Megaupload criminal copyright case is 'fundamental shift'

Legal, business and political implications of the Megaupload case examined at NZCS panel discussion

The legal, business and political implications of the Megaupload case were examined at a breakfast panel discussion held by the New Zealand Computer Society in Auckland recently.

The panelists were IT lawyer Rick Shera, InternetNZ CEO Vikram Kumar, and TPP-Watch founder Jane Kelsey.

Shera opened with an observation that the Megaupload extradition proceedings were likely to be “absolutely fascinating” from the legal point of view. The issues were complex but he was glad “New Zealand’s most tech-savvy jurist,” David Harvey, would be presiding over the hearing which is scheduled to take place in August.

In order for the extradition to succeed, Shera said, “there has to an extraditable offence and it has to be serious. Some say the definition of ‘serious’ is a offence that could carry a 12 month prison sentence, others say it’s four years.”

The extraditable offence also had to be “similar or akin to” New Zealand law. While New Zealand did have the Copyright Act, Shera said there were differences between the US and New Zealand legislation, and issues such as knowledge and the obligations of third parties could be significant.

Shera said it showed the struggle by copyright holders to enforce their rights was moving towards ISPs and cloud providers, as film and music companies were discovering that suing users was not best way of achieving their goals.

There had been earlier civil actions against Limewire and Napster, Shera said, but the difference here was that the Megaupload case was a criminal action. This had involved the “nuclear option of taking down websites, seizing assets, shutting down a business even before the accused has a chance to know they are being accused.”

Shera questioned whether due consideration was being shown to third party rights or whether criminal proceedings delivered an appropriate remedy.

“Win or lose, Megaupload is down and the business is probably destroyed.”

Vikram Kumar took up the theme of the novelty of a criminal copyright case, saying it represented a “fundamental shift that we have to start thinking about.”

“We are not used to seeing copyright matters treated in a criminal context,” he said, adding that many people had “reacted emotionally” to the use of armed police in the Dotcom raid.

“What we have here is the arm of the state acting on behalf of people who have alleged they have been wronged.”

Kumar said there had been two categories of reaction to the case so far, the first of which had played out behind the scenes. Some of Megaupload’s competitors had started clearing up their own lockers, and links to copyright infringing files were taken down. Almost immediately much traffic had shifted to other sites.

“Teenagers very quickly adjusted,” Kumar said.

The second type of reaction included businesses examining their risk management regarding the cloud.

In this sense the Megaupload case was “a strong example of what we should have already known,” and reinforced the need to make backups. Other businesses were watching the case as they were “trying to get some clues as to what is good behaviour,” Kumar said.

An example was the implication for ‘safe harbour’ provisions which prevented internet service providers from being liable to the actions of their customers.

Kumar said it was likely the case would impact on laws in the future. “Some people have said the case demonstrates that SOPA/PIPA type legislation is needed, while others say the opposite is true.”

Jane Kelsey outlined the history of the Trans-Pacific Partnership from its origins as a trade agreement between Chile, New Zealand and Singapore, to a much more sweeping agreement which also involves the US, Singapore, Burma, Australia, Malaysia, Brunei, Vietnam, Peru and possibly Japan.

Kelsey said the TPP “goes further than any previous agreement has gone before,” and aims to “set the gold standard for IP legislation.”

She said New Zealand had become “the collateral damage” in “a bigger gameplan” that had been revealed by Hilary Clinton ‘America’s Pacific Century’ speech to APEC in Honolulu last November.

“This is the economic limb of a policy that seeks to neutralise China,” Kelsey said. “The other one is military.”

Kelsey said the negotiations over IP were being conducted with an obsessive level of secrecy.

Details of the negotiations would not be be released until four years after agreement has been signed, which she said effectively prevented officials from being held accountable.

What little was known about TPP had come out as a result of leaks around the ACTA negotiations, which Kelsey said provided “some idea of what was on the table”. This included globalising existing US laws, extending copyright terms, the “current ask is 90 years,” criminalising small scale copyright infringement, and establishing exclusive rights over imports of copyrighted material.

“Writing laws for the indefinite future behind closed doors is not an acceptable option,” Kelsey said.

She predicted TPP would have a “chilling effect on regulation, locking in place a system that is almost impossible to change.

“I’m not suggesting that is bad or good, but I’d like to see what it is,” Kelsey said.