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Law & Internet Cultures :: Kathy Bowrey

:: Chapter Six: Telling Tales. Digital Piracy and the Law

By way of contrast to the previous chapter where law is shown to be reluctant to intervene and forestall innovation, digital piracy is an example where law is expected to take a strong disciplinary role and curtail technological freedom. This chapter considers the logic and merits of this approach, and consumer power in resisting these legal overtures.

The objectives of this class are to:

  • explore the nature of the technical and administrative obligations on technology makers to assist in policing piracy;
  • discuss the behaviour of consumers in “content markets”;
  • reflect on how technological convergence and vertical integration in media ownership leads to generalisations about the role of copyright in digital era;
  • consider the place and role of creative commons and related content licenses.

For the full colour image of MP3s=Communism and related posters see

external linkThe Modern Humorist site.

What are the legal controls on digital content and its distribution?

This involves- electronic rights management - anti circumvention provisions- authorising infringement- fair dealing rights- ‘safe harbour’ protection for carriage service providers.It is not as easy as you may think to summarise the current relevant Australian law in relation to these. All of the above listed areas have been through various permutations and revisions in the past five years, and these reforms are still ongoing. One of the biggest difficulties here is that legal specifics matter very much to the bigger picture of liability. However if you focus too myopically on any of them, you tend to lose the implications of the whole raft of changes to the legal landscape. A short overview explanation would be that, despite significant jurisprudential differences, Australian law has, with each reform, moved closer in spirit to the US external link“DMCA type” provisions. However while the spirit of those new restrictions on access, use and dissemination of digital works may be pertinent, it is still not the same law that applies in the US. Nor is it likely to be, at least in the near term.For the prehistory of digital copyright protections see Kim Weatherall’s external linkDigital Copyright: A Background History.

Recent Law reform

There are ongoing inquiries into:

Recent and ongoing case law

external linkIt’s more than a copy, it’s a crime!

The legislation and case law provide the specifics of whether or not certain conduct is piracy. The propaganda campaigns about digital piracy gesture to the “crisis” the specific reforms hope to resolve. There are many organizations active in spinning the piracy rhetoric.


Chapter Six reflects on the piracy/freedom rhetoric in the earlier US District Court Grokster decisions. The Supreme Court decision was handed down in June 2005.


We should consider this in light of a consideration of the equivalent Australian case.

external linkUniversal Music v Sharman

Findings of liability

There were over 30 applicants, associated with ownership of music and sound recording rights. The case involves liability arising from use of the Kazaa website and Fast Track file sharing technology. The respondents included Sharman Networks who controlled Kazaa, and Altnet who provided search technology that allowed Kazaa users to access “Gold Files” which were files made available under license from copyright owners. The majority of Kazaa users would search and access “Blue files”, which would allow users to download files from another online user. The majority of this material would include infringing files.

Wilcox found that those responsible for Kazaa authorised the copyright infringement of users.

1. Knowledge of infringements

He expressed “no doubt that, at all material times, each of the respondents was aware that a major use of the Kazaa system was the transmission of copyright material.” Warnings and end-user license agreements were ineffective, and expected to be so. Kazaa encouraged users to “Join the Revolution” which marketed anti-recording industry sentiment as “cool”.

2. Non-infringing uses?

“I do not doubt that some people use Kazaa only in a non-infringing way. However, it seems unlikely that non-infringing uses would sustain the enormous Kazaa traffic claimed by the respondents. The explanation of that volume of traffic must be a more populist use.”

3. Commercial model

The corporate logic of Kazaa is advertising. “It is a fundamental of advertising marketing that price is sensitive to the exposure likely to be achieved by the advertisement. The more shared files available through Kazaa, the greater the attraction of the Kazaa website. The more visitors to the Kazaa website, the greater its advertising value and the higher the advertising rate able to be demanded by Sharman. And what is more likely to attract large numbers of visitors to the website than music, especially currently popular ‘hits’?”

- Altnet benefited two ways. The Gold file service fed off searches for blue files. Secondly, Altnet shared the advertising revenue received by Kazaa, the value of which must have been influenced by the volume of blue file sharing.

4. Centralised server?

He noted with some frustration a lack of direct evidence from those responsible for establishing and operating the Kazaa system, with its adjunct Altnet technology. The tone is sceptical of the lack of centralized control as suggested by Sharman’s experts, but other experts were unable to locate it or conclusively identify a central server. He found that this made it impossible to implement a system of identifying user identities.

5. So what about the Gold files?

“TopSearch is capable of monitoring and controlling the conduct of Kazaa users in relation to gold files. TopSearch is a central server, in the relevant sense, but (at the present time) only in respect of gold files.”

6. And the Blue files?

Technical measures (keyword filtering and gold file flood filtering) would enable the respondents to curtail – although probably not totally to prevent – the sharing of copyright files.

7. What is keyword filtering?

The Kazaa system already incorporated ‘advanced searches’ limiting search results to particular categories of files: audio, video, software, archives and play lists. There are also filters for viruses which removes files with suspicious extensions such as .scr or .bat. An mp3 extension could thus be searched for, but this would block any mp3 files, including ones owners allow to download for free. File extension filtering and file icon filtering was accepted an unfeasible.

However Sharman had ‘the most comprehensive’ adult filter and monitored for child pornography that looks through metadata such as the file title. This shows keyword filtering is feasible.

Wilcox J accepts “that a keyword filter system that was tied to the title of the sound recording or the name of the artist would not be 100% effective. However, counsel for the applicants argued this was no reason to reject the view that the respondents could have used this technique substantially to inhibit copyright infringement."

8. Who would be responsible for the lists of material to be filtered?

“It would be necessary for the applicants, and other copyright owners, to co-operate in the creation of such a list. To the extent they refused or neglected to do so, they would deny themselves such copyright protection as keyword filtering might provide to them. It would also be necessary for the list regularly to be updated. This would be an onerous ongoing task. However, to the extent that copyright owners neglected to do this, it would be they (not the respondents) who would suffer.”

9. What about “false positives”, that is blocking more than infringing files?

“There is no evidence that suggests this would be a frequent occurrence. The impression I have gained from the evidence is that the predominant use of the blue files is the sharing of popular music. Such material may be expected to be overwhelmingly subject to copyright. If that impression is incorrect, the respondents have themselves to blame.”

Thus Kazaa’s history of identifying with downloading infringing material means it has to bear overreaching.

Users can devise methods of evading a keyword filter; for example, by the adoption of a nickname for the artist or a codeword for a particular song but “this technique would allow file-sharing of the relevant works only as between people who were privy to the adopted nicknames or codewords.”

10. What is gold-flood filtering?

It is technically possible to flood search results page with gold files as an effective means of inhibiting the downloading of unauthorised blue files. This may include blank pages or “Don’t steal copyright” messages. Gold Flood filering has the advantage of affecting users even if they do not upgrade to a new version of FastTrack.

11. How do you make users upgrade to the filtering version of the technology?

New users could be made to include the necessary filtering elements. Existing users will not want to upgrade to filtering technology but “there are practical means of forcing an update on users even if it is only by force of rendering the existing version impracticable to use by incessant update offers”. The description sounds like a “mouse-trap” technique of incessant pop-up windows of messages that “drive the user mad”.

12. Doesn’t filtering Kazza affect users in other jurisdictions?

“If it is reasonable for the respondents (or any of them) to adopt a filtering mechanism in order to avoid an infringement of Australian copyright law, it is immaterial whether that step would also have been necessary in order to avoid infringement of the copyright law of some other country.”

13. Why not make owners rely on Digital Rights Management instead of filtering?

“I understand the argument in favour of more widespread licensing of copyright works. No doubt that course would have commercial implications for sound recording distributors. Whether or not they should take it is a matter to be determined by them. Unless and until they do decide to take that course, they are entitled to invoke such protective rights as the law affords them. Similarly in regard to making compact discs less susceptible to ripping; although, in regard to that matter, I add the evidence is insufficient for me to reach any conclusion about the feasibility of doing this.”

“It is not a defence to an action for copyright infringement for a respondent to point to failings in self-protection by the copyright owner. Copyright law contains no equivalent of the doctrine of contributory negligence.”

14. Comparison with Grokster

While noting similarities between the Kazaa system and the Grokster and StreamCast systems, “there were also differences in the conduct of the systems’ respective operators. Moreover, much of the Australian statutory law had no counterpart in United States law. ….the differences, both factual and legal, are such as to render Grokster of little assistance to me.”

In a legal technical sense the differences in categorization, terminology, parliamentary discourse and precedent matter. However there are some similarities that undercuts both cases and jurisdictions. In terms of conduct:

- both technologies were capable of non-infringing uses;

- the business models of Grokster and Kazaa were both based on advertising revenue. This revenue was maximsed by volume, and volume means traffic. High volume traffic means infringing files;

- neither could pretend to be unaware of the infringing activity;

- both had marketing strategies that noted the culture of free downloads and expressed a desire to identify with that;

- neither filtered downloads;

- the combination of not diminishing infringing activity, combined with profiting from downloading activity and the related financial “inducement” to maintain/increase this level of activity, founds the basis for liability in both places, despite the different legal tests. The two recent Australian cases Sharman and external linkCooper, the latter involving operating a MP3s4free website, are very consistent in this regard.

But what does it mean?

There is obviously a problem with the legitimacy of peer to peer that has grown around a culture of free downloads. The courts say they are happy enough with the “general” legitimacy of the technology, but not without “particular” distancing historical association with infringement.

This means that if you don’t take positive steps to show “no benefit” from infringing downloads, and you do make money from advertising revenue generated by traffic, the court may find you liable for authorising infringement in Oz, or contributory infringement in the US. If there are discoverable memos, strategic documents, marketing surveys etc, mentioning the importance of attracting or increasing the customer base you might already be in strife.

But what does it mean for other technology makers whose products might also support music sharing?

There are many devices, and the market is ever growing -mobile phones, the new games consoles etc. And for that matter what about peer to peer software that does not have banner advertising and attract revenue via volume of hits? Given both the US and Oz courts reflect some concern not to trammel innovation, it should not be assumed other kinds of technical ventures are necessarily impacted by the decision.

Assuming the Kazaa “filtering” orders are external linkable to put in placerather than upgrade to the new filtered version of Kazaa after being bombarded with pop up screens judicially endorsed to send you mad, wouldn’t the sensible user just shift to another peer to peer system? There are still many to be found and peer to peer advocacy sites encouraging more.

P2P Advocacy

On the other hand, Lessig argues that Grokster will create further fears of litigation which will drive out investment. This is one reason he argues a legislative solution would be preferable to the current court one. Of course being in the US and not in Australia, he is not still waiting for legislative action on a personal use right to legitimate the common use of an iPod, and for an iTunes store etc. Why are Parliamentary solutions likely to be clearer, or better or different in effect to court ones, particularly in the current political climate?

Debate about the impact of these peer to peer decisions on other technology makers and distributors centres on how specific you tie the finding of liability to the particular facts of the cases, and how broadly you generalize “obligations” to act to prevent infringement if working in an area where piracy may be expected to part of the product or service’s market.

The development of the Australian law on authorising infringement will be affected by judicial perceptions of:

  • - User expectations of the respective technology;
  • - The definition of its market and
  • - Marketing history (is it closely associated with a “deviant” past?).

How and who defines the technology and it’s market might matter a fair bit. There is a role for local industry organisations here.

external linkInternet Industry Association

For one study of perceptions of such markets see AIMIA external linkDigital Content Roadmapping Study

Also note the external linkChapter Two discussion on vertical integration in the media and entertainment industries.

AIMIA’s definition of the digital content industry notes the following sectors:

  • - visual effects and animation (including virtual reality and 3D products),
  • - interactive multimedia (e.g. websites, CD-ROM’s) and software development,
  • - computer and online games,
  • - educational multimedia (e-learning) and
  • - digital film & TV production and film & TV post-production.

However whilst these creators are highly fragmented “The market is highly dependent on large distributors of content, including broadcasters.”

It would be unfortunate if obligations to prevent liability for authorising infringement were broadly interpreted as industry wide obligations and only increased the dependency of the digital content industry on existing large distributors. Nonetheless given the fashionableness of “technology neutral” and broad based criteria to cope with the pace of change, and the lobbying power of media empires, it is unlikely that the law on authorisation would formally acknowledge different rules for different digital content markets/makers.

Creative Commons and Open Content Licences

If overcoming a heritage of piracy does matter, creative commons and related open content movements assume greater importance. They provide a public face to the break with “piracy” heritage, and in Australia are one of the few sources of legitimate files.

See also my old external linkInformation Commons/Public domain links and related topics.

There are a few critiques of these initiatives emerging.

As is clear from the comments in Chapter Six this kind of licensing make me anxious. This probably comes from its genesis. The popularity of the license and the local advocacy stems from the activity and activism of legal communities and their community outreach. Lessig and his book, external linkFree Culture, is the best example of this. This is slightly different from open source and free software where it could be argued it was programmers simply trying to maintain their historic sharing practices with code. In my view the content licenses erode the older practice of downloading, implied license, and unproblematic unbranded works. In light of the formal licenses and the work of the white knights that support them in their legal strategy of providing incontrovertible evidence of “legitimate” download culture, these informal legal relations are made even more grey and tainted as improper, naïve or dubious.

It is a global juridification; a shift to a permissions based cultural economy. For what gains?

What would be the hallmarks of success of the commons licensing movement?

If filtering is the face of the peer to peer future in Australia relying on commons licensing a bit like defending the next big grab of media owners (expressed in the form of keyword files to be applied via filtering) using a pad of post-in notes you try to keep attached announcing the file as (conditionally) free, to try and keep the material from being blocked via the web. It seems highly unlikely that content owner’s keyword lists of what to block won’t include open and other free content material as well. The example of porn filtering in the case showed the Sex Pistols being blocked because of the inclusion of the word sex. This is not subtle or unproblematic technology.

In relation to music downloading, many artists, big and small, and for various motivations, have released material under combinations of conventional, creative commons licenses and just unbranded “free” downloads. See for example the artists represented on the external linkcreative commons CD collection. And then of course there is external linkGeorge Michael.

There is no positive legal obligation for an owner’s list of keywords to be accurate. Wilcox notes the creation of such a list as a significant burden. Whilst Wilcox J suggests “false positives” is something Kazaa have to wear because of their conduct, what about the artists whose work is incorrectly claimed, and the users unfortunately denied access?

Can you leave it to the industry to identify “their” content?

The most extensive independent work done in Australia on the efficacy of content filtering is by my colleague, external linkCarolyn Penfold.

For analysis of chilling activity affecting legitimate users in relation to websites in the US, see external linkChilling Effects. There is also a large page devoted to external linktake-down notices and the US “safe harbour” provisions.

The discussion of how take down notices are automatically generated according to the Software and Information Industry Association (SIIA) site is also illuminating:

“Cyveillance technology is used to search for the title (and a number of possible permutations) on a wide range of Internet sites, including P2P networks, FTP sites, IRC's and usenet. Cyveillance uses metadata, file size, and contextual clues to generate a list of "relevant" results which are reported to SIIA. SIIA spot checks the results for quality assurance. A "notice and takedown" letter is sent via e-mail to all domestic Internet Service Providers (and a limited number of overseas ISPs). Domestic ISPs are given 10-days to pull the infringing material. Typically, the ISP notifies the user to take down the material and, if it is not removed, the ISP terminates the account. An automated check is made to ensure that the material has been removed. Infringing material is removed in nearly 100% of the cases. Cyveillance searches are conducted around the clock and results are sent to SIIA on a rolling basis. SIIA sends out thousands of "notice and takedown" letters each month. SIIA members can review, via the Internet, the results of these searches. SIIA provides an interface by which each company can privately view their present statistics concerning the Cyveillance searches, including the number of hits as well as the number of takedowns across all protocols.” See external linkOnline risk monitoring and management

One should not overstate the ease of accurately identifying the ownership rights of any works subject to copyright. And despite the rhetoric of openness, for non-legally trained users, many of the open licenses seem to mimic the complex specifics of regular licenses and law. The proliferation of them, especially in the education sector is apparent. There is also some support for them by large corporate owner groups traditionally antagonistic to users and external linksome artists, like CAL - the collecting society for educational copying. At the 2004 Unlocking IP conference, CEO Michael Fraser passed off their external linkDigital Copyright Pilot Project, where the collecting society provides a printing service for copyright-cleared material, which may include per pay servicing of open content/free licensed material, as compatible with “Unlocking IP”.

This kind of licensing seems to work best in support of the rights clearance needs of large educational and cultural institutions and their workers, who do have real problems with access issues, clearance and limited resources to pay.

It doesn’t say or do anything much for addressing the broader conditions of production or talk much sense about how cultural production is to be supported, outside of large institutionally supported contexts. For some artists it brings to the fore the problem that they now want creative commons licenses and find that they had already registered pieces with the Australian Performing Rights Association or rights are held by a large, international company. Further Unions like the MEAA fear it is another source of undermining hard won rights. While blocking production of the film Sanctuary, because of use of commons licenses seems both naïve and stupid, the link between Creative commons with particular free market ideologies is also of concern.



  • In what circumstances does creative commons and related licensing “resist” strong copyright?
  • Where does it leave those who are uncomfortable with legal branding and rights management mantras?
  • How does the commons movement affect those already traditionally exploited, such as indigenous artists?

Though Wilcox J expressed some uncertainty about the existence of the movement, with the institutional impetus behind it, it is clearly here to stay. How do you think this liberal approach to licensing will affect the legal landscape five years from now?

Of course once shouldn’t put down creative commons or related licenses too much because it remains the great white hope for a music fix that is an alternative to piracy here, especially for access to MP3. Given the continuing reluctance to create or promote credible legitimate download services here, the Sharman case’s resolution to protect Australian copyright owners is especially punitive to Australian consumers.

Implications for consumers

See the PBS documentary and associated resources external linkThe Way the Music Died

Why are there so few legitimate download services in Australia?

Today’s external linknewspaper report says the music industry “wants to” create such services. It praises the success of our current download services because apparently the ability to download MP3s to mobiles now exceeds CD singles sales!!!! What is the market for CD singles? Where are they sold?

Why is there still no iTunes store?

external linkThe Australian digital download market: holding back the years?by Alex Malik

While the explanation that Sony is stonewalling license clearance here may be plausible, it doesn’t really explain why Apple could negotiate the required licenses in Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, the United Kingdom, and the United States.

And apparently more restrictions affecting video are to be expected once the new version of Microsoft operating system, Vista, is released. It is external linkreputed to “wall off some audio and video processes almost completely from users and outside programmers, in hopes of making them harder for hackers to reach. The company is establishing digital security checks that could even shut off a computer's connections to some monitors or televisions if antipiracy procedures that stop high-quality video copying aren't in place.”


Ginsburg, Jane C., external link"Legal Protection of Technological Measures Protecting Works of Authorship: International Obligations and the US Experience" (August 2005). Columbia Public Law Research paper No. 05-93

external linkBerkeley DRM Conference 2003

Cohen, Julie E., external link"DRM and Privacy". Berkeley Technology Law Journal, Vol. 18, 2003

external linkEFF: DRM Resources

external linkDCITA Guide to DRM

Pamela Samuelson has argued that “The main purpose of DRM is not to prevent copyright infringement but to change consumer expectations about what they are entitled to do with digital content” in external linkDigital Rights Management {and, or, vs.} the Law,

See also Ed Felton external linkEncryption and Copying

The EFF also argue that:

“in this brave new world of "authorized music services," law-abiding music fans often get less for their money than they did in the old world of CDs (or at least, the world before record companies started crippling CDs with DRM, too). Unfortunately, in an effort to attract customers, these music services try to obscure the restrictions they impose on you with clever marketing.” See external linkThe Customer Is Always Wrong: A User's Guide to DRM in Online Music.

User|consumer Rights


  • What are the difficulties of marketing these lesser and shackled products?
  • Can law force this result?
  • Related to the last class, will DRM succeed by hiding it in the PC operating system upgrades?
  • Is the future of these technologies tied to the PC and broadband?
  • What are consumer “rights” in relation to innovation?