Since the days of cassette tapes, publishers have used various forms of copy protection to attempt to protect revenue streams and prevent unlawful copying of works. Digital Rights Management (DRM) now encompasses a wide range of techniques, including those used to identify the owners of software or media, enforce restrictions on use, prevent unauthorised copying or modification, and track usage.

Two types of DRM are expressly recognised by New Zealand law under the Copyright Act 1994:

• Copyright Management Information (CMI), which is the information or system attached to a work that identifies the work, its copyright owner, or indicates terms and conditions for use.
• Technological Protection Measures (TPMs), which comprise any process, mechanism or system that prevents or inhibits the dealing with a work (e.g. software/media) in certain ways.

Copyright Management Information (CMI)

The Copyright Act protects CMI in two ways:

• It prohibits intentional interference with CMI.
• It prohibits commercial dealing in works where CMI has been altered or removed where a person knows, or has reason to believe, that the removal or modification would aid infringement of copyright in the work.

Penalties for commercially dealing in works where the CMI has been modified/tampered include a fine of up to $150,000 and up to 5 years imprisonment.

Technological Protection Measures (TPM)

The Copyright Act defines TPMs as “any process, treatment, mechanism, device, or system that in the normal course of its operation prevents or inhibits the infringement of copyright in a TPM work”.  The rights-holder generally has the same rights against a person who breaches a TPM-circumvention provision as they would against a person who otherwise breaches copyright.

It is an offence to import, sell, hire out, or advertise a TPM circumvention device (or provide information allowing TPM circumvention), in the course of business, where it is intended, or known to be likely, that the device or information will be used to infringe copyright. An example may be a company selling software designed to “crack” a commercial app in order to permit use of the software without a licence, or beyond the licence terms.

The legislation expressly allows (or excludes from restriction) use of TPM circumvention devices for a number of purposes, including:

• For certain educational purposes;
• For certain transient/incidental copying for lawful purposes;
• For copying a legitimate sound recording for personal use;
• For copying or adapting computer program if necessary for certain lawful uses (e.g. error-correction or software backup in certain circumstances).

Notably, the well-known DRM practice of DVD zoning is excluded from the definition of TPM under the Act (the definition excludes a process which “controls geographic market segmentation by preventing the playback in New Zealand of a non-infringing copy of a work”).

It is these types of copyright use exceptions that are among the issues being discussed in Trans Pacific Partnership agreement (TPP) negotiations. Modification of these exceptions would therefore impact the scope to which DRM is legally enforceable in New Zealand.

The contractual overlay

While the Copyright Act 1994 defines limited statutory rights and prohibitions in relation to DRM, terms of use and other contractual provisions will often impose more detailed provisions to give an owner stronger rights where DRM mechanisms are circumvented. For example, while the Act may not expressly prohibit the TPM circumvention of DVD zoning, the DVD’s conditions of sale may do just that. Likewise, DRM restrictions may be imposed as a condition of entering a website, downloading music etc.

The extent to which contracts can diminish or alter carefully balanced statutory rights (either for consumers or commercial users) is a controversial issue. How the ongoing TPP negotiations impact this debate in New Zealand remains to be seen.

Clendons is a commercial law firm in central Auckland with specialist expertise in information copyright, technology, and commercial law. Please visit our website at www.clendons.co.nz

This article provides general information and does not constitute advice. Professional advice should be sought on specific matters.