This article considers the radical, sweeping changes to Australian copyright law wrought by the Australia–United States Free Trade Agreement 2004 (AUSFTA). It contends that the agreement will result in a “piracy of the public domain”. Under this new regime, copyright owners will be able to obtain greater monopoly profits at the expense of Australian consumers, libraries and research institutions, as well as intermediaries, such as Internet service providers. Part One observes that the copyright term extension in Australia to life of the author plus 70 years for works will have a negative economic and cultural impact — with Australia’s net royalty payments estimated to be up to $88 million higher per year. Part Two argues that the adoption of stronger protection of technological protection measures modelled upon the Digital Millennium Copyright Act 1998 (U.S.) will override domestic policy–making processes, such as the Phillips Fox Digital Agenda Review, and judicial pronouncements such as the Stevens v Sony litigation. Part Three questions whether the new safe harbours protection for Internet service providers will adversely affect the sale of Telstra. This article concludes that there is a need for judicial restraint in interpreting the AUSFTA. There is an urgent call for the Federal Government to pass ameliorating reforms — such as an open–ended defence of fair use and a mechanism for orphan works. There is a need for caution in negotiating future bilateral trade agreements — lest the multinational system for the protection of copyright law be undermined.
Part One — A piracy of the public domain: The copyright term extension and orphan works
Part Two — Grand Turismo in the High Court: Copyright law and technological protection measures
Part Three — Selling Telstra: Internet service providers and safe harbours
In 2003, the U.S. President, George W. Bush, made a jet–setting visit to Canberra, the capital of Australia. He told the Australian Parliament of the urgent need for a Free Trade Agreement between their respective nations:
What I’m committed to is seeing that we can get this free trade agreement done by the end of December. I think a free trade agreement with Australia would be good for America, (and) good for American workers. I also believe that it would be good for Australia. Obviously, agriculture is an important issue, (and) intellectual property is an important issue. There’s a lot of important issues that we’ve got to work through, and I think we can. 
The Australian Prime Minister John Howard emphasized the need for “flexibility” in negotiating a Free Trade Agreement between Australia and the U.S. . He seemed prepared to sacrifice local content rules dealing with culture in order to obtain greater access to the agricultural markets of the U.S. .
The U.S. Trade Representative, Robert Zoellick, alleged that Australia’s Copyright Amendment (Digital Agenda) Act 2000 (Cth) (Digital Agenda Act) only provided weak protection to online content and fell short of Australia’s international treaty obligations to protect intellectual property . He demanded reforms to Australia’s intellectual property regime as part of the Australia–United States Free Trade Agreement 2004 (AUSFTA).
In the trade negotiations, Zoellick demanded that Australia ratify the World Intellectual Property Organization (WIPO) Copyright Treaty and Performances and Phonograms Treaty. He supported an extension of the copyright term, so that Australia adopted the standards set by the Sonny Bono Copyright Term Extension Act 1998 (U.S.) (the Sonny Bono Act) . Zoellick pushed for a number of measures in the Digital Millennium Copyright Act 1998 (U.S.) (DMCA) to be reproduced in the Digital Agenda Act. He called for broader protection of “technological protection measures” (TPMs) under the Copyright Act 1968 (Cth). The trade representative asked the Australian Government to provide for copyright protection of temporary copies and reproductions. He also argued that Australia should adopt higher standards of protection with respect to electronic rights management information, and encoded broadcasts. Zoellick called for a tight definition of Internet service providers (ISPs), limited Safe Harbours, and a tough compliance regime. He supported the introduction of procedures for notice and takedown of infringing copyright material by ISPs. Furthermore, Zoellick requested greater protection of performers’ rights in relation to sound recordings in order to prevent the bootlegging of musical works and sound recordings. In addition, the U.S. Government called for stronger enforcement of the rights of copyright owners, and improved measures for combating piracy .
In spite of much criticism of the proposed agreement, the Liberal Federal Government was willing to accede to the AUSFTA. Anne Capling has sought to fathom the motives for this acquiescence:
Australia’s trade negotiators knew how difficult a negotiation with the United States would be, but even they were shocked at the lousy deal Washington offered Australia. Yet their recommendation that the deal not be signed was overridden by the prime minister, who was clearly of the view that a bad deal was better than no deal at all. 
A number of factors account for the decision of the Australian Prime Minister to commit Australia to a trade agreement. Howard acknowledged that the deal was “the best we could get in current circumstances.”  He was nonetheless optimistic that the trade agreement with the U.S. would bring long–term benefits to Australia, especially in the areas of manufacturing, services, and investment. Howard was also keen to strengthen political and strategic ties with the U.S., especially given the close affinity between the Australian Liberal Party and the U.S. Republicans. He was also perhaps fearful of antagonising a cherished ally if Australia rebuffed the agreement. The Prime Minister also believed that the trade agreement would have domestic political benefits because it would divide his political opponents in the Australian Parliament.
The febrile debate over the AUSFTA took place on the eve of the Australian Federal Election in 2004 . The Joint Standing Committee on Treaties reviewed the text of the AUSFTA, and handed down its report in June 2004 . Chapter Sixteen considered issues associated with intellectual property rights and electronic commerce. A Senate Select Committee considered the AUSFTA, and its implementing legislation . Chapter Three provided a more extensive consideration of intellectual property rights. The Australian Labor Party was divided into factions over the AUSFTA, with the right–wing of the party supporting the agreement, and left–wing opposing such a deal. The minor parties in the Senate, the Greens and the Australian Democrats, were both outspoken in their opposition to the AUSFTA. In the end, the Australian Labor Party was willing to pass the implementing legislation, subject to its own amendments upon local culture and the evergreening of pharmaceutical drugs . The enabling legislation for the AUSFTA, the U.S. Free Trade Agreement Implementation Act 2004 (Cth), was passed by the Australian Parliament on 13 August 2004 and received Royal Assent on 16 August 2004. The U.S. President, George W. Bush, signed the countervailing legislation H.R. 4759, the United States–Australia Free Trade Agreement Implementation Act on 3 August 2004.
After the re–election of the Howard Government, further concessions were made at the end of 2004. After a brief consideration by the Senate Legal and Constitutional Committee, the Australian Government passed further amending legislation in December, providing a tougher regime for ISPs and stronger enforcement measures for criminal copyright offences .
The main supporters for the copyright provisions of the AUSFTA were multinational companies operating in publishing, music, film, and computer software. They were supported by copyright collecting societies, and industry think–tank organisations, such as the Australian Copyright Council. The professional associations for creators were noticeably ambivalent about whether or not they would benefit from the AUSFTA . Corporate interests were dominant in the law–making process. As Kathy Bowrey comments in her book Law and Internet Cultures:Whilst there was a space made for U.S. government and particular global owner interests to assert their preferences, there was no corresponding respect for unwelcome Australian perspectives from civil society interest groups like the Electronic Frontiers Australia, Australian Digital Alliance, Australian Library and Information Association, local free software and open source advocates, IP academics, or even passing reference to the findings of the government’s own IP expert committees. 
Most notably, scant respect was paid to the recommendations of a number of domestic reform bodies — such as the Intellectual Property and Competition Review , the Copyright Law Review Committee , and the Phillips Fox Digital Agenda Review . The consultations and negotiations over the IP chapter were inadequate, lacking proper transparency, and accountability. Of particular concern was the dearth of rigorous, independent economic analysis of the impacts of the IP Chapter for the AUSFTA. The Federal Parliament did not have adequate time or resources to properly scrutinise the treaty or the implementing legislation. The process of executive treaty–making remains problematic .
This article takes issue with the assertion of Australian trade representatives that AUSFTA is a flexible, permissive international treaty, which does not commit Australia to U.S. standards. Stephen Deady, Special Negotiator of the Department of Foreign Affairs and Trade (DFAT) told Senate Foreign Affairs, Defence and Trade Committee Estimates hearing that the AUSFTA would not involve Australia being forced to adopt the DMCA: “We have tried to explain that the commitments we have entered into in this chapter do not require us to bring into our legislation the [DMCA].”  At one of the Committee’s public hearings, Toni Harmer of DFAT put forward a similar view:
The IP chapter does contain elements of the U.S. [DMCA]. It also contains flexibility for us to implement that in a way that is appropriate for us. So I believe it is an incorrect reading of the IP chapter to think that it requires us to implement U.S. law word for word in our system. Whilst we have treaty level obligations, we will be implementing those within our own legal context. 
Such comments display a degree of diplomatic sophistry. There is an underlying failure on part of the public servants to come to grips with costs associated with adopting higher intellectual property standards in a trade context. The prescriptive obligations of the AUSFTA certainly embody key features of the DMCA. In some respects, the treaty provisions go further than the DMCA. Indeed, it is worth conceiving of the international treaty as a petri dish, a site of policy experimentation by the U.S.
This article contends that the bilateral agreement facilitates what Lawrence Lessig has memorably called a “piracy of the public domain”.  This article is undeniably a polemic. It does not seek to mediate and balance the competing interests of various stakeholders. It is a cri de coeur against the expansion of copyright protection through the machinery of preferential trade agreements. It is submitted that the reforms wrought by the AUSFTA were unnecessary and unwarranted. The Digital Agenda Act was operating serviceably well. Copyright owners were well protected within the legislative framework, as illustrated by case law on such topics as TPMs, ISP liability, and criminal enforcement. The provisions of the AUSFTA fail to achieve the long–held objective of simplifying the Copyright Act 1968 (Cth). The implementing legislation had added to the length and the complexity of the legislation. The AUSFTA engages in selective harmonisation. It boosts the position of multinational entertainment companies by entrenching into the laws of both countries the Sonny Bono Act and the DMCA. The U.S. Government was quite selective in the features of the DMCA that it desired Australia to adopt. There are notable omissions — most dramatically, nothing has been said about raising the threshold of originality in Australia to the standard set in the Feist case , or remodelling the Australian defence of fair dealing along the lines of the more generous U.S. defence of fair use . The Australian Government was also singularly unimaginative in seeking to mitigate the harshest aspects of the AUSFTA. It has failed to take advantage of the flexibilities left within the regime in order to protect the wider public interest in culture, education, and competition. The AUSFTA will undoubtedly constrain the policy options available in future law–making.
This article is intended to provide an impressionistic account of the sweeping changes made to Australian copyright law under the AUSFTA. This piece is not intended to be an exercise in black letter legal exegesis. This article is a “history of the present”. As Australian writer, David Marr, has noted, such journalism is seldom an easy task:
The job of any honest commentator is to stand in the welter of events, the facts raining down on him, and grasp what is going on. To describe the present takes the skills of a historian and the powers of a clairvoyant. 
This account is necessarily a selective and partial one. A comprehensive survey of the AUSFTA is beyond the scope of this study. A wider geopolitical analysis of U.S. trading power and its influence on global intellectual property laws is also outside the remit of this essay . This article considers three main trends in Australian copyright law and policy in the wake of the AUSFTA. Part One considers the impact of the copyright term extension upon the Australian economy and cultural life. Part Two evaluates the new regime for TPMs and temporary copies in light of the ongoing litigation in Stevens v Sony. Part Three explores how Australia has replaced its current regime of limited liability for ISPs and telecommunications carriers with the safe–harbours regime of the DMCA of the U.S. The conclusion contends that there is a need for courts to exercise judicial caution in interpreting the AUSFTA, especially the reforms to copyright law. There is a great urgency for the Federal Government to counteract with the impact of the AUSFTA with reforms — such as an open–ended defence of fair use and a defence for orphan works. In future, Australia should take care not to hastily rush into accepting bilateral trade agreements, without first engaging in a thorough and painstaking analysis of the provisions.
“Perpetual Copyright On An Installment Plan”
— Professor Peter Jaszi 
In the course of the debate over the AUSFTA, the Australian Federal Government reneged on past promises that it would not extend the copyright term.
In 1995, the European Union extended the copyright term for its member states to the life of the author plus 70 years . The change was a consequence of a Directive of the European Commission in 1993, which required member states to increase their basic term of protection. Anthony Robinson comments about this process of harmonisation:
Harmonisation of the duration of copyright protection will help to prevent distortions in competition across the E.C. and it will aid the smooth running of the internal market. However, its implementation into the United Kingdom will not necessarily be of benefit to the parties affected. Extensions in the term of copyright are rarely in the interest of the consuming public: the longer the term, the longer the prospect of higher prices for copies of a work. 
He concludes that “it is ironic that harmonisation will, on a domestic level, greatly increase the difficulty of ascertaining whether, and for how much longer, works are protected by copyright.” 
The Sonny Bono Act was literally a “Mickey Mouse Bill”. The 1998 statute was the result of intense lobbying by a group of powerful corporate copyright holders, most visibly the Walt Disney Company, which faced the imminent expiration of copyrights on Mickey Mouse and its other famous cartoon characters . The legislation extended the term of copyright protection for copyright works from the life of the author plus 50 years to the life of the author plus 70 years, in line with the European Union. It also extended the term of copyright protection for works made for hire, and existing works, to at least 95 years. Thus Mickey Mickey, a work for hire first copyrighted in 1928, will now pass into the public domain in 2023 — instead of 2003 under the previous law.
In a challenge to the Sonny Bono Act, a group of seventeen economists, including such luminaries as Roy Englert Jr., Kenneth Arrow and James Buchanan, commented upon the economic effect of the legislation:
Taken as a whole, it is highly unlikely that the economic benefits from copyright extension under the [Sonny Bono Act] outweigh the additional costs. Moreover, in the case of term extension for existing works, the sizable increase in cost is not balanced to any significant degree by an improvement in incentives for creating new works. Considering the criterion of consumer welfare instead of efficiency leads to the same conclusion, with the alteration that the [Sonny Bono Act’s] large transfer of resources from consumers to copyright holders is an additional factor that reduces consumer welfare. 
The amicus curiae submission made a number of circumspect points about the economic effect of the legislation. In particular, it emphasized that the legislation extends the period during which a copyright holder determines the production of derivative works, which affects the creation of new works that are built in part out of materials from existing works.
In 2000, the Australian Intellectual Property and Competition Review considered whether it was appropriate to extend the term of copyright extension to the same duration as the U.S. and the European Union . The Committee specifically sought from the Australian Copyright Council evidence that an extension would confer benefits in excess of the costs it would impose. No such evidence was provided. Consequently, the Committee was not convinced of the merit in proposals to extend the term of copyright protection, and recommends that the current term should not be extended. It also recommended that no extension of the copyright term should be introduced in future without a prior thorough and independent review of the resulting costs and benefits.
In November 2003, a spokeswoman for the Minister for Communications, IT and the Arts, Daryl Williams said that the Government “appreciates the value of having material available in the public domain”.  She told the Sydney Morning Herald:
The Government will consider any proposals for increased copyright protection in light of the fact that Australia is a net importer of content. Australian copyright laws currently promote innovation and investment in the content and cultural industries, while at the same time providing Australian consumers, educators and researchers with reasonable access to copyright material. 
In December 2003, Trade Minister Mark Vaile pledged to defend the copyright term in Australia: “It is a very important issue, particularly in terms of cost to libraries, educational institutions and the like here in Australia.”  He told the Australian Financial Review: “There is a whole constituency out there with a strong view against copyright term extension and we are arguing that case.” 
Two months later, it seems that the Australian Federal Government acceded to the demands of the U.S. Article 17.4.4 of the AUSFTA provided that “the term of protection of a work (including a photographic work), performance, or phonogram is to be calculated: (a) on the basis of the life of a natural person, the term shall be not less than the life of the author and 70 years after the author’s death; and (b) on a basis other than the life of a natural person, the term shall be: (i) not less than 70 years from the end of the calendar year of the first authorised publication of the work, performance, or phonogram; or (ii) failing such authorised publication within 50 years from the creation of the work, performance, or phonogram, not less than 70 years from the end of the calendar year of the creation of the work, performance, or phonogram.”
A spokesman for the Trade Minister Mark Vaile said the extension would come into force on 1 January 2005, and copyright fees would not apply to past use: “Our position was that we did not think we needed to go the extra 20 years ... but in the context of the overall agreement we were happy to”.  Such was the closed and secretive nature of the negotiations.
The Federal Government argued that the decision would boost Australia’s competitiveness by giving it access to the U.S. economy. The chief negotiator, Stephen Deady, told the Senate Estimates Committee that the Australian economy would receive an economic boost from the copyright term extension:
One of the numbers I have seen is that between 1996 and 2000 Australia’s exports in this area — IP type areas, copyright industries — grew faster than the national economy, with an average growth rate of about 5.7 percent. Exports grew by around nine percent. So there are certainly some advantages in this area of copyright extension .
However, Deady confessed to the Senate Estimates Committee that the Government had not engaged in any economic research of its own into the impact of the copyright term extension. He told the Senate that he had not perused the Ergas Intellectual Property and Competition Review, or the amicus brief of the economists in Eldred v Ashcroft. Deady ignored the obvious point that Australia was a net importer of copyright works, and would continue to be so with the U.S. Any marginal gains by Australian exporters should be weighed against the costs associated with those imports.
Subsequently, the Australian Government commissioned the Centre for International Economics to undertake economic analysis of the impact of the Free Trade Agreement, taking into account the outcomes of the final negotiated package . The Centre maintained that the impact of the copyright term extension would be negligible:
Extending the copyright term does not seem likely to provide additional incentives to create new works, but may in some cases impose costs on consumers. In many cases the increased cost faced by consumers is not likely to be significant. This is because the demand for most creative works is likely to become very small, if not non–existent, well before the current copyright term expires. However, it is not possible to derive any indication of the magnitude of the costs that may stem from the restriction of new works being produced from existing works. 
This analysis of the intellectual property chapter is implausible on legal, economic, and political grounds. The Centre fails to contextualise the major changes that have taken place and fails to grapple with some of the main economic studies that have been done in relation to particular areas — such as the economists’ amicus brief in the Eldred case or the Productivity Commission's report on patent term extensions. The Centre fails to undertake an analysis of the magnitude of the costs. It has been possible in the past to quantify the costs and benefits associated with making changes to intellectual property — such as the Intellectual Property and Competition Review study on parallel importation. Finally, the Centre fails to provide a political rationalisation for such a stance. It seems strange to assume that the U.S. Trade Representative would put such time, energy, and political capital into the copyright term extension, if its impact would be only negligible.
Dr. Phillipa Dee was also commissioned by the Senate Select Committee to provide an independent economic analysis of the impacts of the AUSFTA . She noted: “The intellectual property (IP) rights chapter is precedent setting in many respects.”  Dee denied that it was impossible to quantify the effects of the copyright term extension. Drawing upon data from the Australian Bureau of Statistics, Dee calculated:
The same assumptions can be invoked in order to put an estimate on the costs of extending the term of copyright. According to this calculation, Australia’s net royalty payments could be up to $88 million higher per year as a result of extending the term of copyright. And the discounted present value of the cost to Australia of extending the copyright term is about $700 million. Thus, even the current term of copyright protection is probably too long, from Australia’s perspective. 
In response, DFAT asserted that the costs of extending the term of copyright estimated in my report were overstated, because the economic life of most copyright material is short. Dee replied: “My estimation used the same assumptions as were used in the CIE/DFAT report to estimate the gains from extending the term of copyright.”  She noted: “If the costs are overstated, then so too are the benefits.”  The economist concluded unequivocally: “The fact remains that this provision is not in Australia’s economic interests.” 
The legislation will no doubt have a significant economic impact upon libraries, archives, cultural institutions, as well as educational and research organisations. The copyright officer of the Australian Libraries and Information Association, Colette Ormonde, commented upon the impact of the copyright term extension upon libraries:
The outcome is bad for libraries. It is bad for students. It is bad for researchers. It is bad for all information users. We have agreed to a very restrictive U.S. copyright regime with no clear dispute mechanism ... it will cause huge problems. People who have been using information that is in the public domain will suddenly have to pay for it. 
The executive director of the Australian Vice-Chancellors’ Committee, John Mullarvey, said that Australian universities currently paid $20 million a year in copyright fees and adding 20 years to the period of copyright protection would add to that sum .
Screensound Australia, the National Screen and Sound Archive, is the national audiovisual archive. A number of significant films — protected under copyright law as a series of photographs — were due to come into the public domain — including Jedda, Robbery Under Arms, and Summer of the Seventeenth Doll. In addition, a number of significant sound recordings were due to fall into the public domain — including the compositions of Percy Grainger, Alfred Hill, Eugene Goossens, and Varney Monk. The organisation will be particularly affected by the extension of the copyright term.
The Australian Broadcasting Corporation was concerned about the effect of the copyright term extension on a special Digital Conversion Project. The Archives and Library Services section is working with Technology and Distribution to implement the Digital Conversion Project which will convert 120,000 hours of analog television and audio archived programming to digital online and hardcopy formats, using special purpose funding. They had hoped: “70 Years of Radio History and 47 Years of Television History to be Digitised by the Australian Broadcasting Corporation.” However, the extension of the copyright term will jeopardize such important initiatives, such as the Digital Conversion Project.
The Australian Attorney General, Philip Ruddock, defended the copyright term extension at a conference:
It is important that I say something about Australia’s agreement to increase the term of protection for copyright works by an additional 20 years. Australia generally does not advocate higher standards of intellectual property protection than those determined internationally. However, it is sometimes in Australia’s interest not to lag behind emerging standards of important trading countries. It is clear that an international standard is emerging amongst out major trading partners for a longer copyright term. In these circumstances, term extension is a necessary and positive thing. It will ensure that Australia remains a competitive destination for cultural investment. It will also ensure that Australians are better able to trade their interests in an increasingly global market. 
Such arguments can be contested on a number of grounds. It must be remembered that the Australian Government was not compelled to extend the copyright term because of any obligations under multilateral agreements — such as the Berne Convention or the TRIPS Agreement. Indeed, the country is only required to provide protection for life of the author plus fifty years under those multilateral agreements.
In spite of the rhetoric about the need for international harmonisation, the Australian Government will not be exactly harmonised with major trading partners such as the U.S. and the European Union. There will be a number of important discrepancies between the copyright duration in Australia and the term provided for in other countries. The Australian Government decided on a prospective copyright term extension, so that the term of works will be extended after 1955. By contrast, the U.S. retrospectively extended the copyright term in 1998, so that works will be in copyright protection from 1928. That means, at present, the U.S. has provided protection for works between 1928 and 1954 — but Australia will not provide equivalent protection in the same period.
Furthermore, the Australian Government has not provided additional protection for works made for hire — works made in employment. With respect to those works the American statute produces an extended term of 95 years while comparable Australian rights last for life plus 70 years. Neither does the statute create uniformity with respect to anonymous or pseudonymous works. Moreover, the Australian Government provides comprehensive protection of moral rights. One would expect that the term of copyright protection for such moral rights will also be extended for life plus 70 years. By contrast, the U.S. Government does not provide comprehensive protection of moral rights. Indeed, the Visual Artists Rights Act 1990 (US) provides protection just for life of artist. Moreover, the Australian Government offers some protection for performers’ rights. The U.S., though, has resisted providing comprehensive protection of performers’ rights. It is doubtful what, if any, benefit this partial future uniformity might achieve.
Moreover, there remain a significant number of our trading partners who provide copyright protection for the life of the author plus fifty years, or from publication plus fifty years. Such nations include members of the Asia Pacific such as China, Indonesia, Malaysia, New Zealand, the Phillipines, the Republic of Korea, and Taiwan. Australia will not be harmonised with some of its nearest neighbours — and members of the Cairns Group. Furthermore, Australia will not be harmonised with Middle Eastern nations such as Egypt, Qatar and the United Arab Emirates. It will not be harmonised with important trading partners such as Canada and South Africa.
The Public Domain Enhancement Act and orphan works
It is surprising that Australia should have adopted a copyright term extension, given the controversy attending the U.S. Sonny Bono Act .
Famously, in Eldred v Ashcroft, the U.S. Supreme Court held by a majority of seven to two that the Sonny Bono Act was valid under the constitutional power for intellectual property, and did not violate the protections of the First Amendment. Professor Lawrence Lessig has argued that the Sonny Bono Act was a form of piracy of the public domain:
By insisting on the Constitution’s limits to copyright, obviously Eldred was not endorsing piracy. Indeed, in an obvious sense, he was fighting against a kind of piracy — piracy of the public domain. When Robert Frost wrote his work and when Walt Disney created Mickey Mouse, the maximum copyright term was just fifty–six years. Because of interim changes, Frost and Disney had already enjoyed a seventy–five monopoly for their work. They had gotten the benefit of the bargain that the Constitution envisions: In exchange for a monopoly protected for fifty–six years, they created new work. But now these entities were using their power — expressed through the power of lobbyists’ money — to get another twenty–year dollop of monopoly. Eric Eldred was fighting a piracy that affects us all. 
Lessig has sardonically observed that the U.S. balance of trade will be improved by the copyright term extension in Australia: “The result: Australian film and culture will be harder to spread and preserve; Hollywood will get richer.” 
There remain a number of other constitutional challenges underway against the Sonny Bono Act in the U.S. courts . There has been much concern about “orphan works” — copyrighted works whose owners are difficult or even impossible to locate. In Kahle v Gonzales, the District Court dismissed a constitutional challenge by two archives, which sought a declaratory judgment that copyright restrictions on orphan works violated the U.S. Constitution . In Golan v Gonzales, the District Court ruled against a Colorado conductor who sought to have the Sonny Bono Act and the Uruguay Round Agreements Act 1994 (US) declared unconstitutional . In Luck’s Music Library v Gonzales, the District Court and Court of Appeals rejected a constitutional challenge by the sellers of public–domain foreign music and motion pictures to the Uruguay Round Agreements Act 1994 (US) provision, which restored copyright protection to certain foreign works . Thus this series of constitutional challenges to the copyright term extension in the U.S. seem to be doomed to failure.
In response to concerns about orphan works, the Public Domain Enhancement Act 2003 (US) was introduced into U.S. Congress in June 2003. The legislation sought to amend the Copyright Act 1976 (US) to allow abandoned copyrighted works enter the public domain after fifty years. It required the Register of Copyrights to charge a fee of $1 for maintaining in force the copyright in any published U.S. work. It required the fee to be due 50 years after the date of first publication or on December 31, 2004, whichever occurred later, and every ten years thereafter until the end of the copyright term. It terminated the copyright unless payment of the applicable maintenance fee was received in the Copyright Office on or before its due date or within a grace period of six months thereafter. Representative Zoe Lofgren reintroduced a version of the bill to the 109th Congress in 2005 . The proposed legislation has yet to win the support of the U.S. Congress.
The U.S. Copyright Office has held an inquiry into the issues raised by orphan works . The investigation was prompted by the concerns of a number of United States Congressmen. Senators Orrin Hatch and Patrick Leahy noted the concern that the copyright term extension would create a greater burden on those who wished to use orphan works . Similarly, Representative Lamar Smith observed that some were concerned that the Sony Bono Copyright Term Extension Act 1998 did not “ensure that older works are commercialized or made available to the public via libraries and archives to the greatest extent possible.”  Furthermore, Representative Howard Berman expressed his worries about this problem: “The ‘orphan’ status of many works significantly impedes the ability of both commercial and non–commercial actors to utilize those works.” 
In January 2006, Marybeth Peters, the Register of Copyrights at the U.S. Copyright Office, released the report on orphan works . The inquiry acknowledged that a wide range of users refrained from using copyright works because of uncertainty about the provenance and ownership of such material. The Office concluded that there was a need for legislative reform because the problems posed by orphan works could not be addressed by existing provisions in U.S. copyright law. The Office recommended a copyright owner should only be entitled to limited remedies where a copyright user had made reasonably diligent efforts to locate the owner of the copyright, and provided proper attribution to the author and the owner.
It is unclear whether such a proposed amendment would solve the orphan works problem. Indeed, it would be cold comfort for users of orphan works to learn that they could be liable for actions for copyright infringement, even though they had made diligent efforts to find the copyright owner. In any case, the proposal to limit remedies in respect of orphan works fails to provide a meaningful response to the magnitude of the problems created by the copyright term extension.
A superior legislative option would be to provide copyright users with a legislative defence in respect of orphan works. In the United States, the group Public Knowledge has argued that there should be a new defence to copyright infringement for users who make a reasonable effort to locate the owner of a copyright work . President, Gigi Sohn, argues that copyright users should not have to pay compensation in such circumstances:
That approach keeps the orphans in the orphanage. The possibility of long negotiations or court action over compensation will still deter artists from using orphan works in their own creations. 
Similarly, the Australian Digital Alliance has called for the creation of a legislative defence to infringement to cover situations where the author of a work is unknown and the user has made reasonable efforts to locate and notify the copyright owner . The Alliance argued that such an exception should be a non–remunerable free–use exception. The Alliance did not support any scheme which deems unidentifiable rights holders to be members of collecting societies.
It remains to be seen whether the U.S. and Australian governments will proffer a solution to the problem of orphan works, and, if so, what mechanism they will prefer.
In 1493, Pope Alexander VI, perhaps the most corrupt of pontiffs, divided the New World of Americas between Spain and Portugal, in a supreme act of arrogance. These days global marketers don’t require papal dispensation. Pope Alexander’s 1493 wave of the papal staff found echoes in Australia’s High Court recently, when it dealt with a case involving Sony’s bid to divide the world into three separate markets for its Playstations and their accompanying CD–ROM games.
Allan Fels and Fred Benchley 
In February 2005, there was an unusual spectacle in the High Court of Australia in the capital city of Canberra. Two junior lawyers were playing an arcade game called “Grand Turismo” on a Sony Playstation II. The motorcycle race was projected onto the walls of the highest court of the land. Six High Court judges watched this display, with a mixture of curiosity and intrigue. They were hitherto unfamiliar with the technology involved. The High Court had requested this demonstration in an effort to determine whether a Kensington man, Eddy Stevens, had circumvented any TPMs pertaining to the Sony Playstation II. The matter concerned the amendments made to the Copyright Act 1968 (Cth) by the Digital Agenda Act. It also provided an opportunity for the High Court to contemplate the future impact of the AUSFTA in respect of technological protection measures.
Section 116 A of the Copyright Act 1968 (Cth) provides a right of action to the owner or exclusive licensee of the copyright in a work or other subject matter which is protected by a “technological protection measure.” The right of action is against a person who makes, sells, or does certain other acts in relation to, a “circumvention device” capable of circumventing, or facilitating the circumvention of, the technological protection measure.
S 10 of the Copyright Act 1968 (Cth) provides a definition of “technological protection measure.” It stipulates:
“Technological protection measure” means a device or product, or a component incorporated into a process, that is designed, in the ordinary course of its operation, to prevent or inhibit the infringement of copyright in a work or other subject–matter by either or both of the following means:
(a) by ensuring that access to the work or other subject matter is available solely by use of an access code or process (including decryption, unscrambling or other transformation of the work or other subject–matter) with the authority of the owner or exclusive licensee of the copyright;
(b) through a copy control mechanism.
Technological protection measures could include copy—control protection for compact discs, encryption for DVDs, software protected by passwords and registration codes.
Sony brought legal action against Eddy Stevens who had mod–chipped Sony Playstation consoles. The company claimed that Stevens had circumvented an access code protected as a “technological protection measure” under the Australian Copyright Act. In the alternative, Sony argued that Eddy Stevens had infringed copyright in temporary reproductions and cinematographic films.
The competition regulator, the Australian Competition and Consumer Commission (ACCC), intervened early in this case as a friend of the court. The ACCC has expressed policy concerns about TPMs, suggesting that “the provisions increase the likelihood of anti–competitive conduct with consequent detrimental outcomes for both consumers of the copyright works and society in general.”  The Australian Digital Alliance later intervened as a friend of the court in this case, because of fears that TPMs would undermine fair dealing and access to information.
At first instance in the Federal Court, Sackville J considered the meaning of a TPM under s 10 (1) of the Copyright Act 1968 (Cth). His Honour ruled that the protective devices relied upon by the Sony companies could not be regarded as TPMs because they merely discouraged people from copying these games as a prelude to playing them on PlayStation console:
It is in this sense that the device or product must be designed, in the ordinary course of its operation, to prevent or inhibit the infringement of copyright in a work. I do not think the definition is concerned with devices or products that do not, by their operations, prevent or curtail specific acts infringing or facilitating the infringement of copyright in a work, but merely have a general deterrent or discouraging effect on those who might be contemplating infringing copyright in a class of works, for example by making unlawful copies of a CD–ROM. 
The judge doubted “whether the temporary storage of part of a computer program in the RAM of a computer (in this case, the PlayStation console) can be said to constitute reproduction of a substantial part of the computer program ‘in a material form’ and thus infringe copyright in the computer program.”  His Honour also questioned whether the PlayStation game embodied a “cinematograph film.”
The Full Federal Court allowed the appeal by Sony. It held that the definition of TPMs embraces inhibition in the sense of deterrence or discouragement of infringement, which results from a denial of access to a program copied in infringement of copyright . Having regard to extraneous materials, Lindgren J believed that a broader approach to the interpretation of TPMs was intended by the legislature:
If, as in the present case, the owner of copyright in a computer program devises a technological measure which has the purpose of inhibiting infringement of that copyright, the legislature intended that measure to be protected (subject to any express exception), even though the inhibition is indirect and operates prior to the hypothetical attempt at access and the hypothetical operation of the circumvention device. 
For his part, French J expressed his frustration at the complicated legislative regime, noting: “The law develops its own access codes requiring special readers.”  Although noting policy concerns about the expansion of copyright protection and related issues of competition policy, he adopted a broad definition of TPMs, noting: “It is not for the Court to cage the ordinary meaning of the words which have been adopted by reference to policy considerations of its own divining.”  Finkelstein J concurred.
However, the majority of the Full Federal Court agreed with Sackville J’s resolution of two other issues against Sony. French and Lindgren JJ held that there is not a reproduction of the computer programs in the Random Access Memory of the PlayStation console when a game is played; and that there is not a copy of the game, regarded as a “cinematographic film”, made in RAM when a game is played. Finkelstein J dissented on these points. Citing U.S. precedents , his Honour supported an American approach in respect of the protection of temporary copies. Finkelstein J also believed that the arcade game should be protected as a cinematographic film .
High Court decision
The High Court of Australia heard debate on the case in February 2005, and handed down its judgment in October 2005. All six sitting judges held that the Sony protection device was not a “technological protection measure” because it did not prevent copyright infringement. It found that the device merely inhibited copyright infringement. The High Court also rejected the alternative arguments of Sony. It denied that there had been any infringement of copyright through a temporary reproduction. The judges also doubted that the work of Sony could be protected as “cinematographic films.”
The High Court noted that the Copyright Amendment (Digital Agenda) Act 2000 (Cth) was intended to ensure that Australia provided adequate legal protection and effective legal remedies to comply with “the technological measures obligations” in two treaties negotiated in 1996 in the WIPO . Article 11 of the WIPO Copyright Treaty stated: “Contracting Parties shall provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne Convention and that restrict acts, in respect of their works, which are not authorized by the authors concerned or permitted by law.” The joint judgment noted: “It will be apparent that the provision is expressed in broad terms, leaving considerable scope to individual States in deciding on the manner of implementation.” 
The High Court was frustrated that the task of statutory interpretation was complicated by the ambiguities in the Digital Agenda Act, and the lack of clear legislative guidance. The joint judgment observed:
Copyright legislation, both in Australia and elsewhere, gives rise to difficult questions of construction. Given the complexity of the characteristics of this form of intangible property, that, perhaps, is inevitable. It may be going too far to say of the definition of “technological protection measure” and of s 116A, as Benjamin Kaplan wrote of the American law even as it stood in 1967, that the provisions have a “maddeningly casual prolixity and imprecision.” However, in this Court no party advanced the proposition that its task on this appeal was satisfied merely by a consideration of the ordinary meaning of the words in the definition of “technological protection measure.” 
Similarly, McHugh J noted that “the Federal Parliament resolved an important conflict between copyright owners and copyright users by an autochthonous solution.”  His Honour reflected: “Much modern legislation regulating an industry reflects a compromise reached between, or forced upon, powerful and competing groups in the industry whose interests are likely to be enhanced or impaired by the legislation.”  McHugh J commented: “There is a good deal of evidence that supports the view that the legislative provisions with which this litigation is concerned are the product of a compromise agreed to, or forced upon, interest groups in the industry affected by the legislation.”  His Honour despaired that it was difficult to divine the purpose of legislation created during such free–wheeling political debate.
The High Court was concerned that the expansive definition of “technological protection measures” would have a detrimental impact upon the defence of fair dealing, and special exceptions for libraries and archives . The joint judgment emphasized:
The true construction of the definition of “technological protection measure” must be one which catches devices which prevent infringement. The Sony device does not prevent infringement. Nor do many of the devices falling within the definition advanced by Sony. The Sony device and devices like it prevent access only after any infringement has taken place. 
McHugh J observed “that the s 10(1) definition of ‘technological protection measure’ ought to be read according to its ordinary meaning and not artificially stretched to include within its scope acts of copyright infringement that are not comprised in the copyright.”  Kirby J noted concerns of libraries that “Sony’s interpretation of s 116A would enable rights holders effectively to opt out of the fair dealing scheme of the Act.”  He maintained: “This is not an interpretation that should be readily accepted.” 
The case highlighted internal divisions within Sony between its consumer electronics divisions, and its recording companies and motion picture studios. As Frank Rose observed in Wired:
Sony Music wants to entertain you. Sony Electronics wants to equip you. The problem is that when it comes to digital media, their interests are diametrically opposed. 
Kirby J was alert to the irony that Sony had in the past advocated broad fair use rights for consumers in superior courts. Famously, in Sony Corp of America v Universal City Studios, Inc., the U.S. Supreme Court held that Sony, as the distributor and seller of the Betamax video cassette recorder, was not liable if users of that recorder infringed the copyright of others in television broadcasts . The superior court found that it was a fair use for consumers to be engaged in “time–shifting” — namely, the taping of television programmes for viewing at more convenient times. The Supreme Court US recently reaffirmed the Sony decision in the case of MGM v Grokster . In particular, Breyer J observed that the Sony Betamax decision was strongly protective of new technology and avoided the introduction of a “chill of technological development” in the name of responding to alleged copyright infringement. Kirby J noted: “Many of these considerations apply in the present case to suggest a preference for a stricter, rather than a broader, meaning of the expression TPM in s 10(1) of the Copyright Act.” 
The High Court was concerned that an expansive interpretation of “technological protection measures” would have anti–competitive effects, no doubt as a result in part of the earlier intervention of the ACCC. Kirby J commented:
By their line the Popes of old divided the world into two spheres of influence. Sony, it appears, has divided the world (for the moment) into at least three spheres or markets. By the combined operation of the CD ROM access code and the Boot ROM in the PlayStation consoles, Sony sought to impose restrictions on the ordinary rights of owners, respectively of the CD ROMS and consoles, beyond those relevant to any copyright infringement as such. In effect, and apparently intentionally, those restrictions reduce global market competition. They inhibit rights ordinarily acquired by Australian owners of chattels to use and adapt the same, once acquired, to their advantage and for their use as they see fit. 
His Honour concluded that “where a choice of interpretation has to be made, the existence of the additional non–copyright purpose of enforcing global market price differentiation does constitute a reason to prefer an outcome that is consistent with the balances ordinarily inherent in copyright legislation over a result that is not.” 
Similarly, the joint judgment considered that “in construing a definition which focuses on a device designed to prevent or inhibit the infringement of copyright, it is important to avoid an overbroad construction which would extend the copyright monopoly rather than match it.”  The decision noted that the broad construction of would “extend the copyright monopoly by including within the definition not only technological protection measures which stop the infringement of copyright, but also devices which prevent the carrying out of conduct which does not infringe copyright and is not otherwise unlawful.” 
Kirby J favoured a narrow construction of “technological protection measures” because it would uphold fundamental rights under the Australian Constitution . His Honour noted: “Ordinary principles of statutory construction, observed by this Court since its earliest days, have construed legislation, where there is doubt, to protect the fundamental rights of the individual.”  The judge observed: “The right of the individual to enjoy lawfully acquired private property (a CD ROM game or a PlayStation console purchased in another region of the world or possibly to make a backup copy of the CD ROM) would ordinarily be a right inherent in Australian law upon the acquisition of such a chattel.”  The judge stressed that copyright law operates against the backdrop of Australian constitutional law: “The provisions of the Australian Constitution affording the power to make laws with respect to copyright operate in a constitutional and legal setting that normally upholds the rights of the individual to deal with his or her property as that individual thinks fit.”  He warned that over–reaching copyright legislation could encounter constitutional problems: “To the extent that attempts are made to push the provisions of Australian copyright law beyond the legitimate purposes traditional to copyright protection at law, the Parliament loses its nexus to the constitutional source of power.”  There have been similar concerns expressed about the constitutionality of para–copyright in the U.S. and Canada .
The High Court favoured a narrow construction of “technological protection measures because there were penal provisions involved. The joint judgment noted “that, in choosing between a relatively broad and a relatively narrow construction of legislation, it is desirable to take into account its penal character.”  Furthermore, the joint decision noted that “an appreciation of the heavy hand that may be brought down by the criminal law suggests the need for caution in accepting any loose, albeit ‘practical’, construction of Div 2A itself.”  Similarly, Kirby J noted that the presence of penal provisions was a final, albeit less important, consideration. His Honour observed: “The fact that the phrase TPM appears in the new criminal offences, as well as in the provision for civil remedies under s 116A, pursuant to which the appellant was sued for copyright infringement, lends some weight to a stricter meaning of the contested definition of TPM, in preference to the broader meaning adopted by the Full Court.”  The High Court has expressed wariness about the growing criminalisation of copyright law.
Finally, the High Court was quite careful to ensure that its decision would be relevant for future legislative changes. Kirby J, in particular, comments upon the need to address very particular concerns in any future iterations of the law with respect to technological protection measures:
Such considerations included the proper protection of fair dealing in works or other subject matters entitled to protection against infringement of copyright; proper protection of the rights of owners of chattels in the use and reasonable enjoyment of such chattels; the preservation of fair copying by purchasers for personal purposes; and the need to protect and uphold technological innovation which an over rigid definition of TPMs might discourage. These considerations are essential attributes of copyright law as it applies in Australia. They are integrated in the protection which that law offers to the copyright owner‚s interest in its intellectual property. 
The Federal Government initially professed itself to be indifferent to the outcome of the decision of the High Court. Asked about the pending decision in Stevens v Sony, Senator Robert Hill observed during the parliamentary debates over AUSFTA: “The idea that the parliament should not determine the appropriate future legislative structure because previous matters are being litigated does not seem to me to be particularly persuasive.”  The Federal Government will now have to comply with the High Court’s demands that any future laws on technological protection measures be drafted with precision and clarity. The government will also need to take into account wider policy concerns that there are not inadvertent detrimental impacts for competition, access to information, and fundamental freedoms . If the Federal Government fails to take heed of the decision, the High Court has made it quite clear that they will exercise judicial restraint, and read down the law. There is even the possibility that a constitutional challenge could be successfully launched against over–reaching copyright regulation.
The Phillips Fox Digital Agenda Review made a number of recommendations in respect of TPMs . The Review advised that the reasoning of Sackville J should be followed and the definition of a TPM should be limited to measures to protect or control rights only that fall within copyright. Furthermore, the Digital Agenda Review recommended an extension of the permitted purposes, so as to clearly allow any supply or use of a circumvention device or service for any use or exception allowed under the Act, including fair dealing and access to a legitimately acquired non–pirated product, otherwise a prohibition on the use (whether commercial or personal) of a circumvention device or service to circumvent a TPM.
However, the AUSFTA required Australia to adopt a TPM regime very similar to that established in the DMCA. Article 17.4.7 (b) expands the definition of a TPM: “Effective technological measure means any technology, device, or component that, in the normal course of its operation, controls access to a protected work, performance, phonogram, or other protected subject matter, or protects any copyright.” There has been a concern that such a broad definition could also cover regional coding devices. As Jacob Varghese comments:
A ban on devices that circumvent TPMs significantly strengthens the copyright holder’s ability to prevent parallel importing, by making it illegal to circumvent the region–coding, and thus play a DVD or computer game purchased in another country on an Australian–bought machine. It does seem incongruous that a “free trade” agreement, purportedly intended to liberalise trade, should assist copyright holders to establish their own trade barriers. 
Furthermore, Article 17.4.7 (a) of the AUSFTA requires Australia to provide civil and criminal liability for the circumvention of any TPM (this would include circumvention by an end–user), and “trafficking” in devices that are designed or promoted as enabling or facilitating TPMs to be circumvented or have only limited commercial purpose other than circumvention of TPMs. Article 17.4.7 (d) provides: “Each Party shall provide that a violation of a measure implementing this paragraph is a separate civil or criminal offence and independent of any infringement that might occur under the Party’s copyright law.” Furthermore, Article 17.4.7 (e) narrows the range of certain exemptions or defences to these actions and offences.
In addition, Article 17.4.9 of the AUSFTA required Australia to provide stronger protection of electronic rights management information. Article 17.7 required Australia to provide protection against the decoding of encrypted broadcast television signals.
Furthermore, Article 17.4.1 of the AUSFTA provided that Australia needed to extend the definition of reproduction to cover all reproductions in any manner or form, permanent or temporary (including temporary storage in material form). The treaty provided that Australia retained its ability to include specific exceptions to allow reproductions in certain circumstances. There were concerns that the protection of temporary copying under the AUSFTA could disadvantage Australia’s ISPs, as well as the cultural and educational sectors, as well as consumers.
The Attorney–General’s Department is currently developing amendments to the Copyright Act 1968 (Cth) to ensure compliance with Article 17.4.7 of the AUSFTA. Such amendments will introduce civil and criminal remedies in relation to circumvention of TPMs that prevent access to copyrighted material, and “dealings with” devices and services that may be used to circumvent a TPM that either controls access to copyright material, or otherwise protects the copyrighted material. Furthermore, the Attorney–General, Philip Ruddock, asked the House of Representatives Standing Committee on Legal and Constitutional Affairs to inquire into TPM exceptions . The Committee recommended that the balance between copyright owners and copyright users achieved by the Copyright Act 1968 (Cth) should be maintained upon implementation of Article 17.4.7 of the AUSFTA. The Committee advised that, in the legislation, the definition of a TPM should clearly require a direct link between access control and copyright protection. In its view, the Government should ensure that access control measures are related to the protection of copyright, rather than to the restriction of competition in markets for non–copyright goods and services. The Committee warned that regional coding devices should be specifically excluded from the definition of a TPM in the legislation. The Committee recommended that the Government allow for as broad as possible exceptions for TPMS in relation to a range of activities — including fair dealing, library and archive exceptions, the use of copyright material by educational institutions, security testing and reverse engineering. The Committee recommended that future administrative reviews required under Article 17.4.7(e)(viii) be conducted by the Attorney–General’s Department. There has been some debate, though, as to whether such recommendations are consistent with the AUSFTA.
It is surprising that Australia should provide for US–style TPM regime given the controversy that has attended the use and abuse of such protections . In Chamberlain Group, Inc. v. Skylink Techs., Inc., the 7th Circuit Court of Appeals considered a law suit by Chamberlain that a Canadian company called Skylink had used a remote control device to circumvent access controls to a computer program in its garage door opener . Gajarsa J commented:
The DMCA does not create a new property right for copyright owners. Nor, for that matter, does it divest the public of the property rights that the Copyright Act has long granted to the public. The anticircumvention and anti–trafficking provisions of the DMCA create new grounds of liability. A copyright owner seeking to impose liability on an accused circumventor must demonstrate a reasonable relationship between the circumvention at issue and a use relating to a property right for which the Copyright Act permits the copyright owner to withhold authorization — as well as notice that authorization was withheld. 
In Lexmark International, Inc. v. Static Control Components, Inc., the Court of Appeals considered a claim by Lexmark claimed that Static Control violated the DMCA by selling its Smartek chips to companies that refill toner cartridges and thereby undercut Lexmark’s prices . The majority of the court denied that the DMCA provisions were applicable because the authentication system did not control access to a copyright work. It observed that “[n]owhere in its deliberations over the DMCA did Congress express an interest in creating liability for the circumvention of technological measures designed to prevent consumers from using consumer goods while leaving the copyrightable content of a work unprotected.”  A number of legal actions over TPMs have attracted great interest .
Furthermore, there has been a push within Congress to review the operation of TPMs under the DMCA. Fred von Lohmann has argued that the regulation of TPMs has failed to achieve its stated goal of reducing copyright infringements:
To put the matter simply, when enacting section 1201 of the DMCA, it appears that legislators may have chosen to regulate the wrong thing. The error is particularly grievous in light of the mounting evidence that the anti–circumvention provisions of the DMCA are inflicting serious collateral damage on other public values, including scientific research, free speech, innovation, fair use and competition. There have been more than a dozen reported incidents involving DMCA threats to researchers, journalists, and hobbyists. Bowing to DMCA liability fears, self–censorship is common: online service providers and bulletin board operators have censored discussions of copy–protection systems; programmers have removed computer security programs from their Web sites; and students, scientists, and security experts have stopped publishing the details of their research. 
The attorney concludes that policy–makers in the U.S. should given serious consideration to repealing the anti–circumvention provisions of the DMCA in favour of a new, workable approach to the digital crisis. He advises that the trading partners of the U.S. should refrain from adopting such a regime.
Congressman Boucher introduced the Digital Media Consumers’ Rights Act 2003 (US) into Congress in order to restore the historic balance to U.S. copyright law . He argued that the exemptions to the technological measures provisions should be expanded to include the defence of fair use; musical sampling and space–shifting; the first sale doctrine; and making a back–up copy of any copyrighted data. This legislative bill received the strong endorsement of leading technology companies and industry associations, including Intel, Sun Microsystems, Verizon, BellSouth, Philips Electronics North America, Gateway, the Consumer Electronics Association, and the Computer & Communications Industry Association. It also has the equally strong endorsement of public interests organizations, including libraries, universities, and consumers groups. However, it did not win support from the Congress as whole.
Similarly, Representative Zoe Lofgren introduced the Benefit Authors without Limiting Advancement or Net Consumer Expectations (BALANCE) Act 2003 (US) into Congress. The Bill emphasized in its preamble the problems caused by the broad reading of TPMs:
Contrary to the intent of Congress, section 1201 of Title 17, United States Code, has been interpreted to prohibit all users — even lawful ones — from circumventing technical restrictions for any reason. As a result, the lawful consumer cannot legally circumvent technological restrictions, even if he or she is simply trying to exercise a fair use or to utilize the work on a different digital media device.
The legislation would serve to clarify that America’s historic principles of fair use — protected under Section 107 of the Copyright Act 1976 (US) — would apply to analog and digital transmissions. It would allow purchasers to make backup copies and display digital works on the devices of their choice. It would protect purchasers by prohibiting non–negotiable shrink–wrap licenses that limit their rights and expectations. The legislation would clarify that purchasers can sell or give away their copies of digital works, just like they can with traditional hard media. It would also permit purchasers to bypass technical measures that impede their consumer rights and expectations. Much like its counterpart in the Senate, the BALANCE Act failed to garner the favour of the Congress as a whole.
Thus it could be seen that AUSFTA acts as a means of entrenching the regime in the DMCA in U.S. law, and frustrating creative attempts at domestic U.S. law reform.
The record industry will continue to take legal action to protect its copyright whether it’s on the Internet or elsewhere. We will continue to act against ISPs whom we believe are set up as vehicles for piracy.
Michael Speck, Music Industry Piracy Investigations 
In Australia, intermediaries have been placed in a vulnerable position, because of the controversially broad approach taken by the courts to the authorisation of copyright infringement. In University of New South Wales v Moorhouse, the High Court of Australia held that the failure by a University to exercise control or supervision in relation to a photocopying machine installed in a library amounted to an authorisation of infringement of copyright . In Telstra Corp Ltd v APRA, the telecommunications carrier was held directly liable for the playing of music–on–hold by its subscribers to their clients, even though Telstra exercised no control in determining the content of the music played . Kirby J canvassed the wider public policy issues raised by this matter in relation to indirect liability:
The potential liability of a telecommunications carrier for infringement of copyright, promoted through its network, is a matter of considerable public importance. The potential financial consequences of the decision in this case for telecommunications carriers (and therefore for the customers who may ultimately bear the costs of such potential liability) are considerable. The impact of a decision imposing liability on a telecommunications carrier may, in time, be heavier still, given the increasing integration of transmission technologies and the resulting technological blurring of the boundaries between the roles of carriers and content–providers. 
His Honour noted that the conclusions could have significant consequences for other information technologies — including facsimile services, video conferencing, data transmission, telecommunications, and ISPs. The judge concluded that “the Parliament may need to consider these questions — and others arising — and to formulate a legislative response to them.”  Understandably, telecommunications carriers and ISPs were alarmed at their vulnerability to copyright infringement actions in the new digital environment.
One of the main purposes of the Digital Agenda Act was to provide a limited immunity to telecommunications carriers and ISPs from legal action by copyright owners for authorising copyright infringement. Subsection 101(1A) was introduced by the 2000 Amendments, codifying the High Court decision in University of New South Wales v Moorhouse . This provision states that in deciding whether a person has authorised the doing in Australia of any act comprised in the copyright, the matters that must be taken into account by the Court include:
(a) the extent (if any) of the persons power to prevent the doing of the act concerned;
(b) the nature of any relationship existing between the person and the person who did the act concerned;
(c) whether the person took any other reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice.
Section 39B and 112E provides that infringement of copyright is not authorised merely because another person uses the facilities provided to do an infringing act. The Digital Agenda Act was intended to promote certainty for communications and information technology industries; and to ensure that the technical processes which form the basis of the operation of the Internet are not jeopardised.
There have been several cases underway involving ISPs and other intermediaries which provide an insight into the rules for secondary liability under both the Digital Agenda Act and the AUSFTA.
In Universal Music Australia Pty Ltd v Cooper, Tamberlin J considered an action brought by various record companies for copyright infringement in relation to sound recordings made available on a Web site, mp3s4free.net, which provided links to music files on other Web sites . His Honour handed down a decision which considered the authorisation of copyright infringement in the context of the Digital Agenda Act. His Honour also contemplated the future operation of the safe harbour scheme provided for by the U.S. Free Trade Agreement Implementation Act 2004 (Cth).
Tamberlin J held that the proprietor of the Web site, Stephen Cooper, was liable for authorising copyright infringement “in the sense of permitting or sanctioning and facilitating the infringements of the Act by the Internet users who access the Web site and also by the owners or operators of the remote Web sites from which the infringing recordings were downloaded.”  The Court rejected an argument that Cooper was responsible for the communication of infringing material to Web site users clicking on the links. Another argument, that Cooper had infringed copyright by “exposing for sale or by way of trade” infringing music files on his Web site, was also rejected.
Tamberlin J held that the ISP E–Talk/Com–Cen used by the Web site, together with the principal and an employee, were also liable for authorising infringements. His Honour commented: “E–Talk/Com–Cen were responsible for hosting the Web site and providing the necessary connection to the Internet and therefore had the power to prevent the doing of the infringing acts.”  The judge commented that the company took no steps to take down the Web site or prevent further copyright infringement. The judge was critical of the evidence provided by the witnesses in the case: “The repeated evasiveness of Bal and Takoushis under cross–examination, their lack of frankness, and their failure to acknowledge an acquaintance with some basic matters of terminology such as ‘webmaster’ and ‘MP3’s’, support a conclusion that they were both involved in and aware of some problems with the operations on the Web site but decided not to further investigate or take any effective action in relation to the hosting of the Web site.”  His Honour concluded: “Where a host is on notice of an irregularity and deliberately elects not to investigate the operation and contents of a site and turns a blind eye to such indications, even having regard to the possible indication afforded by the title of the Web site, then, in my view, there are additional factors called into play beyond merely hosting the site.” 
Tamberlin J considered whether the “safe harbour” scheme introduced by the AUSFTA could apply to the Web site’s ISP. His Honour noted that such amendments did not have a retrospective application. In any case, Tamberlin J observed that the ISP would not have been able to take advantage of the “safe harbour” scheme. First of all, his Honour observed that there was a failure to adopt and reasonably implement a policy that provides for termination, in appropriate circumstances, of the accounts of repeated infringers: “The evidence indicates that despite the respondents’ awareness that copyright material was likely to be infringed, they have not taken any steps to implement such a policy.”  Second, the judge noted that the ISP received a financial benefit directly attributable to the infringing activity if the service provider has the right and ability to control the activity. His Honour concluded: “As I have found that the infringing activity is the triggering, and consequential downloading, of the music files from the Web site, I am satisfied that E–Talk/Com–Cen received a financial benefit from the infringing activity on the Web site because it obtained free advertising on the Web site.”  The judge concluded that the ISP did not act expeditiously to remove or disable access from the hyperlinks and facilities hosted on its network notwithstanding that the circumstances made it apparent that copyright material was likely to be infringed.
In Universal Music Australia Pty Ltd v Sharman License Holdings Ltd, Wilcox J considered whether the operators of the peer–to–peer–network, Kazaa , authorised copyright infringement by the users of the system . His Honour found that a number of the respondents — Sharman Networks, management company LEF Interactive, chief executive Nikki Hemming, business partners Brilliant Digital Entertainment and Altnet, and BDE chief executive Kevin Bermeister — were liable for authorising copyright infringement.
Wilcox J emphasized that a number of factors supported this finding. First, his Honour held that respondents had long known that the Kazaa system was widely used for the sharing of copyright files, and that the measures that they had aopted were “ineffective to prevent, or even substantially to curtail, copyright infringements by users.”  Second, the judge noted that the respondents had failed to take technical measures — such as keyword filtering and gold file flood filtering — that would curtail the sharing of copyright files. His Honour observed: “It is in the respondents’ financial interest to maximise, not to minimise, music file–sharing.”  Finally, Wilcox J observed that “far from taking steps that are likely effectively to curtail copyright file–sharing, Sharman Networks and Altnet have included on the Kazaa Web site exhortations to users to increase their file–sharing and a Web page headed ‘Join the Revolution’ that criticises record companies for opposing peer–to–peer file–sharing.”  His Honour found that this Web campaign would “encourage visitors to think it ‘cool’ to defy the record companies by ignoring copyright constraints.” 
Wilcox J distinguished the U.S. Supreme Court decision in Metro–Goldwyn–Mayer Studios Inc v Grokster Ltd, which had found that the peer–to–peer networks Grokster and Streamcast had induced copyright infringement . His Honour noted: “It had always been obvious that there were similarities between the Kazaa system and the Grokster and StreamCast systems.”  Nonetheless, Wilcox J emphasized that the Australian law on authorisation of copyright infringement was distinct from U.S. law on contributory and vicarious infringement: “Much of the Australian statutory law had no counterpart in United States law.”  His Honour found that the U.S. Supreme Court decision provided little guidance as to the resolution of this case, concluding that “the differences, both factual and legal, are such as to render Grokster of little assistance to me.” 
The respondents and amici, such as the Australian Consumers’ Association Pty Ltd., Electronic Frontiers Australia Inc and New South Wales Council for Civil Liberties Inc., argued that it would be unfair and unrealistic to make software providers monitor content for infringement because Parliament intended to “protect the messenger” through provisions such as ss 22(6) and 112E of the Copyright Act 1968 (Cth). Wilcox J observed in response:
I accept that Parliament intended to “protect the messenger”, although only to the extent indicated by the Act; notably s 112E. However, on my findings, Sharman is and was more than a “messenger”. Whether it is “unrealistic and unfair” that a software provider in Sharman’s position should be held to have authorised copyright infringement by users of the software is a matter of opinion. The Court must take guidance from the Act, as elucidated by relevant judicial decisions. It is not for the Court to reject that guidance on the basis that the particular judge considers the result to be unrealistic and unfair. If Parliament thinks that is, indeed, the result of applying the Act, the remedy is in its hands. 
Wilcox J ordered that the respondents pay damages and 90 percent of costs incurred by Universal Records. He also ordered that the Kazaa Internet file–sharing system could continue to operate but only if within two months it was modified to include technology to prevent copyright infringement. As a result of the decision, there is a concern that the burden of enforcement may be shifted away from the rights holder and onto unrelated third parties — such as telecommunications carriers and Internet service providers.
Arguably, the Kazaa judgment is flawed in terms of its reasoning. The first problem with the judgment is that it is highly fact specific. Although he makes heroic efforts, Wilcox J seems overwhelmed by the mass of detail in the trial. The second problem with the decision is that it fails to articulate clear principles as to what constitutes authorisation. Wilcox J suggests that there are a number of factual indicia that might support a finding of authorisation — knowledge of infringement; a failure to install proper filters; and a misguided public relations campaign “Join the Revolution”. However, he provides little guidance for technology developers and entrepreneurs in other factual scenarios — for instance, the developers of the iPod, TiVo, Foxtel iQ, and Slingbox. The third problem with the case is its failure to address wider policy concerns. Wilcox J neglects to discuss the origins of P2P networks, and consider comparative law on the subject properly. He refuses to address wider policy concerns about competition and consumer rights. One can only hope that the appeal court seeks to remedy the crude nature of Australian law on authorisation of copyright law.
In Warner Music Australia Pty Ltd v Swiftel Communications Pty Ltd, a number of record companies launched legal action against a Perth–based ISP, for authorising copyright infringement by allegedly hosting and maintaining two Internet computer servers and a Web site called Archie’s Hub which deployed the BitTorrent application . The outgoing general manager of Music Industry Piracy Investigations, Michael Speck, alleged:
We have identified Swiftel as an ISP which has adopted BitTorrent technology to link infringers to music clips and sound recordings. We believe hundreds of thousands of downloads have been conducted in the last year in breach of copyright laws. 
The music industry alleged that Swiftel senior system administrators Melissa Ong and Ryan Briggs had received requests from member companies to take down sites which were infringing copyright. The lawyer, Tony Bannon, argued: “They are benefiting from the infringing behaviour ... and they just turn a blind eye.”  The case promises to be the first to test the safe harbours regime implemented to comply with the AUSFTA.
The magistrate, Rolf Driver, noted that there was no precedent for application of the new laws under the AUSFTA in Australia. Nonetheless, he felt that some guidance may be provided from the Comcen case and the Kazaa case. In the end, the magistrate agreed that it was best if the matter was transferred to the Federal Court of Australia: “There is no doubt that complex and novel factual issues arise in the proceedings and that the Court would be called upon to rule upon provisions of the Copyright Act 1968 (Cth), the application of which is far from settled.”  The Magistrate decided that it was appropriate to transfer the case to the Federal Court, “having regard to the public importance of the litigation and the obvious public interest in it” as well as “the fact that other similar litigation of equal importance remains outstanding in the Federal Court.”  He thought that it was desirable that such matters were dealt with in the Federal Court together.
In response, the Internet Industry Association has asked its members — including Telstra, Optus, Yahoo and ninemsn — to “contribute” to the defence of ISP (ISP) Swiftel against litigation by the music industry over alleged copyright infringements . Its chief executive officer Peter Coroneos said those members “with potential liabilities” should “consider their position should Swiftel lose this case.”  He asked the members to provide access to information, technical advice and other resources that may help their case. Coroneos said the IIA would “not be supporting the litigation directly nor taking a strategic role ... but we may be providing the court with an amicus brief to assist the court’s understanding of the issues at stake.”  He said the outcome of the case could alter “the balance struck within Australia’s (Free Trade Agreement) amended copyright legislation, as far as liability for hosting and transmitting content are concerned.”  Coroneos observed: “This case has the potential to see authorisation liability tested as it applies to [peer to peer] and may also amount to the first legal test of the new safe harbour regime.” He observed: “Swiftel is looking for industry players to back it, and we’re letting our members know.” 
In the end, the case between MIPI and Swiftel was settled out of court. The chief executive officer of Swiftel, Ryan O’Hare, said in a statement:
Swiftel regrets that it has not taken enough action to date to stop Internet piracy. We are committed to implementing a new set of industry leading compliance programs to protect the music industry. 
As part of the settlement terms, Swiftel has agreed to implement a new process to deal with copyright infringement notices issued by copyright holders.
The Phillips Fox Digital Agenda Review observed that “it is clear that there is real uncertainty as to what steps Service Providers need to take in order to protect themselves from liability for authorisation of copyright infringement and as to when, and the manner in which, copyright owners can legitimately complain about a Service Provider’s conduct.” 
Phillips Fox recommended that there needed to be better guidance as to the relationship between the general rules of authorisation, and the particular protections afforded to ISPs. The Review also called for amendments to set the acceptable minimum standards or conduct in relation to notice and take down procedures that would determine the reasonableness or otherwise of conduct when considering issues of authorisation of infringement. Phillips Fox also recommended that amendments to the Act, the Federal Court Rules and the Federal Magistrates Court Rules, to implement a limited subpoena process to identify alleged infringers of copyright, where there is existing evidence of infringement. The Review also suggested that appropriate amendments be made to the Telecommunications Act 1997 (Cth) and the National Privacy Principles. The Review recommended that the Federal Privacy Commissioner should play a role in the oversight of such a regime.
The Senate Select Committee noted “with some concern that it will not be possible to adopt the recommendations of Phillips Fox report in the Digital Agenda Review under the terms of the AUSFTA.” 
Article 17.11.29 of the AUSFTA obligations establish a system for dealing with allegedly infringing material on ISP systems and networks. An ISP will receive “safe harbour” immunity when dealing with alleged copyright infringements on their system or networks if they comply with certain conditions. Article 17.11.29 (b)(i) defines four functions for which a limitation of liability is available: transmission of material without modification of content (a category A activity); caching carried out as part of an automatic process (a category B activity); storage at the direction of a user of material “residing on a system ... operated by or for the service provider” (a category C activity) and referring users to an online location using information location tools or technology, such as hyperlinking (a category D activity). If an infringement occurs in the course of carrying on one of these activities, but an ISP complies with the relevant conditions, a court cannot grant relief against the ISP which consists of damages or other monetary relief. Article 17.11.29 (xi) and (x) of the AUSFTA provides for a notification and counter–notification procedure, the form of which is outlined in an accompanying side letter. The procedures exempt an ISP from liability where they expeditiously remove the allegedly infringing material in good faith based on receiving a notice from copyright owners.
It is surprising that the Federal Government would impose such a stringent regime upon telecommunications carriers and ISPs, especially given its desire to sell its remaining stake in the public telecommunications carrier, Telstra. In 1996, the Federal Government passed the Telstra (Dilution of Public Ownership) Act 1996 (Cth), and by 1997, had sold one–third of its stake in the telecommunications company. In 1999, the Federal Government passed the Telstra (Further Dilution of Public Ownership) Act 1999 (Cth), and sold another 13 percent of its stake in Telstra, leaving a controlling interest of 51 percent. In 2005, the Federal Government passed the Telstra (Transition to Full Private Ownership) Act 2005 (Cth), which repealed the provisions that require the Commonwealth to retain at least 50.1 percent of the equity in Telstra.
The Federal Government plans to sell its remaining stake in Telstra on the stockmarket. Surely, analysts would have to factor into the calculations of the share value of Telstra the greater costs associated with copyright management under the regime, and the higher risks of suits for copyright infringement.
In the debate over the AUSFTA, the behemoths of the telecommunications industry belatedly lobbied against further amendments in the Copyright Amendment Act 2004 (Cth). David McCulloch of Optus, along with Carolyn Hough of Telstra, commented:
We believe the new provisions go further than the provisions required by the FTA, or side letters to the FTA. In fact, the two provisions go even further than the provisions required by U.S. copyright law, leaving Australian ISPs in a worse position than our colleagues in the U.S. 
Notwithstanding such concerns, the Federal Government passed the Copyright Amendment Act 2004 (Cth). They sought to allay the fears of Telstra and Optus by emphasizing that regulations could resolve any potential problems.
The Federal Government is conducting a further review of the scope of the definition of “carriage service provider” for the specific purpose of the safe harbour scheme . It is considering whether the definition should be expanded to include other online service providers — such as search engines, like Google or Yahoo.
It is curious that Australia should adopt a U.S.–style ISP regime given that the legitimacy of the subpoena provisions under the DMCA have been called into question.
In Verizon Internet Services v RIAA, the Court of Appeals considered a legal action brought by the RIAA brought against Verizon Internet Services because it refused to reveal the identity of a Verizon subscriber who allegedly used Kazaa peer–to–peer software to share music online . The telecommunications company argued that § 512(h) of the DMCA did not authorise the issuance of a subpoena to an ISP acting as a conduit for peer–to–peer network file–sharing. In the Court of Appeals, Ginsburg J expressed sympathy for the position of the copyright owners. His Honour nonetheless stressed that the court had to obey the intentions of Congress, and could not engage in judicial creativity to enhance the rights of copyright owners:
We are not unsympathetic either to the RIAA’s concern regarding the widespread infringement of its members’ copyrights, or to the need for legal tools to protect those rights. It is not the province of the courts, however, to rewrite the DMCA in order to make it fit a new and unforeseen Internet architecture, no matter how damaging that development has been to the music industry or threatens being to the motion picture and software industries. The plight of copyright holders must be addressed in the first instance by the Congress; only the ‘Congress has the constitutional authority and the institutional ability to accommodate fully the varied permutations of competing interests that are inevitably implicated by such new technology.’ 
The U.S. Supreme Court refused to grant special leave to appeal against the decision of the Federal Court of Appeals. The verdict is an important one because it reveals certain inflexibilities and rigidities with the safe harbours regime set up by the DMCA. It is therefore technologically obsolete model for Australia to follow.
Furthermore, there has been much disquiet about the abuse of the take down and notice provisions of the DMCA. For instance, in 2003, students from Swarthmore College published thousands of internal documents from a company called Diebold Inc., detailing security flaws and software problems in its electronic voting machines . In response, Diebold Inc. sent out cease–and–desist letters to Internet service providers, citing copyright violations under the Digital Millennium Copyright Act 1998 (US), and demanded that the documents be taken down. The Electronic Frontier Foundation intervened in the dispute, filing a lawsuit to protect the e–voting activists’ First Amendment rights. Wendy Seltzer observed:
Diebold’s blanket cease–and–desist notices are a blatant abuse of copyright law. Publication of the Diebold documents is clear fair use because of their direct relevance to the debate over the accuracy of electronic voting machines. 
There have been a number of other instances in which the notice and take–down procedures under the DMCA have been used in inappropriate ways . There have been arguments that there need to be greater safeguards to protect the privacy of consumers from the misuse of the subpoena provisions under the DMCA.
A recent study by the Samuelson Law, Technology and Public Policy Clinic suggests that the regime has “chilling effects”:
Policy concerns related to questionable takedowns seem likely to increase in importance — however successful or problematic the process is, our data show that its use appears to be rising. Some notices are certainly sent in order to accomplish the paradigmatic goal of 512 — the inexpensive takedown of clearly infringing hosted content or links to infringing Web sites. But our data also show the process is commonly used for other purposes: to create leverage in a competitive marketplace, to protect rights not given by copyright (or perhaps any other law), and to stifle criticism, commentary and fair use. 
Finding the operation of the regime to be troubling, the Clinic suggests that there is a need to revisit the DMCA takedown process.
In his second reading speech on the U.S. Free Trade Agreement Implementation Act 2004 (Cth), the Trade Minister, Mark Vaile, argued that “it is important to be clear that these amendments do not represent the wholesale adoption of the U.S. intellectual property regime.”  He maintained: “We have not stepped back from best practice elements of Australia’s copyright regime — but we have strengthened protection in certain circumstances — providing a platform for Australia to attract and incubate greater creativity and innovation.” 
By contrast, this article contends that the AUSFTA would produce what, Lawrence Lessig has memorably, called a “piracy of the public domain.”  The new order will prove to be a windfall for multinational entertainment companies, much to the detriment of copyright users and consumers. There will be much greater risk for intermediaries such as libraries, cultural institutions, telecommunications carriers, and ISPs. As the economist John Quiggin has observed: “Far from promoting free trade, they want to turn Australia into a monopolists’ playground.”  The Australian Government was slavish in its adoption and emulation of features of U.S. copyright law. Most notably, Australia followed the lead of the Sonny Bono Act and extended the term of copyright for works to life of the author plus 70 years, and for subject matter to 70 years from the date of dissemination. The government also adopted key features of the DMCA — a broad TPMs regime and a safe harbours regime for ISPs, with a take down notice procedure. Furthermore, there is further protection against the bootlegging of sound recordings. There are also a broader range of civil and criminal liability offences. In this process, there has been little respect shown for domestic law–making policy processes. The Digital Agenda Act has been abandoned, before the courts have had an opportunity to properly consider its operation. The recommendations of the Copyright Law Review Committee, the Intellectual Property and Competition Review, and the Phillips Fox Digital Agenda Review have been treated with contempt. In the future, the Australian Government will be constrained and limited in its policy–making in the field of copyright law. It will be unable to undo the major changes to the Copyright Act 1968 (Cth) under the AUSFTA without risking the threat of a trade action.
There seems little scope for a constitutional challenge against the implementing legislation for AUSFTA in Australia, given the broad reading given to the intellectual property power and the external affairs power under the Australian Constitution . Some members of the judiciary, though, have expressed surprise at the dramatic policy decisions made in the copyright field as a result of the AUSFTA. Sackville J of the Federal Court has noted askance: “It must be said that the benefits to Australians of the extension of copyright mandated by the FTA is not readily apparent.”  In the lead up to the AUSFTA, Kirby J provided a cautionary warning:
The negotiation of the proposed Free Trade Agreement with the United States of America presents a number of dangers for Australian artists. There is a need to protect of their capacity to speak uniquely to the Australian people of the culture that arises in the midst. We must be alert, as a nation, to the great power of the United States to impose not only its full price pharmaceuticals upon the world but also its culture. It seems inevitable that Mickey Mouse will never come out of copyright protection in the United States. They are foremost in protecting their own culture. We should be equally insistent in protecting ours. 
There is certainly scope for judicial restraint in interpreting both the AUSFTA and the U.S. Free Trade Agreement Implementation Act 2004 (Cth). As Kirby J has observed in the past, “where the interests are large, and the rights are ultimately derived from the language of an international treaty of national as well as global importance, judicial restraint is called for where an Act is obscure or arguably inapplicable.”  There is a need to ensure that the new legislative regime does not allow copyright owners to become carpet–baggers and privateers, profitting from the wealth of the intellectual commons. As a Canadian jurist has observed: “Excessive control by holders of copyrights and other forms of intellectual property may unduly limit the ability of the public domain to incorporate and embellish creative innovation in the long–term interests of society as a whole, or create practical obstacles to proper utilization.” 
The need for judicial restraint is particularly important, because the Australian Federal Government has thus far failed to take any constructive measures to mitigate against the harsh impacts of the AUSFTA. The Attorney–General Philip Ruddock has established an inquiry into the issue of fair use . He has observed:
The Government is aware developments in digital technology are changing the way people use copyright material. Many Australians believe quite reasonably they should be able to record a television program or format–shift music from their own CD to an iPod or MP3 player without infringing copyright law. However, this issue needs careful consideration. I know there is intense interest in this issue and I look forward to receiving public submissions. I acknowledge the concerns of copyright owners about providing more exceptions for copyright users, especially at a time when many have serious fears about copyright piracy. 
However, the copyright industries have mounted a concerted campaign to lobby against the broadening of the current defence of fair dealing. Although happy to adopt many aspects of U.S. law, the copyright owners are adamant that the adoption of an open–ended U.S. defence of fair use would somehow compromise the integrity of the Australian legislation . Such interest groups have, somewhat unconvincingly, argued that the U.S. defence of fair use would be incompatible with the three–step test under the Berne Convention, the TRIPS Agreement, and the AUSFTA . Given such industry lobbying, the Federal Government will have to show leadership to pass significant changes to the defence of fair dealing . Legislators will be also have to display greater initiative in fashioning a legislative solution for the problem of orphan works.
In the meantime, the Australian Federal Government has discovered a new enthusiasm for negotiating bilateral and regional free trade agreements. DFAT is currently in the process of negotiating four free trade agreements with the United Arab Emirates, China, Malaysia; and the Association of Southeast Asian Nations (ASEAN). Undoubtedly, Australia’s trade representatives will seek to impose higher standards of intellectual property and enforcement upon its trading partners. The Australian Government is locked into a TRIPs–Plus regime after the AUSFTA. In particular, it will ask for copyright term extension, DMCA–style provisions for TPMs and ISPs, and tougher enforcement provisions, to be included in these agreements. Again, corporate interests predominate. The Australian Chamber of Commerce and Industry and copyright industry representatives have pushed for sweeping changes . The Australian Government risks being perceived by its trading partners as a mere proxy of the U.S. — willing to do the bidding of the multinational entertainment companies of Hollywood. However, such a maximalist agenda threatens to undermine the multilateral process for the protection of copyright law.
For its part, the U.S. Government has continued to rely upon bilateral and regional agreements to raise global standards of intellectual property protection . The Singapore–United States Free Trade Agreement provided a blueprint for a new regime of intellectual property . It contained detailed prescriptions about the duration of copyright protection, technological protection measures (TPMS), safe harbours for Internet service providers, and civil and criminal penalties. The U.S. has further entrenched the Sonny Bono Act and the DMCA in a number of bilateral agreements with favoured trading nations — such as Australia, Bahrain, Chile, Jordan, Morocco, Oman, and Peru. The U.S. has also pushed for higher standards of intellectual property protection in regional agreements — such as in the Central American Free Trade Agreement . The new U.S. Trade Representative Rob Portman has sought to consolidate and expand upon the accomplishments of his predecessor. He has announced that the U.S. Government is negotiating a free trade agreement with South Korea in 2006. Portman will also no doubt be keen to resume discussions with South Africa over trade and intellectual property. The U.S. Trade Representative has also sought to realise the dream of a hemisphere–wide free trade area, with the proposed Free Trade Area of the Americas . There remains great unease about such bilateral and regional free trade agreements. As Jagdish Bhagwati has observed, such arrangements could fragment the trading system: “The result is a ‘spaghetti bowl’ of rules, arbitrary definitions of which product comes from where and a multiplicity of tariffs depending on source.”  The adoption of preferential agreements will ultimately undermine the efforts of member states to adopt a “development agenda” within the framework of the World Trade Organization and WIPO .
About the author
Matthew Rimmer, BA (Hons)/LLB (Hons) (ANU), PhD (UNSW), is a Senior Lecturer at ACIPA, the Faculty of Law, the ANU College of Law.
The author is grateful for the insights of various critics of the AUSFTA — including Dr. Kathy Bowrey, Colette Ormonde, Lindy Morrison, Rusty Russell, and Kimberlee Weatherall. He is also indebted to Eva Hemmungs Wirten for the opportunity to present this paper at the conference on “Structures of Power” at Uppsala University in September 2005. The author has also been much assisted by the comments of the referees.
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3. However, some commentators suggest that any agricultural gains made under the AUSFTA will be negligible. ACIL Consulting, 2003. A Bridge Too Far? An Australian Agricultural Perspective On The Australia/ United States Free Trade Area Idea, (Canberra: Rural Industries Research And Development Corporation); and, Ross Garnaut, 2003. “Trading Blows: On The Damage Done By The Collapse Of The Cancun Trade Talks,” Intellectual Property And The Life Sciences, ACIPA Conference (21 November).
5. For a discussion of the constitutional challenge to the Sonny Bono Act, see Matthew Rimmer, 2003. “The Dead Poets Society: The Copyright Term and the Public Domain,” First Monday, volume 8, number 6 (June), at http://journals.uic.edu/fm/article/view/1059/979.
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51. There is a large secondary literature on this case. See, for instance, Lawrence Solum (editor), 2002. “Eldred v Ashcroft Symposium,” Loyola of Los Angeles Law Review, volume 36, at http://llr.lls.edu/; Graeme Austin, 2003. “Copyright’s Modest Ontology — Theory and Pragmatism in Eldred v. Ashcroft,” Journal of Law and Jurisprudence, volume 16, number 2, p. 163; Lawrence Lessig, 2004. Free Culture: How Big Media Uses Technology And Law To Lockdown Culture And Control Creativity, New York: Penguin, at http://free-culture.org/; Edward Walterscheid, 2004. “The Preambular Argument: The Dubious Premise of Eldred v. Ashcroft,” Idea, volume 44, number 3, p. 331; and, Dennis Karjala, 2005. “Opposing Copyright Extension, Protecting the Public Domain,” at http://homepages.law.asu.edu/~dkarjala/OpposingCopyrightExtension/.
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53. Lawrence Lessig, 2004. “Australia’s A Big Country But Caves Just as Quickly as the Smallest,” Lessig Blog, (15 February), at http://www.lessig.org/blog/archives/001733.shtml.
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64. Public Knowledge, 2005. “In the Matter of Orphaned Works,” (25 March), at http://www.copyright.gov/orphan/comments/OW0629-PublicKnowledge.pdf.
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69. Kabushiki Kaisha Sony Computer v Stevens (2002) 55 IPR 497, at http://www.austlii.edu.au/au/cases/cth/federal_ct/2002/906.html.
71. Kabushiki Kaisha Sony Computer v Stevens (2003) 57 IPR 161, at http://www.austlii.edu.au/au/cases/cth/FCAFC/2003/157.html.
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102. Stevens v Kabushiki Kaisha Sony Computer Entertainment  HCA 58, at http://www.austlii.edu.au/au/cases/cth/HCA/2005/58.html.
106. Senator Robert Hill, 2004. “US Free Trade Agreement Implementation Bill 2004 (Cth),” Senate Hansard (12 August), p. 26428, at http://www.aph.gov.au/hansard/senate/dailys/ds120804.pdf.
107. For a consideration of the linkage between digital rights management and privacy, see Ian Kerr, 2005. “If Left to their Own Devices ... How DRM and Anti–Circumvention Laws Can Be Used to Hack Privacy,” In: Michael Geist (editor). In The Public Interest: The Future of Canadian Copyright Law. Toronto: Irwin Law, pp. 167–210.
108. Phillips Fox, 2004. Digital Agenda Review, Canberra: Attorney General’s Department, at http://www.ag.gov.au/DigitalAgendaReview/reportrecommendations.
109. Jacob Varghese, 2004/ 2005. “Guide to Copyright and Patent Law Changes in the US Free Trade Agreement Implementation Bill 2004,” Parliamentary Library Current Issues Brief, volume 3, number 17, at http://www.aph.gov.au/library/pubs/CIB/2004-05/05cib03.pdf.
110. House of Representatives Standing Committee on Legal and Constitutional Affairs, 2006. Review of Technological Protection Measures Exceptions, at http://www.aph.gov.au/house/committee/laca/protection/report/fullreport.pdf.
111. For a review of the debate over technological protection measures and competition policy in North America, see Michael Geist, 2005. “Anti–Circumvention Legislation and Competition Policy: Defining a Canadian Way,” In: Michael Geist (editor). In The Public Interest: The Future of Canadian Copyright Law. Toronto: Irwin Law, pp. 221–250.
116. Electronic Frontier Foundation, 2005. “Five Years of Unintended Consequences,” at http://www.eff.org/IP/DMCA/unintended_consequences.php. See, for instance, Universal City Studios v Reimerdes, 111 F. Supp. 2d 294 (S.D.N.Y. 2000). Universal City Studios v Corley, 273 F.3d 429 (2001); Felten and others v RIAA (unreported, United States District Court of New Jersey, 28 November 2001); United States of America v Elcom Ltd. and Dmitry Sklyarov 62 U.S.P.Q.2D (2002) 1736; RealNetworks Inc. v. Streambox Inc., 2000 WL 127311 (W.D. Wash. Jan. 18, 2000); Macrovision Corp. v. 321 Studios, 2004 WL 1066323 (SDNY. May 12, 2004); Davidson & Associates, Inc. v. Internet Gateway, 334 F.Supp.2d 1164 (E.D. Mo. 2004) and on appeal (US Court of Appeals for the 8th Cicuit No. 04–3654; 1 September 2005); and, Storage Tech. Corp. v. Custom Hardware Engineering & Consulting, 2004 U.S. Dist. LEXIS 12394 (D. Mass., July 2, 2004); and on appeal (US Court of Appeals; No 04–1462, 24 August 2005).
117. Fred von Lohmann, 2004. “Measuring the Digital Millennium Copyright Act against the Darknet: Implications for the Regulation of Technological Protection Measures,” Loyola of Los Angeles Entertainment Law Review, volume 24, p. 635.
125. Universal Music Australia Pty Ltd v Cooper  FCA 972, at http://www.austlii.edu.au/au/cases/cth/federal_ct/2005/972.html.
132. For a background account to the litigation over Kazaa, see Matthew Rimmer, 2005. “Hail To The Thief: A Tribute To Kazaa,” University of Ottawa Law and Technology Journal, volume 2, number 1, pp. 173–218, at http://www.uoltj.ca/articles/vol2.1/2005.2.1.uoltj.Rimmer.173-218.pdf.
133. Universal Music Australia Pty Ltd. v. Sharman License Holdings Ltd.  FCA 1242 at http://www.austlii.edu.au/au/cases/cth/federal_ct/2005/1242.html.
138. Metro–Goldwyn–Mayer Studios Inc. v Grokster Ltd. 125 S.Ct 2764; 73 USLW 4675 (“Grokster”), at http://fairuse.stanford.edu/MGM_v_Grokster.pdf.
139. Universal Music Australia Pty Ltd. v. Sharman License Holdings Ltd.  FCA 1242, at http://www.austlii.edu.au/au/cases/cth/federal_ct/2005/1242.html.
143. Warner Music Australia Pty Ltd & Ors v Swiftel Communications Pty Ltd. & Ors  FMCA 627 (16 March 2005), at http://www.austlii.edu.au/au/cases/cth/FMCA/2005/627.html; and, Warner Music Australia Pty Ltd & Ors v Swiftel Communications Pty Ltd. & Ors (No.2)  FMCA 706 (20 May 2005), at http://www.austlii.edu.au/au/cases/cth/FMCA/2005/706.html.
146. Warner Music Australia Pty Ltd. & Ors v Swiftel Communications Pty Ltd. & Ors (No.2)  FMCA 706 (20 May 2005), at http://www.austlii.edu.au/au/cases/cth/FMCA/2005/706.html.
148. Steven Deare, 2005. “Australian Internet Industry Warned over Swiftel,” ZDNet Australia (12 July), at http://au.news.yahoo.com//050711/16/v2i1.html
153. Steven Deare, 2005. “Music Industry settles BitTorrent Case,” ZDNet Australia (14 October), http://www.zdnet.com.au/news/communications/soa/Music_industry_settles_BitTorrent_case/0,2000061791,39217172,00.htm.
154. Phillips Fox, 2004. Digital Agenda Review, Canberra: Attorney General’s Department, at http://www.ag.gov.au/DigitalAgendaReview/reportrecommendations.
155. Senate Select Committee on the Free Trade Agreement between Australia and the United States of America, 2004. Final Report (August), at http://www.aph.gov.au/Senate/committee/freetrade_ctte/report/final/report.pdf.
156. Senate Legal and Constitutional Committee, 2004. Official Committee Hansard (6 December), L&C 1, at http://www.aph.gov.au/hansard/senate/commttee/S8027.pdf.
161. Electronic Frontier Foundation, 2004. Online Policy Group et al. v Diebold Inc., at http://www.eff.org/legal/ISP_liability/OPG_v_Diebold/.
162. Brief of Amici in Support of Verizon’s Opposition to RIAA’s Motion to Enforce in RIAA v Verizon Internet Services. Inc. 351 F.3d 1229 (D.C. Circuit 2003), Civ. No. 1:02MS00323, http://www.eff.org/legal/cases/RIAA_v_Verizon/20030516_eff_amicus.pdf.
163. Jennifer Urban and Laura Qilten, 2005. “Efficient Process or ‘Chilling Effects’? Takedown Notices Under Section 512 of the Digital Millennium Copyright Act,” Samuelson Law, Technology and Public Policy Clinic, University of California, Berkeley (22 November), at http://mylaw.usc.edu/documents/512Rep-ExecSum_out.pdf.
166. Lawrence Lessig, 2004. Free Culture: How Big Media Uses Technology And Law To Lockdown Culture And Control Creativity, New York: Penguin, p. 220, at http://free-culture.org/.
170. Hon. Justice Michael Kirby, 2003. “Arts and Law in a Whirligig of Time,” Arts Law Centre of Australia: 20th Anniversary (31 October), at http://www.hcourt.gov.au/speeches/kirbyj/kirbyj_31oct.html.
172. Binnie J in Thèberge v. Galerie dArt du Petit Champlain Inc. (2002) SCC 34, at http://www.canlii.org/ca/cas/scc/2002/2002scc34.html.
175. For example, Copyright Agency Limited, Fair Use Submission (July 2005). Michael Fraser of CAL has asserted that the AUSFTA is a “fair trade” agreement. He believes that the defence of fair dealing and the exceptions for libraries and archives should be further narrowed; and that there should be greater scope for statutory licensing and levies for copyright users.
176. At best, there has only been questionable speculation that the U.S. defence of fair use does not conform to the three–step test under international treaties. See, for instance, Samuel Ricketson, 2003. “WIPO Study on Limitations and Exceptions of Copyright and Related Rights in the Digital Environment,” Standing Committee on Copyright and Related Rights, Ninth Session, Geneva (23–27 June), at http://www.wipo.int/documents/en/meetings/2003/sccr/pdf/sccr_9_7.pdf; and, David Brennan, 2002. “The Three–Step Frenzy — Why the TRIPS Panel Decision Might be Considered Per Incuriam,” Intellectual Property Quarterly, pp. 212–225. For a critique of such discourse, see Myra Tawfik, 2005. “International Copyright Law: W(h)ither User Rights,” In: Michael Geist (editor). In The Public Interest: The Future of Canadian Copyright Law. Toronto: Irwin Law, p. 66.
179. For an overview of the bilateral trade agreements involving the United States, see: Peter Drahos, 2001. “BITs and BIPs: Bilateralism in Intellectual Property,” Journal of World Intellectual Property, volume 4, p. 791; Ruth Okediji, 2003/2004. “Back to Bilateralism: Pendulum Swings in Intellectual Property Protection,” University of Ottawa Law and Technology Journal, volume 1, p. 125; Peter Drahos, Buddhima Lokuge, Tom Faunce, Martyn Goddard and David Henry, 2004. “Pharmaceuticals, Intellectual Property and Free Trade: The Case of the US–Australia Free Trade Agreement,” Prometheus, volume 22, p. 243; and, Peter Yu, 2004. “Currents and Crosscurrents in the International Intellectual Property Regime,” Loyola of Los Angeles Law Review, volume 38, p. 323.
180. United States–Singapore Free Trade Agreement, at http://www.ustr.gov/new/fta/Singapore/final/text%20final.PDF.
181. The Dominican Republic–Central America Free Trade Agreement 2005, at http://www.ustr.gov/Trade_Agreements/Bilateral/CAFTA/CAFTA-DR_Final_Texts/Section_Index.html.
182. Free Trade Area of The Americas Negotiations, at http://www.ftaa-alca.org/alca_e.asp.
184. The Geneva Declaration on the Future of the World Intellectual Property Organization, at http://www.cptech.org/ip/wipo/futureofwipodeclaration.pdf; and WIPO General Assembly, 2004. “Proposal by Argentina and Brazil for the Establishment of a Development Agenda for WIPO” (27 August), at http://www.wipo.int/documents/en/document/govbody/wo_gb_ga/pdf/wo_ga_31_11.pdf.
Paper received 7 December 2005; revised 6 February 2006; accepted 15 February 2006.
This work is licensed under a Creative Commons Attribution-NonCommercial License.
Robbery under arms: Copyright law and the Australia–United States Free Trade Agreement
by Matthew Rimmer
First Monday, Volume 11, Number 3 - 6 March 2006
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