This article was first published in the 2006 Volume 17, Australian Intellectual Property Journal, a publication of the Lawbook Co, part of Thomson Legal & Regulatory Limited.

www.thomson.com.au. Reproduced with permission.

What can it mean ‘to prevent or inhibit the infringement of copyright’? - A critique on Stevens v Sony

David J Brennan∗

Introduction The Sony PlayStation is a computer console which, when connected to a television, permits its operator to play video games. The video games are contained as computer programs on game discs, which are items of media separate from the console. Each game disc comprises a reproduction of a computer program (categorised as a literary work in Australian copyright law1) and encoded by that program is a copy of an interactive audio-visual game (perhaps oddly categorised as a cinematograph film in Australian copyright law2). The game disc is a form of computer storage termed read only memory, known more commonly by its acronym, ROM. Integrated circuitry within the console precludes the game disc from inter-operating with the console unless an encrypted access code on the disc is recognised.3 This integrated circuitry (which is a computer chip embodying computer code) is referred to as ‘boot ROM’, where ‘boot’ is a computing term which means to cause a computer to start the initial processes. The access code is present on all Sony-authorised game discs. The nature of the encryption is such that if an authorised game disc was copied (using conventional burning technology) without Sony’s authorisation, the program would be reproduced but not the access code. The resultant unauthorised copy disc will not be playable on a PlayStation console; without the access code the disc will not boot. The particular inter-operation of the encrypted code and the console’s circuitry will be referred throughout this article as the Sony system. Notwithstanding his evidence to the contrary, the appellant in Stevens v Sony was found at trial to have commercially supplied and installed a device (the mod-chip) which modified the consoles so as to defeat the operation of the Sony system.4 That is, once Stevens had performed the modification, unauthorised copies on which no access code was present would boot.5 Stevens was also found to have sold unauthorised copies.6 The critical basis on which civil liability was pressed by Sony arose under a ground of liability existing in Commonwealth legislation since 2001.7 It makes unlawful the ∗ B Comm LLB(Hons) PhD(Melb). Senior Lecturer, University of Melbourne Law School. I thank Justine Pila, David Lindsay, Jeremy Gans, Peter Chalk and Gary Chu for their valued input. Responsibility for the analysis rests entirely with me. Email: d.brennan@unimelb.edu.au 1 Copyright Act 1968 (Cth) s 10 (definitions of ‘literary work’ and ‘computer program’). 2 Galaxy Electronics v Sega Enterprises (1997) 75 FCR 8 at 12 (FFC), affirming Sega Enterprises v Galaxy Electronics (1996) 69 FCR 268 at 270 (Burchett J). 3 The following description of the technology and events is extracted from the trial judge’s findings: Kabushiki Kaisha Sony Computer Entertainment v Stevens (2002) 200 ALR 55, 64-67 (hereinafter ‘Sony Trial’). 4 This was undertaken for payments ranging from $45 to $70: Sony Trial (2002) 200 ALR 55, 67-68 5 Sony Trial (2002) 200 ALR 55, 66-68. 6 Sony Trial (2002) 200 ALR 55, 67-68. 7 Copyright Act 1968 (Cth) s 116A.

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commercial supply of a device or service which circumvents a ‘technological protection measure’ (TPM). A TPM is defined as a measure designed ‘to prevent or inhibit the infringement of copyright’.8 It was accepted that if the Sony system were a TPM as defined, Stevens would be liable for supplying a device which circumvented it. But did the Sony system fall within the TPM definition? Was it something which could be said to ‘prevent or inhibit’ copyright infringement? It is this question the High Court recently considered after a divergence of judicial opinion in the Federal Court.9 The High Court unanimously found that the Sony system was not a TPM – it did not prevent or inhibit copyright infringement – and that therefore Stevens was not liable. Stevens did not defend Sony’s action alone. Before the Federal Court (both at trial and on appeal) the Australian Competition and Consumer Commission (ACCC) was given leave to appear as amicus curiae.10 The primary interest that the ACCC had in the litigation related to the possibility of the Sony system being able to be used to effect geographical segregation of markets through region-coding. That is, it was said that the Sony system rendered unplayable not only unauthorised copies made by burning, but also authorised copies sold by Sony in territories other than Australia. An authorised Sony disc sold in countries where the National Television Systems Committee (NTSC) television standard applied (in particular Japan, countries in the South-East Asian region and the US) was unplayable in Australian consoles because the Sony system in Australia only recognised access codes specific to Phase Alternating Line (PAL) television-standard countries (which apart from Australia, included countries in Europe and New Zealand).11 The ACCC has advocated persistently in many fora for the abolition of all legal fetters upon the sale and importation in Australia of copyright material lawfully sold elsewhere.12 The Trial Judge, Sackville J, found that there was nothing in the evidence to suggest that a major purpose behind the Sony system was to effect any geographic segregation of markets.13 This finding was supported by the Full Federal Court, which regarded the different access codes for NTSC and PAL television system countries as a by-product of different television standards in the two sets of countries.14 Before the High Court, the ACCC did not persist in seeking leave, but was replaced by the copyright-users’ groups the Australian Digital Alliance (ADA) and the Australian Libraries Copyright Committee

8 Copyright Act 1968 (Cth) s 10 (definition of ‘technological protection measure’). 9 The key citations are: Sony Trial (2002) 200 ALR 55 (Sackville J), Kabushiki Kaisha Sony Computer Entertainment v Stevens (2003) 132 FCR 31 (Full Federal Court, unanimously reversing Sackville J, hereinafter ‘Sony Full Court’) and Stevens v Kabushiki Kaisha Sony Computer Entertainment (2005) 221 ALR 448 (High Court, unanimously over-ruling the Full Court and reinstating Sackville J, hereinafter ‘Sony High Court’). The litigation leading up to the hearing in the High Court and its context has been extensively described and analysed: Kimberlee Weatherall, On Technology Locks and the Proper Scope of Digital Copyright Laws – Sony in the High Court (2004) 26 Sydney Law Review 613. 10 Sony Trial (2002) 200 ALR 55, 57 and Sony Full Court (2003) 132 FCR 31, 42. 11 Sony Trial (2002) 200 ALR 55, 65. 12 See for example ACCC submissions relied upon in the Intellectual Property & Competition Review Committee, Report on Parallel Importing under the Copyright Act 1968, June 2000, 28-37. The advocacy of the ACCC for the abolition of such parallel importation controls has been found to be based upon unreliable evidence by a Parliamentary Committee: Senate Legal and Constitutional Committee, Inquiry into the Provisions of the Copyright Amendment (Parallel Importation) Bill 2001, 23 May 2001, 30-32. 13 Sony Trial (2002) 200 ALR 55, 79. 14 Sony Full Court (2003) 132 FCR 31, 67-68.

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(ALCC) whose interests were explained as preventing a ‘right to control the manner in which members of the public apprehend a work or other subject matter, extending well beyond the rights conferred by the Copyright Act’.15 The High Court granted leave to the ADA and ALCC to be heard as amici curiae on this basis.16 Stevens v Sony is a case about technology, copyright and statutory interpretation. The belief reflected in this article is that it was wrongly decided by a High Court insufficiently influenced by legislative concern to adapt copyright to technologies that permit an uncontrollable number of perfect copies to be made and circulated. In this endeavour, the law has been informed by the insight that ‘the answer to the machine is the machine’,17 and that it is proper to support that answer with legal protection.18 Protection of Technological Protection Measures The Purposive Approach Since 1981 judicial interpretation of Commonwealth statutes has been required by statute to be done contextually, sympathetic to the purpose underlying the statutory language.19 Courts are required to interpret Commonwealth legislation under this purposive approach. Ambiguity should be resolved in favour of intended effect over semantic meaning if the two would lead to different results.20 Similarly, application of the literal meaning of a statutory text first requires an assessment of whether such an application was intended by the legislature.21 Statutory purpose may be ascertained both from material intrinsic to the legislation and from extrinsic material.22 While courts are not required to have regard to any particular source in ascertaining purpose, they are always required to prefer a construction that promotes an Act’s purpose.23 It is against this interpretative regime that Stevens v Sony must be considered.

15 Written Submission filed in the High Court on behalf of the Australian Digital Alliance and the Australian Libraries Copyright Committee, 1 February 2005, 4. 16 Sony High Court (2005) 221 ALR 448, 454. 17 Charles Clark, ‘Publishers and Publishing in the Digital Era’, Mexico Symposium Book, WIPO Publication No 746 (E/S) (1995), 346. 18 Mihály Ficsor, The Law of Copyright and the Internet – The 1996 WIPO Treaties, their Interpretation and Implementation (2002), 383. 19 Acts Interpretation Act 1901 (Cth) s 15AA: ‘In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.’ The provision was inserted by the Statute Law Revision Act 1981 (Cth) s 115. 20 Acts Interpretation Act 1901 (Cth) s 15AB(1)(b). 21 Acts Interpretation Act 1901 (Cth) s 15AB(1)(a). 22 Acts Interpretation Act 1901 (Cth) s 15AB(2). 23 In CIC Insurance v Bankstown Football Club (1997) 187 CLR 384, Brennan CJ, Dawson, Toohey and Gummow JJ at 408 explained that: ‘It is well settled that at common law, apart from any reliance upon s 15AB of the Acts Interpretation Act 1901 (Cth), the court may have regard to reports of law reform bodies to ascertain the mischief which a statute is intended to cure. Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses `context' in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy.’ (Footnotes omitted.) However the change is the effect

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Definitional text It is section 116A of the Copyright Act that creates the new statutory right of action in copyright owners relating to the circumvention of a TPM. A copyright owner may bring an action against a person who supplies a device which has limited or no purpose other than to circumvent a TPM which is protecting the owner’s copyright.24 As noted above, a critical issue in establishing liability is the identification of a TPM within the terms of its definition, for without a TPM there can be no section 116A liability. The TPM definition, contained in section 10 of the Act, is as follows:

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 licensee of the copyright; (b) through a copy control mechanism.

It seems to have been accepted by Sony that of the two means specified to prevent or inhibit infringement – access control and copy control – the Sony system could only be thought of as an access control.25 As an access control the question was whether the Sony system met the relevant criteria, namely whether it was designed to prevent or inhibit the infringement of copyright (the specified objective) by ensuring that access to the work or other subject matter was available solely by use of an access code (the specified means). The Sony system operated by controlling the access of an end-user, so that authorised copies were rendered on a PlayStation console while unauthorised copies were not. In a finding that was never disturbed on appeal, the Trial Judge held that the Sony system ‘was designed, in the ordinary course of its operation, to deter or discourage persons infringing the applicants’ copyright in the PlayStation games’.26 Was this sufficient to satisfy the concept of preventing or inhibiting infringement? In answering this question, Sackville J at trial placed particular reliance upon the legislative history of the provisions.27 Based upon that history he concluded that there was nothing to support the view that a technological measure was intended to fall within the definition of a TPM and thereby receive legal protection if the measure merely discouraged, rather than disallowed, the making of infringements.28 On this reading, the definition of a TPM

of the Acts Interpretation Act 1901 (Cth) provisions in – unlike the smorgasbord of common law rules which could be selected by a court as it saw fit – mandating that a purposive construction is to be preferred in all cases. 24 Copyright Act 1968 (Cth) ss 116A(1)(a) and (5). 25 Sony Trial (2002) 200 ALR 55, 62-64. 26 Sony Trial (2002) 200 ALR 55, 79. 27 Sony Trial (2002) 200 ALR 55, 70-75. 28 Sony Trial (2002) 200 ALR 55, 81-82.

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required a close link between the specified objective (of preventing or inhibiting infringement) and the specified means (of access control in this case). The Sony system fell outside the definition. By denying access to infringing reproductions of PlayStation games, it was not ‘preventing or inhibiting’ any infringement itself. Giving the majority judgment for the Full Federal Court, Lindgren J repeated the excursion into the legislative history to arrive at the opposite conclusion.29 On his reading the definition of TPM was intended to embrace technologies designed to prevent or inhibit infringement by the less direct means of deterring infringement through denial of access to unauthorised copies.30 The Sony system was a protected TPM on this basis. Justice French (another member of the Full Federal Court) arrived at the same answer as Lindgren J, but did so by taking the view that this meaning was the ordinary meaning conveyed by the text of the provision.31 On the Full Federal Court’s unanimous interpretation, the disincentive inherent in the Sony system to make unauthorised copies met the specified objective by a specified means of access control. The High Court unanimously preferred the outcome arrived at by Sackville J. It interpreted the TPM definition as requiring that the prevention or inhibition must arise from an end-user’s submission to the access control, both causally and temporally.32 A ‘but for’ test applied for the concepts of ‘prevent or inhibit’ within the definition, so that it was only satisfied where but for the measure, an infringement could be made. Like Sackville J, the High Court conflated the objective and means required of a TPM. For the Sony system to fall within the TPM definition it would have needed to prevent or inhibit infringement by the person submitting to the access control. Any deterrent impact on others contemplating infringement of Sony copyright was not relevant. In arriving at this narrow interpretation the High Court also sought to ascertain the relevant purpose of section 116A from the legislative history. Unlike Sackville J and Lindgren J in the Federal Court, Gleeson CJ, Gummow, Hayne and Heydon JJ in a joint judgment, and McHugh J writing separately concluded that section 116A had no discernable purpose relevant to the resolution of the issue. The former adopted Weatherall’s analysis of section 116A’s purpose33 to assert that:

• There was such obscurity in the intent underlying the final form of drafting the definition of TPM that to select a purpose would be to risk ‘picking a winner’;

29 Sony Full Court (2003) 132 FCR 31, 55-67 and 69-70. Finkelstein J agreed with Lindgren J’s analysis: 132 FCR 31, 80. 30 Sony Full Court (2003) 132 FCR 31, 69-70. 31 Sony Full Court (2003) 132 FCR 31, 41 referring to the ‘ordinary and grammatical meaning’ of the language. 32 Sony High Court (2005) 221 ALR 448, 457-458 (Gleeson CJ, Gummow, Hayne and Heydon JJ), 478-479 (HcHugh J), 501 (Kirby J). 33 Weatherall above note 9. Weatherall gave pro bono assistance as a ‘consultant/brains trust’ for the Australian Digital Alliance and the Australian Libraries Copyright Committee in helping to prepare their submissions as amici curiae before the High Court: Kimberlee Weatherall, Weatherall’s Law: An Intellectual Property Blog from Oz, ‘Sony in the High Court’, <http://weatherall.blogspot.com/2005_02_01_weatherall_archive.html#110785505597625079> at 13 January 2006. In 2006 she was appointed a director of the Australian Digital Alliance.

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• The stated objects of the amending act did not refer explicitly to any purpose for 116A;

• The selection of a ‘dominant’ purpose for the provision risked unintended consequences.34

McHugh J found section 116A to be ‘an autochthonous solution’ to a conflict between copyright owners and end-users.35 Also relying upon Weatherall’s analysis, he found nothing in the legislative history that revealed a purpose of assistance in determining the meaning of the TPM definition.36 Both the joint judgment and McHugh J endorsed Sackville J’s conclusion by relying predominantly on a linguistic analysis of the text of section 116A buttressed by assorted factors best categorised as judicial policy. Kirby J’s supporting decision was of a more discursive nature. He observed that both approaches to the definition were arguable and that the task of statutory interpretation was partially ‘one that involves individual impressions’.37 Kirby J also failed to identify any relevant legislative purpose as an operative consideration, other than ‘the purpose of the parliament expressed in the language of its legislation’.38 International setting The way legislative history was treated in the litigation reveals a limitation in how best to ascertain the purpose of a provision such as section 116A. The statutory right of action created in section 116A was enacted to meet an obligation found in two World Intellectual Property Organization (WIPO) treaties finalised in 1996 (‘the WIPO treaty obligation’).39 A proper review of this international setting is essential to ascertaining the purpose of the legislative text of the TPM definition, and thus the scope of section 116A liability. The amending act which introduced section 116A and the TPM definition was the Copyright Amendment (Digital Agenda) Act 2000. The term ‘Digital Agenda’ was not autochthonous. It arose in 1996 as a formal identifier of many of the issues covered by the treaties from preparatory work to the WIPO treaties.40 Moreover, paragraph 183 of the Revised Explanatory Memorandum to that Act explained the intention underlying section 116A in the following terms:

The amendments reflect obligations in both the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty. These amendments are intended to ensure that Australia provides adequate legal protection and effective legal remedies to comply with the technological measures obligations … in the new WIPO treaties.41

34 Sony High Court (2005) 221 ALR 448, 456. 35 Sony High Court (2005) 221 ALR 448, 476. 36 Ibid 476-477. 37 Ibid 493. 38 Ibid 491. 39 WIPO Copyright Treaty, opened for signature 20 December 1996, 36 ILM 65, art 11 entered into force 6 March 2002; WIPO Performances and Phonograms Treaty, opened for signature 20 December 1996, 36 ILM 76, art 18 entered into force 20 May 2002. In both treaties the obligation is worded in similar terms. 40 Ficsor above note 18, 33-35. 41 Revised Explanatory Memorandum, Copyright Amendment (Digital Agenda) Bill 2000 (Cth) 62.

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If a purpose is sought for section 116A then the relevant obligation in the WIPO treaties referred to in paragraph 183 is the first place to look – both as a matter of common sense and under the interpretative orthodoxy required of a court construing Commonwealth legislation.42 While the WIPO treaty obligation was referred to in most of the Stevens decisions,43 it was largely overlooked as an explicator of legislative purpose. The impetus for the WIPO treaty obligation came largely from the US. Its genesis can be found in two reports by a Working Group on Intellectual Property Rights within the Information Infrastructure Task Force (IITF) established by the Clinton administration. The Group prepared a Green Paper published in July 1994 and a White Paper which was published in September 1995.44 It was a drafting expression suggested in these reports which found its way into Australian law as a means of implementing the WIPO treaty obligation concerning technological measures. The 1995 White Paper, circulated at meetings preliminary to the WIPO conference,45 proposed that the US copyright law be amended to provide that:

No person shall import, manufacture or distribute any device, product, or component incorporated into a device or product, or offer or perform any service, the primary purpose or effect of which is to avoid, bypass, remove, deactivate, or otherwise circumvent, without the authority of the copyright owner or the law, any process, treatment, mechanism or system which prevents or inhibits the violation of any of the exclusive rights of the copyright owner under section 106.46

Central to this provision was the concept of the protected measure, which the draft conceived as ‘any process, treatment, mechanism or system which prevents or inhibits [infringement]’. In February 1996, during the preparatory sessions for the WIPO conference, the US proposed a similarly drafted obligation for inclusion in the WIPO treaties.47 That proposal was expressly based on the findings of the 1995 White Paper,48 and gave legal protection to any measure which ‘prevents or inhibits the unauthorised exercise of any of the rights under the Berne Convention or this Protocol’.49 The same wording was

42 Acts Interpretation Act 1901 (Cth) s 15AA and s 15AB(2)(e) which makes plain that extrinsic material to which resort may be had to ascertain purpose includes ‘any explanatory memorandum relating to the Bill containing the provision’. 43 Sony Trial (2002) 200 ALR 55, 70; Sony Full Court (2003) 132 FCR 31, 70 (Lindgren J); Sony High Court (2005) 221 ALR 448, 451-452 (joint judgment). 44 Information Infrastructure Task Force, Intellectual Property and the National Information Infrastructure – Preliminary Draft of the Working Group on Intellectual Property Rights (1994) Electronic Frontier Foundation <http://www.eff.org/Infrastructure/Govt_docs/ipwg_nii_ip_lehman_report.draft> at 13 January 2006 (‘Green Paper’) and Information Infrastructure Task Force, Intellectual Property and the National Information Infrastructure - The Report of the Working Group on Intellectual Property Rights (1995) United States Patent and Trademark Office <http://www.uspto.gov/web/offices/com/doc/ipnii/ipnii.pdf> at 13 January 2006 (‘White Paper’). 45 Ficsor above note 18, 27. 46 White Paper above note 44, appendix 1. Section 106 sets out the exclusive rights attached to copyright subject matter under the US Copyright Act 1976. 47 Ficsor above note 18, 389-390. 48 Ibid. 49 Ibid.

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subsequently adopted in a counter-proposal of the European Community, expressed as protecting any measure ‘which is designed to prevent or inhibit the infringement of the rights under [the Berne Convention or this Protocol][this Instrument]’.50 Given the European acceptance of this aspect of the original US drafting, it is unsurprising that the basic proposal put before the WIPO conference referred to making unlawful devices which circumvent any ‘system that prevents or inhibits any of the acts covered by the rights under this Treaty’.51 At the WIPO conference, the delegates from several countries were concerned primarily with three aspects of the basic proposal. These were the issue of circumvention devices which had a plurality of purposes including circumvention, the accommodation of traditional copyright exceptions, and the unnecessary complexity of the basic proposal.52 It was the South African delegate Visser who appeared to offer a solution. He indicated that the obligation contained in the basic proposal ‘addressed a real problem’ and could be made clearer through simplified wording.

The obligation should simply be that Contracting parties must provide adequate legal protection and effective remedies against the circumvention of certain technological measures, which should have three characteristics; first, they should be effective technological measures; second they should be used by right holders in connection with the exercise of their rights under the Treaties; and, third, they should restrict acts which were not authorized by the right holder or not permitted by law.53

The WIPO treaty obligation in final form, titled ‘Obligations Concerning Technological Measures’, closely reflected this simplified form.54 At all times in the legislative history of its attempt to meet the WIPO treaty obligation, Australia has adopted a similar expression of the protected measures as that contained in the original IITF draft and resultant US, EC and WIPO treaty proposals. A protected measure was consistently defined in the Australian legislative history as a measure designed ‘to prevent or inhibit the infringement of copyright’.55 A 1999 exposure draft of the Copyright Amendment (Digital Agenda) Bill defined a TPM as something ‘designed to prevent or inhibit the infringement of copyright’ which would be given legal protection if ‘access to the work or other subject-matter protected by the measure is available solely

50 Ibid 394. A similar form of language found its way into the European Union draft directive published at the time the Australian legislature was formulating its implementation of the WIPO treaty obligation: Sony Full Court (2003) 132 FCR 31, 60-61 (Lindgren J). 51 WIPO, Records of the Diplomatic Conference on Certain Copyright and Neighboring Rights Questions − Geneva 1996 (1999), volume one, 217 (draft article 13(3)). 52 WIPO, Records of the Diplomatic Conference on Certain Copyright and Neighboring Rights Questions − Geneva 1996 (1999), volume two, 709-716. 53 Ibid 710-711. 54 WIPO Copyright Treaty art 11 provides: ‘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.’ Article 18 of the WIPO Performances and Phonograms Treaty is in similar terms. 55 Sony Full Court (2003) 132 FCR 31, 59-66 (Lindgren J).

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by use of an access code or process’.56 Over the course of its subsequent passage through the legislative processes leading to enactment in 2000, the form of the legislation changed in various respects but this essential aspect of the protected technology remained intact; access-control having been subsequently augmented by copy-control as a result of the partial implementation of a Parliamentary Committee recommendation.57 The central question in Stevens v Sony was whether a technological measure designed to preclude the rendering of unauthorised copies on a Sony console was a measure designed ‘to prevent or inhibit the infringement of copyright’. It is useful to consider what the original proposer of this obligation intended by use of the expression ‘prevents or inhibits’. Did the IITF have the type of inhibition effected by the Sony system in mind? The 1995 White Paper indicates that it did. In setting out the ways in which technology may play a central role in ‘implementing controls on the access to and use of protected works’, the IITF White Paper explained:

Restrictions on access at the file level can be implemented using features in ‘rendering’ software … For example, the rendering software could preclude a user who had not obtained the appropriate authority from the content provider or who enters an unauthorized or expired password from using the data. Rendering software can also be written to deny general access to the work if the file containing the work is not a properly authenticated copy (e.g., the file has been altered from the version as distributed by the content provider). Such features will be possible provided that sufficient information regarding authorized use can be associated with the file containing the information product (e.g., through inclusion in a file header, packaged and sealed in an ‘electronic envelope’ sealed with a digital signature, embedded through stenographic means etc.).58

A note at the conclusion of this passage amplified the reference to digital signatures in these terms:

For example, the software may deny access to a work if the electronic file containing the work has been altered or information stored in the file does not match data supplied by a user necessary to open and use the file. See discussion of digital signatures infra.59

In that discussion the White Paper described a digital signature as a unique sequence of digits that is encrypted and associated with a work. Verification of the signature by a system means that ‘the work is a bona fide copy of the original work’.60 In support of its proposed anti-circumvention provisions the IITF found:

The ease of infringement and the difficulty of detection and enforcement will cause copyright owners to look to technology, as well as the law, for protection of their works. However, it is clear that technology can be used to defeat any protection that technology may provide. The Working Group finds that legal protection alone will not be adequate to provide incentive to authors to create and to disseminate works to the public. Similarly, technological protection likely will not be

56 Ibid 86. 57 Sony Trial (2002) 200 ALR 55, 73-74. 58 White Paper above note 44, 184-185. 59 Ibid 185 and footnote 509. 60 Ibid 187-188.

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effective unless the law also provides some protection for the technological processes and systems used to prevent or restrict unauthorized uses of copyrighted works.61

In terms of the drafting it proposed, the IITF considered that legal protection was required for ‘any process, treatment, mechanism or system which prevents or inhibits the violation of any of the exclusive rights of the copyright owner’.62 It may be seen that the Sony system is deploying a type of control contemplated by the IITF. Sony’s technology is exercising control and thereby inhibiting the unauthorised exercise of its rights in one of the ways described by the body which first put forward the ‘prevent or inhibit’ drafting. These were technologies identified in the IITF report as ‘rendering’ controls which denied ‘general access to the work if the file containing the work is not a properly authenticated copy (e.g., the file has been altered from the version as distributed by the content provider)’. This describes the Sony system. An unauthorised copy has been altered, when compared to a Sony-authorised copy, by the subtraction of the encrypted access code, its digital signature. The Sony system – in particular the code embedded within the boot ROM computer chip – denies general access to the works contained in the unauthorised copy through the unsigned disc not booting. Neither the game program nor the game itself can be rendered by the console when an unauthorized game disc is inserted because it cannot be authenticated absent the access code. The provenance of the ‘prevent or inhibit’ expression is clear, and links both the WIPO treaty obligation and the access arm of the Australian TPM definition to the types of technologies originally contemplated by the IITF as ‘preventing or inhibiting’ infringement. Those technologies include technologies such as the Sony system that ‘prevent or inhibit’ infringement by excluding access to a work other than ‘by use of an access code or process (including decryption, unscrambling or other transformation of the work or other subject-matter)’.63 The origin of the TPM definition supports French J’s straight-forward approach to the TPM definition. It is notable that the provenance of the ‘prevent or inhibit’ expression in the Australian TPM definition was not identified in the course of the extensive Stevens v Sony litigation. This arguably reflects a general approach to the interpretation of legislation in Australia in which international material is not fully used for the etymological sense of national law derived from it. The Weatherall analysis of legislative history, accepted by the court, drew no connection between the ‘prevent or inhibit’ language of the TPM definition and the origins of the WIPO treaty obligation,64 focusing instead on the implications for that obligation of the competing interpretations of the TPM definition.65 The parties too did not make this connection, preferring to concentrate on parochial legislative history, linguistics and, in the case of Stevens and the amici curiae, policy issues. The High Court’s Interpretive Methodology 61 Ibid 230. 62 White Paper above note 44, appendix 1. 63 Copyright Act 1968 (Cth) s 10 (definition of ‘technological protection measure’). 64 Weatherall above note 9. 65 Weatherall above note 9, 627-628 and Sony High Court (2005) 221 ALR 448, 452.

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No member of the High Court considered the language of the TPM definition unambiguous.66 Having found the legislative purpose to be unknowable, each of the Judges supported the reinstatement of the Trial Judge’s construction with reference predominantly to linguistics and judicial policy. Avoiding stultification of the defence The interpretation of the TPM definition contained in the High Court’s joint judgment was based primarily on an analysis of the operation of the defence within section 116A. The statutory right of action contained in that section is limited to the (essentially commercial) supply of circumvention devices or services and does not cover acts of circumvention per se. The defence in section 116A operates where a circumvention device or service is supplied to a person who has provided a signed declaration to the supplier that the device or service is to be used by that person, the ‘qualified person’, only for a permitted purpose under one or more of nine specific exceptions.67 These nine exceptions, which do not include fair dealing, relate primarily to the exercise of the reproduction right in section 31 and the right to make copies in sections 85 to 88.68 For the defence to operate, the text of section 116A(7) provides that the circumvention device or service must be used only ‘for the purpose of’ the qualified person’s excepted exploitation of copyright. Paragraph 43 is the lynchpin of the joint judgment’s analysis. It states:

If the construction of the definition for which Sony contends were accepted despite the linkage specified in s 116A(7) between the use of a circumvention device and the central provisions of ss 31 and 85-88 of the Act, the permitted purpose provisions would risk stultification. The facts of the present case are in point. The use of Mr Stevens' mod chip in order to circumvent the protections provided by (a) the access code on a CD-ROM in which a PlayStation game is stored and (b) the boot ROM device contained within the PlayStation console cannot be said to be for the ‘purpose’ of reproducing a computer game within the sense of s 31 of the Act. Any such reproduction will already have been made through the ordinary process of ‘burning’ the CD-ROM. The mod chip is utilised for a different purpose, namely to access the reproduced computer program and thereafter visually to apprehend the result of the exercise of the functions of the program.69

66 Indeed the only judge of the ten who heard argument in the matter of the view the provisions were capable of a straightforward reading was French J: Sony Full Court (2003) 132 FCR 31, 38-41. 67 Copyright Act 1968 (Cth) s 116A(3), (4), (4A), (7) and (8). 68 Under section 116A(7) the exceptions in the Copyright Act 1968 supporting a permitted purpose to supply are: sections 47D, 47E and 47F (free exceptions permitting the reproduction of computer programs to make interoperable products, to correct errors and for security testing); sections 48A, 49, 50 and 51A (free exceptions for libraries and archives); section 183 and Part VB (remunerated exceptions for the Crown and educational institutions). The stipulated exceptions chosen in section 116A relate to institutional copyright users: software industry, libraries, government and educational institutions. Absent from the list of exceptions which support the permitted purpose defence in section 116A are the fair dealing and parallel importation exceptions found in sections 40-43 (fair dealings in works); sections 44A-44F (parallel importation of reproductions of works); 103B-103C (fair dealings in other subject matter); sections 112A-112DA (parallel importation of copies of other subject matter). 69 Sony High Court (2005) 221 ALR 448, 458-459.

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Section 116A(7), the subsection central to the line of reasoning adopted, provides as follows:

For the purposes of this section, a circumvention device or a circumvention service is taken to be used for a permitted purpose only if:

(a) the device or service is used for the purpose of doing an act comprised in the copyright in a work or other subject-matter; and

(b) the doing of the act is not an infringement of the copyright in the work or other subject- matter under section 47D, 47E, 47F, 48A, 49, 50, 51A or 183 or Part VB.70

In paragraph 43 of the joint judgment, the Court is suggesting that if the construction put forward by the Full Federal Court applied, liability would never be excluded by operation of the defence where a circumvention device or service was supplied to enable access to unauthorised reproductions or copies. This is because such access would not be ‘for the purpose’ of making a reproduction or copy. Such a result would, on the reasoning advanced, ‘stultify’ the defence by excluding its operation in such settings. Three points can be made about this reasoning. First the defence provides that only the facilitation of a qualified person’s excepted exercise of rights is capable of supporting a permitted purpose.71 Second, the defence applies on any interpretation of section 116A liability to the supply of circumvention devices or services which facilitate copying for a permitted purpose by disabling a copy control referred to in the second arm of the TPM definition. And third, focusing upon the access control arm of the TPM definition, the defence seems capable of operating under a consistent application of the Full Federal Court’s approach across both liability and defence provisions. The third point is the most critical. Assume that a person duly authorised by the government of the State of Victoria wished to make a copies of a Sony game disc for a government purpose under the section 183 copyright exception – one of the nine permitted purposes in section 116A. Such a person would be a qualified person. Quite clearly – and as the joint judgment observes – the copying of the disc (ie ‘burning copies’) could occur without circumvention of the Sony system. However, the resultant section 183 copies would be inutile if the government’s purpose was to render the program on PlayStation consoles. For the purpose of the copying to be fulfilled the Sony system would need to be circumvented. If the qualified person provided Stevens with the signed declaration in accord with section 116A, would the defence apply so that Stevens could lawfully supply and install mod-chips to facilitate the use of the section 183 copies for the government’s purposes? The joint judgment’s reasoning suggests that the defence would not apply on the basis that the Victorian government’s use of the mod-chip in these circumstances would not be ‘for the purpose’ of doing an act comprised in the copyright excepted under section 183. However this reading of the expression ‘for the purpose of’ in section 116A(7) is strained under the way in which the Full Federal Court conceived liability. If the expression ‘prevents or inhibits infringement’ in the TPM definition is given the meaning put forward by the Full Federal Court the Sony system 70 See above note 68 for an overview of these exceptions. 71 Copyright Act 1968 (Cth) s 116A(3)(b)(iv) and (7).

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prevents or inhibits the exercise of the rights excepted by section 183 because the resultant section 183 copies are useless. Consistent with this broader approach to liability should follow a similar approach to construing the defence. Under the Full Federal Court’s approach, the use of the mod-chip could be said to be ‘for the purpose’ of the exercise of the excepted rights under section 183 because it makes the exercise of those rights meaningful. In the scenario imagined here with the Victorian government, Stevens could lawfully supply and install mod-chips under the interpretive approach contended for by the Full Federal Court and Sony. It seems that what the joint judgment has done in paragraph 43 is to take the Full Federal Court’s expansive reading of section 116A for the purposes of liability and to tie that reading to the joint judgment’s own narrow reading of section 116A for the purpose of the permitted purpose defence. This would naturally cause the defence to dissolve under the breadth of the liability. It is this inconsistent approach which is used to support the key defence stultification basis upon which the joint judgment primarily rests its interpretation. If an expansive construction is applied consistently across the provisions relating to liability and the defence, far from risk of stultification, the defence applies within its proper sphere. That is, under the Full Federal Court’s approach, the permitted purpose defence can operate where a circumvention device or service is supplied to facilitate access to reproductions or copies made by a qualified person for a permitted purpose, where such access is required by the qualified person to make the exercise of rights efficacious. Such access control circumvention can be readily seen, under the Full Federal Court’s expansive approach, to be ‘for the purpose’ of making the reproductions, given their making would have otherwise been prevented or inhibited by the TPM. Collateral Considerations In support of its conclusion that a narrow reading of liability was justified, the joint judgment offered three ‘other considerations’ that were separate from the defence stultification rationale. The first related to a common law principle of statutory interpretation that if a penal provision is ambiguous, the provision ‘will not be construed so as to make unlawful that which was previously lawful’.72 Supply of a circumvention device could give rise, in certain cases, to not only civil liability under section 116A but also criminal liability under sections 132(5B) of the Copyright Act. Stevens v Sony was, however, a case involving only section 116A civil liability. The joint judgment reasoned 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’.73 The existence of copyright-related criminal liability is neither new nor unique. Ricketson and Cresswell have observed that ‘there is a history of criminal liability for copyright infringement that goes back to the Act of Anne, and before this to the ordinances of the

72 R v Coster [1978] 1 NSWLR 515, 520 (Street CJ). 73 Sony High Court (2005) 221 ALR 448, 459.

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Star Chamber’.74 The Copyright Act attaches criminal liability to certain exercises of a range of exclusive rights. These include the right to reproduce, to copy, to perform in public and to deal in unauthorised copies.75 Presumably this principle of interpretation should apply equally to these exclusive rights in civil trials, given their potential also to support some future criminal prosecution. However, such a wide-ranging principle of interpretation seems quite unnecessary. All provisions establishing criminal liability under the Copyright Act carry some form of knowledge requirement. The knowledge requirement for criminal liability relating to the supply of a circumvention device is that person ‘knows or is reckless as to whether, the device or service will be used to circumvent, or facilitate the circumvention of, a technological protection measure’.76 This mens rea requirement must be read in conjunction with provisions in the Criminal Code77 and it is far from certain that Stevens would have satisfied the mental requirement for criminal liability under section 132(5B) had the Sony system been found to meet the TPM definition. In any event, it would be open to the court to confine an expansive interpretation of the TPM definition to the civil liability provisions in section 116A. It is surprising that a principle is being suggested in the joint judgment that in civil trials a term which is used within penal provisions must be subjected to a principle of interpretation that ambiguity should be resolved in favour of the defendant. It is a principle not found within the Acts Interpretation Act and in certain cases it could be inconsistent with its cardinal requirement that courts always prefer an interpretation that promotes underlying purpose.78 The second consideration was expressed as:

[T]hat 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.79

This is not so much an additional consideration, as a restatement of the narrow interpretation given to the term ‘prevents or inhibits infringement’ within the TPM definition. The third supporting consideration was judicial policy. The joint judgment asserts that a narrow interpretation was to be preferred because ‘it is important to avoid an overbroad

74 Staniforth Ricketson and Christopher Creswell, The Law of Intellectual Property: Copyright, Designs & Confidential Information, vol 1 (at reissued update 5), [13.290]. 75 Copyright Act 1968 (Cth) s 132(1)-(5AA). 76 Copyright Act 1968 (Cth) s 132(5B). 77 This would require showing that the person was aware of a substantial risk that TPM circumvention would occur and, that having regard to the known circumstances, it was unjustifiable to take that risk: Criminal Code Act 1995 (Cth), sch 1 Criminal Code Art 5.4. 78 Section 15AA above note 19. Justice Kirby noted in his judgment that any special treatment of penal provisions is against the trend of recent authority which favours a uniform purposive approach. However, Kirby J also considered that potential penal consequences in other cases supported a narrow reading of the TPM definition: Sony High Court (2005) 221 ALR 448, 501. 79 Sony High Court (2005) 221 ALR 448, 459.

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construction which would extend the copyright monopoly rather than match it’.80 A legal realist might point to this passage as providing the key rationale for the joint judgment; judicial scepticism towards the expansion of copyright law that section 116A represents. French J had stated in the Full Court: ‘It is not for the court to cage the ordinary meaning of words which have been adopted by reference to policy considerations of its own divining’.81 The joint judgement, in offering its third supporting consideration, can only be understood as doing the very thing that French J considered should not be done. Australia’s copyright regime, nested within its international setting, should not have its central principles defined by what judges think those principles should be. Section 116A was added to our copyright law because the WIPO treaty obligation added a new variety of liability in addition to that recognised in the Berne Convention and TRIPS.82 A purpose of section 116A, as Australia’s implementation of the WIPO treaty obligation, was to extend copyright law. The Separate Decisions Justices McHugh and Kirby wrote separate judgments in agreement with the joint judgment. As noted above, McHugh J shared with the joint judgment the finding that it was ‘impossible to discern the purpose of the relevant provisions’ from their context. The following in McHugh J’s judgment stands out in his rationale for favouring a linguistic method over a purposive one:

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. In such cases, what emerges from the legislative process is frequently not a law motivated solely by the public interest. It reflects wholly or partly a compromise that is the product of intensive lobbying, directly or indirectly, of Ministers and parliamentarians by groups in the industry seeking to achieve the maximum protection or advancement of their respective interests. The only purpose of the legislation or its particular provisions is to give effect to the compromise. To attempt to construe the meaning of particular provisions of such legislation not solely by reference to its text but by reference to some supposed purpose of the legislation invites error.83

80 Ibid. 81 Sony Full Court (2003) 132 FCR 31, 41. But compare the endorsement of the High Court’s approach by Matthew Rimmer, ‘Robbery Under Arms: Copyright Law and the Australia-United States Free Trade Agreement’, First Monday, 2006 <http://www.firstmonday.org/issues/issue11_3/rimmer/index.html> at 10 April 2006. There Rimmer characterises High Court’s approach as an exercise of ‘judicial restraint’ in reading down the law. Rimmer, together with Kimberlee Weatherall (above note 33), was appointed a director of the Australian Digital Alliance in 2006. 82 It was for this reason that the existing enforcement provisions in TRIPS could not be relied upon to support anti-circumvention rights created under the WIPO treaty obligation; rather the WIPO treaty obligation had to contain its own enforcement provision. The note explaining the basic proposal stated that the proposed WIPO treaty obligation was ‘more akin to public law obligations directed at Contracting Parties than to provisions granting ‘intellectual property rights’: WIPO, Records of the Diplomatic Conference on Certain Copyright and Neighboring Rights Questions − Geneva 1996 (1999), volume one, 216. 83 Sony High Court (2005) 221 ALR 448, 476. Justice Gummow, when a Federal Court judge, engaged in a different examination of the issue of legislated compromises. Gummow J considered, drawing upon

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This passage begs two related questions: how should the legislative process be conducted and, by what means should the public interest be discerned? It is unclear what alternative McHugh J is advocating in his criticism. Perhaps McHugh J is yearning for a parliamentary system in which statutes are handed down as if from Mount Sinai. In the real world the legislative process, like all law making, is a human phenomenon. Such processes typically require open discourse for there to be maximum democratic support for any legislation. It is difficult to see what better safeguard there is for the public interest that permitting relevant parties to advocate from a position of self-interest. Legislating so as to give effect to compromises is not undesirable so long as processes are transparent and parties are given opportunity to be heard. Moreover, the existence of legislated compromises does not mean relevant purpose of the resulting law is unascertainable. In contractual construction, courts have been identifying intention for centuries from compromise. A purposive construction in all cases requires neither tortured linguistics nor mind-reading, but rather an objective deduction from the relevant documents (and sometimes other evidence) openly available to explicate the chosen words and expressions.84 Remarkably, in arriving at his conclusion on legislative purpose, McHugh J’s judgment fails to cite the WIPO treaties. Rather McHugh J accepted the Weatherall analysis that the opacity of the legislative history precluded discernment of any relevant purpose.85 Accordingly McHugh J interpreted the text of the provisions detached from purpose. In so doing, McHugh J applied a predominately linguistic approach to the TPM definition and the related definition of circumvention device to arrive at the conclusion that the interpretation arrived at by the Full Federal Court was wrong.86 Justice Kirby’s judgment exhibited a different approach to that of the joint judgment or McHugh J. In more discursive tone, Kirby J commenced his substantive analysis by stating:

Because the legislative words do not, alone, yield a convincing resolution to the problem of interpretation, it is necessary to refer to contextual and extrinsic circumstances that bring the decision-maker to the ultimate resolution.87

This introduced a range of issues on a broader tableau, including the fundamental right to enjoy chattel property.88 Although adopting this more far-ranging methodology, Kirby J

Posner’s writings, that although these may be ‘properly reached as an appropriate part of the legislative process’, such compromises may challenge purposive approaches to construction: Brennan v Comcare (1994) 122 ALR 615, 634-635. 84 Lord Hoffmann in Kirin Amgen v Hoechst Marion Roussel [2005] 1 All ER 667 at 680, has provided this account of what is a broad-based purposive construction rule: ‘The meaning of words is a matter of convention, governed by rules, which can be found in dictionaries and grammars. What the author would have been understood to mean by using those words is not simply a matter of rules. It is highly sensitive to the context of and background to the particular utterance.’ 85 Sony High Court (2005) 221 ALR 448, 476. 86 Sony High Court (2005) 221 ALR 448, 477-480. 87 Sony High Court (2005) 221 ALR 448, 493.

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supported the narrow interpretation of the TPM definition and did not to draw assistance from any discernible legislative purpose. Treatment of More Proximate Exercises of Rights To this point in the analysis of Stevens v Sony, the focus has been on the binary choice facing the court. Did the concept of ‘prevent or inhibit infringement’ in the TPM definition extend (as found by the Full Federal Court) to deterring a prospective infringer by making any infringements not able to be accessible to an end-user? Or was the concept more limited (as found by Sackville J and the High Court) to preventing or inhibiting infringements only made by the end-user, the person submitting to the access control? There were, however, two main alternative ways in which it was said that the Sony system qualified as a TPM under the definition. The first involved preventing or inhibiting infringement by the sale of an unauthorised copy disc. The second involved preventing or inhibiting infringement by end-users’ automatic copying into the Sony console RAM parts of the computer program and cinematograph film when the end-user played an unauthorised copy disc. Under both arguments, the Sony system remained characterised as an access-control TPM. Section 38 Infringement Section 38(1) of the Copyright Act provides that subject to certain exceptions infringement of copyright may occur by knowingly selling or offering for sale articles, the making of which constituted an infringement of copyright. French J in the Full Federal Court observed that given the concept of ‘infringement’ includes liability arising under section 38:

The conduct covered by the term ‘infringement’ must have a bearing upon the ways in which a device may prevent or inhibit that conduct. Prevention or inhibition of infringement is relevant not only to reproduction of a work in a material form, but also to its sale or offering for sale. If a device such as an access code on a CD-ROM in conjunction with a Boot ROM in the PlayStation console renders the infringing copies of computer games useless, then it would prevent infringement by rendering the sale of the copy ‘impracticable or impossible by anticipatory action’.89

Once section 38 liability is taken into account, infringing conduct is made more proximate to the operation of the access measure. The specified objective and means required by the TPM definition are more closely tied. Given that the sale of an unauthorised copy disc itself comprises infringement, the Sony system has the effect that the infringer has nothing of value to sell. Accordingly, the Sony system can be seen in this more direct way to ‘prevent or inhibit’ infringement by sale. It prevents or inhibits sale infringement by removing consumer demand for unauthorised copy discs; an

88 Sony High Court (2005) 221 ALR 448, 497-500. This line of Kirby J’s analysis based upon ‘fundamental rights’ is discussed further below. 89 Sony Full Court (2003) 132 FCR 31, 40.

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infringer can not sell that which is unsaleable. On that basis alone, French J considered that the Sony system could qualify under the TPM definition. Kirby J does not address French J’s section 38 analysis. Both the joint judgment and McHugh J’s judgment refute the analysis on different grounds and both are unconvincing on this point. The overall impression created is one of a High Court that struggled to find a plausible means to overcome the French analysis. The joint judgment dealt with French J’s section 38 reasoning in these terms:

However, the provision in s 38 … may be accommodated within the operation of s 116A without going so far as did French J in construing the definition of ‘technological protection measure’. Taking the example discussed by French J, s 38 itself indicates that what might be called the act of secondary infringement by sale must necessarily follow in a temporal and practical sense from the primary infringement of making the article. The ‘technological protection measure’, consistently with the construction accepted by Sackville J, prevents the act of primary infringement in an immediate sense. It also thereby ‘inhibits’ the act of secondary infringement.90

The joint judgment here is observing that under its interpretation of the TPM definition, the operation of a qualifying TPM would prevent the production of saleable infringements and thereby inhibit section 38 infringements. This is certainly true. Just as an infringer can not sell that which is unsaleable, an infringer also can not sell that which is unmakeable. However, this simply does not answer French J’s analysis. It side-steps French J’s logic by raising a feature of the joint judgment’s own interpretation of the TPM definition which is related to section 38, but is not related to French J’s reasoning supporting his interpretation. McHugh J’s refutation of French J’s analysis took on a somewhat different complexion. Similar to the defence stultification argument offered in the joint judgment as the crux of its decision, McHugh J had resort to the operation of the defence provision within section 116A. McHugh J considered that ‘the parliament did not contemplate that technological protection measures would ‘prevent or inhibit’ acts of dealings with infringing copies’.91 This was deduced from the interoperation of the exceptions to section 38 and the permitted purpose defence to section 116A. As noted above, section 116A provides a defence of supply of a circumvention device or service for permitted purposes tied to a list of nine specific exceptions in the Copyright Act. Absent from the list are the fair dealing exceptions. The four fair dealing exceptions are the most far-reaching exceptions in Australian copyright law, the broadest two applying to freely except uses of copyright for research or study, and for criticism or review. Section 38 liability is subject to a range of exceptions contained in Part III, Division 3 of the Act which includes fair dealing. Because fair dealing does not support a permitted purpose defence to section 116A but it does comprise an exception to section 38, McHugh J reasoned that under the French J analysis:

90 Sony High Court (2005) 221 ALR 448, 460. 91 Sony High Court (2005) 221 ALR 448, 480.

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[A] circumvention device may be needed to circumvent a technological protection measure in order to sell, trade or import the protected work for one of the purposes listed in Pt III, Div 3 of the Act. On this hypothesis, the fair dealer who installs the device does not infringe copyright by selling, trading or importing the work, but nonetheless would contravene s 116A of the Act by making a circumvention device for a purpose that is not permitted. This would be an anomaly.92

The claimed anomaly may be a moral one, but it is not a legal one. Within the statutory rubric a deliberate choice was made not to inscribe all the exceptions to copyright (including fair dealing) as defences to section 116A liability. Such an inscription had been essentially made under the 1999 exposure draft of the provisions. That had been done through a proposed requirement that to be liable the supplier of a circumvention device or service must have known, or been reckless as to whether, the device or service was to be used ‘for the purpose of infringing copyright’.93 The government commentary to that draft made clear that this had been proposed ‘to ensure the enforcement measures do not limit the operation of the exceptions to the exclusive rights of copyright owners.’94 However as the law reform process progressed, the position changed. As enacted the mental element for liability merely required that the supplier ‘knew, or ought reasonably to have known, that the device or service would be used to circumvent, or facilitate the circumvention of, the technological protection measure’.95 In place of an inscription of all copyright exceptions, the more limited permitted purposes defence was supported by only nine exceptions excluding fair dealing. As deliberate policy parliament can be seen to have provided that a person who supplied a circumvention device entirely in reliance upon a fair dealing exception had no defence under section 116A. It seems that McHugh J’s suggestion resolves to the proposition that if a measure prevents or inhibits an unauthorised exercise of copyright for which there are more copyright exceptions able to be raised than those nine which support section 116A’s permitted purposes defence, then that measure must be outside the contemplation of the TPM definition. Taken to its logical extreme, this would mean that no measure would ever satisfy the TPM definition as all the exclusive rights attached to copyright have exceptions which are in excess of the nine listed in section 116A(7). Ultimately neither the joint judgment nor McHugh J adequately explain why French J’s analysis on preventing or inhibiting section 38 liability was wrong. RAM Copying Infringement Sony’s fall-back position throughout the litigation primarily concerned the issue of ‘RAM copying’ (explained below) rather than section 38. Nine of the ten judges who decided the case at its various stages rejected Sony’s RAM copying argument, with only Finkelstein J in the Full Federal Court accepting it.96

92 Ibid. 93 Digital Agenda Bill Exposure Draft 1999, sch 1 items 85 and 87. 94 Commentary to Digital Agenda Bill Exposure Draft 1999, [92]. 95 Copyright Act 1968 (Cth) s 116A(1)(c). 96 Sony Full Court (2003) 132 FCR 31, 80-92.

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Sony’s argument can be understood along these lines. Although typically we do not consider the act of reading a book to comprise reproducing the work on our retinas, or the act of television reception of a film to comprise copying the film on our television screens, the act of playing a Sony game disc is different. That is because in order for the Sony game to be played, the computer program encoding the game, and the cinematograph film which is the audio-visual of the game, must be stored temporarily in the computer memory in the console to be available to the computer processor. This form of storage is random access memory more commonly known by its acronym RAM. RAM may be contrasted with the more permanent storage form of ROM storage, of which the game discs themselves are an example. When an end-user plays a Sony game disc, the necessary RAM storage of portions of the program and corresponding film portions was said to comprise an exercise by the user of the exclusive rights to reproduce the program and to copy the film. When this was done using a Sony-authorised game disc, these exercises were licensed by Sony. When, however, this was done using an unauthorised disc, the exercises were said to be infringements of copyright by the end-user. Therefore, taking account of these exercises, the Sony system was argued to satisfy even the more narrow reading of the TPM definition favoured by Sackville J and the High Court because the access control prevented or inhibited such infringements by the end-user submitting to the measure by preventing the storage in RAM from unauthorised discs. This argument about RAM storage gave rise to two separate lines of copyright law application: one for the act of reproducing the program (a literary work) and the other for the copying the audio-visual game (a cinematograph film). Each was unsuccessful for different reasons. The difficulty for Sony on the reproduction of its computer program argument was that RAM storage of the program code was required to be reproduced in a ‘material form’, defined as a form of storage from which the work ‘can be reproduced’.97 The legislative history of the ‘material form’ definition suggested that RAM storage satisfied the material form criteria.98 However, unlike RAM storage in an ordinary personal computer which is associated with means of copying data (for example data output ports) the Sony console RAM storage was not connected to any means from which a copy could be taken from its contents. It was ‘closed box’ RAM. To reproduce the program code from it, the console would need to be opened up and a custom-built device attached. This led nine of the ten judges considering the argument not to accept that a user reproducing program code into Sony console RAM through playing a game amounted to any exercise of rights. Lindgren J best expressed the reason for rejecting Sony’s contention:

I think it an unrealistic and strained construction to treat the words ‘can be reproduced’ at the end of the definition of ‘material form’ so widely as to encompass ‘could be reproduced if an

97 Copyright Act 1968 (Cth) s 10 (definition of ‘material form’ prior to amendment in 2005). On 1 January 2005 the definition was amended by the US Free Trade Agreement Implementation Act 2004 as a result of an obligation in the Australia–United States Free Trade Agreement 18 May 2004 [2004] ATNIA 5, art 17.4.1. The definition now states parenthetically: ‘whether or not the work or adaptation, or a substantial part of the work or adaptation, can be reproduced’. 98 Sony Full Court (2003) 132 FCR 31, 83 and 86 where Finkelstein J highlights the inclusion of a reference to random access memory within the Explanatory Memorandum to a revision of the material form definition in 1984.

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additional device, not supplied with the console and not yet available, were to be manufactured and attached to it’ or ‘could be produced if the RAM under consideration formed part of a future modified console’.99

In relation to the RAM copying of the audio-visual game itself, the issue was not reproducibility. This was (presumably) because it was accepted by the parties that the audio-visual game stored in RAM could ‘with … the aid of some other device’ be reproduced from the RAM.100 However, to copy the film in RAM required a substantial part of the film to be embodied in RAM.101 Nine of the ten judges agreed that the transient storage of a portion of the game images and sounds in RAM was not an act of such copying. Three of those judges so found on the basis that it was not a sufficient embodiment102 and the other six found that it did not constitute a substantial part of the cinematograph film.103 The general approach of the courts to the RAM copying points seems a reasonable one. The ‘closed box’ nature of the RAM in question was always going to make any argument based upon a material form reproduction difficult. The evidence of Sony’s relating to the RAM film copy was described by the trial judge as ‘very sketchy’.104 Both arguments can be seen as Sony putting forward an ambitious application of copyright which should not be necessary if anti-circumvention provisions were properly construed.105 However, if as a result of recent reforms RAM copying does emerge as a mainstream way in which copyright property is conceived,106 copyright law verges towards the creation in many instances of a de facto exclusive right ‘to access a work in digital form’. While such a new right may well be worthwhile to consider at an international level, RAM copying seems a rather roundabout way of achieving it.107 Exercises of rights through RAM copying give rise to difficult questions of interaction with the over-riding criteria of substantial part and the operation of exceptions. If an exclusive right to access a work in a 99 Sony Full Court (2003) 132 FCR 31, 77. 100 Copyright Act 1968 (Cth) s 24. This could, presumably, have been achieved through a device such as a video cassette recorder connected to the console audio visual output, or indeed a video camera recording a television as a game was played. 101 Copyright Act 1968 (Cth) ss 10(1) (definition of ‘copy’), 14(1), 24, 86(a). Of the judges hearing the matter only Finkelstein J was satisfied that this criteria was met: Sony Full Court (2003) 132 FCR 31, 88-92. 102 Sony Full Court (2003) 132 FCR 31, 79-80 (Lindgen J, French J agreeing); Sony High Court (2005) 221 ALR 448, 481-483 (McHugh J). 103 Sony Trial (2002) 200 ALR 55, 93; Sony High Court (2005) 221 ALR 448, 467-469 (joint judgment, Kirby J agreeing). The joint judgement suggests that judging what is a substantial part of an interactive film (a video game) requires an approach different to that undertaken for a linear-sequenced conventionally film. 104 Sony Trial (2002) 200 ALR 55, 91. 105 Another example of a strained argument succeeding before the High Court in relation to the sale of device which circumvented an type of rendering control prior to the enactment of section 116A was Autodesk Inc v Dyason (1992) 173 CLR 330 and Autodesk v Dyason (No 2) (1993) 176 CLR 300 (an unsuccessful application for re-hearing). The test of infringement applied in Autodesk has been recanted by the High Court: Data Access Corp v Powerflex Services Pty Ltd (1999) 202 CLR 1, 30-34 (Gleeson CJ, McHugh, Gummow and Hayne JJ). 106 See above note 97. A detailed discussion of this topic is beyond the scope of this note. 107 A point previously observed: David Lindsay, ‘A Comparative Analysis of the Law Relating to Technological Protection Measures’ (2002) 20 Copyright Reporter 118, 123.

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digital form is to be introduced, it is best introduced in those terms because it is probably only in this way that such questions can be fully considered in the formulation of the reform. Conclusion We live in a technological environment. The WIPO treaty obligation reflects one attempt at an international level to preserve market opportunities for creative and cultural industries in that environment. Section 116A was the Australian legislature’s attempt to implement that obligation. In the courts it has failed to protect the very technological measures explicitly envisaged by the original framers of its key language.108 This outcome can be attributed, in part, by a failure to have sufficient regard to the etymology of the expression ‘prevent or inhibit the infringement of copyright’. Other factors, however, are at play. Section 116A can be thought of as a type of contributory infringement provision in copyright law. As such, it is interesting to consider that another contributory infringement provision in an intellectual property statute has been considered previously by Gummow J, the co-author of the joint judgment with the most intellectual property experience. When a Federal Court judge Gummow J had vigorously read down a provision in the Patents Act 1990 which creates patent liability for contributory infringement.109 That interpretation, while perhaps linguistically defensible, was clearly at odds with its purpose.110 A similar view can be taken of the joint judgment’s reasoning in Stevens v Sony which raises the question whether Gummow J, who presumably made a key contribution to that judgment, harbours idiosyncratic reservations about contributory infringement provisions in intellectual property statutes. The other, more obvious, factor at play is the emerging and increasingly fashionable antipathy towards copyright owners’ rights, hinted at in the joint judgment’s third supporting consideration. Even more pointed ‘copy-leftist’ philosophy can be found in Kirby J’s judgment:

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. In that setting, absent the provision of just terms, the individual is specifically entitled not to have such rights infringed by federal legislation in a way that amounts to an impermissible inhibition upon those rights

108 The Australia–United States Free Trade Agreement 18 May 2004, art 17.4.7 imposes highly prescriptive treaty obligations concerning the legal protection of technological measures which must be implemented by 1 January 2007. The imposition of such minutiae in treaty articles is highly offensive to the sovereignty of Australia. It represents the US exporting its domestic anti-circumvention law. However, if statutory text is not going to be interpreted sympathetic to purpose, and courts chose to substitute judicial policy in its place, one (typically futile) response is to attempt to try to spell everything out in statutory text. 109 Rescare v Anaesthetic Supplies (1992) 111 ALR 205, 242-243. The provision was the Patents Act 1990 (Cth) s 117. 110 The holding was overruled eight years later by the Full Federal Court where the court observed ‘the Rescare construction leaves s 117 virtually, if not completely, otiose’ and ‘it seems clear that s 117 was not meant by its framers to have the limited meaning given to it in Rescare’: Bristol-Myers Squibb v F H Faulding (2000) 97 FCR 524, 557 (Black CJ and Lehane J, Finkelstein agreeing).

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constituting an acquisition. This is not the case in which to explore the limits that exist in the powers of the Australian Parliament, by legislation purporting to deal with the subject matter of copyright, to encumber the enjoyment of lawfully acquired chattel property in the supposed furtherance of the rights of copyright owners. However, limits there are.111

Since the early 1990s an ever-increasing amount of copyright scepticism has dominated the academic copyright literature. A standard-bearer of this movement has been US law academic Lawrence Lessig – cited by Kirby J, together with an Australian disciple Brian Fitzgerald112 – whose contributions have marked a new period of copyright analysis in which information technology is viewed as the dominant force around which copyright should be organised. To some extent, Kirby J’s sentiments can be seen to be an adaptation of a libertarian argument put forward by Fitzgerald that chattel property rights should prevail over authorial property rights.113 From the industrial revolution Western society’s natural environment has been increasingly replaced by a technological one. Our lives exist within the host of mass technology. Copyright law has always been concerned with protecting human expression in the face of that technology. Commencing with the printing press, that protection necessary impinges upon what a chattel owner can lawfully do with the owner’s lawfully acquired chattel property. To an Australian consumer a mass-produced disc ROM absent content has low value as a chattel per se – in the realm of twenty-nine cents per disc.114 If such chattel property in mass-produced form has value to a consumer above this, it is explained by the value of the content it stores. The rights discourse engaged in by Lessig, Fitzgerald and others is one for evaluation within legislative processes when formulating the sphere of copyright protection. It should not be for judges to commence a wholesale reading down of statutory copyright in favour of supposed values of ‘digital liberty and digital diversity’.115 Kirby J’s sentiment that property in authorial works should not impinge upon property in material goods is highly contestable. One value it elevates is the freedom of people to use the technological equipment they own to consume the cultural goods of others. One value it relegates is the ability of creative people to be supported by market rewards for their cultural goods, rather than dependence on government grant, or altruism, or poverty or the non-production of the goods. It is not at all clear that this ordering of values represents the correct social setting. Copyright law traditionally promotes creativity over materialistic consumption. To do this it necessarily restricts what may lawfully be done with chattels. Anti-circumvention law is best understood as

111 Sony High Court (2005) 221 ALR 448, 498 (footnotes omitted). 112 The two writing specifically cited by Kirby J in the passage extracted above were Lawrence Lessig, Code and Other Laws of Cyberspace (1999) and Brian Fitzgerald, ‘The Playstation Mod Chip: A Technological Guarantee of the Digital Consumer’s Liberty or Copyright Menace/Circumvention Device?’ (2004) 10 Media & Arts Law Review 85. 113 Fitzgerald above note 112, 98 where, for example, a proposition put is that ‘It is unconstitutional to legislate intellectual property rights for the benefit of the copyright owner that extinguish the power of the owner of a lawfully acquired chattel to modify it as they wish’. 114 Packs of 50 BENQ 52X CD-Rs (recordable disc ROMs) were being advertised for retail sale at Melbourne’s JB-HIFI store (Burke Road, Camberwell) on 15 January 2005 for $14.50. 115 Fitzgerald above note 112, 96.

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part of an on-going attempt in public law to ensure that works of creative human expression are not made sacrificial offerings to the gods of the latest technologies.