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In Stevens v Sony, the Australian High Court today offered its first view on Australia’s current legal equivalent to the US DMCA. The encounter is an interesting one.

Stevens v Sony itself is about mod-chipping of Sony Playstation consoles – and about whether modchipping is illegal, because it involves selling a device for ‘circumventing’ a ‘technological protection measure’, contrary to s 116A of the Copyright Act. The High Court, today, unanimously overturned a decision of the Full Federal Court of Australia, in which the Full Court had held that mod-chipping was contrary to the Act.

The basic reasoning of the court is that the ‘technical measure’ used by Sony was not a ‘technological protection measure’. In essence, Sony’s ‘device’ prevented pirated and other unauthorised disks from being used in Sony PlayStation consoles. Sony argued that the measure ‘inhibited’ infringement by ‘deterring’ it – by making infringing disks unplayable in Sony consoles. The High Court have rejected this, finding that the definition of TPM requires that the device physically prevent infringement.

As always, when a court hands down a decision like this, what we have to think about is: how important is this decision? What are its implications? What does it mean for people’s behaviour, and the legality of their behaviour?

Usually, when the High Court hands down a decision you would expect some significant effect on the state of the law; the legality of certain behaviour, right? After all, that’s what the High Court is for, right? But here there’s an extra ‘crinkle’ to it all. Since the events giving rise to the Stevens case, Australia concluded an FTA with the United States, that necessitated changes to our digital copyright laws. And that changes the equation. The point can be illustrated by a short question and answer:

Q: So, does this decision settle Australian law when it comes to the legality of circumventing ‘technical measures’ like those used by Sony in this case?

A: No, the law isn’t settled, because under the FTA we have to change our anti-circumvention laws by 1 January 2007. In fact, the new laws are currently being drafted, and discussed by a Parliamentary Committee.

Q: Well, does this decision at least mean mod-chipping is legal in the meantime?

A: Well, no. Even that is not clear, because the meaning of ‘reproduction’ has changed from 1 January 2005, so that it’s possible to argue now, post FTA, that a ‘reproduction’ of the computer program is made in a Sony console when a pirated game is played. And that means it could be argued that the Sony measure is now a technological protection measure, even though on 31 December 2004 it wasn’t.

Q: So, the law isn’t settled by this High Court decision, and it’s even possible that Stevens’ activities are illegal under the new law. So is this the least important High Court decision ever rendered on copyright law?

And therein lies the real question.

You might think from what I’ve said so far that I think the decision is irrelevant. You’d be wrong.

Analysing the decision

The main significance in the case I think is that the High Court has explicitly, and consciously, adopted a narrow interpretive approach to this legislation. Australian courts have often taken a broad, ‘beneficial’ approach to construing copyright law in favour of copyright owners. The High Court has not done that here. Why?

The reasoning in the judgments basically follows 2 stages.

First, the court rejects Sony’s contention that the clear purpose of the legislation was to prevent conduct like that of Eddy Stevens, and ‘mod-chipping’. According to the High Court, no clear ‘purpose’ emerges from the legislative history. In this respect, the High Court has rejected the view of the legislative history accepted by the Full Federal Court – particularly that of Lindgren J, who took the view that the legislative history was definitive and clear in showing that the Parliament intended to protect access controls of the kind used by Sony.

The High Court sees the history differently from Lindgren J. It accepts that the legislature, in enacting s 116A, was in effect drafting legislation as a ‘compromise’ between ‘warring’ interest groups. In such a case, the High Court tells us, there’s not much point looking for a ‘legislative purpose’:

Having accepted that there is no such clear purpose, the court then had to choose between a broad interpretation of the provisions (favoured by Sony and the Full Court), and the narrow approach (favoured by the trial judge). The court has preferred a narrow approach.

Why? Because paracopyright, the court appears to be saying, is extraordinary and that is a reason to interpret these laws narrowly.

Gleeson CJ, Gummow, Hayne and Heydon JJ make this point when they specifically state, as one of their three reasons for taking the narrow view, that ‘it is important to avoid an overbroad construction which would extend the copyright monopoly by including … devices which prevent the carrying out of conduct which does not infringe copyright and is not otherwise unlawful.’

Kirby J goes even further, citing several reasons for preferring a narrow approach that emphasise the really extraordinary nature of ‘uber copyright’. Kirby J takes into account that:

• Sony’s interpretation would give Sony ‘a de facto control over access to copyrighted works or materials that would permit the achievement of economic ends additional to, but different from, those ordinarily protected by copyright law’ (ie, market segmentation through region-coding);
• Sony’s interpretation would lead to a position in law which ‘clearly impinges on what would otherwise be the legal rights of the owner of a Sony CD ROM and PlayStation console to copy the same for limtied purposes and to use and modify the same for legitimate reasons, as in the pursuit of that person’s ordinary rights as the owner of chattels’. A person who purchases a Sony CD Rom in Japan or the US ‘should … be entitled to copy teh CD ROM and modify the console in such a way as to enjoy his or her lawfully acquired property without inhibition’;
• a broad interpretation here would ‘chill … technological development’ by chilling new technologies to protect copyright owners.

The effect of the decision?

You know what I think is useful about this High Court judgment? Even though the law considered by the High Court will all change, the judgments get at something which is fundamental, but which it is easy to forget. And that is this:

that the technical measures used by Sony are not, in essence, about preventing infringement of copyright.

Infringement happens regardless of whether measures like Sony’s are used. While anti-circumvention laws are sold as being about ‘preventing piracy’, the fact remains: the Sony measures do not prevent infringement, no matter which way you turn it. That’s why, in the end, the court has decided the way it did.

In reality, measures like those used by Sony are about controlling use of and access to Sony PlayStation consoles. Sony controls all kinds of things about the way people use Sony consoles. For example: they control whether people can:

• play legitimately purchased games sold in overseas markets;
• play games created by someone other than Sony on the Sony console (something that cannot be done on a non-chipped console owing to the absence of an access code).

So while Sony can argue that it wanted to prevent piracy (it clearly did), and that the measures acted in part to deter piracy (they clearly could), Sony’s own approach to the measures muddies the waters. It doesn’t just act to prevent infringement, and that point is taken notice of by the Court here. One can’t help but suspect the legal reasoning would look different, in this case, if Sony only used its power over the console to actually prevent use of ‘pirated’ disks. The way Sony goes about its business quite apparently takes its measures outside the heart of what is covered by the legislation: and justifies the High Court’s approach.

What next?

The most interesting thing will be how this decision affects the current, very live debate about how we enact the requirements of the US FTA into Australian law. I suspect some will use it as ‘proof’ that Australia ‘needs’ stronger anti-circumvention laws.

I hope, however, that those drafting such laws will pay attention, in the way the High Court did, to how exceptional these laws are; how far they go beyond ordinary copyright rights, and how they interfere with other intererests, like interests in technical development and the right of consumers to make legitimate use of legitimately purchased material.

The role of the High Court is to stand about the ‘hurly burly’ that is copyright debate in our Parliaments today. By virtue of this role, the High Court can take a slightly ‘longer view’ of the issues. Well, they looked at this law, and saw a different beast from ordinary copyright. They saw interference with other interests. In response, they took a cautious approach.

And I think there’s something in that for all of us.