Catallaxy Files

polymathic pontification, bleeding heart economic rationalism and liberal secularist contrarianism

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    Saturday, August 02, 2003
    Hopeless Hope

    I get myself into trouble by refusing to share friends' enthusiasm for "classic" films. In such a visual medium obviously they suffer from not having available the latest in film technology, but more heretically I think the scripts and acting are often much worse than the best of today's films. To avoid being howled down again for failing to recognise the greatness of the past, I'd said nothing as newspaper obituaries and the TV news struggled to find anything funny that the late Bob Hope ever said. I'll still hold fire, but only because Christopher Hitchens can say it so much better.

    Friday, August 01, 2003
    More on the Sony case

    Interested readers might want to follow Kim Weatherall's discussion and analysis of the case on her blog, Weatherall's Law.
    On the digital frontier: another win for Sony

    Apologies for the long silence from digital copyright land, which I'll break now due to some recent developments.

    Just a couple of days ago, Sony won its appeal against a Sydney-based retailer that mod-chipped PlayStation consoles, allowing users to play the unauthorised copies of PlayStation games he also sold. The copyright law claims in this case were not focused on the illegal copies, but on the act of replacing the chips, which disabled the consoles from recognising whether the copy of the game being used was authorised or not. At first instance, the court held that mod-chipping the consoles was not copyright infringement; this decision holds that that it is.

    The retailer, Eddy Stevens, has been ordered to stop selling the mod-chips and to pay Sony's legal costs. Sony's claim for damages will be considered at a later date. Any fine is likely to be a significant burden on Stevens, given that he has had difficulty in paying his own legal costs during the course of litigation. (The Australian competition/antitrust government agency, the Australian Competition and Consumer Commission, represented Stevens in the lower court, although it is unclear if they did so in the appeal.)

    This case is important in Australia, because it provides the first judicial interpretation of what a "technological protection measure" is under copyright law. (This concept, along with the anti-circumvention provisions in Australian copyright law, was implemented to satisfy obligations under the WIPO Copyright Treaty. The United States' Digital Millennium Copyright Act satisfies the same obligations, although not in exactly the same way as the Digital Agenda Act did in Australia.) It also has some significant implications for how copyright has evolved to do much more than protect against piracy.

    Before discussing these broader issues, it's important to get some technical legal explanations out of the way. Under Australian copyright law, a "technological protection measure" is a device, product, or component incorporated into a process that is designed to prevent or inhibit the infringement of copyright in a work or other subject-matter either (a) by ensuring that access to the work or other subject matter is available solely by use of an access code or process with the authority of the owner or exclusive licensee of the copyright; or (b) through a copy control mechanism.

    To understand how this provision works, it’s also important to understand what a “circumvention device” is. The Copyright Act defines a “circumvention device” as hardware or software that has no significant commercial purpose or use other than circumventing (or the facilitating circumvention of) a technological protection measure.

    In technological terms, this means that cracking an encryption code and/or device that has been used to protect a copyright work can result in copyright infringement. The provision focuses on gaining access to a protected work, rather than possible unauthorised uses (such as copying) of that work. So, if Sony could prove that Stevens had “circumvented” its “technological protection measure”, Sony would succeed in proving copyright infringement.

    Last year, the first instance court held that Sony's combination of hardware (a chip in the PlayStation console) and software (access codes contained only in authorised copies of PlayStation games) did not constitute a technological protection measure, reasoning that it was not designed to prevent or inhibit post-access infringement of copyright. According to Justice Sackville, devices that merely deterred copyright infringement did not satisfy the definition.

    However, this past week, the Full Federal Court (French, Lindgren, and Finkelstein JJ) held that it was enough that Sony’s hardware/software device inhibited infringement by making it impossible to use the unauthorised copies. Unmodified Sony PlayStation consoles will only recognise copies of PlayStation games that contain a specific access code, and will not play unauthorised copies of games, which do not contain that code.

    Without going further into the details of the legal decision, there are a couple of implications that are worth discussing. This decision is yet another example of how some owners of copyright are using the law to do more than just protect their copyright works, and how copyright law has developed to allow copyright owners to do so. Following on that development, this decision is likely to have some extremely serious implications for resellers of DVD players and drives who have mod-chipped their devices to play DVDs from multiple regions.

    With regards to the first point, it is important to note that Sony PlayStations, like DVD players, make use of a regional coding system to control the sale of game software internationally. While the DVD Copy Control Association enforces the division of the world into eight regions, Sony enforces three regions with respect to PlayStation consoles and games. These regions are roughly defined as the United States, Japan/Asia, and countries on the PAL television standard (including Australia, New Zealand, and Europe). So Stevens’ mod-chipping of PlayStations not only enabled users to play illegal copies of PlayStation games -- it also let them play copies of games legally purchased from the United States or Japan.

    The situation with respect to DVD region coding is a little different, due to the fact that the DVD technology is licensed to device makers, and the terms of that licence require device manufacturers to region-code the devices. (Whether or not the actual DVDs are region coded is left up to the movie studios and other producers of DVDs, but the reality is that most DVDs are produced to be used in specific regions.)

    Nonetheless, in most parts of the world other than the United States, it's not difficult to buy a DVD player that has been modified to be either “multi-region” or “regionless”. If a reseller modifies the region coding of a DVD player, he’s not violating the terms of the patent licence, because only manufacturers (and not retailers) are bound by that licence. But under this new decision, the mod-chipping reseller might be caught by copyright law.

    Don’t think that I am advocating copyright infringement. But what if I want to modify my PlayStation or DVD player to use legally-purchased games or DVDs that I bought in New York or London? If I can’t buy a chipped device, the process becomes much more expensive (the only other option is to buy multiple devices). We shouldn’t forget that the user is the customer -- and while the movie studios and Sony have a very valid concern in protecting their assets from illegal copying and dissemination, it’s the customers’ trade that brings in profits.

    In addition to all of this, Australian copyright law permits the importation into Australia of non-infringing copies of books (printed or electronic) or computer programs. Feature films that might be combined with computer programs, such as DVDs, are excluded from these “parallel importation” provisions. But gaming software doesn’t appear to be excluded. Assuming that the parallel importation of Sony PlayStation games is legal, there are some interesting results. From a policy point of view, if I can legally purchase a copy of a PlayStation game that was produced for the United States market, but I cannot purchase a console that will recognise that copy, my only recourse is to purchase a console manufactured for the United States market. Do I have a legal right to be able to play my legally-purchased game, without having to purchase another console? Probably not, although from a practical standpoint this result may not make a great deal of sense.

    I should add that there are some technological reasons for producing different game software versions or DVDs for different geographical markets, but that they do not really justify region coding. But even so, it seems to me that region coding is used primarily to segment markets for the purposes of price and product discrimination, under the protection of copyright law. This strategy is, as this case shows, a pretty effective one, but is it appropriate?

    The Blair 'bitchin' project
    Not much time to write weighty posts for now but I have been following the ins and outs of the Oz blogosphere with interest. The most recent controversy that has erupted is over Tim Blair - that's right. It all started when Gerard Jackson's BrookesNews published an attack on Blair by Joe Cambria.

    Now at the risk of getting a few slings and arrows myself, let me note that Gerry Jackson, for reasons that are not within my capacity to disclose, is not exactly overflowing with love for the Australian right-wing think tank establishment, and the hostile Cambria article, which argues essentially that the right wing think tank establishment should not publicise Blair because he is too 'lightweight', is only the latest in a series of strikes that Jackson has launched against his nemeses.

    Let me also put in my two cents here - Tim is a very nice guy who has done a lot to promote Australian blogs - and not just those which share his views - and more importantly, he has never held himself out as an intellectual or expert, and therefore Cambria's critique of him is rather misguided.

    Having said that, his blog can be rather glib and annoying sometimes (as it was during the Iraq war) and he's not always as funny as he thinks, nor is he always intellectually consistent, but that is rather irrelevant to the unfairness of Cambria's article which is premised on the assumption that only 'intellectuals' are allowed to blog and be taken seriously when they blog or that Tim has presented any false credentials. Scott Wickstein mounts a long critique of the Cambria article along similar lines, as does Steve Edwards.
    Yes, there are right-wing idiots too

    Homer Paxton took me to task this week for only singling out left-wing idiots like Michael Moore, pointing out that for every Moore on the left there is an Ann Coulter on the right. At least among moderately educated people in Australia, I think that the left are far more open to daft ideas that the right - with the sales of Noam Chomsky, John Pilger, Eva Cox, Michael Pusey etc as my evidence on this point. But I'm happy to admit that idiocy knows no ideological boundaries, and link to the ever-excellent Anne Applebaum's review of Coulter's book.

    Wednesday, July 30, 2003
    Oh, the irony!

    A NEW fundamentalism is stalking the Australian political landscape. Often couched in the language of religion, it is in fact deeply rooted in politics.

    Its adherents, like all fundamentalists, keep their politics of hate simple. Rejecting nuance, ignoring the complex
    , they present us with the world according to them.

    ~Janet Albrechtsen
    Defending second-best policies

    I have an article in The Australian this morning defending the government's stance on Australian full-fee undergraduates (extra places, income-contingent loans) and criticising Labor's position (abolish them). Those of us in the pure policy world of a think-tank often feel uncomfortable defending policies we don't fully support, but at this stage in the policy cycle, when our policy recommendations have been rejected, the practical choice is between two sub-optimal alternatives. On this issue, Dr Nelson's position is less sub-optimal than Ms Macklin's.

    Sunday, July 27, 2003
    Moore or less made up

    I've never gotten around to reading Michael Moore's Stupid White Men, which seems to have spent an amazing amount of time on the Australian bestseller lists. I had the impression that Moore was America's version of Bob Ellis, a buffoon with a gift for words. This article from City Journal suggests that assessment was about right. Like some Australian leftists Moore is a good act, but doesn't bother getting his facts right.




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