Susan Corbett is a Senior Lecturer in Commercial Law, Victoria University of Wellington

In response to a barrage of criticism, unprecedented in response to a topic as alien to the average kiwi as copyright law, New Zealand Prime Minister John Key has announced that section 92A of the Copyright Act 1994 will not come into force in its current form. Popularly, although perhaps somewhat misleadingly, referred to as "the three strike rule", s 92A as drawn required ISPs to "adopt and reasonably implement a policy that provides for termination, in appropriate circumstances, of a repeat infringer".  It was due to come into force on 27 March 2009 but has now been referred back to the Minister of Commerce for revision.

In anticipation of s 92A coming into force, the Telecommunication Carriers Forum ("TCF"), a body comprised of leading New Zealand copyright rights holders and ISPs, had drafted a code of practice which provided that a "repeat infringer" is anyone who infringes copyright three times within an 18 month period. Whether this definition would have satisfied the appropriateness and reasonableness requirements of s 92A was of course yet to be determined. In any event, the viability of the TCF draft code itself was placed in doubt when TelstraClear, the third largest ISP member of the TCF,  announced on 16 March it would not after all be signing up to the draft code, which it described as "an attempt to tidy up poorly drafted legislation". 

In addition to the questions around the TCF code, there were several other matters that contributed to the eventual downfall of s 92A. Much of the criticism was related to its potential harm when linked to the broad definition of an ISP in s 4 of the Copyright Act, viz: -

"ISP means a person who does either or both of the following things:

• (a) offers the transmission, routing, or providing of connection with digital online communications, between or among points specified by a user, of material of the user's choosing:
• (b) hosts material on websites or other electronic retrieval systems that can be accessed by a user"

This definition appears to include not only conventional ISPs, but also intranet providers such as schools, universities, businesses, and libraries. Should an individual employee of one of these organisations be deemed to be a "repeat infringer", potentially, the entire organisation could lose its communications network. The practical difficulties and costs of tracking down and cutting off the internet access of the offending employee in a large organisation such as a university were unimaginable.   Even more alarmingly, perhaps, it was becoming apparent that many such organisations neither understood the new law, nor realised the implications for their own businesses.

For conventional ISPs, compliance with s 92A would involve not only substantial additional costs in relation to monitoring of the data flowing through their networks and terminating suspected infringing customers' accounts, but also potential liability for breach of contract should they inadvertently terminate an innocent customer's account.

Another point which did not feature in the New Zealand debate but which is, I would argue, highly significant, is the potential for any ISP which is required to monitor customers' data that is "published" through its networks, to fail to satisfy the requirements for the defence of "innocent dissemination" contained in s 21 of the Defamation Act 1992(NZ), and thus risk being found liable as a publisher of defamatory material.

The issues succeeded in uniting a variety of seemingly disparate groups in opposition to s 92A. The New Zealand artistic community ran an energetic campaign against s 92A under the umbrella of the recently formed "Creative Freedom Foundation" and was able to demonstrate overwhelming support for the cause by signatures to its online petition from 18,941 individuals. The New Zealand ICT and internet communities were equally vociferous in their opposition to the provision, as was Business New Zealand.

 Criticism of s 92A was also received from well-known overseas individuals and organisations, including Stephen Fry, Lawrence Lessig, and Google. Google's submission to the TCF warned that a majority of takedown notices it receives are submitted from businesses targeting their competitors and that over one third of those are not valid copyright claims. The report in late January from the UK that its proposed "three strike policy" was not after all to be supported by the government is likely to have also been influential, since New Zealand copyright law is largely based upon that of the UK.

So what should replace s 92A? Keith Davidson, executive director of Internet NZ, has suggested that education, not legislation, is a more effective way of combating the issue: "Termination of accounts won't inspire young people to stop downloading illegally". Other commentators have called for a proper economic analysis of the need for any such legislation to be carried out. The government has emphasised, however, that there is no question of permanent removal of this kind of provision from New Zealand's copyright law. Such a step would endanger the country's trading opportunities; most importantly its chances of entering into a free trade agreement with the United States.