text of a proposed directive on Orphan Works - which (on a quick read) it would appear would apply only to allow public institutions to digitise and make available their collections of orphan works - and would allow for a pan-European status of "Orphan" to apply once that has been determined by a search in one country. It will be interesting to see how the details of this proposal have been structured so as to be compatible with the Berne Convention and other international treaty obligations.

Actually in many ways of more interest is the detailed "communication" that accompanies the press release, even if this is currently described as a "provisional" version. In it, we find a number of big ideas:
A. The Commission is talking about consolidating the existing "acquis" into a single European Copyright Code and, more radically, exploring the introduction of a "unitary" copyright title modelled (it appears) on the Unitary EU Patent project (and which would apply as an optional layer in addition to national protection).

B As with last week's Hargreaves report, the Commission comes out in support of brokering copyright clearing houses, especially to help "amateur" users to clear rights for lawful use, as well as supporting initiatives such as the Global Repertoire Database. 
C. Harmonisation of private copying levies. 
D. (probably not that important, except to a select few) the review of the artist's resale rights (droit de suite) Directive. 
E. Reviewing the EU's policies on IPR engagement with third countries.
Looks like we will all be kept busy over the next few months or years.

Monday, 23 May 2011

Systran heads for the ultimate showdown

Back in December the 1709 Blog reported on the ruling of the General Court in Case T-19/07 Systran SA and another v European Commission, a decision of 16 December 2010 that the European Commission was liable for copyright infringement in respect of Systran's Unix translation software [this decision is still not available in English: so much for translation software ...]. Now we have details of the European Commission's appeal, which has been allocated the reference C-103/11 P.

The Commission relies on eight pleas in law in support of its appeal and claims that the judgment is vitiated by a series of errors such as to justify its being set aside. Its pleas relate to the jurisdiction of the General Court to hear the case, its compliance with procedures and its fulfilment of the three conditions which, according to settled case-law, are cumulatively necessary in order to give rise to the Community's non-contractual liability: the existence of fault, of damage and of a causal link between the fault and the damage. Want to read more? Here you are:
By its first plea, the Commission claims that the General Court erred in law by deciding that the dispute was of a non-contractual nature and, accordingly, by declaring that it had jurisdiction to hear the case. [It's the old question: where a tort such as copyright infringement is committed in the course of a contract relationship, is the dispute (i) contractual, (ii) tortious or (iii) both contractual and tortious and actionable as either, at the plaintiff's option?]
By its second plea, the applicant claims that the General Court infringed the rights of the defence enjoyed by the Commission and disregarded the rules on the taking of evidence. 
By its third plea, it maintains that the rules on copyright were incorrectly applied with regard to the ownership of copyright. 
By its fourth plea, the Commission maintains that the General Court made a manifest legal error with regard to its assessment of the existence, first, of an infringement of copyright and, second, of an infringement of Systran's know-how. 
Its fifth plea alleges that, by considering that the Commission's supposed fault constitutes a sufficiently serious breach, the General Court made a manifest error of assessment which led to an infringement of the principles governing the European Union's non-contractual liability. 
By its sixth plea, the applicant submits, first, that the General Court erred in law in its interpretation of the exception laid down in Article 5 of Directive 91/250/EEC and, second, that it failed to fulfil its obligation to state reasons with regard to Article 6 of that directive. 
By its seventh plea, the Commission alleges, first, that the General Court made clearly incorrect findings of fact, misinterpreted evidence, and made manifest errors of assessment and, second, that it failed to fulfil its obligation to state reasons with regard to the existence of a causal link. 
Finally, the eighth plea alleges that, by awarding Systran damages with interest amounting to EUR 12 001 000, the General Court, first, is guilty of making clearly incorrect findings of fact, misinterpreting evidence, and making manifest errors of assessment and, second, the General Court fails to fulfil its obligation to state reasons concerning the calculation of the damage. [What the court rules on the obligation to state reasons will be closely watched, since the extent to which national courts give reasons seems to vary as between jurisdictions and sometimes as between different IP rights. We might expect damages awards under the IP Enforcement Directive to be measured by whatever yardstick the court stipulates]

Friday, 20 May 2011

Google chair says he will fight website blocking legislation


Google’s executive chairman Eric Schmidt has said that the internet search engine giant will oppose anti-piracy efforts on both sides of the pond in the USA and the United Kingdom. Schmidt singled out provisions in the USA’s PROTECT IP Act and the Digital Economy Act in the U.K. where provisions could allow governments to block access to websites that host infringing content or sell counterfeit goods with Schmidt saying “If there is a law that requires DNSs [domain name systems] to do X and it’s passed by both houses of congress and signed by the president of the United States and we disagree with it then we would still fight it.” Speaking at the company’s Big Tent conference in London he added “If it’s a request the answer is we wouldn’t do it, if it’s a discussion we wouldn’t do it.”

The blogsphere took Schmidt’s comments as support for sites such as The Pirate Bay and Newzbin2 with Torrentfreak saying that both sites are at the very top of the domain-blocking wishlists of both the U.S. and UK, but neither of them are in ideal positions to mount legal challenges of their own.

Schimdt went on to compare the notion of website blocking with methods used by the Chinese to censor the Internet, cautioning that when those further east see that the west aren’t opposed to censorship when it comes to achieving their particular aims, it might only encourage further crackdowns saying “I would be very, very careful if I were a government about arbitrarily [implementing] simple solutions to complex problems,” Schmidt said. “So, ‘let’s whack off the DNS’. Okay, that seems like an appealing solution but it sets a very bad precedent because now another country will say ‘I don’t like free speech so I’ll whack off all those DNSs’ – that country would be China.”

In a follow-up statement to Schmidt’s comments, Google told CNET that, “Free expression is an issue we care deeply about, and we continue to work closely with Congress to make sure the Protect IP Act will target sites dedicated to piracy while protecting free expression and legitimate sites.”

http://news.cnet.com/8301-31001_3-20063963-261.html

http://torrentfreak.com/google-boss-well-fight-anti-piracy-blocking-laws-110519/

Thursday, 19 May 2011

Early responses to Hargreaves: at least the Pirates are pleased ...

But is it the Ultimate Wisdom?
The content of Digital Opportunity, as the Hargreaves Review is now to be known, has been swiftly and efficiently publicised by a combination of social, asocial and antisocial media to the point at which it has hardly even news any more. A handy summary of its recommendations can be found here.  This post focuses on early responses to it.

Mark Owen, head of the IP practice at media and entertainment law firm Harbottle & Lewis, says:
"Most of the sectors the report affects, whether creators, owners or users of rights will find things to quibble with [Given the tension between opposing stakeholder interests in every area of copyright, this might be expected]. Some of its proposals are not feasible, or are not much more than good intentions. It is also determinedly non radical, which will disappoint some who expected big immediate changes. ... [T]his is a prospectus, which lays out the scope of what should be looked at, but with plenty of scope still for detailed policy consideration and argument. And the report's approach recognises that simplistic broad strokes are difficult to make in the complex, and interconnected world of IP.

The people who face the most challenges from the report are the government, as Hargreaves repeatedly makes the point that the changes he advocates have to be brought about through serious governmental effort and application [This should surely have been expected in a field which is heavily overlaid with existing legislation, much of which is or should be in accord with international or European norms]. This may not be what the government were after and much of this work will be costly.

When David Cameron set the review up he made much of the benefits he saw from introducing a fair use right and cynics detected in this an attempt to appear pro innovation without the government having to do much, in particular not spend money such as through tax breaks. As plenty of commentators said at the time, EU law would not allow this. Hargreaves has echoed that and dismissed the possibility of a fair use law. Instead he has listened and listed a large number of less radical changes government must consider.

The changes he suggests to basic copyright law are relatively minor. The suggestion of a format shifting right was widely predicted, not least as the previous government had said it would introduce such an exception in 2006 but never managed to do so. A parody right is also given another outing despite having recently been considered in detail by a government review and rejected [f parody is to be reconsidered, it seems silly to consider it in the context of copyright alone, without taking note of the possible need to do likewise in trade mark and design law]. Perhaps the most important idea is that the UK should introduce the same exceptions to copyright as the rest of the EU. Bringing our law more into line internationally is worth considering. From the perspective of important trading partners such as the US and the EU much about UK copyright law seems odd and out of step, and this costs us. ...

Will the Review end up making any difference? The Gowers Review of IP in 2006 was also well-written and thought out [I'd contest both of these propositions, particularly the latter -- Gowers was peppered with oddities, as many commentators pointed out at the time], with many interesting proposals. Many of the easy ones were eventually implemented but plenty were ignored by government. Hopefully this time the government will do more and will learn from the Gowers experience, so we are not having yet another trumpeted review of IP in 5 years time."
Ilya Kazi, a partner in the patent and trade mark attorneys Mathys & Squire, describes the Review as a "missed opportunity", adding:
"Many of the recommendations of the Hargreaves review are sensible and represent a positive step towards renewing outdated intellectual property and copyright laws that until now have in some areas been restrictive and unworkable.
“However, the review has ... fallen short of David Cameron’s specific vision of creating an environment where companies like Google can flourish [If you listen carefully, you can hear the sound of thousands of readers sighing "Thank heavens for that!"].
“In particular the review supports the current level of protection for technology-related patents in the UK and recommends that we should resist broadening the scope of what can and cannot be protected [but let's not forget that, even for 'non-protected' software inventions, a measure of legal protection through copyright still exists]. It is precisely because of the more open policy in the US that it has been much easier for internet and technology businesses to safeguard their ideas and in turn access investment [I suggest here that this line is at best unproven and at worst a fallacy: it's the relatively loose competition laws which might make the difference]. 
In my view, some more radical thinking in the way we approach protection for the software industry is needed to ensure the UK becomes an ideal location for technology entrepreneurs. Unless we address this issue, the UK will never foster the next Google.”
The official Marks & Clerk early response to the Review, from partner Simon Mounteney, makes the following points:
"The aims of review are laudable and it rightly identifies some of the pressing problems with our current IP regime. It is well-documented that aspects of our IP laws are out of sync with the digital age, and that these problems can act as a barrier to innovation ["can" is not the same as "do".  Copyright owners identify a high level of unauthorised use that cannot be easily detected and which is uneconomical to enforce, which would suggest that the law is widely ignored and rarely enforced. If this is the case, it presumably isn't acting as a barrier to very much at all]. ...
 Britain ’s IP laws are so dependent on myriad international and European treaties that unilateral reform of our copyright and patent systems is impossible to achieve. Real reform will need to be pursued at a European or international level, and many of the proposed solutions will need significant attention to detail in order to become viable [cf the comment earlier about how we should bring UK law into line with the rest of the EU ...]. 
His partner, solicitor Gregor Grant, adds:
"Copyright licensing is a minefield. A single work can have several rights owners, each owning different slices of the pie. The digital revolution has made it yet more difficult for anyone who wants to broadcast - or even play - works such as music [Hasn't the digital revolution made it easier to broadcast or play? The difficult thing now, as before, is to do it legally]. The problem is self-evident; the solution is not. The report identifies and analyses the problem. It points a finger in the direction of a solution, which is a centralised digital registry, allowing people to use copyrighted works for a fee - a bit like a scaled-up version of the Performing Rights Society but not limited to music alone. But it does not hand out a packaged solution. These days, no national government can hope to do anything significant with copyright law unilaterally. There are simply too many international conventions, plus the fact that much of European copyright law has to adhere to a common format. .. ".
Moving now to industry, Katja Hall (Confederation of British Industry Chief Policy Director) said:
"... The ... voluntary Digital Copyright Exchange ...should make it easier for businesses and individuals to legitimately access and pay for copyrighted material, while allowing rights owners to retain control of how their content is used and sold. However, robust copyright protection should be available to all, and preferential enforcement action for material registered on the Digital Copyright Exchange must be avoided [I'm not sure what this means. Can anyone clarify or explain?]. Instead the Exchange should be a collaboration between content creators and the technology sector [ditto]. 
Enforcement of IP rights, both at home and abroad, will remain one of the biggest issues for firms in the knowledge economy. Those firms will now be looking for reassurance from the Government that it will champion international enforcement, which is so critical to an export-led economic recovery.”[How interesting: the CBI, which represents industries per se rather than rights-owners, seems more interested in enforcement than in access and use]
Chris Marcich, President and Managing Director of Motion Picture Association, wasn't going to say anything that might compromise the six major film studios in the MPA's stable represents:
“... We welcome the assurances regarding better enforcement at home and abroad and the measures to assist in rights clearance where there is market failure but we are concerned about a number of recommendations which will have an impact on the film industry including proposals related to exceptions on copyright and linking the Digital Copyright Exchange to enforcement.

“We look forward to engaging with the Government [does that mean the now-discouraged practise of, er, lobbying?] on these proposals to ensure that the vital safeguards provided by IP protection, which give the creative sector its value, are maintained and that any changes are carefully considered in the context of their potential impact on the market place.”
Another rights-based body, the Creative Coalition Campaign (CCC), speaks for some 30 leading organisations in the media, games and sport sectors, among others. Christine Payne (CCC Chair) said:
“We are delighted that Professor Hargreaves has listened to the creative sector and has rejected moves to change the fundamental principles behind UK copyright law which would have damaged investment in the UK ’s creative industries. The decision to omit the US style ‘fair use’ system is recognition that the UK already has a flexible copyright framework that facilitates fair dealing.  ...[W]e are keen to work with the Government to ensure that any changes are business led not regulatory fixes." [The two are not mutually exclusive: business-led is where it comes from; regulatory fix is what it is]
The warmest of the early responses came from the Pirate Party UK, which endorsed the Review as far as it went and mourned the fact it didn't go further:
" ...the Pirate Party agrees that copyright and patents should 'make not break markets' [Well, that's something we all agree on] and that the rights of innovators and artists should be balanced with those of the public to enjoy such work.  The Party agrees with the review when it states that "businesses too need change, in the form of more open, contestable and effective global markets in digital content". ...

The Party is disappointed, however, that the review has been held back from proposing any real reform to deal with the extensive problems that current copyright and patent frameworks pose, nor sought to redress the imbalance between the rights of creator and the needs of society.[It would be good to identify and explain those needs.  Like SMEs, society is something on whose behalf many people speak, but who lack any apparent mandate to do so]  While the Review has clearly made progress in addressing some of the symptoms of our broken copyright and patent system, the Pirate Party believes that we need a more radical rethinking of the role of copyright and patent laws in the digital age".

Sunday, 15 May 2011

Limes are not the only fruit


I’ve been pondering over the weekend who the real winners and losers in the LimeWire saga were – and where the recorded music industry goes from here - and for that matter where film companies and other content owners go from here. Despite a court victory for the record labels, and an agreed settlement, I just can’t find any real winners, but I can find lots of losers, including (of course) LimeWire which has been shuttered and forced to pay over $105 million.

What we had was a widely popular internet service that was admittedly used by many to download illegal content – but LimeWire’s own figure showed that 30% of consumers used the service to find new music – and another 25% were “morally persuadable” – in that they could have been encouraged to pay for content. In a “can pay, won’t pay” era, not a bad market at all – and that’s gone. So a potential business has been lost, the consumer has lost out – and consumers have been lost too.

The recorded music sector is still in a steep decline, and the unpalatable truth is that those who used LimeWire for illegal downloading and peer-2-peer fileswapping will have undoubtedly moved elsewhere - as no doubt will those who would have paid. When the French government ran a survey of French consumer habits post the introduction of their version of the three strikes law (the ‘Law Hadopi’) in January this year, it showed that 49% of French internet users continued to download illegally. This can be compared with the 25% of LimeWire users who were“ hardcore pirates” and the 20% who were ‘legally unaware’ that what they were doing was illegal (or didn’t care) and whose behaviour is perhaps harder to change and monetise. That said, 55% remain as potential consumers (or 51% in France!) and losing that audience to other (often illegal) services can’t be a good move, can it (?) when your market has declined 52% in the last ten years (and that’s the record industry’s own figures).

So LimeWire lose – and the record labels lose, and consumers lose too! And what about those poor sods who actually created and paid for the sound recordings in the first place – the artists. As successful artists almost always have to assign ownership of their sound recordings over to record labels, despite paying for those recordings out of recouped royalties that would have otherwise been due to them, surely they have the most to lose financially? And I haven't seen much by way of statements from the labels on whether or when they will be making payments from the settlement to artistes - and indeed artistes don't really seem to have benefitted from any of the previous settlements received by the record labels from legal actions against downloaders and websites. In the cases I have seen, funds are (reportedly) being allocated to legal costs, enforcement costs and invested in ‘education’. I won' dwell on this, but lets be clear, the artist loses too.

But am I being to negative? Its not all doom and gloom. The live music industry, whilst not recession proof and certainly damaged by high ticket prices and ticketing charges over the last two years, remains in rude health and U2 have just broken box office records for the highest grossing World tour ever. The festival market in buoyant with a raft of 'sell outs' across Europe and the USA this year; merchandising is still a highly profitable sector; and music publishing revenues appear to be holding up, not least because of the success of the collection societies in continuing to monetise copyrights, and the successful growth of revenue streams such as synch licensing. With the recorded, music sector Warner Music Group has just been sold and there were a number of parties interested in buying the major label - and the Citigroup owned EMI have just announced healthy profits of £330 million for 2010 from their music publishing and recorded music divisions.

Even the data that came out of the LimeWire trial wasn't all negative. Whilst I suspect a relatively large proportion of LimeWire users would prefer not to pay for their music, the fact that 30% were 'sampling' new music, 20% were legally unaware of the true copyright position and that 25% were "morally persuadable" to pay means that up to 75% WOULD PAY. That’s a lot better than some of the record industries own statistics, such as those offered by the IFPI that show that 19 out of every 20 downloads are illegal. If the record industry could monetise 75% of downloads I imagine they would be very happy indeed, if not laughing all the way to the bank! And very recent French research conducted by the organization set up in France to administer its “three-strikes” file-sharing law, found that 50% of citizens view HADOPI as a positive initiative, and the same number also said it has persuaded them to “more often” seek legal content online - and that 72% of the respondents who had received a file-sharing warning from HADOPI, or knew of someone who did, either ceased or reduced their illicit downloading.


Traditional copyright law provisions, the new deterrent offered by three strikes laws,and the legal tools available post Grokster (at least in the USA and other countries such as Spain) against wesbites and software that encourages or induces illegal dwnloading means that customers can be pushed towards legal services, if the prices and offerings are right, and that those who profit from illegal filesharing can be chased down (sometimes) and their services can be shut down. This does give some legal protection to a 'content' business that isn’t entirely based on give always and copyright theft. But the fact remains is not an easy 'market' to monetise. The UK's Hargreaves review of IP law may offer a glimmer of hope - it may well recommend the introduction of a consumer right to format shift. The labels, both the majors and the indepdent labels, have always fudged this, but it the modern era consumer restricting DRM on paid for content seems just plain wrong and methinks the labels need some tough love here. But it will be moves to simplify and globalise content licensing that will be the key to this - something the music publishers have definately been better at - both domestically and on a global level, although criticisms still remain that the licensing both songs and sound recordings remains hopelessly out of step with new internet business models. Again, it might not quite be what the labels want but it is what the online content businesses desperately need - on both sides of the table. And whatever Hargreaves says (and of course the Report may well NOT favour content owners but may well favour internet businesses interests) there is no simple solution.

The rise of Apple as a brand has clearly shown the value of music in creating value -its just not much of that value went back to the major record labels and artistes. Apple is now the most valuable business in the World and its rise from a smallish boutique computer company to a global phenomenon can be almost directly synchronised with the rise of the iPlayer and iTunes. In early March this year at a talk I gave for BLACA I pointed out that between 1992 and 2003 Apple's revenue growth was almost static, but once the iPlayer was launched and then iTunes was launched (in 2003 in the USA and 2004 in Europe) Apple's revenues grew rapidly - from $8 billion in 2004 to $24 billion in 2007, and then to $65 billion in 2010. Apple became sexy (and valuable) in no small part because of its association with music. I am not sure the reverse is true, a least when looking at the 'value' part!

In some ways artistes are, despite some being in truly appalling contracts with record labels, in a better position to monetise themselves than the record labels will ever be, and this includes a better position to monetise their copyrights in the digital age as bands like Nine Inch Nails and Radiohead have proved when freed fom label contracts. Image Rights and in particular Trade Marks still give substantial protection to bands as 'brands' and increasingly artistes seem to recognise this. My concern for the recorded music sector remains that the major labels are stuck with supporting outmoded business models and, whilst changing faster than they would like, almost certainly are not changing fast enough.

I noticed an interesting story last week about the launch of a new £350 million investment fund called Icebreaker. The venture capital fund, up by former Kleinwort Dresden banker Caroline Hamilton, has the backing of wealthy investors and aims to back recording artistes who want to operate outside traditional record company business models. The fund has brought in UK indie label Cooking Vinyl as a consultant and has already placed its first funding, providing backing for Marilyn Manson’s new recordings. Like the Edge Group which also operates in a similar way, these financing deals provide a far more interesting business model for artistes in the digital age when they can move away from thinking about 'record music' and 'live music' and 'merchandising' and 'endorsement 'and 'publishing' as discrete areas of business, and rather can combine all of their activities into a 'business' where MAYBE the recorded music element supports live but maybe its a 'loss leader' or a pure promotional tool. Lady Gaga now has ten million followers on Twitter - whether or not that is a the basis for a new revenue stream who knows - but I suspect in the future artists will be at the core of '360 degree' business models but ones that do not necessarily involve record labels. It is a music business, just not as we know it!

And on that note, a new report on how record companies have evolved to cope with the challenges of the digital era has been published (16th May) having been launched at The Great Escape Conference and Festival in Brighton over the weekend. Penned by BPI Chair and former EMI UK chief Tony Wadsworth for MusicTank, the paper challenges the idea that record labels are outdated 'dinosaurs'. Based on interviews with key players from across the music business, including the majors, independents, managers and agents, the Report does make some suggestions for changes in the industry, though, including a call for more innovation in licensing and more transparency so that all stakeholders feel rewarded for their efforts.

The report is available from Westminster University's Music Tank at www.musictank.co.uk for £45, including a year's membership to MusicTank.

And interesting comment on the LimeWire settlement from digitalmusicnews.com; My thanks to Len Bendel for sending this link over to me http://www.digitalmusicnews.com/stories/051311labels

And a really clear review of many of the issues Professor Hargreaves will be considering has been compiled by Laurie Kaye in 'A Big Week For Copyright" which can be here on Laurie's Blog: http://laurencekaye.typepad.com/laurence_kayes_blog/

Saturday, 14 May 2011

LimeWire settles with record labels for $105 million


LimeWire, the now defunct file sharing platform, and its founder, Mark Gorton, have reached a settlement with the 13 record labels that brought an action against them in the Manhatten federal court, agreeing to pay $105 million in damages. The defendants has already been found liable for copyright infringement last year by Judge Kimba Wood and the trial that has been settled was to award damages – the Jury could have potentially awarded up to $1.4 billion in statutory damages. LimeWire had already settled an action brought by 30 music publishers in March 2011.

Glenn Pomerantz, the lawyer representing 13 record labels in their legal action in the Manhatten federal court against Lime Wire LLC and founder Mark Gorton, said at the start of the action that the defendants should pay the highest range of damages for harming the recording industry by allowing people to download songs for free saying “The harm that Lime Wire has caused is truly staggering,”

The record companies also accused Gorton of the fraudulent transfer of assets into family limited partnerships where they would be shielded from liability. Gorton, who was CEO of Limewire from 2000 to 2006, was found by the court to have been intimately involved with the management of the company and until 2005, Gorton owned at least 87% of the company, according to court records. Pomerantz told the jurors Gorton made the transfer three days after the U.S. Supreme Court ruled in 2005 that file-sharing service Grokster could be held liable for copyright infringement in the MGM v Grokster case. In a pre-trial ruling Judge Kimba Wood said that Gorton and all his business entities (such as Lime Group and Lime Wire FLP) could be liable for copyright infringement, so that he himself and any other companies he set up will also be liable to pay any damages awarded to the rights owners.

The record labels evidence all pointed to LimeWire’s role is facilitating illegal downloading and the resultant destruction of the recorded music market. In opening remarks Pomerantz told the jury the record industry’s revenue declined 52% from 2000 (the year Lime Wire was founded) to 2010. Gorton and LimeWire’s lawyers have, unsurprisingly, a slightly different take on this, arguing that many other factors were responsible for the drop in music industry revenue besides peer-to-peer file sharing, with the defendant’s attorney Joseph Baio saying “The record companies know and have known that their problems started well before Lime Wire” in his opening remarks. Baio cited the record companies’ own past comments to show that other factors were more to blame for the decrease in revenue than file-sharing. These included counterfeit and copied CDs, the economic recession, bankruptcies of music wholesalers and retailers, the maturation of the CD market, competition from other forms of entertainment such as video games, and the industry’s own inability to exploit the new technologies.

The defendants were hampered by another of Judge Wood’s rulings when she said that one of their key witnesses, a damages expert called George Strong, would not be allowed to deliver his entire testimony. Strong planned to tell the court that the link between file-sharing and slumping record sales in the last ten years was not proven, and that there is evidence that file-sharing can lead to an increase in record sales, ie the 'file-sharing is basically a preview service' argument. However Wood ruled that Strong was not an expert on either the music or technology industries, and that as he hadn't undertaken any of his own research regarding file-sharing, he would not be allowed to make such sweeping statements in court with Judge Wood saying ”He can’t argue that file sharing may have stimulated additional music purchases, because he didn’t do any analysis in that area”. Judge Wood has also indicated that she wouldn't allow evidence from recording artistes who would say that illegal file swapping has not harmed their careers – and in some cases may have (in their opinion) helped their careers. Judge Wood was happier with the record companies’ experts and Dr. Richard Waterman of the University of Pennsylvania, who ran a study which concluded that 98.8% of the files requested by Limewire users were copyright protected, would have been allowed to give evidence.

As the trial progressed the defence did produce a number of statements in court from various record label executives to explain the rise of filesharing and point towards the label’s own failures to contain piracy. One internal memorandum produced to the court by the defence from Warner Music Group chief Edgar Bronfman Jr, saying “"[W]e inadvertently went to war with consumers ... [and] consumers won," Doug Morris, former head of Universal Music wrote in a note presented as evidence "The real problem is that there is no technology coming from the record companies" with current Universal Music CEO Zach Horowitz also quoted: It seems when told by Victory Records CEO Tony Brummel, "You can't compete with free," Horowitz replied "We can. We have to. It's just that we have to be creative and add value" although I am not quite sure why the defence felt this helped their case. LimeWire also produced a memo from Recording Industry Association of America (RIAA) chairman Mitch Bainwol, entitled, "Burning and Ripping are Becoming a Greater Threat Than P2P" – again I am not quite sure why this helped the defence - its all piracy and all damaging! LimeWire's attorney concluded his opening statement in the case by pointing out that anytime a file-sharing network has been shuttered, users have migrated to another service. CNET reports Baio concluded by saying "Music that is free is here to stay".

Next it was LimeWire founder Mark Gorton’s turn to give evidence. Noting last year's court ruling on his company's operations, Gorton told the court "I was wrong. I didn't think our behaviour was inducing [copyright infringement] but I understand that a court has found otherwise". The RIAA clearly have a different opinion and said that Gorton ploughed ahead (despite a cease and desist letter sent after Grokster) because of the potential profits he could make - even more so once most of his US competitors shut down post Grokster. Indeed Pomerantz highlighted a pre-Grokster interview Gorton gave to the New York Times in which he said: "If the Supreme Court says it is illegal to produce this software, LimeWire will cease to exist" and also noted that LimeWire staff divided up their users into four categories: “hardcore pirates” (25%), “morally persuadable” (25%), those “sampling music” (30%) and “legally unaware” (20%). Pomerantz also said that Gorton had banned his staff from responding to user queries regarding the service's legality. Gorton told the court that he took the cease and desist letter as a request by the labels that he find a way of persuading his users to pay for music, and that he forbade staff discussing LimeWire’s legality as hadn't wanted to be placed in a position of giving legal advice to internet users.

And then it was time for the first of the record industry heavyweights – with Warner Music Group Chief Executive Officer Edgar Bronfman telling the federal jury that Lime Wire’s effect on Warner’s business was “devastating.” Bronfman, 54, testified that the drop in revenue caused by peer-to-peer music sharing services such as Lime Wire forced Warner to fire employees and release fewer recordings. He said he had hoped the services would shut down voluntarily after the Supreme Court Grokster decision held that music-sharing programmes could be held liable for infringement. “When Lime Wire kept operating it frustrated me greatly,” adding “It was devastating, frankly.” And that was the last of the heavyweights too as .... and the case was suddenly announced as settled, with the first report I saw in the Wall Street Journal, based on a defence statement to the press.

With a week of the trial still scheduled, and with no public indication from the record labels about how much they were seeking, media reports were still speculating that it would be maximum statutory damages (under federal copyright law) for 9,561 sound recordings released since 1972. If the jury awarded maximum statutory damages of $150,000 for each recording, that would result in an award of $1.4 billion. Other damages on pre-1972 recordings were also being sought. In my own opinion the record labels had made a good case – and of course had already won the argument about whether or not LimeWire was liable for infringement - but clearly LimeWire alone was not the reason for the decline in the sale of recorded music – there are many reasons – piracy and P2P file swapping being key factors of course – but the record labels failure to adapt to the digital age is as much to blame in my mind (and yes, I still remember the awful Pressplay and Music Net the labels launched which is another story altogether). That said, much of the defence was, at best, irrelevant and some seemingly self defeating. Baio had said the labels deserved far less and seemingly said that Gorton made ‘only’ about $6 million from the songs the record companies have listed as infringed. What did become clear was that as the case developed, ongoing settlement talks had run parallel with case with the Wall Street Journal again reporting that lawyers for the labels and LimeWire representatives have met on at least three occasions in the hope of replacing the jury decision. And then on May 12th the WSJ reported that a settlement HAD been reached with LimeWire LLC and its founder, Mark Gorton, agreeing to pay the (major record labels) plantiffs and their trade group the Record Industry Association of America $105 million to settle the copyright infringement lawsuit, according to a statement issued by the defendants' lawyer with LimeWire and Mr. Gorton saying that they were "pleased that this case has concluded” and quite possibly very pleased that LimeWire group companies - and indeed Mr Gorton personally - were facing having to pay over less than 10% of what COULD have been awarded, and certainly a lot less than the record labels had been suggesting was the real economic damage to the recorded music market by LimeWire. That said the labels will probably be pleased that they are not reliant on an unpredictable jury, that a significant (if not ground breaking) sum of money had been recovered and another important precedent publicly set, without too much collateral damage, in a public arena.

Update: I have just found the post settlement comments from chairman and CEO of the RIAA Mitch Bainwol who told reporters: "We are pleased to have reached a large monetary settlement following the court's finding that both LimeWire and its founder Mark Gorton were personally liable for copyright infringement. LimeWire wreaked enormous damage on the music community, helping contribute to thousands of lost jobs and fewer opportunities for aspiring artists". He added: "The significant settlement underscores the Supreme Court's unanimous ruling in the Grokster case: designing and operating services to profit from the theft of the world's greatest music comes with a stiff price".

What remains is one now defunct internet business and a declining recorded music business.



Arista Records LLC v. Lime Wire LLC, [2011] 06-05936, U.S. District Court, Southern District of New York (Manhattan).

EMI April Music Inc et al v. Lime Wire LLC, [2011] U.S. District Court, Southern District of New York, No. 10-04695.


www.thecmuwebsite.com (CMU Daily, 5th May 2011)

http://www.bloomberg.com/news/2011-05-04/lime-wire-jury-chosen-as-warner-music-sony-labels-seek-copyright-damages.html

http://paidcontent.org/article/419-limewire-trial-beginsjury-to-decide-how-much-labels-are-owed/

http://news.cnet.com/8301-31001_3-20061209-261.html

Tuesday, 10 May 2011

Karaoke hoarder becomes first Scottish file-share convict

Procurator Fiscal:
"Law and honour"
Via the ever-helpful Hector MacQueen comes news of a media release from the other side of Hadrian's Wall, issued earlier today by the Crown Office and Procurator Fiscal Service, Scotland. It reads as follows:
"FIRST PERSON IN SCOTLAND CONVICTED OF ILLEGAL MUSIC FILE SHARING

Anne Muir, 58, has become the first person in Scotland to be convicted for illegally sharing music files online. Muir pleaded guilty at Ayr Sheriff Court last month to a contravention of section 107(1)(e) of the Copyright, Designs and Patents Act 1988. Muir, from Ayr, admitted to distributing £54,000 worth of copyrighted music files by making them available to others via a 'peer-to-peer' file sharing application.

Following an initial investigation by BPI (British Recorded Music Industry) and IFPI International Federation for the Phonographic Industry), a formal complaint was made to Strathclyde Police. Officers subsequently obtained a search warrant for her home at Gordon Street, Ayr, and seized vital evidence, including computer equipment.

This is the first conviction of its kind in Scotland and is particularly significant to the music industry.

District Procurator Fiscal for Ayr, Mirian Watson, said:
"Intelligence gathered by BPI and IFPI revealed that Anne Muir was a prolific user of a particular file sharing network based in the UK. Illegally flouting copyright laws is tantamount to theft and not only deprives legitimate companies and artists of earnings, but also undermines the music industry as a whole. We will continue to work effectively with law enforcement in this area and to apply our robust prosecution policy."
Sentencing has been deferred until 31 May at Ayr Sheriff Court".
The BBC has supplied further details. Muir's lawyer Lorenzo Alonzi is reported as saying that his client, an auxiliary nurse at Ayr hospital, had not used the network for any financial gain, but to build up her self-esteem after suffering from depression for a number of years:
"Mrs Muir was not in any way trying to distribute on a large scale, she had a very big quantity of these files because she was hoarding -- a symptom of a severe obsessive personality disorder that she suffers from. She has, for many years, suffered from bouts of depression, which causes her to have extremely low self-esteem."
Her haul consisted of 7,493 digital music files and, truly depressingly, 24,243 karaoke files.

Much will depend on how the court treats Muir when it comes to the sentencing.  A low sentence will be seen as no more than a slap on the wrist and as a message that it's not worth prosecuting file sharers; a high one will make her into a martyr and can result in poor publicity for the copyright-reliant industries.  The court may have a tough job getting the right balance, particularly if Muir's mental state is a major issue.

Monday, 9 May 2011

Ireland seeks radical copyright reforms

The three-person Committee decided it was time
to get to grips with the new digital technologies ...
According to a media release this morning, kindly forwarded by Samantha Holman (Executive Director, Irish Copyright Licensing Agency), Ireland's Minister for Jobs, Enterprise and Innovation Richard Bruton T.D. has commenced a process of reform of Ireland’s copyright regime, in an effort to maximise the potential of Ireland's digital industry. The politician says:
“I am determined that government will make whatever changes are necessary to allow innovative digital companies reach their full potential in Ireland. These companies make an enormous contribution to jobs and economic growth, and government must do everything it can to allow them to flourish and expand in Ireland.

Some companies have indicated that the current copyright legislation does not cater well for the digital environment and actually creates barriers to innovation and to the establishment of new business models [Depends whether the business model involves creating new work or using other people's, doesn't it?]. Moving towards a US-style “fair use” doctrine is one suggestion that has been made [My personal impression is that "fair use" has both advantages -- in terms of getting some good results -- and disadvantages in terms of encouraging more litigation because its outcome is less easy to predict].

I am determined to respond to these suggestions in a comprehensive and timely manner. It is not wise to make changes to this extremely complex area of legislation without first considering the issues in detail. [Now there's a thought!]

Therefore I have commenced a time-limited review of the law in the area to be conducted by three industry experts. The review will include a full consultation process with all relevant stakeholders, and the entire process will be complete within six months.

If they find that there are changes that can be made, within the confines of EU and other law in this area, which can enhance the environment for innovation by digital companies, I will move swiftly to act”.
The Review Committee will be chaired by Dr Eoin O’Dell of Trinity College, Dublin and will include Professor Steven Hedley of University College Cork and Patricia McGovern of DFMG Solicitors. Details of the review and the Terms of Reference are available here. Submissions to the Copyright Review Committee should be emailed here by close of business on Thursday 30 June 2011.

The choice of committee members is interesting. Two are academics, each of whom has an interest in restitution.  This leads me to wonder whether a restitution-based approach -- possible based on a pay-as-you-use basis in place of the traditional copyright monopoly (and in turn a bigger role for collecting societies) -- might be seriously considered.  The third is a seasoned and respected private practitioner who will, in the course of her career, have had the opportunity to advise both those who own rights and those who are anxious to minimise the risk of infringing the rights of others.  Conspicuously absent is anyone from a business currently operating in the digital environment.  This probably makes sense.  The panel of three will be obliged to listen closely to the many submissions from within the digital industries and from copyright owners and their representatives, but it is less certain that a panel drawn from the various industrial and rights-owning interests would have the time and the patience to listen to the still small voice of the academic.

US decline in TVs heralds a new generation's choice


A new study from The Neilsen Company says that the number of homes in the United States equipped with a television set is expected to decline through 2012 - dropping to 114.7 million homes (96.7 percent) from 115.9 million (98.9 percent). This is first time US TV ownership has gone down in two decades and the snappily titled “2012 Advance/Preliminary TV Household Universe Estimate (UE)" puts the decline down to a number of factors – the recession being one, but the Report also cites ‘digital transition’ and more tellingly the increased use of ‘multiple viewing platforms’ for the decline.

The Report argues that the economic downturn has had an inevitable effect but the transition from analogue to digital broadcasting in 2009 has compounded this as it meant that viewers needed to have purchased a new digital TV or bought a digital-to-analog converter box to watch digital services and this marked the first decline in TV penetration as analogue households who could not afford new digital sets and antennas were no longer ‘connected’. But tellingly it is rise of alternative viewing platforms, such as computers and tablets and even mobile devices, that seems most likely to lead to a drop in TV ownership by 2012 as the USA catches up with consumer trends in other countries where for the younger generation the TV is no longer the dominant platform for viewing content. Market analyst ComScore estimates that in 2010 over 12 million smartphone owners in the UK, France, Germany, Spain and Italy watched videos online via their mobile device. Evidence of a similar change in US viewer habits is the rapidly shrinking number of new students who take a TV with them to University or College. Even this blogger has started using the BBC’s iPlayer on a regular basis to ‘catch up’ on the occasional missed programme, but I watched my first ‘live’ TV programme this weekend on my laptop, primarily as it was something I wanted to watch and the laptop seemed the easiest place to view (it was a lunchtime Championship soccer match on BBC1, Leeds United v QPR if you must know – and Leeds won!).

The last time TV ownership figures dropped was back in 1992 when the US economy was suffering, but in 2012 whilst the decline is more interesting and complex, it doesn’t necessarily mean that consumers are consuming less TV – just they are consuming it in different ways. This alone has prompted Nielsen to think about a redefinition of the term ‘television household’ to include Internet viewers. But more tellingly the shift is no doubt a worry for the TV networks, with the younger generation shifting away from TV subscriptions to free internet based access. They ARE watching content, just not in a linear traditional way.

The Report also indentifies other shifts in audience behavior and already sees another change, with evidence that hand held tablet owners such as the iPad are using their PCs and desktops less, cutting down on using e-readers and a quarter of respondents had cut down on use of their games consoles although tablets seem to have less effect on users of internet connected TVs and those with smartphones. Nielsen asked tablet owners how their usage of other devices had changed since they acquired the new devices and more than a third (35 percent) said they use their desktop computer less or not at all, while 32 percent said they use their laptop less. Nielsen reports 77 percent of tablet users use a tablet for tasks that they previously would have done on a laptop or desktop. The most popular reason cited for favoring tablets is unsurprising: they're easy to carry around. 31 percent of tablet owners responded that portability was the main reason for using a tablet over a laptop or a desktop with ease of interface or operating system and fast start-up and power-off times as the second and third most common reasons given.

A final report that will also set off alarm bells with content owners is a new report from the Digital Entertainment Group which showed that US sales of new DVDs had fallen a whopping 20% last year as consumers shift away from buying physical product to streaming movies using services such as Netflix. With DVD sales still underpinning big movie releases and still seen important in both the television and music industries, it is an alarming decline, unless content owners are quick enough to replace paid for DVD sales with paid for streaming or other revenue models. It is a difficult time for content owners as technology races ahead and consumer behaviour changes at an ever increasing rate of change, but as ever it offers new opportunities for both existing companies and new market entrants – but perhaps tellingly there seems to be no one model that solves all problems, and even ‘new’ business models can seem outdated after increasingly short periods of time.


http://www.independent.co.uk/life-style/tv-ownership-expected-to-decline-in-the-us-ndash-economics-platforms-and-digital-blamed-2278764.html

http://www.pcworld.com/article/227262/tablets_cutting_into_laptopdesktop_use_nielsen_finds.html

http://techland.time.com/2011/05/04/dvd-sales-plunge-in-u-s-digital-sales-on-the-rise/

Friday, 6 May 2011

Record industry looks for $1.4 billion in Limewire trial


Glenn Pomerantz, the lawyer representing 13 record labels in their continuing legal action in the Manhatten federal court against Lime Wire LLC and founder Mark Gorton, has said that the defendants should pay the highest range of damages for harming the recording industry by allowing people to download songs for free saying “The harm that Lime Wire has caused is truly staggering,”

A brief reminder of the facts behind the trial: last May District Judge Kimba Wood ruled that Lime Wire induced or willfully contributed to the infringement of recordings by allowing its users to download and illegally share thousands of songs on the Internet through its peer-to-peer file-sharing software. The court ordered Lime Wire to shut its music service last year and it duly did (although a ‘pirated’ LimeWire software later appeared).

The record companies have also accused Gorton of the fraudulent transfer of assets into family limited partnerships where they would be shielded from liability. Gorton, who was CEO of Limewire from 2000 to 2006, was found by the court to have been intimately involved with the management of the company and until 2005, Gorton owned at least 87% of the company, according to court records. Pomerantz told the jurors Gorton made the transfer three days after the U.S. Supreme Court ruled in 2005that file-sharing service Grokster could be held liable for copyright infringement in the MGM v Grokster case. In a pre-trial ruling Judge Kimba Wood said that Gorton and all his business entities (such as Lime Group and Lime Wire FLP) could be liable for copyright infringement, so that he himself and any other companies he set up will also be liable to pay any damages awarded to the rights owners.

The record labels evidence all points to LimeWire’s role is facilitating illegal downloading and the resultant destruction of the recorded music market. In opening remarks Pomerantz told the jury the record industry’s revenue declined 52% from 2000 (the year Lime Wire was founded) to 2010. Gorton and LimeWire’s lawyers have, unsurprisingly, a slightly different take on this, arguing that many other factors were responsible for the drop in music industry revenue besides peer-to-peer file sharing, with the defendant’s attorney Joseph Baio saying “The record companies know and have known that their problems started well before Lime Wire” in his opening remarks. Baio cited the record companies’ own past comments to show that other factors were more to blame for the decrease in revenue than file-sharing. These included counterfeit and copied CDs, the economic recession, bankruptcies of music wholesalers and retailers, the maturation of the CD market, competition from other forms of entertainment such as video games, and the industry’s own inability to exploit the new technologies.

The defendants have been hampered by another of Judge Wood’s rulings where she said that one of their key witnesses, a damages expert called George Strong, would not be allowed to deliver his entire testimony. Strong planned to tell the court that the link between file-sharing and slumping record sales in the last ten years was not proven, and that there is evidence that file-sharing can lead to an increase in record sales, ie the 'file-sharing is basically a preview service' argument. However Wood ruled that Strong was not an expert on either the music or technology industries, and that as he hadn't undertaken any of his own research regarding file-sharing, he would not be allowed to make such sweeping statements in court with Judge Wood saying ”he can’t argue that file sharing may have stimulated additional music purchases, because he didn’t do any analysis in that area”. Judge Wood has also indicated that she won’t allow evidence from recording artistes who would say that illegal file swapping has not harmed their careers – and in some cases may have (in their opinion) helped their careers. Judge Wood was happier with the record companies’ experts and Dr. Richard Waterman of the University of Pennsylvania, who ran a study which concluded that 98.8% of the files requested by Limewire users were copyright protected, will be allowed to give evidence.

However, the defence did produce a number of statements in court from various record label executives to explain the rise of filesharing and point towards the label’s own failures to contain piracy. One internal memorandum produced to the court by the defence from Warner Music Group chief Edgar Bronfman Jr, saying “"[W]e inadvertently went to war with consumers ... [and] consumers won," Doug Morris, former head of Universal Music wrote in a note presented as evidence "The real problem is that there is no technology coming from the record companies" with current Universal Music CEO Zach Horowitz also quoted: It seems when told by Victory Records CEO Tony Brummel, "You can't compete with free," Horowitz replied "We can. We have to. It's just that we have to be creative and add value." LimeWire also produced a memo from Recording Industry Association of America (RIAA) chairman Mitch Bainwol, entitled, "Burning and Ripping are Becoming a Greater Threat Than P2P." LimeWire concluded its opening statement in the case by pointing out that anytime a file-sharing network has been shuttered, users have migrated to another service. CNET reports Baio concluded by saying "Music that is free is here to stay".

The record labels haven’t publicly indicated how much they are seeking from Gorton but it understood that they will try to get statutory damages (under US federal copyright law) for 9,561 sound recordings released since 1972. If they ask the jury for maximum statutory damages of $150,000 for each recording, that would result in an award of $1.4 billion. Other damages on pre-1972 recordings will also be sought. Baio said the labels deserved far less and seemingly said that Gorton made only about $6 million from the songs the record companies have listed as infringed.

In related news, a new lawsuit has been filed by film producer Alki David, who also runs online TV-on-demand service FilmOn.com. He has sued tech website CNET and its publisher CBS Interactive for copyright infringement on the basis they were the "main distributor" of the LimeWire software. Reports say that CNET has always had a section on its site where users can download free software, or free previews of premium software, and among the packages offered over the years have been various P2P technologies, including LimeWire. The lawsuit asserts that LimeWire was downloaded 220 million times from CNET since 2008, and that that amounts to 95% of the software's distribution in that time. In a statement issued to Billboard, a CBS Interactive spokesman said: "CBS and a host of other media companies were awarded a court ordered injunction against one of Alki David's companies last year with respect to that company's improper use of copyrighted content. This latest move by Mr David is a desperate attempt to distract copyright holders like us from continuing our rightful claims. His lawsuit against CBS affiliates is riddled with inaccuracies, and we are confident that we will prevail, just as we did in the injunction hearing involving his company".


Arista Records LLC v. Lime Wire LLC, 06-05936, U.S. District Court, Southern District of New York (Manhattan).

www.thecmuwebsite.com (CMU Daily, 5th May 2011)

http://www.bloomberg.com/news/2011-05-04/lime-wire-jury-chosen-as-warner-music-sony-labels-seek-copyright-damages.html

http://paidcontent.org/article/419-limewire-trial-beginsjury-to-decide-how-much-labels-are-owed/

Thursday, 5 May 2011

Copyright Tribunal: new regime gets first outing

Archive Media Publishing Ltd v MCPS is the first ruling of the newly-streamlined version of the UK's Copyright Tribunal. Decisions of the tribunal are held on the Intellectual Property Office website and you can find this one here. As Copyright Tribunals go, it's of historical importance, being the first decision under the small applications track, the matter being decided entirely on paper and without a hearing.

The tribunal consisted of Judge Colin Birss QC (whose real job is that of Patents County Court judge), Mrs Sam Madden and Manny Lewis. The dispute itself related to a Mechanical-Copyright Protection Society (MCPS) licence which DVD manufacturer Archive Media accepted as recently as August 2010 but to which it objected shortly thereafter on the grounds that its terms were unfair and discriminatory. The licence required payment of an estimated first-year royalty on monthly pay-as-you-go terms.

The ruling, just 15 sides long, dismissed the licensee's application. MCPS was entitled to require pay-as-you-go payments from a licensee which was a small business with no previous track record. However, it could have explained more effectively why it needed to do so and its terms were by no means clear. MCPS's application for costs is now pending: it has to keep its submission to just two sides and the tribunal reminded it that this was a (bargain basement) paper-based hearing.

Tuesday, 3 May 2011

Did the USA write New Zealand's new law?


More on New Zealand - and both Techdirt and Zeropaid report that the Green party in New Zealand is demanding clarification of possible US government and US rights industry intervention in helping to shape and pass the country’s somewhat controversial Copyright (Infringing File Sharing) Amendment Act, including the US music industry’s offer to fund an intellectual property enforcement unit to combat what US officials call “key gaps in intellectual property rights enforcement”. The information that comes from Wikileaks cables from 2005 and the Green Party’s Information and Communications Technology spokesperson, Gareth Hughes reportedly said “The latest Wikileaks cables show how vulnerable our Government is to pressure from big businesses in the USA,” adding “We’ve got to keep politics honest, so it’s important to find out exactly what influence US interests had in securing the rushed passage of controversial copyright legislation through Parliament”. Hughes went on to say “This kind of blatant intervention in local law enforcement is undermining our democracy … the New Zealand Government has been subject to intense international corporate lobbying. As the Government consults further on the current online copyright regime, it must make decisions that work for the New Zealanders that elected them, not US interests” adding “Hollywood moguls shouldn’t be writing our law!” Similar allegations about undue US influence were raised about draft copyright legislation recently introduced in Spain.

Separately, it also seems that the US warned New Zealand that exceptions in copyright law for format and time-shifting for personal use should not be allowed in New Zealand because “these exceptions to copyright protection would send the wrong message to consumers and undermine efforts to curb unauthorized copying of CDs in New Zealand. They would cost the industry in revenue and profits and discourage innovation".

http://www.techdirt.com/articles/20110501/00364014101/us-offered-to-write-new-zealands-three-strikes-laws.shtml

http://www.zeropaid.com/news/93336/new-zealand-green-party-why-is-hollywood-writing-our-copyright-law/