Government software piracy initiatives ineffective
Announcement posted by Business Software Association of Australia (BSAA) 10 Apr 2003
Measures to improve copyright protection in Australia incorporated in the Parallel Importation Bill passed in Federal Parliament in the final days of the last sitting would be ineffective in improving copyright protection for software, the Business Software Association of Australia has claimed.
The BSAA said it had closely analysed the initiatives announced in concert with lifting parallel importation restrictions on business software and concluded that they would do little to address Australias software piracy problem.
The Business Software Association of Australia and its members including Microsoft, Adobe, Autodesk, Macromedia, and Symantec, did not oppose lifting of parallel importation restrictions, which will allow anyone to import their software products into Australia. However, the BSAA called for measures to help reduce Australias business software piracy rate, which it says could increase with parallel importation restrictions removed.
Chairman of the BSAA, Jim Macnamara, said the industry was very disappointed with the initiatives announced by the Federal Government. It has taken years to get the Government to recognise Australia is not meeting its obligations to protect intellectual property under international trade regulations not to mention failing to foster a local software industry and finally when it has acted the measures are inadequate, he said.
As part of the Parallel Importation Bill 2002, the Government introduced four measures claimed to assist in protecting intellectual property such as software from being illegally copied and used, namely:
n Changes to the provisions for additional damages in civil cases;
n Presumptions in relation to ownership of copyright in civil and criminal cases;
n An increase in the maximum fine for importation of infringing goods; and
n The Federal Magistrates Court has been given jurisdiction to deal with civil claims for infringement of copyright, as well as the Federal Court of Australia which currently handles such cases.
Analysis by the BSAAs copyright lawyers has revealed that the new provisions either add little to existing law or contain flaws which it says make them unworkable.
Additional Damages
The Parallel Importation Bill introduced two new factors for courts to take into account when determining damages:
(a) the need to deter similar infringements of copyright; and
(b) the conduct of the defendant following the infringement or following notification by the copyright owner of the infringement.
Under the existing Copyright Act, Section 115, the court is already directed to take account of all other relevant matters, and existing case law shows that the courts are able to take into account the two factors introduced by the Bill. So it adds nothing of substance, Mr Macnamara said.
Proof of Copyright
Under previous law, copyright owners were required to prove every element of subsistence and ownership of copyright on products. For instance, Microsoft was required to prove it owned the copyright for Microsoft Office in each case. This involved software owners in expensive and time consuming legal processes including affidavits and sometimes even flying international programmers and technical experts to Australia.
The Parallel Importation Bill introduced new presumptions in relation to subsistence and ownership of copyright designed to facilitate proof of ownership in civil and criminal cases.
However, the new provisions are defective. They do not cover all of the facts which are required to be proved to establish subsistence and ownership of copyright. For instance, there is no presumption relating to originality of the work, so it will still be necessary to produce evidence of this, Mr Macnamara said.
In addition, the main presumption relating to subsistence of copyright relies on the work bearing a label or mark stating the year and place of first publication or making of the work. Since software products do not usually have any such label this presumption is of little value. he added.
Increased Fines for Importation of Infringing Goods
The Parallel Importation Bill increased the maximum fine for importation of infringing goods from $60,500 to $71,500 for individuals and $302,500 to $357,500 for corporations.
In practice this will have no effect as it provides for penalties up to specified amounts when, in reality, the penalties actually handed down by the courts for software infringement are extremely low. The largest fine ever handed down in a software copyright prosecution in Australia was $5,000.
The Governments own committee the Australian House of Representatives Standing Committee on Legal and Constitutional Affairs in its report entitled Cracking Down on Copycats: Enforcement of Copyright in Australia issued in November 2000 recommended measures to ensure penalties actually imposed were a deterrent, including introduction of guideline judgments and criminalisation of business end-user piracy (currently illegal copying of software is only a criminal offence if the goods are sold). However, many of the recommendations of this committee have been ignored, Mr Macnamara said.
Federal Magistrates Court Jurisdiction for Copyright Cases
The Parallel Importation Bill gives the Federal Magistrates Court jurisdiction to deal with civil claims for infringement of copyright.
The Governments claim is that this will afford a quicker and lower cost venue for bringing copyright cases. However, in reality, there are serious potential disadvantages for copyright owners in filing cases through the Federal Magistrates Court, the BSAAs analysis claimed.
Specifically, the BSAA has pointed out that copyright cases, particularly in relation to computer software, are complex. Already the Federal Court of Australia has encountered difficulties in understanding the issues involved. One case involving circumvention of a hardware locking device fitted to protect Autodesks AutoCAD software went all the way to the High Court of Australia. It is unlikely that the Federal Magistrates Court will have the expertise or experience to hear complex software copyright cases.
Furthermore, the process of discovery, a critical stage of gathering evidence in software copyright cases is not allowed in the Federal Magistrates Court unless the Magistrate specifically declares it is in the interest of administration of justice. This is a serious impediment to bringing cases in this court, Mr Macnamara said.
The BSAA also argues that costs are likely to be higher in the Federal Magistrates Court as time-consuming affidavits have to be filed at the start of cases and successful copyright owners are awarded only nominal costs which do not reflect the actual cost of bringing the case.
We commend the Governments focus on improving protection of software which is valuable intellectual property vital to economic development in the e-economy. But the measures introduced ignored industry advice and the recommendations of Government inquiries and committees, Mr Macnamara said.
The Australian Copyright Law Review Committee (CLRC) 1994 report, Computer Software Protection, and the Australian House of Representatives Standing Committee on Legal and Constitutional Affairs (Andrews Committee) report, Cracking Down on Copycats: Enforcement of Copyright in Australia issued in November 2000 recommended amending the Copyright Act to introduce a criminal offence for business end user piracy. As well, the Andrews Committee report recommended introduction of statutory damages in civil cases; guideline judgments for judges in criminal cases; and meaningful easing of onerous proof of ownership provisions for copyright owners.
Article 41 of the TRIPS Agreement (Trade Related Intellectual Property), which Australia is a signatory to, provides in part that:
Members shall ensure that enforcement procedures as specified in this Part are available under their national laws so as to permit effective action against any act of infringement of intellectual property rights covered by this agreement, including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements.
Article 61 of the TRIPS Agreement provides in part that:
Members shall provide for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale. Remedies available shall include imprisonment and/or monetary files sufficient to provide a deterrent, consistently with the level of penalties applied for crimes of a corresponding gravity.
It is difficult to see how Australia complies with these commitments under the current regime of copyright protection which involves no resources within the Federal Police to bring criminal prosecutions; lack of a criminal offence for business end user piracy; low penalties handed down by the courts; loopholes in legislation; and slow, complex and expensive procedures for copyright owners to take civil action to protect their copyright.
Meanwhile, the passage of the Parallel Importation Bill is likely to see an increase in the flow of pirated software products into Australia and reduced capacity for Customs and copyright owners to detect and take action against counterfeits, Mr Macnamara concluded.
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More information:
Toll-free hotline for public inquiries (anonymously if preferred): 1800 021 143
BSAA Web site: www.bsaa.com.au
About BSAA & BSA
The Business Software Association of Australia (BSAA) is affiliated with the Business Software Alliance (BSA), which operates globally in 65 countries. BSAA members include Adobe, Autodesk, Macromedia, Microsoft and Symantec.
The Business Software Alliance (www.bsa.org) is the foremost organization dedicated to promoting a safe and legal online world. BSA is the voice of the world's commercial software industry before governments and in the international marketplace. Its members represent the fastest growing industry in the world. BSA educates consumers on software management and copyright protection, cyber security, trade, e-commerce and other Internet-related issues. BSA worldwide members include Adobe, Apple, Autodesk, Avid, Bentley Systems, Borland, CNC Software/Mastercam, Internet Security Systems, Macromedia, Microsoft, Network Associates and Symantec. BSA regional members in Asia include Robert McNeel & Associates, SolidWorks and Unigraphics Solutions (EDS).
The BSAA said it had closely analysed the initiatives announced in concert with lifting parallel importation restrictions on business software and concluded that they would do little to address Australias software piracy problem.
The Business Software Association of Australia and its members including Microsoft, Adobe, Autodesk, Macromedia, and Symantec, did not oppose lifting of parallel importation restrictions, which will allow anyone to import their software products into Australia. However, the BSAA called for measures to help reduce Australias business software piracy rate, which it says could increase with parallel importation restrictions removed.
Chairman of the BSAA, Jim Macnamara, said the industry was very disappointed with the initiatives announced by the Federal Government. It has taken years to get the Government to recognise Australia is not meeting its obligations to protect intellectual property under international trade regulations not to mention failing to foster a local software industry and finally when it has acted the measures are inadequate, he said.
As part of the Parallel Importation Bill 2002, the Government introduced four measures claimed to assist in protecting intellectual property such as software from being illegally copied and used, namely:
n Changes to the provisions for additional damages in civil cases;
n Presumptions in relation to ownership of copyright in civil and criminal cases;
n An increase in the maximum fine for importation of infringing goods; and
n The Federal Magistrates Court has been given jurisdiction to deal with civil claims for infringement of copyright, as well as the Federal Court of Australia which currently handles such cases.
Analysis by the BSAAs copyright lawyers has revealed that the new provisions either add little to existing law or contain flaws which it says make them unworkable.
Additional Damages
The Parallel Importation Bill introduced two new factors for courts to take into account when determining damages:
(a) the need to deter similar infringements of copyright; and
(b) the conduct of the defendant following the infringement or following notification by the copyright owner of the infringement.
Under the existing Copyright Act, Section 115, the court is already directed to take account of all other relevant matters, and existing case law shows that the courts are able to take into account the two factors introduced by the Bill. So it adds nothing of substance, Mr Macnamara said.
Proof of Copyright
Under previous law, copyright owners were required to prove every element of subsistence and ownership of copyright on products. For instance, Microsoft was required to prove it owned the copyright for Microsoft Office in each case. This involved software owners in expensive and time consuming legal processes including affidavits and sometimes even flying international programmers and technical experts to Australia.
The Parallel Importation Bill introduced new presumptions in relation to subsistence and ownership of copyright designed to facilitate proof of ownership in civil and criminal cases.
However, the new provisions are defective. They do not cover all of the facts which are required to be proved to establish subsistence and ownership of copyright. For instance, there is no presumption relating to originality of the work, so it will still be necessary to produce evidence of this, Mr Macnamara said.
In addition, the main presumption relating to subsistence of copyright relies on the work bearing a label or mark stating the year and place of first publication or making of the work. Since software products do not usually have any such label this presumption is of little value. he added.
Increased Fines for Importation of Infringing Goods
The Parallel Importation Bill increased the maximum fine for importation of infringing goods from $60,500 to $71,500 for individuals and $302,500 to $357,500 for corporations.
In practice this will have no effect as it provides for penalties up to specified amounts when, in reality, the penalties actually handed down by the courts for software infringement are extremely low. The largest fine ever handed down in a software copyright prosecution in Australia was $5,000.
The Governments own committee the Australian House of Representatives Standing Committee on Legal and Constitutional Affairs in its report entitled Cracking Down on Copycats: Enforcement of Copyright in Australia issued in November 2000 recommended measures to ensure penalties actually imposed were a deterrent, including introduction of guideline judgments and criminalisation of business end-user piracy (currently illegal copying of software is only a criminal offence if the goods are sold). However, many of the recommendations of this committee have been ignored, Mr Macnamara said.
Federal Magistrates Court Jurisdiction for Copyright Cases
The Parallel Importation Bill gives the Federal Magistrates Court jurisdiction to deal with civil claims for infringement of copyright.
The Governments claim is that this will afford a quicker and lower cost venue for bringing copyright cases. However, in reality, there are serious potential disadvantages for copyright owners in filing cases through the Federal Magistrates Court, the BSAAs analysis claimed.
Specifically, the BSAA has pointed out that copyright cases, particularly in relation to computer software, are complex. Already the Federal Court of Australia has encountered difficulties in understanding the issues involved. One case involving circumvention of a hardware locking device fitted to protect Autodesks AutoCAD software went all the way to the High Court of Australia. It is unlikely that the Federal Magistrates Court will have the expertise or experience to hear complex software copyright cases.
Furthermore, the process of discovery, a critical stage of gathering evidence in software copyright cases is not allowed in the Federal Magistrates Court unless the Magistrate specifically declares it is in the interest of administration of justice. This is a serious impediment to bringing cases in this court, Mr Macnamara said.
The BSAA also argues that costs are likely to be higher in the Federal Magistrates Court as time-consuming affidavits have to be filed at the start of cases and successful copyright owners are awarded only nominal costs which do not reflect the actual cost of bringing the case.
We commend the Governments focus on improving protection of software which is valuable intellectual property vital to economic development in the e-economy. But the measures introduced ignored industry advice and the recommendations of Government inquiries and committees, Mr Macnamara said.
The Australian Copyright Law Review Committee (CLRC) 1994 report, Computer Software Protection, and the Australian House of Representatives Standing Committee on Legal and Constitutional Affairs (Andrews Committee) report, Cracking Down on Copycats: Enforcement of Copyright in Australia issued in November 2000 recommended amending the Copyright Act to introduce a criminal offence for business end user piracy. As well, the Andrews Committee report recommended introduction of statutory damages in civil cases; guideline judgments for judges in criminal cases; and meaningful easing of onerous proof of ownership provisions for copyright owners.
Article 41 of the TRIPS Agreement (Trade Related Intellectual Property), which Australia is a signatory to, provides in part that:
Members shall ensure that enforcement procedures as specified in this Part are available under their national laws so as to permit effective action against any act of infringement of intellectual property rights covered by this agreement, including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements.
Article 61 of the TRIPS Agreement provides in part that:
Members shall provide for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale. Remedies available shall include imprisonment and/or monetary files sufficient to provide a deterrent, consistently with the level of penalties applied for crimes of a corresponding gravity.
It is difficult to see how Australia complies with these commitments under the current regime of copyright protection which involves no resources within the Federal Police to bring criminal prosecutions; lack of a criminal offence for business end user piracy; low penalties handed down by the courts; loopholes in legislation; and slow, complex and expensive procedures for copyright owners to take civil action to protect their copyright.
Meanwhile, the passage of the Parallel Importation Bill is likely to see an increase in the flow of pirated software products into Australia and reduced capacity for Customs and copyright owners to detect and take action against counterfeits, Mr Macnamara concluded.
#####
More information:
Toll-free hotline for public inquiries (anonymously if preferred): 1800 021 143
BSAA Web site: www.bsaa.com.au
About BSAA & BSA
The Business Software Association of Australia (BSAA) is affiliated with the Business Software Alliance (BSA), which operates globally in 65 countries. BSAA members include Adobe, Autodesk, Macromedia, Microsoft and Symantec.
The Business Software Alliance (www.bsa.org) is the foremost organization dedicated to promoting a safe and legal online world. BSA is the voice of the world's commercial software industry before governments and in the international marketplace. Its members represent the fastest growing industry in the world. BSA educates consumers on software management and copyright protection, cyber security, trade, e-commerce and other Internet-related issues. BSA worldwide members include Adobe, Apple, Autodesk, Avid, Bentley Systems, Borland, CNC Software/Mastercam, Internet Security Systems, Macromedia, Microsoft, Network Associates and Symantec. BSA regional members in Asia include Robert McNeel & Associates, SolidWorks and Unigraphics Solutions (EDS).