[2013] NZCOP 5 COP 012112 UNDER The Copyright Act 1994 BETWEEN RECORDING INDUSTRY ASSOCIATION OF NEW ZEALAND Applicant AND Respondent BEFORE THE COPYRIGHT TRIBUNAL Jane Glover HEARING ON THE PAPERS DECISION Introduction This case concerns alleged file sharing infringement under ss. 122A-U of the Copyright Act 1994 ("the Act"). 1 Sections 122A--process for copyright owners to use when they consider that an internet user has infringed their copyright via a file sharing network. File sharing is defined in s.122A of the Act as follows: "File sharing is where - Material is uploaded via, or downloaded from, the Internet using an application or network that enables the simultaneous sharing of material between multiple users; and Uploading and downloading may, but need not, occur at the same time." File sharing networks are not illegal in themselves, although much of the content on file sharing networks is music, film, television, books or software that is protected by the Copyright Act 1994. When a rights owner alleges that its copyright has been infringed via file sharing, the Act provides that the rights owner may require the relevant internet protocol address provider (IPAP) to issue infringement notices to the account holder concerned. The first infringement notice is a detection notice, the second is a warning notice, and the third is an enforcement notice. After an enforcement notice has been issued, the rights owner may apply to the Copyright Tribunal for an order under s.122O of the Act that the account holder pay to it a sum of money, calculated in accordance with the Copyright (Infringing File Sharing) Regulations 2011 ("the Regulations"). 1 Sections 122A-U were inserted into the Copyright Act 1994 by virtue of the Copyright (Infringing File Sharing) Amendment Act 2011. Parties The Applicant is the Recording Industry Association of New Zealand (RIANZ). RIANZ filed its application to the Tribunal in its capacity as agent for the relevant copyright owners, Island Def Jam Music Group (Universal Music New Zealand Limited), and RCA Records (Sony Music Entertainment New Zealand Limited). Applications to the Copyright Tribunal may be made by representatives of the copyright owners, and "rights owner" is defined as including a person acting as agent for one or more copyright owners? The Respondent is an individual internet account holder. Factual background and procedural history On 6 February 2012, Slingshot (the relevant IPAP) sent an initial detection notice to the Respondent. The detection notice alleged that on 25 January 2012 the Respondent had infringed copyright in the song by uploading it and thereby communicating the work to the public in breach of of the Act. Copyright in the work is owned by Island Def Jam Music Group (Universal Music New Zealand Limited). The warning notice was sent to the Respondent on 24 July 2012. The warning notice alleged that on 18 July 2012 the Respondent had infringed copyright in the song I Like It Like That. Again, the Respondent was alleged to have infringed copyright by "communicating the work to the public". Copyright in the work is owned by RCA Records (Sony Music Entertainment New Zealand Limited). The enforcement notice was sent to the Respondent on 18 September 2012 in respect of a further alleged infringement of copyright in the song I Like it Like That, on 12 September 2012. Again, the Respondent was alleged to have infringed copyright by communicating the work to the public. The Application was filed with the Tribunal on 18 October 2012. The Applicant filed its submissions together with the Application, and the Tribunal therefore sent both the submissions and the Application to the Respondent. On 20 November 2012 the Respondent wrote to the Tribunal in respect of the alleged infringement, explaining as follows: have just returned from deployment overseas [in] Afghanistan and was not aware of music being downloaded. It is very difficult to determine who in the household is responsible for downloading music as flatmates are currently deployed around NZ. However] understand entirely that I am the person who is held liable for these actions. I have spoken to the pars [sic] who have access to my internet IP address, and between 8 pers, we cannot determine who is fully responsible. I ask that this notice be a lesson to those in my household as they now understand how severe the consequences may be for committing such an act. I do not wish this situation to grow any more than it needs to be. I am currently 2 Section 3 going through transitioning from military life in Afghanistan to life back home tackle this allegation made against me. However I take full responsibility for the acts committed under my IP address and wish for this to be resolved asap. I am willing to co-operate by any means required of me." [10] The Applicant responded by way of a further letter of submissions dated 29 November 2012. In particular, the Applicant noted that it appreciated the responsible approach taken by the Respondent. It advised that, in the circumstances, it was confining its application to an order for payment under regs. of the Regulations, and was waiving its request for an additional deterrent sum to be awarded pursuant to [11] Neither party has requested a hearing, and the Tribunal does not consider it necessary to convene one. Accordingly, this matter is determined on the papers in accordance with s.122L of the Act. Infringement [12] The Act creates a presumption that each incidence of file sharing identified in an infringement notice constitutes an infringement of the right owner's copyright in the work identified.3 An account holder may submit evidence that this presumption does not apply, or give reasons why it should not apply.4 In this case, the Respondent has not provided any evidence that the presumption should not apply. In fact, the Respondent acknowledges that infringement has taken place. Although the Respondent states that the infringing activities were undertaken by third parties, as the holder of the relevant Internet account the Respondent accepts ultimate responsibility for those activities. [13] In the circumstances, the Tribunal is satisfied that: Each of the three alleged infringements that triggered the notices amounted to an infringement of the right owner's copyright;5 and The infringements occurred at the IP address of the account ho|der.5 [14] Further, in the absence of any evidence to the contrary, the Tribunal accepts that the three infringement notices were issued in accordance with the Act.7 In this regard, the Tribunal notes ss. 122N(1)(b) and of the Act, which create statutory presumptions that the information recorded in an infringement notice is correct and that the notice was issued in accordance with the Act. Penalties [15] The Tribunal has jurisdiction to require the Respondent to pay various sums to the Applicant under four different heads of relief: 3 Section 122N(1)(a). 4 Section 5 Section 1220(1)(a)(i). 5 Section 1220(1)(a)(ii). 7 Section 1220(1)(b). 4 Regulagion which deals with the cost of purchasing the works legally; Regulation which provides for a contribution towards the fees paid by the rights owner to the Regulation which provides for reimbursement of the application fee paid by the rights owner to the Tribunal;1? and Regulation which provides that an additional sum may be awarded as a deterrent against further infringing (not sought in this case) [16] The total amount ordered by the Tribunal to be paid by the account holder must not exceed $15,000.12 The Tribunal also has a discretion to decline to make orders if to do so would be manifestly unjust to the account holder." It may only award costs against a party if that party has engaged in conduct intended to impede the prompt determination of the proceedings." Regulation 12(2)(a) [17] In calculating the appropriate relief, the Tribunal must begin by determining the reasonable cost of purchasing each of the works in electronic form (if they were legally available for purchase at that time).15 In this case, the works were available for purchase in electronic form at the time of the infringements. According to the Applicant, the works were available for purchase from iTunes at a cost of $2.39 for 88M and $1.79 for I Like lt Like That. [18] On a literal reading of therefore, the reasonable cost of purchasing the work would be a total of $5.97 for the three infringements. However, the Applicant argues that the legislation should not be interpreted as requiring the Tribunal to award only the cost of purchasing the works, especially where the copyright works have been uploaded by the rights owner rather than downloaded. "However such a sum is not appropriate to compensate the rights owner for the act of making a copyright work available to a potentially very large audience via a P2P network. The sum referred to in Regulation appears to be more appropriate as compensation in a case where a sound recording has been downloaded once by a person using the account holders IP address. This is because the reasonable cost of purchasing the work is what the account holder or the person using the account holders address would have paid if he or she had purchased the work legally. The act of uploading, on the other hand, is more harmful as it enables multiple potential unauthorised downloads by third parties, each of which could have been paid for by those third parties at a cost of each." 8 See also sections 1220(1) and (2). 9 see also section 122o(1)(3)(a). 1" See also section 1220(3)(b). 11 See also regulation 12(3). 12 Section 1220(4). 13 Section 122o(s). 14 Section 1220(7). 15 Regulation (emphasis in original) [19] The Applicant submits that is directed at compensating the rights owner for its losses, and that limiting the amount determined under to the market cost of one copy of the work in electronic form would be inadequate because uploading the works makes them available to any number of other BitTorrent users within the swarm. [20] The Applicant submits that the proper approach is for the Tribunal to read as giving it a mandate to determine a sum with reference to the reasonable cost of purchasing a copy of the work. As has been outlined in earlier decisions," the Tribunal does not accept this submission. See, for example, RIANZ [2013] NZCOP 2 at paragraphs 49 and 50: "The Tribunal does not accept the Applicant's submission on the interpretation of cl. 12(2)(a) of the Regulations. That clause requires the Tribunal to determine "the reasonable cost of purchasing the work in electronic form at that time", and the Words "at that time" can refer only to the time of the particular infringement identified in the enforcement notice. Also, the words "the reasonable cost of purchasing the work" cannot reasonably describe the total amount an unknown number of hypothetical purchasers of the work would have paid if each of them had legally purchased an electronic copy of the work. The plain language of cl. 12(2)(a) refers only to the amount it would have cost the account holder to purchase one copy of the relevant work in electronic form at the time of the infringement identified in the enforcement notice. In this case, that is the sum of 39 for each of the three identified infringements." [21] The Tribunal considers that the number of downloads flowing from a work being uploaded is not relevant to the determination under It may be relevant, however, to the provision relating to deterrence and,_ in particular, to the potential effect on the market for the work [22] Accordingly, under this particular head of relief, the Tribunal orders the Respondent to pay to the rights owner 1 $2.39 in respect of the work 88M and 2 $1.79 in respect of the work lLil