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[2003] FCAFC 157
appellant. Appeal allowed. The order dismissing the remainder of Sony's proceeding was set aside. The Court declared that Stevens sold circumvention devices in contravention of s 116A on 8 April 2001, 28...
Sony's PlayStation system used a code on genuine game CDs and a Boot ROM in the console to prevent ordinary consoles from playing unauthorised copies. Stevens sold chips that bypassed that system. The Full Court majority held that the system qualified as a technological protection measure because making unauthorised copies unusable could discourage infringement, even if it did not physically stop the copying itself. The Court rejected Sony's separate arguments that playing a game reproduced its program or film in RAM. Sony nevertheless won its s 116A appeal, and damages were left for the primary judge.
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The Full Court of the Federal Court of Australia, comprising French, Lindgren and Finkelstein JJ, decided Sony's appeal on 30 July 2003. The issue was whether the protection system used with Sony PlayStation games came within the Copyright Act 1968 (Cth), particularly the anti-circumvention provisions introduced by the Copyright Amendment (Digital Agenda) Act 2000.
Sony's games were embodied in computer programs stored on CD-ROMs. The CDs contained an access code that conventional copying equipment could not reproduce. The PlayStation console contained a Boot ROM that checked for the code. A copied CD without the code would ordinarily not run on the console. Stevens sold unauthorised game copies and sold and installed “mod chips” that bypassed the code check, allowing those copies to operate. The primary judge found that Stevens knew the chips enabled consoles to play copies without the access code. [Lindgren J [65]]
Sony sued on several grounds. The primary judge found trade mark infringement but rejected Sony's Fair Trading Act claim and its claim under s 116A. The appeal concerned only the s 116A ruling. [French J [6]-[9]; Lindgren J [32]]
The appeal raised three principal questions: whether the access code and Boot ROM were a technological protection measure; whether game-program data stored in RAM amounted to a reproduction in material form; and whether playing the game made a copy of a cinematograph film in RAM. The Court allowed the appeal on the first question. French and Lindgren JJ also rejected the RAM and film arguments, with Finkelstein J dissenting on those two issues.
The orders declared that Stevens sold circumvention devices in contravention of s 116A on 8 April 2001, 28 September 2001 and 16 November 2001. They also restrained specified further sales, awarded Sony its costs, and remitted the claims for damages and additional damages to the primary judge.
Section 116A supplied a right of action in specified circumstances against people who dealt in circumvention devices. The definition of “technological protection measure” in s 10(1) was central. It covered a device, product or component designed, in the ordinary course of operation, to “prevent or inhibit” copyright infringement through access control or copy control.
The primary judge had read that definition more narrowly. In the extract of his reasons set out by Lindgren J, he considered that the device had to use its own technological processes to prevent or hinder particular acts that would otherwise infringe copyright. A system that only discouraged copying by making copied CDs useless was not enough. [Lindgren J [73], quoting primary judge [115]-[118]]
The appeal majority rejected that limitation. French J relied on the ordinary meanings of “prevent” and “inhibit”. Those words overlap, but their scope includes forestalling or discouraging an infringement. A measure may inhibit infringement by making an unauthorised copy unusable for its intended purpose. [French J [16]-[18]] Lindgren J likewise read “inhibit” as restraining or checking infringement, including discouraging or deterring it without preventing it outright. [Lindgren J [87]-[91]]
The majority applied that reading to the PlayStation system. Because unauthorised CDs lacked the required code, the ordinary console would not play them. That feature could make infringing copies commercially unattractive or unsaleable unless the protection was circumvented. French J considered that s 116A was not confined to physical prevention of reproduction, and that the relevant infringement could include the sale or offering for sale of infringing articles. [French J [18]-[20]] Lindgren J concluded that the access code and Boot ROM inhibited infringement by denying access to unauthorised copies and discouraging their making or use. [Lindgren J [138]-[140]]
The legislative history reinforced Lindgren J's conclusion. He considered that the history showed a legislative intention to protect access-control systems as well as copy-control systems, and that the parliamentary committee's preference for a narrower definition was not adopted. He also noted the legislative approach of providing express exceptions rather than implying broad limits on the measure's protection. [Lindgren J [117]-[120], [138]] French J emphasised that ordinary meaning remained the starting point, and cautioned against letting policy considerations substitute for limiting words the legislature had not included. [French J [22]-[25]]
The mod chips were intended to override the system. The primary judge had found they had only a limited commercially significant use other than circumvention, and that Stevens knew their intended purpose. [Lindgren J [61], [83]] Once the Sony system was recognised as a technological protection measure, the statutory elements supported the declaration of contravention.
The majority did not accept Sony's alternative arguments about RAM. Section 10 defined material form to include a form of storage from which the work or a substantial part could be reproduced. Section 21(1A) could deem electronic conversion to be reproduction, but did not decide whether that reproduction was in a material form. [Lindgren J [37]-[40], [162]-[168]] The evidence was that only a small portion of the code was in RAM at a time and that it could not be extracted from the console as supplied without developing additional hardware. [Lindgren J [142], [169]-[172]] Lindgren J therefore considered the primary judge entitled to find that the material-form requirement was not met.
For the film argument, the majority focused on whether the images were embodied in an identifiable article or thing within ss 10 and 24. The evidence established that images could be generated from RAM while it was in the powered console, but did not establish that the RAM, considered as an article or thing, had itself been treated so that the images could be reproduced from it. [Lindgren J [177], [183]-[187]] Finkelstein J considered “article or thing” capable of applying to RAM and concluded that the visual material stored there was more than de minimis. [Finkelstein J [217]-[224]] That was a dissenting view.
Before this appeal, the primary judge had held that the PlayStation system was not a technological protection measure because it did not physically prevent or inhibit the act of copying. The Full Court majority displaced that interpretation for this case. It held that “inhibit” can include a measure that discourages infringement by making the infringing copy unusable. [French J [17]-[20]; Lindgren J [138]-[140]]
The decision therefore clarified that the connection between a technological measure and infringement need not be limited to direct interference with the act of reproduction. A measure may qualify where denying access to a copied work has the practical effect of deterring infringement. The judgment did not say that every access control, or every system affecting use, automatically qualifies. The statutory definition still requires a device designed in the ordinary course of its operation to prevent or inhibit infringement by one of the specified means.
The judgment also addressed, but did not resolve in Sony's favour, the legal significance of temporary RAM storage. The majority's conclusion depended on the definition of material form and the evidence about the PlayStation console as supplied. Lindgren J did not decide every possible question about RAM, including whether its transient nature or the portion stored affected the result. [Lindgren J [170]-[173]]
On cinematograph films, the majority applied the statutory requirements of “copy” and “embodied” to the particular evidence. It did not accept that the images generated while RAM was within the console established the necessary embodiment in RAM considered as an article or thing. [Lindgren J [183]-[187]]
The judgment records that Parliament later amended the definition of “circumvention device” to remove the word “effective”, retrospectively from the commencement of the Digital Agenda Act. It also records a related amendment to the definition of technological protection measure. [Lindgren J [44]] Those amendments form part of the statutory history described in the reasons; this judgment does not provide a full account of later statutory amendments or the law as it stands today.
French J said that “the scope of these two verbs, in their ordinary meanings, is wide enough” to cover deterrence through making an infringing copy useless. [French J [17]] In plain English, a protection mechanism need not make copying technically impossible. It may be enough that it is designed to discourage infringement by preventing the copy from being used as intended.
Lindgren J described “inhibit” as meaning “restrain” or “check”, including “discourage or deter, without preventing”, infringement. [Lindgren J [89]] This is the clearest statement of the majority's interpretation. “Prevent” and “inhibit” do not have identical work to do: inhibition can be less than complete prevention.
Lindgren J applied the interpretation directly: Sony's measure inhibited infringement because access to the game was unavailable without the Boot ROM, the access code, or both. [Lindgren J [139]] In practical terms, a copy that could not be played on the ordinary console was less useful, which could deter people from making or selling it.
The RAM analysis turned on the words “from which the work ... can be reproduced” in the definition of material form. [Lindgren J [167]] The majority treated this as a real statutory condition. It was not enough that data had temporarily entered RAM; the evidence also had to establish that the work or a substantial part could be reproduced from that storage in the circumstances considered.
For the film claim, Lindgren J said the evidence did not establish that s 24 was satisfied on the relevant understanding of embodiment. [Lindgren J [186]] Put plainly, evidence that the console could display images while powered did not, in the majority's view, establish that the images were embodied in RAM itself as a separate article or thing.
Finkelstein J's competing approach is also important to understanding the divided reasoning. He considered that “article or thing” should be interpreted in a way that accommodates technological development, and that the amount and quality of game material in RAM could be substantial. [Finkelstein J [217], [220]-[224]] This reasoning did not prevail.
The most direct factual setting is one in which a copyright owner uses a technological mechanism that restricts access to a work, and another person deals commercially in a device designed to bypass it. In Sony, the access code and Boot ROM worked together, genuine CDs carried the code, unauthorised copies lacked it, and the mod chip overrode the check. [French J [4]-[5]; Lindgren J [58]-[61]]
The decision is particularly relevant where a protection measure does not stop the copying itself but makes the resulting copy unusable or less commercially valuable. The majority treated that practical deterrent effect as capable of amounting to inhibition of infringement. [French J [17]-[20]; Lindgren J [138]-[140]]
The statutory context remains important. The judgment concerned s 116A and the definition applicable to technological protection measures, and it addressed dealings such as selling or installing circumvention chips. Lindgren J noted that s 116A did not generally create an action against the ordinary user merely for using a circumvention device. [Lindgren J [41]-[42]] The decision should not be restated as a general conclusion that all use of a bypass device is itself an infringement under s 116A.
The RAM and film parts are more fact-sensitive. The majority's conclusions turned on the evidence about the PlayStation's limited RAM, the temporary loading and replacement of code, the lack of extraction hardware in the console as supplied, and the nature of the visual material said to be embodied in RAM. [Lindgren J [142], [169]-[172], [183]-[186]] Finkelstein J's disagreement illustrates that different evidence or statutory context could matter, but the judgment did not settle those broader questions.
The judgment text identifies authorities considered by the Full Court, including earlier Australian decisions and a United Kingdom decision, but it does not describe how later courts treated Sony v Stevens. It therefore cannot, by itself, establish whether later courts followed, narrowed, distinguished or questioned this decision.
The reasoning does show how the Full Court situated the issues before it. Lindgren J distinguished Sony v Edmunds because the United Kingdom legislation expressly treated transient or incidental copying and the running of computer programs differently. [Lindgren J [159]-[161]] He discussed Australian RAM cases including Dyason v Autodesk, Microsoft v Business Boost and AVRA v Warner. [Lindgren J [144]-[158]] The majority's RAM analysis drew on the material-form reasoning in AVRA v Warner. [Lindgren J [155]-[158]]
For subsequent treatment of the decision, the relevant questions would include whether a later court applied the majority's broad construction of “inhibit”, how it treated later versions of the legislation, and whether the RAM and film reasoning was applied in different technological settings. Those matters are not answered by the supplied judgment.
The appeal resolved whether the particular Sony access-code and Boot ROM system could qualify as a technological protection measure. It did not determine the outer limits of the term. For example, the reasons do not establish that any access restriction qualifies irrespective of its design, operation, connection to infringement, or the statutory exceptions. The Court's analysis remained tied to the wording of s 10(1) and the particular PlayStation system.
The judgment also discusses a question raised by Stevens about lawful backup copies and games acquired overseas. Lindgren J rejected the s 47C aspect of the notice of contention on the facts and legislative provisions before the Court. [Lindgren J [130]-[137]] The judgment does not provide a comprehensive answer for every possible lawful-copy or regional-access scenario.
The majority did not finally resolve all aspects of whether computer-program data stored in RAM can amount to a reproduction in material form. Lindgren J considered the evidence insufficient because the game could not be extracted from RAM in the console as supplied, and expressly left other arguments undecided. [Lindgren J [169]-[173]] Finkelstein J's contrary analysis highlights the unsettled character of that issue within this Full Court.
The cinematograph-film issue was likewise determined on the evidence presented. The majority held that the statutory concept of embodiment was not established for the RAM in this console, while Finkelstein J viewed the statutory language as capable of covering RAM and considered the stored portion substantial. [Lindgren J [183]-[187]; Finkelstein J [217]-[224]] The judgment therefore records a disagreement about how technology, statutory language and evidence interact, rather than a unanimous rule for all digital storage.
Finally, liability was addressed before damages. The Court remitted the claims for damages and additional damages to the primary judge. The reasons supplied here do not state the eventual assessment of those amounts.
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In accordance with the practice of the Federal Court in certain cases of public interest, we have prepared this brief summary to accompany the Reasons for Judgment that are being delivered today. But the only authoritative pronouncement of our reasons is that contained in the full Reasons for Judgment. This summary is necessarily incomplete.
This appeal concerns amendments made to the Copyright Act 1968 (Cth) ("the Copyright Act") by the Copyright Amendment (Digital Agenda) Act 2000 (Cth) ("the Digital Agenda Act").
Section 116A of the Copyright Act, which was introduced by the Digital Agenda Act, gives a right of action to the owner or exclusive licensee of the copyright in a work or other subject matter which is protected by a "technological protection measure". The right of action is against a person who makes, sells, or does certain other acts in relation to, a "circumvention device" capable of circumventing, or facilitating the circumvention of, the technological protection measure.
The Sony companies ("Sony") manufacture and sell PlayStation games which are capable of being played on ordinary domestic television sets by means of a PlayStation console, which Sony also manufactures and sells. The games are embodied in computer programs which are contained in CD-ROMs ("CDs"). Sony owns the copyright in the computer programs. Insertion of a PlayStation CD into the PlayStation console enables the game to be played.
There is an "access code" contained within a track on each CD, and a chip described as a "Boot ROM" is located on the circuit board of the PlayStation console. They have the effect that a game can be played only with the authority of the owner or licensee of the copyright. The reason is that an unauthorised copy of a Sony PlayStation CD does not replicate the access code and therefore the Boot ROM of the console denies it access: it cannot be used in the console.
The respondent, Mr Stevens, sold "mod chips" or "converter chips" and installed them in PlayStation consoles. Their purpose and effect was to overcome Sony's device. But they would constitute "circumvention devices", and Sony would have a right of action against Mr Stevens under the new s 116A, only if Sony's device itself constituted a "technological protection measure" as defined in subs 10(1) of the Copyright Act.
The learned primary judge held that it did not. His Honour held that the definition required that in order to be a technological protection measure, a device must be designed to prevent or inhibit post-access infringement of copyright.
In this respect, we respectfully disagree with his Honour's interpretation of the definition. We think it sufficient that Sony's device inhibits infringement by rendering the resulting unauthorised copies unusable.
By majority, however, we agree with his Honour's resolution of two other issues against Sony. French and Lindgren JJ (Finkelstein J dissenting) agree with his Honour:
· that there is not a reproduction of the computer programs in the Random Access Memory ("RAM") of the PlayStation console when a game is played; and
· that there is not a copy of the game, regarded as a "cinematograph film", made in RAM when a game is played.
For the reason first mentioned above, we are allowing the appeal and granting to Sony a declaration and an injunction as well as an order for costs.
The primary judge dealt with the issue of liability but not, at this stage, that of damages. The questions of damages and additional damages are remitted to his Honour.
The full text of the Court's judgment, reported as Kabushiki Kaisha Sony Computer Entertainment v Stevens [2003] FCAFC 157, will shortly be available on the Court's website at www.fedcourt.gov.au.
Kabushiki Kaisha Sony Computer Entertainment v Stevens [2003] FCAFC 157 COPYRIGHT - circumvention device - "technological protection measure" - "PlayStation" games on CD-ROMs, playable on purpose-specific PlayStation console - manufacturer of console and CD-ROMs ("Sony") builds access code into CD-ROMs and Boot ROM into console, to prevent unauthorised copies of the CD-ROMs from being played on the console - by preventing the playing of counterfeit CD-ROMs, the device would discourage the making and selling of unauthorised copies of the CD-ROMs - whether, in these circumstances, the device "inhibited" infringement of the copyright in the computer programs for the games, contained in the CD-ROMs, for the purpose of definition of "technological protection measure" in subs 10(1) of Copyright Act 1968 (Cth) - whether the "infringement" referred to in that definition was limited to infringement which would occur after access - whether playing of game involved a reproduction of its computer program in the Random Access Memory ("RAM") of the PlayStation console - whether playing of game involved making of a copy of a "cinematograph film" in the RAM of the PlayStation console. WORDS AND PHRASES - "technological protection measure" - "inhibit" - "embody"
Copyright Act 1968 (Cth) ss 10(1) ("circumvention device", "technological protection measure", "material form", cinematograph film", "copy", "computer program"), 21(1A), 24, 116A Copyright Amendment (Digital Agenda) Act 2000 (Cth) Copyright Amendment Act 1984 (Cth) Acts Interpretation Act 1901 (Cth) ss 15AA, 15AB Advanced Computer Services of Michigan Inc v MAI Systems Corporation 845 F Supp 356 (ED Va 1994) discussed Apple Computer Inc v Computer Edge Pty Ltd (1983) 50 ALR 581 referred to Australian Video Retailers Association Ltd v Warner Home Video Pty Ltd (2001) 114 FCR 324 discussed Autodesk Inc v Dyason (No 1) (1992) 173 CLR 330 referred to Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 referred to CIC Insurance Ltd v Bankstown Football Club (1995) 187 CLR 384 cited Computer Edge Proprietary Limited v Apple Computer Inc (1986) 161 CLR 171 referred to Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 cited Dyason v Autodesk Inc (1990) 24 FCR 147 discussed Folsom v Marsh 9 Fed Cas 342 (Mass 1841) referred to Fox v Percy (2003) 77 ALJR 989 cited Francis Day & Hunter Ltd v Bron [1963] Ch 587 referred to Galaxy Electronics Pty Ltd v Sega Enterprises Ltd (1997) 75 FCR 8 discussed Gambart v Ball (1863) 143 ER 463 referred to Gyles v Wilcox (1740) 26 ER 489 referred to Jefferys v Boosey (1854) 4 HLC 815 (10 ER 681) referred to Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 referred to MAI Systems Corporation v Peak Computer Inc 991 F2d 511 (9th Cir 1993) referred to Microsoft Corporation v Business Boost Pty Ltd (2000) 49 IPR 573 not followed Nationwide News Pty Ltd v Copyright Agency Ltd (1996) 65 FCR 399 referred to New Boston Television Inc v Entertainment Sports Programming Network Inc 215 USPQ 755 (1981) referred to Nintendo Co Ltd v Golden China TV Game Centre (1993) 28 IPR 313 referred to Roland Corporation v Lorenzo & Sons Pty Ltd (1991) 33 FCR 111 referred to Sega Enterprises Ltd v Galaxy Electronics Pty Ltd (1996) 69 FCR 268 referred to Sony Computer Entertainment v Edmunds (t/as Channel Technology) (2002) 55 IPR 429 distinguished Tate v Fullbrook [1908] 1 KB 821 referred to White-Smith Music Publishing Company v Apollo Company 209 US 1 (1908) cited
Fuori and Aufiero, Computers and Information Processing, Prentice-Hall, New Jersey, 1986 Goldstein, Copyright, 2nd edn, s 10.1 Hamacher, Vranesic and Zaky, Computer Organization 5th edn, McGraw-Hill, Boston, 2002 Laddie, Prescott and Vitoria, The Modern Law of Copyright and Designs, 3rd edn, Butterworths, London, 2000 London, Introduction to Computers 5th edn, Faber and Faber, Boston, 1986 4 Nimmer on Copyright s 13.03A(2) Dickerson, The Interpretation and Application of Statutes, Little, Brown, Boston 1975 Somma, Computer Technology and the Law, McGraw-Hill, New York, 1983 Tocci and Ambrosio, Microprocessors and Microcomputers: Hardware and Software, 6th edn, Prentice-Hall, New Jersey, 2003 KABUSHIKI KAISHA SONY COMPUTER ENTERTAINMENT & ORS v STEVENS N 929 OF 2002 FRENCH, LINDGREN & FINKELSTEIN JJ SYDNEY 30 JULY 2003
NEW SOUTH WALES DISTRICT REGISTRY N 929 OF 2002
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN: KABUSHIKI KAISHA SONY COMPUTER ENTERTAINMENT
SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LTD (ACN 077 583 183)
AND: EDDY STEVENS
JUDGES: FRENCH, LINDGREN AND FINKELSTEIN
DATE OF ORDER: 30 JULY 2003
WHERE MADE: SYDNEY
THE COURT ORDERS THAT:
THE COURT DECLARES THAT: 1. On 8 April 2001, 28 September 2001 and 16 November 2001 the respondent sold circumvention devices, as defined in subs 10(1) of the Copyright Act 1968 (Cth), for use in association with "PlayStation" computer consoles and the CD-ROMs for "PlayStation" computer games, in contravention of s 116A of that Act.
THE COURT FURTHER ORDERS THAT: 3. The respondent shall not, by himself, his servants or agents, sell circumvention devices as defined in subs 10(1) of the Copyright Act 1968 (Cth), for use in association with "PlayStation" computer consoles and the CD-ROMs for "PlayStation" computer games in contravention of s 116A of that Act. 4. The respondent pay the appellants' costs of the appeal. 5. The respondent pay the costs of the appellants as applicants in proceeding N 738 of 2001 in this Court. 6. The matter be remitted to the primary judge for determination of the appellants' claims for damages pursuant to subs 116D(1) of the Copyright Act 1968 (Cth) and for additional damages pursuant to subs 116D(2) of that Act. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
NEW SOUTH WALES DISTRICT REGISTRY N 929 OF 2002
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN: KABUSHIKI KAISHA SONY COMPUTER ENTERTAINMENT
SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LTD (ACN 077 583 183)
AND: EDDY STEVENS
JUDGES: FRENCH, LINDGREN AND FINKELSTEIN JJ
DATE: 30 JULY 2003
PLACE: SYDNEY
REASONS FOR JUDGMENT FRENCH J: Introduction 1 Two years ago Mr Eddy Stevens sold unauthorised copies of computer games on CD-ROMs for use on Sony PlayStations. He also supplied and installed modifying chips in PlayStation consoles so that the unlawfully copied games could be played on them without the non-reproducible access codes that are normally the means by which a device in the consoles, known as a Boot ROM, recognises lawful copies. By supplying and installing the modifying chips he was said to be liable, under s 116A of the Copyright Act 1968 (Cth) to the three Sony companies who produce and distribute the PlayStation consoles and associated games. Section 116A confers upon copyright owners a right of action against persons supplying devices to circumvent technological protection measures which are designed to prevent or inhibit the infringement of copyright by the use of access codes or copy control mechanisms. Sackville J held that the Sony device, comprising the access codes in the CD-ROMs, and the Boot ROM in the console, did not constitute a technological protection measure within the meaning of s 116A. On that basis his Honour denied relief to the Sony companies under the Copyright Act. He reasoned that the Sony device only deterred or discouraged infringement of copyright in the computer games by rendering unauthorised copies unplayable. It did not "prevent or inhibit" infringement by reproduction of the CD-ROMs in the physical sense which he considered the Act requires. 2 On appeal from his Honour's decision, it is the opinion of all of us that the broader construction of the definition of "technological protection measure" is to be preferred and that, on that basis, the appeal brought by the Sony companies should be allowed. 3 Two other bases for the application of s 116A were advanced by the Sony companies and rejected by his Honour. The first was that the Sony device prevents infringement by preventing the transient reproduction of parts of the computer game on the internal Random Access Memory or RAM of the PlayStation console. The second was that it prevents infringement of copyright in the cinematograph film comprised in images and sounds forming part of the computer game which would be uploaded into the console's RAM and thereby reproduced if it were not for the Boot ROM and access code. On these two matters we are of divided opinion. I agree with Lindgren J, for the reasons which he has expressed, that the learned primary judge's conclusions rejecting the Sony companies' arguments on RAM reproduction and cinematograph film reproduction were correct. History of the Proceedings 4 In 2001, Mr Stevens sold and supplied unauthorised copies of CD-ROMs containing computer games for use on PlayStation consoles manufactured and distributed by Kabushiki Kaisha Sony Computer Entertainment ("Sony Japan") and its subsidiaries, Sony Computer Entertainment Europe Limited ("Sony Europe") and Sony Computer Entertainment Australia Pty Ltd ("Sony Australia"). Ordinarily a person selling an unauthorised copy of a CD-ROM for use on a Sony PlayStation would be selling a useless product because the CD-ROMs manufactured by Sony Japan bear an access code or a number of encrypted sectors of data that cannot be reproduced by conventional CD recording or copying devices generally known as CD-ROM "burners". The CD-ROM inserted into a PlayStation console will not operate the console unless the access code or encrypted data on it has been read by a Boot ROM which is located in the console. 5 The unauthorised CD-ROMs sold by Mr Stevens did not contain the requisite access codes or encrypted data. However he provided a service that sidestepped that difficulty. He sold and installed in PlayStation consoles programmed computer chips designed to override the console's internal operating system to allow it to load the software on an unauthorised CD-ROM. Such chips are known as "mod chips" or "converter chips". A console in which such chips have been installed is known as a "chipped console". 6 Mr Stevens was sued by the three Sony companies. They alleged that he infringed the registered trade marks of Sony Japan, engaged in misleading or deceptive conduct in contravention of the Fair Trading Act 1987 (NSW) and was liable to action under s 116A of the Copyright Act. The infringement of the Sony trade marks was said to have arisen because the games sold by Mr Stevens bore electronically stored representations of the trade marks which became visible when the games were played. The misleading or deceptive conduct was said to be constituted by representations, arising from Mr Stevens' supply of Sony PlayStation games, to the effect that: (i) they were manufactured by one or more of the Sony companies; (ii) they were of the same standard and quality as those supplied or offered for sale by the Sony companies; (iii) they were compatible with the PlayStation computer game console distributed in Australia by Sony Australia; and (iv) that Mr Stevens and/or the games which he supplied or offered for sale had the sponsorship approval or affiliation of one or more of the Sony companies. The liability under s 116A was said to arise because Mr Stevens' supply and installation of mod chips in Sony PlayStations involved him in selling or offering to sell circumvention devices capable of circumventing technological protection measures comprised by the use of the access codes and Boot ROMs referred to earlier. 7 The technological protection measures were defined, for the purpose of these proceedings, in par 25 of the amended statement of claim thus: "… (i) Each of the computer games for use with the Sony PlayStation® computer game console embodying the Works is programmed with an access code which is contained within a track on each of the CD-ROMs on which each of the Works is contained. (ii) Each Sony PlayStation® computer game console manufactured by the First Applicant and on which the computer games are intended to be played features a device which is designed in the ordinary course of its operation to inhibit the infringement of copyright in the Works and the Films by ensuring that access to the Works and the Films is available solely by use of the access code referred to in subparagraph (i) above." The copyright protected by these measures was said to subsist in the computer programs embodied in the Sony PlayStation computer games. These programs were referred to as "the Works". In addition the games were said to embody images constituting cinematograph films within the meaning of the Act. 8 After a trial of issues going to liability only, Sackville J made the following findings on 26 July 2002: 1. Mr Stevens infringed the registered trade marks of Sony Japan by selling unauthorised copies of computer games which stored in electronic form representations of those trade marks. The trade marks were reproduced when the unauthorised copies were played on chipped PlayStation consoles ([64] of primary judgment). The claim for infringement of the Sony Japan trade marks succeeded. 2. Mr Stevens did not, as alleged, misleadingly represent that the unauthorised copies of PlayStation games sold by him had the sponsorship or approval of any of the Sony companies or that he was affiliated with them. The claim of misleading or deceptive conduct in contravention of s 42 of the Fair Trading Act failed. 3. The protection devices relied upon by the Sony companies did not constitute a "technological protection measure" as that expression is used in s 116A(1) of the Copyright Act. The mod chips installed by Mr Stevens therefore did not constitute circumvention devices. The claim for relief under s 116A(5) therefore failed. 9 On 16 August 2002, his Honour made a declaration that Mr Stevens had infringed the Sony Trade Marks, awarded injunctive relief, made a delivery up order and directed that an account be taken of the profits earned by Mr Stevens from the sale of infringing goods. Orders ancillary to the order for an account of profits were made and the application was otherwise dismissed. The three Sony companies appeal from that part of the judgment of his Honour which held that their claim under s 116A of the Copyright Act failed.
The Copyright Act Provisions 10 The reasons for judgment of Lindgren and Finkelstein JJ set out in detail the findings of fact, the relevant statutory provisions and their legislative history. It is therefore not necessary for me to repeat what they have said. It is however useful to refer to the essential elements of s 116A of the Copyright Act. 11 Section 116A(5) of the Copyright Act confers upon the owner or exclusive licensee of copyright in a work or other subject matter a right to bring an action against a person who makes to sell or offers for sale a circumvention device capable of circumventing or facilitating the circumvention of a technological protection measure by which the work or other subject matter is protected. Central to the case brought by the Sony companies under this provision was the definition of "technological protection measure" in s 10(1) of the Copyright Act which is: "… a device or product, or a component incorporated into a process, that is designed, in the ordinary course of its operation, to prevent or inhibit the infringement of copyright in a work or other subject-matter by either or both of the following means: (a) by ensuring that access to the work or other subject matter is available solely by use of an access code or process (including decryption, unscrambling or other transformation of the work or other subject- matter) with the authority of the owner or exclusive licensee of the copyright; (b) through a copy control mechanism." "Circumvention Device" is defined as: "… a device (including a computer program) having only a limited commercially significant purpose or use, or no such purpose or use, other than the circumvention, or facilitating the circumvention, of an technological protection measure." The Issues on Appeal 12 The issues arising in this appeal are conveniently identified by reference to the groupings of the grounds in the Notice of Appeal. It may be noted at the outset that the issue whether the access code on Sony CD-ROMs by itself constitutes a technological protection measure, as part of the computer program in which copyright subsists, was raised by grounds 5, 6 and 7 each of which was abandoned at the hearing of the appeal. The remaining live issues and the grounds which raised them were as follows: 1. Whether the definition of technological protection measure in s 10(1) of the Copyright Act covers a mechanism which deters or discourages the copying of works to which it relates and, relevantly to the present case, the copying of PlayStation games prior to playing them on PlayStation consoles (grounds 8 to 11 inclusive). 2. Whether the protection devices used by the Sony companies directly prevented infringement of copyright in their works by preventing reproduction of the game or a substantial part of it from an unauthorised CD-ROM on to the random access memory (RAM) within the console. Such internal reproduction is part of the normal operation of the PlayStation console. The argument depended upon the proposition that this internal reproduction was reproduction of the work on the CD-ROM in a "material form" as defined in s 10 of the Copyright Act (grounds 12 to 18 of the Notice of Appeal). 3. Whether the protected devices used in the Sony PlayStation directly prevented infringement by preventing infringing reproduction, within the PlayStation console, of a cinematograph film by reproduction of images from the CD-ROM onto the RAM. This argument depended upon the proposition that the embodiment of images in the RAM constituted the making of a copy of a cinematograph film within the meaning of s 86(a) of the Act. On the first of these I agree with the conclusions of Lindgren J, with whom Finkelstein J also agrees. However I wish shortly to state my own basis for that agreement as we differ from the carefully reasoned conclusions of the learned primary judge in this respect. Whether a "technological protection measure" includes a device which has the practical effect of discouraging infringement 13 The Sony companies submitted to the learned trial judge that the definition of "technological protection measure" in s 10(1) of the Copyright Act should be read so as to include a device which has the practical effect of discouraging infringement of copyright. His Honour observed that the focus of the definition of "technological protection measure" was on a technological device or product designed to bring about a specified result, namely preventing or inhibiting the infringement of copyright in a work, by a particular means. His Honour did not think the definition was concerned with devices or products that did not, by their operations, prevent or curtail specific acts infringing or facilitating the infringement of copyright in a work, but which merely had a general deterrent or discouraging effect on those who might be contemplating infringing copyright in a class of works, for example, by making unlawful copies of a CD-ROM. 14 After referring to the legislative history of s 116A and its travaux preparatoires, including the July 1997 Discussion Paper released by the Commonwealth Attorney-General's Department, Copyright Reform and the Digital Agenda, his Honour concluded: "There seems to be nothing in the legislative history to support the view that a technological measure is to receive legal protection from circumvention devices if the only way in which the measure prevents or inhibits the infringement of copyright is by discouraging infringements of copyright which predate the attempt to gain access to the work or to copy it." [117] His Honour therefore held that the protective devices relied upon by the Sony companies could not be regarded as technological protection measures if the only way in which they inhibited infringement of copyright in PlayStation games was by discouraging people from copying these games as a prelude to playing them on PlayStation consoles. He said: "It is necessary for the applicants to demonstrate that the protective devices are designed to function, by their own processes or mechanisms, to prevent or hinder acts that might otherwise constitute an infringement of copyright." [118] The Sony companies say that, in so holding, his Honour erred. They say that he ought to have held that the protective devices, the access codes and the Boot ROMs are technological protection measures within the meaning of the Act because they inhibit the infringement of copyright by discouraging people from copying PlayStation games prior to playing them on PlayStation consoles (appeal ground 11). 15 It is necessary to begin with a consideration of the ordinary meaning of the words used to define "technological protection measure" in s 10(1) of the Act. This consideration must also have regard to the statutory context in which the words appear, both in that definition and in the application of the defined term in s 116A. 16 A technological protection measure must answer the description of "a device or product or a component incorporated into a process …". The ordinary meaning of the word "device" includes relevantly "… a thing designed for a particular function or adapted for a purpose; an invention, a contrivance …" - Shorter OED. A device may comprise more than one part and, as in the present case, embrace the two elements of the access code on the Sony PlayStation CD-ROM and the Boot ROM in the console. Alternatively, the combination of access code and Boot ROM is arguably "a component incorporated into a process" although each by itself would probably more comfortably fit within that description. The choice of words "device", "product" and "component" bespeaks a mechanism whose elements are physical, a characterisation that covers codes or instructions in electronic form. The device, product or component must be "designed, in the ordinary course of its operation, to prevent or inhibit the infringement of copyright in a work or other subject matter…". It is the "design" of the device, product or component that is critical. The verb "design" is used in the purposive sense of construction in order to achieve a particular outcome. 17 In this case the outcome for which the device must be designed is "to prevent or inhibit the infringement of copyright…". The ordinary meanings of these words "prevent" and "inhibit" overlap. So "prevent" means, inter alia, to "stop, hinder or avoid … forestall or thwart by previous or precautionary measures … make impracticable or impossible by anticipatory action … stop from happening … frustrate, defeat, make void" - Shorter OED. Inhibit means relevantly, "restrain or prevent" - Shorter OED. The scope of these two verbs, in their ordinary meanings, is wide enough, in my opinion, to cover an intended result of deterring or discouraging infringement by rendering the infringing copy useless for the purpose for which it was made. The term "prevent" encompasses forestalling or thwarting infringement by previous or precautionary measures and making infringement "impracticable" by anticipatory action. The requirement that the device be designed to prevent or inhibit the infringement of copyright "in the ordinary course of its operation" excludes the case of a device which produces that outcome only in a special or unusual application. In a sense it reinforces the requirement that the device be designed for the requisite purpose. It does not qualify or limit the nature of the prevention or inhibition of infringement contemplated by the definition. 18 The question then is whether the remainder of the definition and its statutory context require the narrower view which found favour with the learned trial judge. The fact that the device, product or component has a physical existence in the sense described above does not of itself indicate that "prevent" and "inhibit" are to be confined in their application to the physical prevention or inhibition of infringement by reproduction of the copyright work or other subject matter. If such a constraint exists, it must be found elsewhere. The means of prevention or inhibition of infringement specified in the definition of "technological protection measure" are: (a) by ensuring that access to the work or other subject matter is available solely by use of an access code or process (including decryption, unscrambling or other transformation of the work or other subject matter) with the authority of the owner or licensee of the copyright; (b) through a copy control mechanism. If these means are confined to physical mechanisms, as it appears they are, that no more requires a narrow "physical" construction of "prevent or inhibit the infringement of copyright …" than does the fact that the technological protection measure must consist of a physical device product or component. In my opinion par (a) is logically entirely consistent with the notion that the practical denial of access to a work or other subject matter by the use of an access code may prevent or inhibit the use of copying devices which cannot reproduce that code. For infringement is to that extent prevented or inhibited according to the ordinary meaning of those words. Reference to a "copy control mechanism" in par (b) does not imply any additional constraint. 19 Section 116A, in which the term "technological protection measure" is used, does not in terms impose any constraint upon the kind of prevention or inhibition of infringement that it may be designed to achieve. It is of importance to bear in mind that the section appears in Div 2A of Pt V of the Copyright Act which deals with remedies and offences generally. Although Div 2A was introduced into the Act by the Copyright Amendment (Digital Agenda) Act 2000, concerned, according to the Revised Explanatory Memorandum, with the question of copyright protection "in the online environment", its application was not confined to that environment or to particular technologies. The Digital Agenda Act had, as one of its objectives, set out in the Memorandum: "To replace technology specific rights with technology-neutral rights so that amendments to the Act are not needed each time there is a development in technology." It is no doubt for that reason that the protection afforded by s 116A and the definitions of "technological protection measure" and "circumvention device" are applicable generally to "works" or "other subject matters" in which copyright may subsist. They are not limited to works or subject matters stored electronically or in any particular way. 20 Section 116A also operates with respect to the full range of acts which may constitute infringement of a work or other subject matter under the Act. That range goes beyond reproduction. It extends to knowingly selling or offering for sale articles, the making of which constituted an infringement of copyright (s 38). The conduct covered by the term "infringement" must have a bearing upon the ways in which a device may prevent or inhibit that conduct. Prevention or inhibition of infringement is relevant not only to reproduction of a work in a material form, but also to its sale or offering for sale. If a device such as an access code on a CD-ROM in conjunction with a Boot ROM in the PlayStation console renders the infringing copies of computer games useless, then it would prevent infringement by rendering the sale of the copy "impracticable or impossible by anticipatory action". 21 I therefore agree with Lindgren J as to the proper construction of the term "technological protection measure" and that the appeal should be allowed on the grounds which relate to the first issue in the appeal. I agree also with his Honour's reasoning in relation to the notice of contention filed by Mr Stevens relating to s 47C of the Act. 22 The parties provided the Court with comprehensive materials covering what may broadly be called the travaux preparatoires and the legislative history of s 116A. It is, with respect, entirely appropriate to refer to those matters for a better understanding of the broad historical context in which the provision came into being. It may also assist the Court in attaining a clearer understanding of its purpose. Purposive construction is mandated by s 15AA of the Acts Interpretation Act 1901 (Cth) and reference to extrinsic material is authorised by the same Act on the conditions set out in s 15AB. As was said in the joint judgment of Brennan CJ, Dawson, Toohey and Gummow JJ in CIC Insurance Ltd v Bankstown Football Club (1995) 187 CLR 384 at 408: "… the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses 'context' in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy." Nevertheless, when considering resort to extrinsic materials it is important to have regard to the cautionary directive contained in s 15AB(3) of the Acts Interpretation Act which provides: "In determining whether consideration should be given to any material in accordance with subsection (1), or in considering the weight to be given to any such material, regard shall be held, in addition to any other relevant matters, to: (a) the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; and (b) the need to avoid prolonging legal or other proceedings without compensating advantage." 23 Those who are subject to the law and those who apply it are entitled to expect that it means what it says. The ordinary and grammatical sense of the words of a statute is the starting point of all construction: "… for, after all, those who are subject to the law's commands are entitled to conduct themselves on the basis that those commands have meaning and effect according to ordinary grammar and usage." - Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 at 340 per Gaudron J That ideal may seem far removed from the complexities of contemporary statutes. It is not, for that reason, to be abandoned. It is mandated by s 15AB(3) of the Acts Interpretation Act as a consideration of weight in statutory construction. 24 The more complex and extensive the travaux preparatoires and legislative history considered in the construction of a statute and the greater the influence they have on its construction, the less accessible is that construction to the ordinary intelligent reader and, perhaps more importantly, to anyone other than the specialist practitioner in intellectual property law. So the law develops its own access codes requiring special readers. This may be good for the special readers. It is not necessarily good for the law. 25 In my opinion the proper construction of s 116A and the definition of "technological protection measure" flows from a consideration of the ordinary and grammatical meaning of its language. There may be all manner of powerful policy considerations which can be extracted from the legislative history and other materials referred to in this case which favour the narrower reading of the definition of "technological protection measure" preferred by the learned primary judge. Limitations upon the extension of the bounds of effective copyright protection and related issues of competition policy have been pressed upon the Court as well as the uncertain boundaries of anything less precise than physical prevention or inhibition of infringement by reproduction. In the end, in my opinion, it is for the legislature to spell out the limiting words which may respond to such considerations. It is not for the Court to cage the ordinary meaning of the words which have been adopted by reference to policy considerations of its own divining. The Determination of the Second and Third Issues 26 The second and third issues agitated on the hearing of this appeal raised alternative bases for holding that the Sony device is a technological protection measure. Given that the Court is unanimously of the view that, upon a proper construction of the definition of that term, the device answers that description, it is unnecessary to proceed to the second and third issues on appeal. Powerful arguments on either side of those issues have been set out by Lindgren and Finkelstein JJ. In my opinion, however, on both matters the reasoning and conclusions of Lindgren J, which accord with those of the learned primary judge, are to be preferred. I agree with his Honour that on the second and third issues the Sony companies do not succeed. Conclusion 27 For the preceding reasons, I agree that the appeal should be allowed on the basis of the grounds relating to the definition of "technological protection measure". I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French.
NEW SOUTH WALES DISTRICT REGISTRY N 929 OF 2002
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN: KABUSHIKI KAISHA SONY COMPUTER ENTERTAINMENT
SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LTD (ACN 077 583 183)
AND: EDDY STEVENS
JUDGES: FRENCH, LINDGREN AND FINKELSTEIN JJ
DATE: 30 JULY 2003
PLACE: SYDNEY
REASONS FOR JUDGMENT LINDGREN J: 28 The appellants (I will use the word "Sony" to refer to them collectively and to that one of them relevant to the particular context) appeal from that part of the judgment of a judge of the Court ((2002) 55 IPR 497) that dismissed Sony's claim under s 116A of the Copyright Act 1968 (Cth) ("the Act" - unless the context indicates otherwise, references to sections and paragraphs are references to sections and paragraphs of the Act). Section 116A was introduced into the Act by the Copyright Amendment (Digital Agenda) Act 2000 (Cth) ("Digital Agenda Act"), which commenced on 4 March 2001. The section is designed to safeguard "technological protection measures" against circumvention. The proceeding at first instance, and now this appeal, have raised questions as to the proper construction and application of the definition of the expression "technological protection measure" in s 10 of the Act. 29 The proceeding concerned Sony's "PlayStation" computer games ("the PlayStation games"). Sony alleged that the respondent ("Mr Stevens") sold and installed circumvention devices which were intended to facilitate the use of pirated copies of PlayStation games. 30 At first instance, Sony claimed that the PlayStation games were protected by a technological protection measure and that in contravention of s 116A Mr Stevens sold and installed devices designed to circumvent the technological protection measure. As a result, counterfeit PlayStation games could be played on the purpose built console manufactured by Sony ("the PlayStation console"), notwithstanding the technological protection measure. 31 The hearing before his Honour was limited to the issue of liability. 32 Sony also claimed infringement of trade marks and contraventions of the Fair Trading Act 1987 (NSW). It succeeded on the former claim and failed on the latter. Those results are not challenged: the appeal concerns only the failure of Sony's claim under s 116A. 33 Mr Stevens was not represented before the primary judge. Subject to conditions, his Honour granted leave to the Australian Competition and Consumer Commission ("ACCC") to appear as amicus curiae on the ground that the case was likely to present important questions of construction concerning s 116A. On the appeal, Mr Stevens was represented by senior and junior counsel. Nonetheless, we granted the ACCC leave to make written submissions.
Computer program as a literary work 34 Subsection 32(1) of the Act provides that, subject to certain conditions, copyright subsists in an original literary work that is unpublished. The expression "literary work" is defined by subs 10(1) to include "a computer program or compilation of computer programs". The expression "computer program" is defined in that subsection to mean: "a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result." 35 Subsection 36(1) of the Act provides that, relevantly, the copyright in a literary work is infringed by a person who, not being the owner of the copyright and without the licence of the owner, does or authorises the doing of any act comprised in the copyright. Copyright in a work is also infringed by a person who sells, or, by way of trade, offers or exposes for sale an article if the seller knew, or ought reasonably to have known, that the making of the article constituted an infringement of copyright: subs 38(1). 36 Section 31 defines copyright, in relation to a work. In relation to a literary work, it is defined as the exclusive right to do all or any of certain specified acts, including the right"to reproduce the work in a material form". In so far as the proceeding relates to Sony's copyright in the computer programs embodied in the CD-ROMs for the PlayStation games, it relates to Sony's exclusive right to reproduce in a material form the sets of statements or instructions embodied in those CD-ROMs. 37 Subsection 21(1A) of the Act provides as follows: "For the purposes of this Act, a work is taken to have been reproduced if it is converted into or from a digital or other electronic machine-readable form, and any article embodying the work in such a form is taken to be a reproduction of the work." 38 The expression "material form" is defined in subs 10(1), in relation to a work or an adaptation of a work, to include "any form (whether visible or not) of storage from which the work or adaptation, or a substantial part of the work or adaptation, can be reproduced." 39 Subsection 14(1) of the Act provides as follows: "In this Act, unless the contrary intention appears: (a) a reference to the doing of an act in relation to a work or other subject-matter shall be read as including a reference to the doing of that act in relation to a substantial part of the work or other subject-matter; and (b) a reference to a reproduction, adaptation or copy of a work shall be read as including a reference to a reproduction, adaptation or copy of a substantial part of the work, as the case may be." 40 It follows from the above provisions that the copyright in the set of statements or instructions embodied in the CD-ROM for a PlayStation game includes the exclusive right to store them or a substantial part of them in a form of computer storage from which they, or a substantial part of them, can be reproduced in another digital or electronic machine-readable form. 41 Part V, Div 2A (ss 116A-116D) was also introduced into the Act by the Digital Agenda Act. Division 2A is headed "Actions in relation to circumvention devices and electronic rights management information". Section 116A provides, relevantly, as follows: "(1) Subject to subsections (2), (3) and (4), this section applies if (a) a work or other subject-matter is protected by a technological protection measure; and (b) a person does any of the following acts without the permission of the owner or exclusive licensee of the copyright in the work or other subject matter: (i) makes a circumvention device capable of circumventing, or facilitating the circumvention of, the technological protection measure; (ii) sells, lets for hire, or by way of trade offers or exposes for sale or hire or otherwise promotes, advertises, or markets, such a circumvention device; (iii) distributes such a circumvention device for the purpose of trade, or for any other purpose that will affect prejudicially the owner of the copyright; …; and (c) the person knew, or ought reasonably to have known, that the device or service would be used to circumvent, or facilitate the circumvention of, the technological protection measure. …; (5) If this section applies, the owner or exclusive licensee of the copyright may bring an action against the person. (6) In an action under subsection (5), it must be presumed that the defendant knew or ought reasonably to have known, that the circumvention device …to which the action relates would be used for a purpose referred to in paragraph (1)(c) unless the defendant proves otherwise." (my emphasis) Subsections (2), (3), (4) and (4A) (omitted above) provide for circumstances in which s 116A does not apply. It is noteworthy that the use of a circumvention device is not referred to in par 116A(1)(b), and that apart from the making of a circumvention device, that paragraph refers to trading activity only (and the making of a circumvention device can be expected often to be a trading activity). Accordingly, s 116A does not apply to enable the copyright owner to bring an action against the ordinary user of a circumvention device, and, subject to what is said about the reproduction in RAM and cinematograph film arguments below, a user does not infringe copyright any more than the reader of a book infringes the copyright in the literary work embodied in it. 42 "Circumvention device" is defined to mean "a device (including a computer program) having only a limited commercially significant purpose or use, or no such purpose or use, other than the circumvention, or facilitating the circumvention, of an effective technological protection measure." 43 The expression "technological protection measure", which lies at the heart of the present appeal, is defined in subs 10(1) to mean: "a device or product, or a component incorporated into a process, that is designed, in the ordinary course of its operation, to prevent or inhibit the infringement of copyright in a work or other subject-matter by either or both of the following means: (a) by ensuring that access to the work or other subject matter is available solely by use of an access code or process (including decryption, unscrambling or other transformation of the work or other subject-matter) with the authority of the owner or licensee of the copyright; (b) through a copy control mechanism." 44 As will be seen below, drafts of the legislation included the expression "effective technological measure" and a definition of "effective", but the word "effective" in that expression and the definition of "effective" were not retained. However, through oversight, the definition of "circumvention device" retained the expression "effective technological measure". Since the primary judge's decision, the word "effective" has been removed from the definition of "circumvention device" by the Copyright Amendment (Parallel Importation) Act 2003 (Cth), s 3, Schedule 3, item 1. That Act was assented to on 15 April 2003 but the amendment mentioned commenced retrospectively immediately after the commencement of the Copyright Amendment (Digital Agenda) Act 2000 (Cth): see s 2, table, item 4. (The Copyright Amendment (Parallel Importation) Act 2003 amended the definition of "technological protection measure" in another respect with retrospective effect from the same date: it omitted the word "licensee" and replaced it with the words "exclusive licensee": see s 3, Schedule 3, item 3, and for its commencement, again, s 2, table, item 4.) 45 Section 116D provides for the remedies that are available in actions under s 116A. I need not refer to them.
Cinematograph film 46 The learned primary judge noted the following provisions of the Act which were relevant to the cinematograph film argument: "cinematograph film means the aggregate of the visual images embodied in an article or thing so as to be capable by the use of that article or thing: (a) of being shown as a moving picture; or (b) of being embodied in another article or thing by the use of which it can be so shown; and includes the aggregate of the sounds embodied in a sound-track associated with such visual images" (subs 10(1)). "copy, in relation to a cinematograph film, means any article or thing in which the visual images or sounds comprising the film are embodied" (subs 10(1)). "For the purposes of this Act, sounds or visual images shall be taken to have been embodied in an article or thing if the article or thing has been so treated in relation to those sounds or visual images that those sounds or visual images are capable, with or without the aid of some other device, of being reproduced from the article or thing" (s 24). 47 Generally speaking, the maker of a cinematograph film is the owner of any copyright subsisting in the film by virtue of Part IV of the Act (subs 98(2)). Section 131 provides as follows: "Where the name of a person appeared on copies of a cinematograph film as made available to the public in such a way as to imply that the person was the maker of the film…that person shall, in an action brought by virtue of this Part, be presumed, unless the contrary is established, to be the maker of the film…". 48 Subsection 86(a) provides that for the purposes of the Act, copyright, in relation to a cinematograph film, is the exclusive right to "do all or any of the following acts: (a) to make a copy of the film…" (my emphasis) Subsection 101(1) provides that subject to the Act, copyright subsisting by virtue of Pt IV is infringed by a person who, not being, or having the licence of, the owner of the copyright, does, or authorises the doing, in Australia, of any act comprised in the copyright. 49 Subsection 21(6) provides that for the purposes of the Act a cinematograph film is taken to have been copied if it is converted into or from a digital or other electronic machine-readable form, and any article embodying the recording or film in such a form is taken to be a copy of the recording or the film. 50 Subsection 14(1) was set out at [39] above. It follows from that provision and the others noted above that a person infringes copyright in a cinematograph film if he or she, without the licence of the copyright owner, makes an article or thing from which a substantial part of the visual images and sounds comprising the film can be reproduced.
The Pleading 51 Sony pleaded its claim generally along the following lines. The first appellant ("Sony Japan") manufactured and distributed PlayStation consoles and computer games for use with them. The second appellant ("Sony Europe") was a subsidiary of Sony Japan. The third appellant ("Sony Australia") was a subsidiary of Sony Europe. 52 Mr Stevens sold computer games for use with PlayStation consoles. Those games were not manufactured by or with the licence of Sony. 53 Sony Europe was the owner or exclusive licensee of copyright in a range of computer programs ("the Works") or, alternatively, cinematograph films ("the Films") embodied in the PlayStation games for use with the PlayStation console. More than 150 PlayStation games for use with the PlayStation console embodying the Works or, alternatively, the Films, had been released in the United Kingdom and other countries in Europe by Sony Europe, including the PlayStation games named in Schedule 1 to the amended statement of claim. 54 Sony Australia was the licensee of the copyright in the Works and the Films. Each of the PlayStation games embodying the Works and the Films was protected by a "technological protection measure". There are two components to the technological protection measure: an "access code" contained within a track on each of the CD-ROMs on which a Work is contained, and a device within the PlayStation console itself, which ensures that access to the Works and the Films is available solely by use of the access code. 55 Mr Stevens sold devices known as "mod chips" or "converters" which he installed in PlayStation consoles and which had a limited commercially significant purpose or use, or no such purpose or use, other than the circumvention, or facilitation of the circumvention, of the technological protection measure described. Mr Stevens knew, or ought reasonably to have known, that the devices which he sold and installed would be used to circumvent, or to facilitate the circumvention of, the technological protection measure.
Nature of appellants' claim before primary judge under s 116A and issues arising 56 Senior counsel who appeared for Sony before his Honour identified the elements of Sony's primary claim under s 116A as follows: "(i) a work (s 116A(1)(a)) (ii) is protected by a technological protection measure (s 116A(1)(a)) (iii) and a person (s 116A(1)(b) (iv) without the permission of the owner or exclusive licensee of the copyright in the work (s 116A(1)(b)) (v) sells or distributes a circumvention device (s 116A(1)(b)(ii) and (iii)) (vi) capable of circumventing or facilitating the circumvention of, the technological protection measure (s 116A(1)(b)(i)) (vii) and the person knew, or ought reasonably to have known, that the device…would be used to circumvent, or facilitate the circumvention of, the technological protection measure (s 116A(1)(c))." 57 As to (i), the relevant "work" was the original computer program stored on each of the CD-ROMs constituting a PlayStation game identified in Schedule 1 to the amended statement of claim. On this basis, it was not in dispute that Sony Europe was the owner or exclusive licensee of the copyright in the literary works constituted by those computer programs. 58 As to (ii), senior counsel said that each work was protected by a "technological protection measure". Sony identified the technological protection measure as: · the chip, described in evidence as the "Boot ROM", located on the circuit board of the PlayStation console which reads and verifies the access code stored on a genuine PlayStation game; · the access code stored on the CD-ROM for each PlayStation game; or · a combination of the Boot ROM and the access code.
Sony's case before his Honour was that one or other of these devices, or both of them in combination, functioned by "ensuring that access to the work [the computer program] [was] available solely by use of an access code or process … with the authority of the owner or licensee of the copyright". 59 But was the protection device designed in the ordinary course of its operation "to prevent or inhibit the infringement of copyright in a work"? Sony submitted that it was, on either of two alternative theories. The first was that the device inhibited the making of infringing copies of PlayStation games by rendering the making of them financially pointless. The protective device rendered infringing copies of PlayStation games unusable and therefore unsaleable. 60 The alternative basis on which Sony contended that the device was designed in the ordinary course of its operation "to prevent or inhibit the infringement of copyright in a work" depended on the evidence that, in the course of the playing a PlayStation game, the console stored an electronic copy of a portion of the computer program on the console's RAM (Random Access Memory), and so permitted the game, or a portion of it, to be played, even after the CD-ROM was removed from the console. It was argued that the computer program, or a substantial part of it, was reproduced in RAM, and that, in this way, there was an infringement of Sony's copyright in the computer program. Sony submitted that the protective device was designed to prevent the infringement that would take place upon the playing of the infringing copy by reason of a substantial part of the computer program stored on the CD-ROM being reproduced in RAM. 61 As to elements (iii), (iv), (v), (vi) and (vii) referred to in [56] above, Mr Stevens was the person who sold and distributed the "mod chip" or "converter chip" which he installed in PlayStation consoles. The mod chip had no purpose or use, or only a limited commercially significant purpose or use, other than the circumvention, or facilitating the circumvention, of the Boot ROM, or the access code, or both of them in combination, and the mod chips installed by Mr Stevens were, in fact, capable of doing so as Mr Stevens knew. In any event, Sony was entitled to the benefit of the presumption created by subs 116A(6) of the Act, namely, that Mr Stevens knew or ought to have known that the devices he installed would be used for the purpose identified in par 116A(1)(c). 62 By a late amendment, Sony contended before his Honour that the PlayStation games embodied cinematograph films. They relied on the Full Court decision of this Court in Galaxy Electronics Pty Ltd v Sega Enterprises Ltd (1997) 75 FCR 8 ("Galaxy v Sega"), for the proposition that the aggregate of the visual images shown upon the playing of a PlayStation game constituted a "cinematograph film" within the definition of that expression subs 10(1) of the Act (set out at [46] above), and were therefore the subject of copyright under Part IV of the Act. This was because the aggregate of the visual images was "embodied" in the computer program stored on the CD-ROM. Consistently with Galaxy v Sega, it was no objection to this conclusion that the images appearing on the screen were dependent on player input, or that the computer program was or could also be a literary work the subject of copyright by virtue of Part III of the Act. Since Sony did all things necessary for the production of the first copy of the Films, Sony was the maker of them and owned any copyright in them: see subs 22(4) and s 90. In any event, since Sony Europe's name appeared on each copy of the Films, Sony was presumed to be the maker of the them: s 131. 63 Again, Sony relied on the storing in RAM of a substantial part of each of the Films. Sony's argument was that this constituted the making a copy of the Film since, with the aid of the Central Processing Unit ("CPU"), the images are capable of being reproduced on screen from RAM. The Boot ROM or access code, or both in combination, prevent infringement of copyright in the Films by this form of copying, just as they prevent infringement of copyright in the computer program by the same form of copying, that is to say, storage in RAM. 64 It was not in dispute that Sony Europe was the owner or exclusive licensee of the copyright in the computer programs for the PlayStation games involved in the proceeding, or that Sony Australia was the licensee of that copyright in Australia. The CD-ROMs in which the computer programs were embodied and the packaging for the games bore a notice warning that unauthorised copying and other infringements of copyright were prohibited. 65 His Honour found that Mr Stevens sold mod chips for installation in PlayStation consoles on, relevantly, 8 April 2001, 28 September 2001 and 16 November 2001, knowing: · that the purpose of installing the chip was to enable the console to play copies of the PlayStation games that did not carry the access code; and · that many, if not all, such copies would have been made without the authority or licence of Sony.
REASONING OF THE PRIMARY JUDGE 66 The learned primary judge gave an account of the historical background to the enactment of s 116A of the Act. Rather than summarise that account here and supplement it later with my own observations, I will give an expanded account of it later under "My Reasoning on the Appeal". 67 I will summarise his Honour's reasons by reference to the headings that he used which remain relevant to the appeal.
The Work 68 His Honour had no difficulty in regarding the computer programs stored in the PlayStation game CD-ROMs as sets of statements or instructions to be used directly or indirectly in a computer (the PlayStation console) to bring about a particular result, namely, the playing of the PlayStation games. Accordingly, the set of statements or instructions for each game was a "computer program" and therefore a "literary work". The "certain result" which the use of the set of instructions in the PlayStation console was to bring about was the conversion of the original content of the CD-ROM into a form which enabled the consumer to have the visual and aural experience of playing the game (his Honour referred to Australian Video Retailers Association Ltd v Warner Home Video Pty Ltd (2001) 114 FCR 324 ("AVRA v Warner") at [71] of the reasons of Emmett J). His Honour discussed, but did not need to resolve, the question whether the access code, embedded in the CD-ROM, itself formed part of the relevant computer program.
The Regional Access Code Issue 69 The learned primary judge did not accept a submission by the ACCC to the effect that in order to be a "technological protection measure", the only purpose of the device must be to prevent or inhibit infringement of copyright. His Honour thought that a device might be within the definition even though it had another purpose as well, such as the purpose of limiting a console to the playing of PlayStation games with the "correct" regional access code. His Honour acknowledged that there might be a question as to whether a device designed primarily to achieve a particular non-copyright purpose by specified means was within the definition simply because it incidentally prevented or inhibited the infringement of copyright, but he did not find it necessary to resolve that question. His Honour referred to the reasoning of Jacob J in Sony Computer Entertainment v Edmunds (t/as Channel Technology) 55 IPR 429 ("Sony v Edmunds"). 70 His Honour inferred that the protective device was intended by Sony to deter or otherwise discourage copyright infringement by the unlawful making, importation and distribution of its PlayStation games. He also inferred that the existence and use by Sony of that device did have the practical effect of doing so. He found nothing in the evidence to suggest that the major purpose or objective of the protection device, from Sony's perspective, was to ensure that the PlayStation consoles could be used to play only PlayStation games lawfully acquired in Australia or Europe. 71 The above inferences left open the question whether they were enough to warrant a conclusion that the Boot ROM or access code, or both in combination, constituted a "technological protection measure" within the statutory definition.
The "Practical Effect" Argument 72 Senior counsel for Sony pointed out that the word "inhibit", which is used in the definition of "technological protection measure", has a dictionary meaning of "to restrain, hinder, arrest or check" (Macquarie Dictionary). Sony accepted that where a person simply played a "pirated" copy of a PlayStation game on a PlayStation console, the person did not infringe copyright in the computer program constituting the game, and that any infringement would have occurred previously. Sony also accepted that it was not an infringement for a person to play a PlayStation game lawfully acquired in one region of the world, such as a game acquired in the United States, on a PlayStation console purchased in a different region, such as a console purchased in Australia, even though the game lacked the regional access code which would allow it to be played on such a console. But, according to Sony's submission, it was not to the point that a protective device, by its own processes or mechanisms, was not capable of physically preventing an infringement from occurring: it sufficed that "as a practical matter", it removed the incentive for persons to infringe. Sony contended that its protective devices did so by rendering infringing copies unsaleable (unless the devices could be circumvented). 73 The learned primary judge addressed this issue and expressed his conclusion on it in the following paragraphs: "[115] The definition, so it seems to me, contemplates that but for the operation of the device or product, there would be no technological or perhaps mechanical barrier to a person gaining access to the copyright work, or making copies of the work after access has been gained, thereby putting himself or herself in a position to infringe copyright in the work. The definition is intended to be confined to devices or products that utilise technological processes or mechanisms to prevent or curtail specific actions in relation to a work, which actions would otherwise infringe or facilitate infringement of copyright in that work. In other words, a "technological protection measure", as defined, must be a device or product which utilises technological means to deny a person access to a copyright work, or which limits a person's capacity to make copies of a work to which access has been gained, and thereby "physically" prevents or inhibits the person from undertaking acts which, if carried out, would or might infringe copyright in the work. It is in this sense that the device or product must be designed, in the ordinary course of its operation, to prevent or inhibit the infringement of copyright in a work. I do not think the definition is concerned with devices or products that do not, by their operations, prevent or curtail specific acts infringing or facilitating the infringement of copyright in a work, but merely have a general deterrent or discouraging effect on those who might be contemplating infringing copyright in a class of works, for example by making unlawful copies of a CD-ROM. [116] I appreciate that it is a general principle of statutory construction that all words in a section must be given some meaning and effect: D C Pearce and R S Geddes, Statutory Interpretation in Australia (5th edn 2001), at par 2.22 and cases cited there. However, I think the construction I have adopted gives the word "inhibit" in the definition work to do. There may be devices which are not necessarily designed, in the ordinary course of their operation, to prevent the infringement of copyright, but to inhibit such infringement. A copy control mechanism, for example, might not prevent all copying that infringes copyright, but might limit the extent of unlawful copying that can take place, for example by reducing the quality of copies that can be made of the copyright work. Such a device could properly be said to be designed, in the ordinary course of its operation, to "inhibit" the infringement of copyright in a work, rather than to prevent such infringement. It may be that access to only part of a work is restricted by a process requiring decryption or unscrambling. In this situation, too, it might be more appropriate to say that the process is designed to inhibit rather than prevent the infringement of copyright in the work. [117] The legislative history of s 116A and of the definition of "technological protection measure" is not conclusive on the question of construction. It is, however, consistent with the interpretation I have adopted. From at least the 1997 Digital Agenda Discussion Paper, the emphasis has been on penalising or discouraging the commercial distribution of devices for circumventing "locks" or protective devices which deny unauthorised access to materials stored in electronic form, including Internet sites, or which prevent unauthorised copying of such materials. The EC Directive, which has proved influential in the drafting of the current legislation, was intended to provide legal protection against commercial activities facilitating the circumvention of specific technological measures such as those requiring a code for a user wishing to gain access to the work. This emphasis suggests that what the drafter of s 116A (and its accompanying definitions) had in mind was to provide legal protection to devices that use technological or mechanical means to thwart acts which, if committed, would infringe copyright in the work. There seems to be nothing in the legislative history to support the view that a technological measure is to receive legal protection from circumvention devices if the only way in which the measure prevents or inhibits the infringement of copyright is by discouraging infringements of copyright which predate the attempt to gain access to the work or to copy it. [118] It follows that the protective devices relied on by the applicants cannot be regarded as technological protection measures if the only way in which they inhibit infringement of copyright in PlayStation games is by discouraging people from copying these games as a prelude to playing them on PlayStation consoles. It is necessary for the applicants to demonstrate that the protective devices are designed to function, by their own processes or mechanisms, to prevent or hinder acts that might otherwise constitute an infringement of copyright.
The Reproduction in RAM Argument 74 His Honour did not accept Sony's argument that the protection device prevented a user of an infringing PlayStation game from reproducing a substantial part of the game's computer program in RAM. His Honour thought Sony's submission gave rise to the following question (at [119]): "whether the temporary storage of part of a computer program in the RAM of a computer (in this case, the PlayStation console) can be said to constitute reproduction of a substantial part of the computer program "in a material form" and thus infringe copyright in the computer program (Copyright Act, ss 31(1)(a)(i)), 36(1))." 75 The primary judge referred to the fact that the storage in RAM was "temporary" or "volatile" in the sense that when the computer is turned off the contents of the RAM are lost. His Honour referred to United States cases in which it has been held that the loading of computer software into RAM constitutes the making of a "copy" for the purposes of the Copyright Act 1976 (17 USC s 101): MAI Systems Corporation v Peak Computer Inc 991 F2d 511 (9th Cir 1993) ("MAI v Peak") and Intellectual Reserve Inc v Utah Lighthouse Ministry Inc 75 F Supp 2d 1290 (D Utah 2000). 76 The primary judge thought "the better view, on the rather patchy evidence" to be that, although only a very small proportion of the PlayStation game's computer program was stored in the console's RAM at any one time, what was stored had the quality of originality, since it allowed the game to be played, albeit at one level only. He said (at [125]): "... the instructions stored in the RAM ordinarily incorporate some elements of the game that give it originality". His Honour therefore concluded that Sony had shown that a substantial part of the computer program for a PlayStation game was temporarily stored in RAM when the game was played. The storage was temporary because the contents of the RAM would be lost if power to the console was disconnected, and, in any event, the content was lost as new instructions were downloaded into RAM. 77 His Honour considered three Australian cases in which the present question had been considered. They were the decision of the Full Court of this Court in Dyason v Autodesk Inc (1990) 24 FCR 147 ("Dyason v Autodesk") (reversed on other grounds in Autodesk Inc v Dyason (No 1) (1992) 173 CLR 330); the decision of Tamberlin J in Microsoft Corporation v Business Boost Pty Ltd (2000) 49 IPR 573; and Emmett J's decision in AVRA v Warner, above. It seemed to his Honour that the reasoning of Emmett J in AVRA v Warner was precisely in point. His Honour noted that Emmett J had proceeded on the basis that the definition of "material form" in subs 10(1) of the Act could not be satisfied "unless the copyright work (the computer program), or a substantial part of it, can be reproduced from the data temporarily stored in the computer's RAM" (at [137]). His Honour found that this requirement was not satisfied in the present case. 78 The primary judge noted a submission by Sony that the definition of "material form" in s 10 of the Act was inclusory, and that the program had been reproduced "in a material form" as a matter of ordinary language. But his Honour thought that expression not apt to describe a storage in RAM of what were essentially incorporeal electronic impulses. His Honour continued as follows (at [148]): "On the face of things, it might seem surprising that the reproduction in electronic or digital form of a computer program is not necessarily an infringement of copyright in the computer program. The scheme of the legislation, however, seems to be that reproducing a work in electronic or digital form infringes copyright, pursuant to ss 31(1)(a)(i) and 36(1) of the Copyright Act, only if the form in which the work is reproduced is itself capable of further reproduction." His Honour thought that subs 21(1A) (set out at [37] earlier) did not avail Sony because it speaks only of circumstances in which a work is "taken to have been reproduced", not "taken to have been reproduced in a material form".
The Cinematograph Film Argument 79 Sony submitted that each PlayStation game CD-ROM embodied a cinematograph film and that a copy of a substantial part of the film was made in RAM. The instructions stored in RAM then generated the sounds and the visual images on the screen. According to the submission, Sony's protection device prevented the copy being made in RAM or, in the alternative, the visual images from being generated from the instructions stored in RAM. 80 His Honour was prepared to assume that the reasoning in Galaxy v Sega applied to the PlayStation games. However, he was not satisfied that the data reproduced in RAM constituted a copy of a "substantial part" of the "aggregate of visual images" constituting the cinematograph film. His Honour followed Emmett J in AVRA v Warner, in which Emmett J rejected an argument that the means by which the DVD disc was played, which included the sequential decompression of the audio, video and caption content and storage in RAM, constituted the making of a copy of the whole or a substantial part of the embodied cinematograph film. In particular, his Honour quoted at [158] the following passages from Emmett J's reasons in AVRA v Warner ([59] - [65]): "Does a person who plays the Bait DVD Disc or the Romeo Must Die DVD Disc make a copy of the whole or a substantial part of the embodied cinematograph film in the course of playing the respective disc on either a DVD player or a personal computer? … 62 Warner's contention raises the question of whether audio, video and caption content stored in RAM is capable of being reproduced. The storage of the motion picture is volatile in the sense that it is lost if the DVD player is switched off. In the ordinary course, a DVD player will be configured such that the whole of the contents of its RAM will be volatile. It will not be possible to reproduce its contents. In such a case, the temporary storage of the motion picture in the RAM of a DVD player will not involve a reproduction of the computer program in a material form. On the other hand, a DVD player could be modified such that it would be possible to study or use the RAM for the purpose of reproducing its contents. In that case there could be a reproduction of sounds and images. 63 The statutory scheme…requires that it be possible to identify, at the time of the act referred to in s 86(a), an article or thing in which the cinematograph film or motion picture, namely the visual images or sounds comprising it, is embodied. It is not sufficient that the visual images and sounds comprising the cinematograph film or motion picture have at some time been embodied in the article or thing. There must be a point at which an article or thing can be identified in which the visual images and sounds are embodied. 64 Section 14(1) provides that a reference to the doing of an act in relation to a work or other subject-matter, including making a copy of a cinematograph film, is to be read as including a reference to the doing of the act in relation to a substantial part of the work or subject-matter. The phrase 'substantial part' refers to the quality of what is taken, rather than the quantity - Autodesk Inc v Dyason [No.2] (1993) 176 CLR 300 at 305. However, an inquiry should also take into account the purpose of the copying - Nationwide News v Copyright Agency Limited (1996) 65 FCR 399 at 418-419. It is common ground that, in the case of the storage in RAM of the audio, video and caption content of a DVD, only a tiny fraction of the motion picture is stored at any one time. The purpose of the storage is to display the motion picture. The storage is volatile. 65 I consider that the ephemeral embodiment of tiny fractions of the visual images and sounds that comprise a cinematograph film or motion picture sequentially does not constitute the act of making a copy of the motion picture or cinematograph film within the meaning of s 86(a). It is clear that neither the whole nor any substantial part of a cinematograph film or motion picture is ever embodied in the RAM of a DVD player or personal computer at any given time. The mere fact that, over a period of time, being the time taken to play the motion picture or cinematograph film, tiny parts are sequentially stored in the RAM of the DVD player or personal computer does not mean that the motion picture or cinematograph film is embodied in such a device. As a result, a consumer, by playing a DVD disc, does not, for the purposes of the Act, make a copy of the whole or a substantial part of the motion picture or cinematograph film embodied in that DVD disc." 81 The learned primary judge considered that, although the present case was not identical to AVRA v Warner, because the film in the present case did not comprise simply audio, video and caption content intended to be viewed sequentially, the evidence nonetheless suggested that only a very small proportion of the images and sound comprising the cinematograph film were "embodied" in the PlayStation console's RAM at any given time. Moreover, his Honour accepted as applicable the observation of Emmett J that the purpose of the storage in RAM was to display the images and to allow the game to be played. 82 While the question of substantiality in relation to the reproduction of a computer program is to be assessed by reference to the "originality" of that which is taken, this approach is not applicable to the copying of a cinematograph film, since originality is not a condition for the subsistence of copyright under Part IV of the Act. According to the primary judge, the question was rather one of the "quality" of what was reproduced (at [160]). His Honour concluded as follows (at [160]): "In the absence of clearer and more detailed evidence as to the nature and quality of the images embodied in the instructions stored in the RAM, assessed in relation to the totality of 'the aggregate of visual images' constituting the cinematograph film, I cannot conclude (to adopt the language of Emmett J) that 'the ephemeral embodiment' of a small proportion of images in the RAM constitutes the act of making a copy of the cinematograph film for the purposes of s 86(a) of the Copyright Act. In my opinion, on the evidence before me, the argument founded on s 86(a) of the Copyright Act must be rejected."
Circumvention Device 83 In view of Sony's failure to establish that the copyright work was protected by a technological protection measure, it was not necessary for his Honour to determine whether the mod chips installed by Mr Stevens in PlayStation consoles were otherwise "circumvention devices" within the Act. However, his Honour said that on the evidence he would have held that the chips had only a limited commercially significant use other than that of circumventing or facilitating the circumvention of Sony's device. Accordingly, if that device had been a "technological protection measure", the chips would have been circumvention devices.
GROUNDS OF APPEAL 84 In substance, Sony submitted that his Honour erred in not accepting: 1. Sony's construction of the definition of "technological protection measure" in subs 10(1) of the Act; 2. Sony's submission that when a PlayStation game was played, the literary work consisting of the computer program contained in the CD-ROM for the game was reproduced in a material form in RAM; 3. Sony's submission that when a PlayStation game was played, a copy of the cinematograph film concerned was made in RAM.
(a) The text 85 I find the issue of construction finely balanced. Nothing in the text of the definition of "technological protection measure" persuades me strongly to one construction or the other. The definition is ambiguous. Therefore, consideration may be given to extrinsic materials: Acts Interpretation Act 1901 (Cth) s 15AB. Ultimately the learned primary judge resolved the ambiguity by reference to the text of the definition. But he gained from it more assistance than I do, and from the extraneous materials, less assistance than I do. 86 The expression "in the ordinary course of its operation" sits comfortably with the construction for which Sony contends. That expression first appeared in the Copyright Amendment (Digital Agenda) Bill 1999 (Cth), the Explanatory Memorandum for which stated its purpose. According to par 15 of the Explanatory Memorandum, that purpose was to foreclose a possible argument arising from the presence of the word "effective" in the expression "effective technological protection measure". The argument intended to be foreclosed was that a protection fell outside the definition where access was in fact gained, thereby demonstrating that the measure was not "effective" after all. When the word "effective" was later omitted from the statutory expression, which was reduced to "technological protection measure", the raison d'ętre of the expression "in the ordinary course of its operation" was gone and it might well have been omitted. In the circumstances, the presence of that expression does not assist in resolving the present question. 87 Both of the alternative notions, "prevent" and "inhibit", apply to each of pars (a) and (b) of the definition of "technological protection measure" to the extent to which they may be capable of doing so. The Shorter Oxford English Dictionary defines the verb "inhibit" as, relevantly, "to restrain, check, hinder, prevent, stop", and it identifies the derivation of the word as the prefix "in" and the Latin verb habere, to hold. In my opinion, in the collocation "prevent or inhibit", the word "inhibit" means something falling short of "prevent". 88 Mr Stevens submitted that the word "inhibit" may have been intended to apply to a post-access "reproduction" where the resulting article was to some extent "spoilt" by the operation of the device. Sony submitted that it was intended to embrace the discouragement of antecedent reproduction which would arise from knowledge that access would be denied to an infringing copy. 89 I regard the word "inhibit" as used in relation to infringement in the definition of "technological protection measure" as meaning "restrain" or "check", in the sense of "discourage or deter, without preventing", infringement. 90 Strictly, there either is or is not a "reproduction", and so, even on Mr Stevens' approach, the inhibition which arises from spoiling can be seen to operate by way of making reproduction difficult and unsatisfactory, and so discouraging an intending reproducer. 91 The text of the definition conforms at least as well, and I think slightly better, to Sony's submission, than it does to that of Mr Stevens.
(b) Legislative history 92 I will consider the genesis of the definition of "technological protection measure", as the learned primary judge did and the parties invited us to do. The chronological sequence of events appears below. 93 (i) A convenient starting point is the Draft Report on Computer Software Protection of the Copyright Law Review Committee (CLRC) released in 1993 (see [75] and [76] of his Honour's judgment). Paragraphs 10.62 and 10.63 of that Draft Report were as follows: "Decompilation to defeat program 'locks' 10.62 Many products distributed for the personal computer market have some form of protection to prevent copying of the program or, as in the Autodesk case, to prevent unauthorised use of the program. This may take the form of 'program lock' (eg, with a password) or a 'hardware lock' (eg, the AutoCAD lock). This no doubt reflects the concern of the manufacturer that, while copying other than in accordance with express or implied licence is an infringement, it is impractical either to detect or to take infringement action in respect of such copying. Users often find these locks inconvenient and overcome them by modifying the code to bypass the lock. 10.63 Subject to the Committee's recommendation concerning copying for 'normal use' (paragraph 10.10) and in the course of debugging (paragraph 10.58), the Committee is of the opinion that the modification of a locked computer program for the purpose of circumventing the lock should not be permitted, nor should the subsequent copying of such modified computer programs. Modification of a computer program to defeat a copy protection lock will in most cases involve either reproducing a substantial part of the original program or making an adaptation of the program. These acts should continue to be prohibited unless done with the licence of the copyright owner. Any future amendments to the Act should avoid eroding this protection for the copyright owner. Special provisions concerning program locks are discussed at paragraph 16.26ff." (my emphasis) The notion of a "lock" is illustrated, but not defined, and may be taken to refer simply and in a general way to any kind of device designed to "keep out" persons not authorised by the copyright owner. 94 The first sentence of par 10.62 recognises that the devices there in contemplation have one (or both) of two purposes: "to prevent copying of the program" and "to prevent unauthorised use of the program". Paragraph 10.63 contemplates modification of the "locked computer program" to circumvent a lock, and recommends prohibition of both the modification and the subsequent copying of the modified program. The particular form of circumvention in contemplation was modification of a computer program, albeit modification for the purpose of overcoming both program locks and hardware locks. 95 The reference in par 10.62 to Autodesk Inc v Dyason (No 1) (1992) 173 CLR 330 is significant. The AutoCAD program with which that case was concerned, unlike the PlayStation games, was run on an ordinary computer, not a purpose specific one (like the PlayStation console) manufactured by the entity (Sony) which owned the copyright in the computer programs contained on the CD-ROMs (the PlayStation games). The AutoCAD lock in that case was a device which was plugged into the computer and into which peripheral devices, such as printers or monitors, were in turn plugged. The AutoCAD lock was necessary if the manufacturer's program was to be run on the computer. Dawson J observed (at 337) that it was easy to make copies of the disks and that it was for the purpose of avoiding the making of pirated copies that the manufacturer had developed the AutoCAD lock. There would be no point in making pirated disks if, for lack of the AutoCAD lock, the copy of the program on the pirated disk could not be run. The AutoCAD lock was therefore akin to the Boot ROM in the present case. The CLRC saw the AutoCAD device as an appropriate response by a copyright owner to copyright piracy, calling for legislative protection in the form of a prohibition of any modification of the AutoCAD program designed to circumvent it. 96 (ii) The CLRC received submissions on its Draft Report and produced its Final Report, Computer Software Protection, in 1995 (see [75] of his Honour's reasons). Again there was a section headed "Decompilation to defeat program 'locks'". Paragraph 10.90 of the Final Report was a repetition of par 10.62 of the Draft Report (set out at [93]) above. In par 10.91, the Committee set out all but the final sentence of par 10.63 of the Draft Report (also set out at [93] above). The omission of the sentence is immaterial. My observations at [93] - [95] above in relation to those paragraphs of the Draft Report are therefore applicable also to pars 10.90 and 10.91 of the Final Report. 97 In pars 10.92 and 10.93 of the Final Report, the CLRC noted the five submissions it had received on the present issue. It noted a submission from the CSIRO that locking should be protected provided it was "limited to prevention of copying only". Rightly or wrongly, the CLRC said it understood this submission to mean that "it should be permissible to defeat locks in the limited circumstances where a copy needs to be made for the purpose of interoperability and error correction". The Final Report said (at 10.93) of a submission by Mr Muratore: "Mr Muratore in his submission referred to the computer games market and noted that some manufacturers included programs with their games that were recognised by the game console. Unless a competing game contains that program it will not be recognised by the console and will not run. Mr Muratore commented that the Committee's recommendation in the Draft Report would perpetuate this type of monopoly by the computer game manufacturer. The Committee notes that an exception allowing the decompilation of locked programs for the purpose of interoperability would go some of the way to addressing this concern. The LCA [Law Council of Australia] also submitted that copying or modification of a locked computer program should be excepted from infringement where copying is for the purpose of interoperability, error correction or understanding techniques. The Committee agrees with the thrust of these comments." (my emphasis) Then the CLRC concluded as follows (at 10.94): "Accordingly, the Committee now recommends, subject to the Committee's recommendations concerning copying for back-up copying, interoperability, and error correction that the modification of a locked computer program for the purpose of circumventing the lock should be prohibited as should subsequent copying of such modified programs (Recommendation 2.29)." (my emphasis) Again, the CLRC had in mind, inter alia, devices of the kind involved in this case, but in terms its recommendation referred to circumvention only in the form of a modification of the computer program. 98 In sum, subject to exceptions expressly noted (none of which apply in the present case), the CLRC adhered to the recommendation proposed in its Draft Report, notwithstanding the monopoly by a computer game manufacturer which it would entail. Subject to express exceptions, two things were to be prohibited: modification of a locked computer program for the purpose of circumventing the lock at all; and the subsequent copying of the modified program. The CLRC's statement that the provision for exceptions would only "go some of the way to addressing" Mr Muratore's concern about monopoly, is an acknowledgment that subject to express exceptions, the copyright owner would be entitled to prevent the use of copyright material. 99 In a later chapter of its Final Report dealing with "Other Issues Raised in Submissions", the CLRC addressed "Program Locks" specifically. Paragraphs 16.42 and 16.43 of the Final Report express the CLRC's conclusion in relation to Program Locks in the following terms: "16.42 The Committee is of the view that the unauthorised circumvention of locking devices should be actionable at the suit of copyright owners and their exclusive licensees. In other words the use of any device which enables the "unauthorised use" of a program should be prohibited. Accordingly, the Committee recommends that the Act be amended to provide that copyright owners and their exclusive licensees should have the right to prevent the commercial manufacture, importation, distribution and possession for commercial purposes of devices which are designed to facilitate the unauthorised circumvention of locks or other devices applied to protect computer programs from unauthorised copying (Recommendation 2.73). 16.43 The Committee would like to emphasise that there will be instances where the users of copyright material will have cause to legitimately circumvent locking devices, such as for the purpose of decompilation for error correction or to create a new interoperable program. The Committee is of the view that the onus should lie with users of computer programs to clearly understand the circumstances in which the circumvention of a program locking device will be permissible." (my emphasis) Paragraph 16.42 is expressed more broadly than the paragraphs noted to date. The form of circumvention considered is not limited to that of modification of a computer program. The first sentence speaks generally of "unauthorised circumvention [of any form] of locking devices [of any form]. The breadth of the second sentence is obvious. The recommendation expressed in the third sentence is akin to the question-begging form of the definition of "technological protection measure" with which we are concerned. In one sense Mr Stevens's mod chip was, and in another sense it was not, "designed to facilitate ... unauthorised copying". 100 (iii) The next event in this chronological account is that on 20 December 1996 the WIPO Copyright Treaty ("WCT") and the WIPO Performances and Phonograms Treaty ("WPPT") were adopted in Geneva (see [74] of his Honour's reasons). Article 11 of the WCT was as follows: "Contracting Parties shall provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne Convention and that restrict acts, in respect of their works, which are not authorized by the authors concerned or permitted by law." (my emphasis) (Article 18 of the WPPT provided similarly in relation to performers and producers of sound recordings.) (The WCT became effective on 6 March 2002 and the WPPT became effective on 20 May 2002. Australia proposes to accede to both treaties when complying legislation has been passed.) 101 It is true that the WCT allowed latitude to a Contracting Party as to how to balance the interests of copyright owners and the users of copyright material. But what is important at present is that the expression "technological measures that are used by authors ... that restrict acts, in respect of their works, which are not authorised by the authors concerned ...", is ample to embrace a measure which, like Sony's device in the present case, prevents the use of a copyright work. As will appear below, no decision was ever taken in Australia that the formulation in Art 11 was too broad. 102 (iv) The anti-circumvention device recommendations of the CLRC were not immediately acted upon, but in July 1997 the Attorney-General's Department and the Department of Communications and the Arts released a discussion paper, Copyright Reform and the Digital Agenda ("the Government's DA Discussion Paper" and simply "the Paper" - noted by his Honour at [77] and [78]). Part of the Government's purpose was to determine, on the basis of consultation, whether Australia should sign the WCT and the WPPT, which had been concluded the preceding December. The Government's DA Discussion Paper (at par 3.50) quoted Art 11 of the WCT (being also Art 18 of the WPPT) and (at pars 2.58 - 3.66) the exceptions for which those treaties contemplated a Contracting Party might wish to provide. It noted that the obligation under the treaties was to provide "adequate legal protection" and "effective legal remedies" (par 5.5). It invited comment as to how "effective technological measures" could be identified in a "general, technology-neutral way" (par 5.6), and stated that, "[for] instance", the Government was aware of technological systems in use, or under development, for: " · 'encrypting' broadcast signals so that only authorised subscribers who have been supplied with a decrypting device can receive the signal; · 'locking' computer programs and other materials in electronic form and accessed using a computer against copying of the program or other work, including locking materials on an Internet site against unauthorised access (so that payment for authorised access can be obtained); and · 'spoiling' copies sought to be made of materials recorded on compact discs and cassette tapes, so as to prevent unauthorised copying."
The Government's DA Discussion Paperinvited interests to provide details of other technological protection measures, and proposed, inter alia, that manufacture, importation and possession for, as well as acts of, commercial distribution of unauthorised equipment for circumventing "locks"
· on copies of computer programs and other copyright materials in electronic form and accessed using a computer; and · on materials on Internet sites
be made criminal offences (par 5.10). It advanced the same proposal in relation to unauthorised equipment for circumventing "spoiler" devices incorporated on compact disks (par 5.11). The tenor of the discussion is that protection should not be limited by reference to any particular form of "lock", that is, any particular kind of device designed to exclude unauthorised persons. 103 The Government's DA Discussion Paper noted with approval (at par 5.13) the recommendation the CLRC had made in its Final Report in 1995, that owners of copyright in computer programs have a right of action to prevent "commercial manufacture, importation, distribution and possession for commercial purposes of devices designed to facilitate the unauthorised circumvention of computer program 'locks'". The Government's DA Discussion Paper continued (at par 5.14): "It is also proposed that the owner of copyright in a computer program or other materials electronically stored and accessed by a computer have a right of action against the unauthorised commercial importation, distribution and possession for commercial purposes of a device designed to circumvent a lock incorporated in that program or other materials against unauthorised copying or access." (my emphasis) Consistently with both the Draft Report and the Final Report of the CLRC, this paragraph proposed that a lock against unauthorised access, as an alternative to a lock against unauthorised copying, was something which should be protected by legislation. 104 Seventy one submissions were received in response to the Government's DA Discussion Paper and it was discussed at some 13 face-to-face consultations. 105 (v) On 30 April 1998 the Attorney-General and the Minister for Communications and Information Technology announced the Government's intention to legislate to implement the Digital Agenda copyright reforms. 106 (vi) On 26 February 1999 the Government released for public comment an Exposure Draft and Commentary on the Digital Agenda Copyright Amendments. The Exposure Draft was of a Copyright Amendment (Digital Agenda) Bill 1999 (Cth) (and was noted by his Honour at [79] - [81]). I will refer to this Exposure Draft Bill simply as the "Exposure Draft". According to the Exposure Draft, the expressions "circumvention device", "circumvention service" and "technological protection measure" were to be defined in subs 10(1) of the Act, and the significance of the word "effective" was to be stated in a proposed new subs 10(5) (I will not discuss the "circumvention service" further). The proposed definitions were as follows: [item 4] "circumvention device means a device having only a limited commercially significant purpose or use other than the circumvention, or facilitating the circumvention, of any effective technological protection measures." [item 8] "effective technological protection measure has the meaning given by subsection (5) [see item [18] below]." [item 14] "technological protection measure means a device or product designed to prevent or inhibit the infringement of copyright subsisting in any work or other subject-matter." [item 18] "(5) For the purposes of this Act, a technological protection measure is taken to be effective only if access to the work or other subject-matter protected by the measure is available solely by use of an access code or process (including decryption, descrambling or other transformation of the work or subject-matter) with the authority of the owner of the copyright in the work or subject-matter." 107 The proposed s 116A would apply if a work or other subject-matter was protected by "effective technological protection measures" and a person without authority knowingly did certain things in relation to those measures, including making, importing, selling, letting for hire, and by way of trade offering or exposing for sale or hire, a circumvention device. The Commentary said (at par 78) that the amendments were based on those put forward in the Government's DA Discussion Paper, and reflected obligations in the WCT and the WPPT. It will be recalled (see [103] above) that the Government's DA Discussion Paper itself (at par 5.13) referred to, and (at par 5.14) proposed legislation consistent with, the earlier Final Report of the CLRC. 108 Paragraphs 77 to 103 of the Commentary were headed "Technological copyright protection measures". In par 80, the Commentary observed that Art 11 of the WCT (similarly Art 18 of the WPPT) was "broadly worded", and that "[t]o comply, Australia must provide adequate legal protection and effective legal remedies". This observation may fairly be seen as sympathetic with the obligation expressed in Art 11 (set out at [100] above). The Commentary also stated (at par 81) that the Exposure Draft drew on provisions of a then proposed European Commission Directive on the harmonisation of certain aspects of copyright and related rights in the information society ("the proposed EC Directive"), concerning the protection of technological measures. (The proposed EC Directive led to the making on 22 May 2001 of Directive 2001/29/EC referred to at [127] - [128] below, which was in some immaterial respects, in different terms.) The Commentary stated that the definition of "technological protection measure" in item 14 of the Exposure Draft was based on a simplified version of that contained in the proposed EC Directive. The Commentary quoted from Art 6 of the proposed EC Directive as follows: "Article 6
Importantly, the reforms in the Bill are consistent with new international standards to improve copyright protection in the online environment adopted in the 1996 World Intellectual Property Organisation (WIPO) Copyright Treaty and WIPO Performances and Phonograms Treaty. Australia was an active participant in the Diplomatic Conference in December 1996 that agreed to the WIPO treaties, and the enactment of this Bill will be a major step towards aligning our copyright laws with the obligations imposed by the treaties." The Attorney-General stated (at 9749) that the reforms in the Bill were largely based on the Government's DA Discussion Paper. Specifically in relation to circumvention devices, the Attorney-General stated (at 9750-9751): "The Bill introduces three new enforcement measures in response to the problems posed for copyright owners by new technologies. The first is the provision of criminal sanctions and civil remedies against persons who manufacture, deal in, import, distribute or make available online devices, or provide services, for the circumvention of technological protection measures designed to inhibit the infringement of copyright. Examples of such measures include password protection or computer program locks. The new enforcement measures are subject to important exemptions which will allow a person to undertake the proscribed activities for specific 'permitted purposes'. These exemptions will facilitate the operation of specific exceptions to the rights of copyright owners, and are vital for ensuring reasonable access to copyright material in electronic form. The 'permitted purposes' relate to the operation of the exceptions for libraries and archives, educational institutions and government users. They also relate to the exceptions for the decompilation of computer software for the purposes of interoperability, error correction and security testing. A further exception to the enforcement measure provisions exists in relation to activities carried out for the purposes of national security and law enforcement. .......... The use of technological protection measures by copyright owners … is likely to increase in the near future as systems for the online trading of copyright material are adopted. The government wants to ensure that such systems are protected by the law. The two enforcement schemes described will provide copyright owners and licensees with a powerful weapon against the piracy of copyright material online. The schemes will allow copyright owners to confidently establish new commercial markets for copyright material in the knowledge that this legislation will offer them the tools to protect that material." The speech again suggests a policy of recognising a copyright owner's right to protect the copyright in whatever way the copyright owner might see fit, subject only to specific exceptions to be expressly identified in the legislation. 112 The definition of "circumvention device" in item 4 of the 1999 Bill differed in minor respects from that which had been contained in item 4 of the Exposure Draft. More importantly, the separate definitions of "technological protection measure" and "effective" in items 8, 14 and 18 of the Exposure Draft were abandoned in favour of the following definition of "effective technological protection measure" in item 8 of the 1999 Bill: "effective technological protection measure means a device or product, or a component incorporated into a process, that is designed to prevent or inhibit the infringement of copyright subsisting in a work or other subject-matter if, in the ordinary course of its operation, access to the work or other subject-matter protected by the measure is available solely by use of an access code or process (including decryption, unscrambling or other transformation of the work or other subject-matter) with the authority of the owner or licensee of the copyright in a work or other subject-matter." This definition reflected par (2) of Art 6 of the proposed EC Directive which was set out at [108] above. 113 The Explanatory Memorandum stated under the heading "Outline" that the reforms in the 1999 Bill were based largely on the proposals in the Government's DA Discussion Paper and were consistent with "new international standards to improve copyright protection" adopted in the WCT and WPPT, and represented a major step towards aligning Australian copyright laws with the obligations prescribed by those treaties. The Explanatory Memorandum also stated (at par 11) that the language of the definition of "circumvention device" in item 4 was similar to that of Art 6 of the proposed EC Directive. Of the definition of "effective technological protection measure", the Explanatory Memorandum stated (at par 15) that "[s]uch a measure, in the ordinary course of its operation, allows access to the copyright material solely by use of an access code or process with the authority of the copyright owner or licensee". The Explanatory Memorandum also explained, in effect, that the words "in the ordinary course of its operation" were intended to ensure that no argument could be made that a measure was not within the definition because illicit means had rendered the device not "effective". 114 (viii) On 3 September 1999, the day after his Second Reading Speech on the 1999 Bill, the Attorney-General signed the terms of reference for an inquiry into the 1999 Bill by the House of Representatives Standing Committee on Legal and Constitutional Affairs ("the HRLACA Committee"). Over a short period of time, the HRLACA Committee received some 100 submissions and held public hearings. The result was an Advisory Report of November 1999 which was tabled in the House of Representatives on 6 December 1999 ("the HRLACA Committee Report"). 115 The HRLACA Committee Report was discussed by his Honour at [84] - [85]. The HRLACA Committee understood, in the light of the submissions made to it, that it was confronted by the very kind of issue which has arisen in the present case. That this was its understanding is borne out by a reading of the transcript of the proceedings of the Committee in the first of its two sessions on Thursday 21 October 1999. 116 The representative of the Australian Digital Alliance argued that a technological protection measure should be defined so as to require a "direct link to infringement". He urged that the legislation preventing circumvention of copyright owners' self-protection measures should not be the vehicle for an extension of copyright beyond its proper bounds. On the other hand, the representative of the International Intellectual Property Alliance argued for a link to access or to copying in the alternative, with express provision for particular exceptions. Indeed, he produced a suggested definition which introduced a division, into par (a) dealing with access and par (b) dealing with copying. 117 The learned primary judge set out part of par 4.11 of the HRLACA Committee Report at [84] of his reasons and summarised subsequent paragraphs of the report. Omitting footnotes and references to them, pars 4.11-4.19 were as follows: "Effective technological protection measures 4.11 Evidence to the Committee indicated that technological measures to protect copyright materials are essentially of two types: access control measures and copy control measures. Access control measures allow the copyright owner to control who has access to the copyrighted material. Examples of access control measures include password protections, file permissions and encryption. Copy control measures allow the copyright owner to control the extent of a person's access to copyright material. Copy control measures are based on the premise that a user already has some lawful access to the work, and the measures seek to control what the user can then do with the lawfully obtained copyrighted material. An example of a copy control mechanism is a mechanism that allows first generation copies but prevents second and subsequent generation copies. 4.12 As was pointed out to the Committee, there is a difference in scope between the two types of measures [access control measures and copy control measures]. Copy control measures are more closely allied with copyright, and with the infringement of copyright, than access control measures. Access control measures seek to prevent all access to copyright material, not only that access which is unlawful. Purpose of effective technological protection measures 4.13 This difference in scope between access and copy control measures gave rise to argument before the Committee between copyright owners and copyright users as to how far the definition of effective technological protection measure should extend. The copyright users maintained that linking protection measures to copyright infringement was critical. They argued that to include access control measures in the definition of effective technological protection measure would be to extend the reach of copyright law, rather than to merely enforce it. 4.14 Copyright users expressed the further concern, with which the Committee sympathises, that the wider definition (including access control measures) has the potential to seriously threaten the continued existence of the public domain. The copyright owners replied that as a practical matter, the threat posed by access control measures to the public domain is minimal. The issue of the impact of protection measures on the public domain arises more generally in the context of the exceptions to the enforcement provisions, and further discussion of this issue will he deferred until the exceptions are canvassed (see below). 4.15 There was also some argument before the Committee as to whether or not the applicable international treaties (the WCT and the WPPT) require domestic legislation to proscribe interference with access control measures, in addition to copy control measures. The copyright users asserted that the treaties did not require the inclusion of access control measures in the definition of effective technological protection measure, while the copyright owners maintained the opposite view. The copyright owners further noted that the wider definition is consistent with the positions taken by the US and the European Community (EC). Definition of effective technological protection measure 4.16 Against this background the Committee considered the definition of effective technological protection measure contained in the Bill. Item 4 [sic - the reference should be to item 8] inserts the following definition: [There appeared here the definition of "effective technological protection measure" in item 8 of the 1999 Bill which was set out at [112] above.] 4.17 This definition condenses items 14 to 18 of the Exposure Draft of the Bill. The Explanatory Memorandum indicates that the proviso 'if, in the ordinary course of its operation' was inserted to ensure that the argument cannot be advanced that a measure is not an effective technological protection measure because access has in fact been gained through unlawful means. The Committee notes ARIA's [Australian Record Industry Association's] and PPCA's [Phonographic Performance Company of Australia's] concern that the proviso may undermine the whole definition, but does not share that concern. Similarly, the Committee is aware of, but does not share, the Law Council of Australia's concern that the proviso introduces a logical flaw into the definition. 4.18 The Committee received submissions to the effect that the new definition of effective technological protection measure lacks clarity and that it is probably ineffective. The IIPA [International Intellectual Property Alliance] argues that the definition betrays a lack of understanding as to how many copy control protection measures work. The definition encompasses only those protection measures that operate by controlling access by an access code or process, and for the purposes of preventing infringement. 4.19 In the view of the Committee, the definition of 'effective technological protection measure' in the Bill is a hybrid of access control and copy control measures, as those terms have been described above. For this reason the Committee does not consider the proposed definition of effective technological protection measure ineffective. However, in the Committee's view, it may be preferable to define effective technological protection measure simply in terms of copy control measures. In other words, an effective technological protection measure is a device or product, or component incorporated into a process, that, in the ordinary course of its operation, is designed to prevent or inhibit the infringement of copyright subsisting in a work or other subject-matter." (my emphasis) 118 The notions of "access control" and "copy control" devices referred to in par 4.11 were to find their way into pars (a) and (b) of the definition of "technological protection measure" which was ultimately adopted and with which we are concerned. 119 In par 4.19, the HRLACA Committee was acknowledging that the existing "hybrid" definition in item 8 of the 1999 Bill caught both (a) a device designed to prevent or inhibit infringement by preventing lawful access to the work, and (b) a device designed to prevent or inhibit infringement by preventing access to the work which is a condition precedent to unauthorised copying, and said it would prefer that the definition encompass only the latter. At first blush it may not be clear how the final sentence (commencing "In other words") of par 4.19 merely re-expresses the HRLACA Committee's earlier stated preference. The HRLACA Committee clearly intended by that sentence to describe a copy control measure and to exclude an access control measure. How was the final sentence narrower than the "hybrid" definition? The answer is: by its omission of any reference to the notion of denying access except by the use of an access code or process. According to the HRLACA Committee, a "device ... that ... is designed to prevent or inhibit the infringement of copyright subsisting in a work or other subject-matter" is a copy control measure, but a "device ... that is designed to prevent or inhibit the infringement of copyright subsisting in a work or other subject-matter if, ... , access to the work or other subject-matter protected by the measure is available solely by use of an access code or process ... with the authority of the owner or licensee of the copyright in a work or other subject-matter", is or embraces a device which prevents lawful use, and is, for this reason, too wide. In the HRLACA Committee's view, the reference to access without the authority of the owner or licensee opened up the undesirable possibility that the infringement referred to may be inhibited merely because of the impossibility of use of infringing copies, rather than only because the physical act of copying is prevented or inhibited. 120 Importantly, the HRLACA Committee's recommendation was not adopted. 121 In support of his submission that the hybrid definition of "effective technological protection measure" referred only to devices which prevented unlawful access, senior counsel for Mr Stevens drew attention to s1201 of the United States Copyright Act 1976 (17 USC s 101) which provides: "No person shall circumvent a technological protection measure that effectively controls access to a work protected under this title". Senior counsel submitted that the "introductory words" of the Australian definition of "effective technological protection measure" (now, "technological protection measure - see below) limited the scope of the protection of copyright owners under the Act in the manner mentioned. While the Australian "hybrid" definition has its complexity, I do not agree that it has that effect. The non-implementation of the HRLACA Committee's recommendation supports my view. 122 (ix) As the learned primary judge noted at [86] and [87] of his reasons, the Government amended the 1999 Bill following the HRLACA Committee Report. The result was a Copyright Amendment (Digital Agenda) Bill 2000 (Cth) ("the 2000 Bill"). There were an associated Supplementary Explanatory Memorandum and a Revised Explanatory Memorandum. 123 The definition of "effective technological protection measure" in item 8 of the 1999 Bill was omitted as a consequence of the introduction, by a new item 15B, of a definition of "technological protection measure". That definition was the one which was ultimately enacted (set out at [43] above). The item 4 definition of "circumvention device" in the 2000 Bill remained the same as in the 1999 Bill, continuing (erroneously) to contain the expression "effective technological protection measure". There were also amendments to the proposed s 116A, but none of present importance. 124 The revised Explanatory Memorandum said (at par 22) of the definition of "technological protection measure" inserted by item 15B: "A 'technological protection measure' means a device, product, or component incorporated into a process which, in the ordinary course of its operation, is designed to prevent or inhibit the infringement of copyright in a work or other subject-matter by either or both of two means: by a copy control mechanism; or by ensuring the access to the work or other subject-matter is available solely by an access code or process with the authority of the copyright owner or licensee." 125 Paragraph 184 of the Revised Explanatory Memorandum stated of the new s 116A: "New s 116A provides copyright owners or licensees with civil actions (in accordance with s 116A(5)) against persons who make, deal in, import or make available online devices, or provide services, used to circumvent technological protection measures designed to protect their copyright material. The provision is extended to copyright owners' licensees who may use technological protection measures to protect copyright material. It will include situations where an owner of copyright material licenses a website proprietor to place his or her material on a website and the website proprietor uses a technological protection measure to protect the material." 126 (x) The 2000 Bill was enacted as the Copyright Amendment (Digital Agenda) Act 2000 (No 110, 2000), and was assented to on 4 September 2000. 127 (xi) It is noteworthy that on 22 May 2001, the European Parliament and the Council of the European Union made Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society. Post-dating, as it does, the amendments of the Act with which we are concerned, it cannot be relevant to their construction. For no other purpose than to complete this chronological account, I note the following provisions. 128 The first three paragraphs of Art 6 were as follows: " Obligations as to technological measures
(c) Notice of contention 130 By a notice of contention, Mr Stevens contends that Sony's device is designed, in the ordinary course of its operation, to prevent or inhibit, not infringement of copyright, but "the use of 'unauthorised copies' of [Sony's] works, including copies lawfully made pursuant to s 47C of the Act or lawfully acquired from abroad". It is not in dispute that Sony's device is, indeed, designed in the ordinary course of its operation to prevent the use of unauthorised copies of its works. The question is whether, being so designed, it is designed in the ordinary course of its operation to inhibit the infringement of copyright in the works, for the purposes of the definition of "technological protection measure". 131 Section 47C of the Act (set out at [134] below), referred to in the notice of contention, provides, in substance, that the making of a "back-up" reproduction, in the circumstances set out in the section, of a literary work that is a computer program, does not constitute infringement of copyright in the work. 132 The reference to "copies ... lawfully acquired from abroad" in the notice of contention is a reference to the fact that, according to the evidence before his Honour, and his Honour's findings, colour television systems operating in Japan, South East Asia and North America follow the National Television Systems Committee ("NTSC") standard. Accordingly, PlayStation consoles and games manufactured for those markets are in the NTSC format. On the other hand, the format used in Europe and Australia is the Phase Alternating Line ("PAL") format, to which PlayStation consoles and games for those markets conform. PlayStation CD-ROMs sold in an NTSC or PAL region have an access code permitting them to be played only on PlayStation consoles purchased in an NTSC or PAL region respectively. It follows, for example, that a PlayStation game lawfully purchased in the United States cannot be played on an unmodified PlayStation console purchased in Australia. The access code cannot be copied by conventional recording or copying devices. But a mod chip installed in a console can override the regional access code. 133 I agree with the primary judge that a device can be "designed ... to prevent or inhibit ... infringement of copyright" even if it is designed for another purpose as well. The definition of "technological protection measure" does not require a different result. His Honour was entitled to find (as he did at [108]): · that there was nothing in the evidence to suggest that the major purpose or objective of Sony's device, from Sony's perspective, was to ensure that PlayStation consoles could play only PlayStation games acquired in Australia or Europe (and therefore playable on the compatible television sets of those areas); and · that Sony's device was designed in the ordinary course of its operation to deter or discourage persons infringing Sony's copyright in the PlayStation games. 134 Subsections 47C of the Act, referred to in the notice of contention, is, relevantly, as follows: "(1) Subject to subsection (4), the copyright in a literary work that is a computer program is not infringed by the making of a reproduction of the work if: (a) the reproduction is made by, or on behalf of, the owner or licensee of the copy (the original copy) from which the reproduction is made; and (b) the reproduction is made for use only by, or on behalf of, the owner or licensee of the original copy; and (c) the reproduction is made for any of the following purposes: (i) to enable the owner or licensee of the original copy to use the reproduction in lieu of the original copy and to store the original copy; (ii) to enable the owner or licensee of the original copy to store the reproduction for use in lieu of the original copy if the original copy is lost, destroyed or rendered unusable; (iii) to enable the owner or licensee of the original copy to use the reproduction in lieu of the original copy, or of another reproduction made under this subsection, if the original copy, or the other reproduction, is lost, destroyed or rendered unusable. (2) Subject to subsection (4), the copyright in a literary work that is a computer program, and in any work or other subject-matter held together with the program on the same computer system, is not infringed by the making of a reproduction of the program, or of such a work or other subject-matter if: (a) the reproduction is made by, or on behalf of, the owner or licensee of the copy (the original copy) from which the reproduction is made; and (b) the making of the reproduction is part of the normal back-up copying of data for security purposes. (3) Subsection (1) applies in relation to a reproduction of a work made for a purpose referred to in subparagraph (1)(c)(iii) whether or not other reproductions of the work have previously been made for the same purpose from the same copy. (4) Subsections (1) and (2) do not apply to the making of a reproduction of a computer program: (a) from an infringing copy of the computer program; or (b) if the owner of the copyright in the computer program has so designed the program that copies of it cannot be made without modifying the program; or (c) if a licence to use the original copy, given by, or on behalf of, the owner of the copyright in the computer program to the owner of the original copy when the owner of that copy acquired it, has expired or been terminated. (5) ... (6) ... " 135 In Sony v Edmunds, Jacob J described a submission similar to that made by Mr Stevens as "rather fanciful" (at 432). I agree. It is difficult to conceive of the conditions referred to in subs 47C(1) or (2) ever being satisfied in the case of Sony PlayStation games. 136 Implicit in the use of the word "licensee" in both subsections is a requirement that the making of the copy be permitted by the copyright owner. The making of a copy of a PlayStation game lies outside the licence granted by Sony. Subsections 116A(2)-(4) of the Act set out, by way of exception to subs 116A(1), purposes for which a circumvention device may be used. The purpose of making of back-up copies is not one of them. Finally, the CLRC Final Report stated (at 10.17): "The right to make a back-up copy should not extend to copies of computer programs that have been 'locked' by the copyright owner against the making of copies". 137 For the above reasons, there is no substance in the s 47C aspect of the notice of contention either.
(d) Conclusion on the first issue on the appeal 138 I have felt the force of the considerations which persuaded the learned primary judge to the construction which he accepted, but it seems to me, with great respect, that it is based on an unwarranted preconception that the "access" to which par (a) of the definition of "technological protection measure" refers is limited to access for the purpose of subsequent infringement. I am persuaded to think that a broader approach was intended by the legislature, by the extraneous materials to which I referred at [92] - [128], and, in particular by: · the reference to "unauthorised use" and the AutoCAD device of Autodesk v Dyason in the Draft Report and the Final Report of the CLRC; · the way in which the suggestion of monopoly by computer game manufacturers was addressed in the Final Report of the CLRC; · the reference to "unauthorised access or copying" in the Government's DA Discussion Paper: · the fact that s 116A was intended, without any expressed reservation or qualification, to implement the broad kind of protection described in the WCT, the WPPT and the proposed EC Directive; · the way in which the present issue was addressed by the HRLACA Committee and the failure of the legislature to adopt the preference expressed by that Committee; and · the legislative policy, evident throughout, of recognising that copyright entitled its owner, if so minded, to deny access for lawful use, and of meeting any objection based on the monopoly involved, only by expressly providing for specific exceptions.
In my opinion the extrinsic materials to which I have referred show an intention that the opening words coupled with par (a) of the definition of "technological protection measure" were intended to embrace that inhibition, in the sense of deterrence or discouragement of infringement, which results from a denial of access to, and therefore prevention of use of, a program copied in infringement of copyright. 139 If, as in the present case, the owner of copyright in a computer program devises a technological measure which has the purpose of inhibiting infringement of that copyright, the legislature intended that measure to be protected (subject to any express exception), even though the inhibition is indirect and operates prior to the hypothetical attempt at access and the hypothetical operation of the circumvention device. By ensuring that access to the program is not available except by use of the Boot ROM, or the access code embedded in the PlayStation games, or both in combination, Sony's measure does inhibit the infringement of copyright in the PlayStation games in that way. 140 Accordingly, I would allow the appeal on the first ground relied on by Sony.
(i) Dyason v Autodesk Inc (1990) 24 FCR 147 145 In Dyason v Autodesk, Sheppard J stated (at 177 - 178) as follows: "I have ... serious misgivings whether it is appropriate to say that the transfer of the program to the random access memory itself constitutes either a reproduction or an adaptation. I have less difficulty with the notion that the transfer of the program from a floppy disk to a hard disk within the computer is a reproduction or adaptation. In my view it is. I think that it may be inferred from the evidence that some users of AutoCAD would transfer the program to hard disks in their computers. Counsel for Autodesk also submitted that the display on a screen connected to the computer of information contained within the program was, if not the reproduction, then an adaptation of a substantial part of what was contained within the program. The same submission was made in respect of printouts of parts of the information contained within the program obtained from a printer attached to the computer. Counsel for the appellants submitted that the position should be likened to what occurs upon the sale of a book in which there is copyright. No reproduction occurs when the purchaser of the book reads the book. Nor is there any reproduction if the book is lent to someone else who also reads it. The analogy is, I think, helpful, but ought not be taken too far. The very nature of a computer program cautions one against taking too much from it. Nothing needs to be done in relation to the book except to turn the pages. On the other hand, the computer program cannot be used for its intended purpose unless the program is run in a computer. But both the transfer of a program from a floppy disk to the random access memory of the computer and the display or printout of a version of part of the program on a screen or printout are essential incidents of the proper and accepted use of the program. They are just as essential as the ability of the purchaser of a book to turn its pages in order to read them. But the transfer of a program to a hard disk within the computer in which it is permanently stored is more akin to making a copy of a book if one wishes to pursue the analogy. I should add that I see no difference between an act of that kind and the copying of the program on to additional floppy disks. It follows from what I have said that, in my opinion, there is established the fact that some purchasers of AutoCAD would make reproductions or adaptations of the computer program in the course of their ordinary use of it. These would be those purchasers who cause it to be fixed permanently on to hard disks within their computers." 146 Like the primary judge, I think Sheppard J treated the transient holding and displacement of data in RAM which necessarily occurs in the course of the running of a computer program as not constituting "storage" within the definition of "material form" in subs 10(1) (set out at [38] above). 147 Beaumont J thought (at 201) that there was force in the submission that "loading a program into RAM in order to run it does not constitute a 'reproduction' of the program 'in material form'", and that "running a program is analogous to reading a book or hearing a musical work", and is "the very use intended to be made of the work". 148 None of their Honours referred to par 28 of the Explanatory Memorandum relating to the Copyright Amendment Bill 1984 (Cth), which is set out in [151] below. 149 The third member of the Court, Lockhart J, left the present question open (at 156-157). 150 On appeal (Autodesk v Dyason (No 1) (1992) 173 CLR 330)the High Court did not consider the present question.
(ii) Microsoft Corporation v Business Boost Pty Ltd (2000) 49 IPR 573 151 Tamberlin J was persuaded to a different conclusion on an ex parte hearing in Microsoft v Business Boost. His Honour stated (at [12] - [14]): In relation to RAM, it is possible for a computer program to remain stored in RAM indefinitely until the computer system is shut down or otherwise powered down. Accordingly, in my opinion, it follows from this evidence that the period of time during which the instructions or data are stored in RAM can be substantial. For example, it is not infrequently the case that computers are left on for a considerable period of time with one or more programs running. The RAM storage continues over this period. The fact that that memory is vacated when power is extinguished does not necessarily mean that there has not been a substantial period of storage of the instructions and data comprised in the RAM memory. It is to be noted that the definition of 'material form' in the Act makes no reference to the duration of the storage and is consistent with storage being either for a short or long period. The crucial concept is 'storage'. The present case is one where I consider regard can be had to the explanatory memorandum directed to the Copyright Amendment Bill 1984 introducing the present definition. That relevantly reads: 28. The definition of 'material form' is new and makes it clear that the material form includes such methods as storage or reproduction on magnetic tape, read only or random access computer memory, magnetic or laser disks, bubble memories and other forms of storage which will doubtless be developed. [emphasis added by Tamberlin J] It is evident from this that the definition was intended to be far-reaching and to cover not only ROM and RAM but also other types of storage to be developed in the future." There is an error in the quotation of par 28 of the Explanatory Memorandum. It omitted the words "of fixation". The original read "... such methods of fixation as storage or ...".
152 His Honour drew "general guidance" from certain United States authorities, in particular, MAI v Peak which was followed in many subsequent cases, and in which it was decided that data stored in RAM were within the definition of "copies" in the Copyright Act 1976 (17 USC s101). That definition was:
"material objects ... in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced or otherwise communicated, either directly or with the aid of a machine or device." (my emphasis) The same Act defined "fixed" as follows: "A work is 'fixed' in a tangible medium of expression when its embodiment in a copy ... is sufficiently permanent and stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration." (emphasis added by Tamberlin J) Tamberlin J thought that the United States term "fixed" indicated something more permanent than the Australian term "storage", but, "on the other hand", that the United States provision, apparently in his Honour's view unlike the Australian one, "cover[ed] any period of time provided it [could] be said to be more than 'transitory'" (at [17]). 153 His Honour cited four United States cases in which MAI v Peak had been followed and expressed the view that MAI v Peak and those decisions lent support to Microsoft's submissions. 154 His Honour did not address the argument which was to find favour with Emmett J in AVRA v Warner and with the primary judge in the present case that any reproduction which may take place in RAM is not a reproduction in a "material form" because the work (the computer program) or a substantial part of it cannot be reproduced from RAM (see the definition of "material form" in subs 10(1) of the Act set out at [38] above.
(iii) Australian Video Retailers Association Ltd v Warner Home Video Pty Ltd (2001) 114 FCR 324 155 In AVRA v Warner Emmett J held that storage in the RAM of a DVD player or a personal computer, of a substantial part of the program instructions on a DVD in the course of the playing of the DVD, did not amount to a reproduction of the computer program in a material form. "DVD" was originally an acronym derived from "digital video disk" or "digital versatile disk". A DVD is now part of a system by which material, both video and audio is stored on a disk in digital form and is capable of being retrieved by a device and converted into moving images on a screen accompanied by sound, or merely into sound. Emmett J (at [100] of his reasons) identified the question for decision as being "whether that copying of a substantial part of ... computer programs [in RAM] involves the reproduction of the computer program ... in a material form ..." and said: "Under the definition of 'material form' in s 10, there will be a reproduction in a material form if the reproduction is in a form of storage from which the computer program or a substantial part of the computer program can be reproduced." 156 Emmett J referred to par 28 of the Explanatory Memorandum for the 1984 amendments to the Act (set out in [151] above), and to the contrast between the volatile nature of RAM and the non-volatile nature of ROM, then stated as follows: "[103] The definition inserted in 1984 makes clear that 'material form' includes a form of storage that is not visible, such as ROM and RAM. Whether or not there will be a reproduction of a computer program in a material form, as that concept is extended by the definition, will depend upon the particular circumstances. That will entail an examination of the particular device whose RAM is under consideration. ... ordinarily it will not be possible to reproduce the contents of RAM in a DVD player. If a DVD player has been modified, such that it is possible to study or use the RAM for the purpose of reproducing its contents, there could be a reproduction of the computer program in a material form within the meaning of s 31(1)(a)(i) of the Act. However, in the ordinary course, temporary storage of a substantial part of the computer program in the RAM of a DVD player will not involve a reproduction of the computer program in a material form. [104] Where a DVD disc is being played by means of a personal computer, it will be possible, where an appropriate additional program is installed in the personal computer, to reproduce the contents of RAM. However, where a computer does not have such a program installed, the use of the computer for the purpose of playing a DVD disc will not involve the reproduction of the computer programs in question in a material form within the meaning of s 31(1)(a)(i) of the Act." (emphasis of Emmett J) 157 The learned primary judge in the present case found this reasoning of Emmett J to be precisely in point. His Honour gave (at [137]) the following account of the significance of Emmett J's reasoning: "His Honour proceeded on the basis that the definition of 'material form' in s 10(1) of the Copyright Act cannot be satisfied unless the copyright work (the computer program), or a substantial part of it, can be reproduced from the data temporarily stored in the computer's RAM. In the case of a DVD player or the PlayStation console, this means that it must be possible to reproduce the computer program, or a substantial part of it, from the data stored in the RAM of the DVD player or of the PlayStation console." (my emphasis) 158 Subsequently, the primary judge stated (at [147], [148]): "It may well be that the reservations expressed by Sheppard and Beaumont JJ in Dyason v Autodesk Inc can be overcome and that copying or transferring a computer program into the RAM of a computer can be said to 'reproduce' the program. But it is difficult to say that the program has been reproduced 'in a material form', given that what is stored in the RAM is essentially electronic impulses. In other words, the material stored in the RAM is incorporeal in character. It does not seem to me an ordinary or customary use of language to say that the transfer of part of a computer program from a CD-ROM into the RAM of a computer is the reproduction of the program in a 'material form'. Indeed that strikes me as a very curious use of language. On the face of things, it might seem surprising that the reproduction in electronic or digital form of a computer program is not necessarily an infringement of copyright in the computer program. The scheme of the legislation, however, seems to be that reproducing a work in electronic or digital form infringes copyright, pursuant to ss 31(1)(a)(i) and 36(1) of the Copyright Act, only if the form in which the work is reproduced is itself capable of further reproduction. This approach is consistent with s 21(1A) of the Copyright Act, upon which Mr Bannon [senior counsel for Sony] relied. Section 21(1A) provides that a work that is converted into or from a digital or other electronic machine readable form is 'taken to have been reproduced'. It does not say that the work is taken to have been reproduced in a material form. Whether the reproduction is in a material form involves a further inquiry. Similarly, there is nothing in s 47B(1) of the Copyright Act which is inconsistent with this approach. That provision has work to do once it is recognised that some, if not all, electronic or digital reproductions of a computer program will infringe copyright in that program."
(iv) Sony Computer Entertainment v Edmunds (t/as Channel Technology) (2002) 55 IPR 429 159 Sony v Edmunds, relied on by Sony, concerned the very Sony device that was circumvented by the mod chip installed by Mr Stevens. 160 Jacob J decided that Sony's copyright in its PlayStation games was "copy protected" within s 296 of the Copyright, Designs and Patents Act 1988 (UK). In the United Kingdom, it is clear that loading or running a copyright computer program, without authority, may infringe copyright. The relevant law is found in s 17 of the Copyright, Designs and Patents Act 1988 and in Art 4 of the EC Council Directive of 14 May 1991 on the Legal Protection of Computer Programs (91/250/EEC). So far as relevant, s 17 of the UK Act provides as follows: "(1) The copying of the work is an act restricted by the copyright in every description of copyright work; and references in this Part to copying and copies shall be construed as follows. (2) Copying in relation to a literary ... work means reproducing the work in any material form. This includes storing the work in any medium by electronic means. ... (6) Copying in relation to any description of work includes the making of copies which are transient or are incidental to some other use of the work." (my emphasis) Article 4 of the EC Council Directive defines the restricted acts as including: "(a) the permanent or temporary reproduction of a computer program by any means and in any form, in part or in whole. Insofar as loading, displaying, running, transmission or storage of the computer program necessitate such reproduction, such acts shall be subject to authorisation by the rightholder ..." Accordingly, in Sony v Edmunds his Lordship was able to say (at 431): "There really can be no doubt that the special codes put in by Sony fall within subs (4). They are a device or means intended to prevent or restrict copying of a work. The copying that is prevented is, of course, the loading of the game into the computer. There can be really no doubt that Sony intended that to be the case." (my emphasis) 161 It seems appropriate to say at once that the terms of s 17 and Art 4(a) make Sony v Edmunds readily distinguishable and of little assistance.
My conclusion on the second issue on the appeal 162 Sony's contention on the second issue on the appeal must be that its device prevents or inhibits reproduction of the literary work constituted by the computer program, being the set of statements or instructions embodied in the CD-ROM for a PlayStation game, in a material form in RAM (s 31(1)(a)(i) of the Act). The Act does not define "reproduce", but s 21 deems reproduction to have occurred in the various sets of circumstances there described. One of those sets of circumstances is that described in subs 21(1A) (set out at [37] above). But if the conversion of the program from a CD-ROM to RAM is within subs 21(1A), there remains the question whether the reproduction in RAM is in a material form. Subsection 21(1A) refers only to reproduction: it does not go so far as to deem any reproduction of any of the kinds to which it refers to be a reproduction in a material form. 163 Paragraph 28 of the Explanatory Memorandum for the Copyright Amendment Bill 1984 (Cth)(see [151] above) shows that it was contemplated that at least in some circumstances RAM might constitute "material form". But I do not think the paragraph indicates that RAM would do so in all circumstances. 164 The Explanatory Memorandum does not explain why the intractable words "from which the work ... can be reproduced" were included. The genesis of the Copyright Amendment Act 1984 (Cth) (Act 43 of 1984) was the decision of Beaumont J on 7 December 1983 in Apple Computer Inc v Computer Edge Pty Ltd (1983) 50 ALR 581 that none of the computer programs in source code or object or machine code relied on in that case was a "literary work" within the Act. (I need not discuss the subsequent appeals: see Full Court at (1984) 1 FCR 549 and High Court, Computer Edge Pty Ltd v Apple Computer Inc (1986) 161 CLR 171.) Within 14 days, on 21 December 1983, the Attorney-General, the Minister for Industry and Commerce and the Minister for Science and Technology jointly announced that the Government intended to legislate to ensure that computer software was adequately protected. 165 The solution chosen of deeming a computer program to be a literary work raised difficulties. For example, subs 22(1) provided that a reference in the Act to the time when the period during which, inter alia, a literary work was made was to be read as a reference to the time when, or the period during which, the work was "first reduced to writing or to some other material form". A computer program in electronic or magnetic format was not in "some other material form". Accordingly, the inclusory definition of "material form" (set out at [38] above) was introduced into subs 10(1). 166 Senior counsel for Sony suggests that the qualification "from which the work ... can be reproduced" may owe something to the Act's definition of "cinematograph film" (see [46] above). He submits that by analogy, it should be permissible to take into account the use of an article or thing, even one yet to be designed and made, in determining whether the qualification is met. But whatever may be the origin of the qualification "from which the work ... can be reproduced", the definitions of "cinematograph film" and "copy" in subs 10(1) coupled with s 24 of the Act (all set out at [46] above) present a different legislative scheme. In the case of a cinematograph film, the subject matter of the copyright is the "aggregate of the visual images" which constitute the desired output, and s 24 refers expressly to "the aid of some other device". In the case of a computer program, on the other hand, copyright subsists in something which constitutes an input necessary to generate, in this case, visual images, and the Act does not expressly refer to "the aid of some other device".
167 It cannot be gainsaid that the inclusory definition of "material form" in subs 10(1) (set out at [38] above) insists that in order for a form of storage (RAM) to be a "material form", it must be possible for the work (the computer program consisting of the set of statements or instructions contained in the PlayStation CD-ROMs) to be reproduced from that form (RAM).
168 In my opinion, according to ordinary English usage, the electronic impulses in RAM do not constitute "material form". Can the set of statements or instructions constituting the computer program contained in the CD-ROM for a PlayStation game be reproduced from RAM (a deemed reproduction within subs 21(1A) will suffice)? In my opinion, the learned primary judge was entitled to answer this question "No" on the evidence that was before him. 169 That evidence consisted of the following testimony in chief and cross-examination of Mike Nabarro, Vice President of Technical Services of the second applicant: "[Q]: In relation to the demonstration that you did yesterday when you took the CD-ROM out of the console and the particular track in the game remained on the screen, at that point the contents of the RAM which it is suggested by the demonstration there is content frozen as it were in the RAM, that can't be extracted from the RAM by any means and, for example, put on to a CD or printed out, can it? [A]: I'm afraid there's a yes and no answer to that. In its immediacy in a normal game playing scenario, no; if it were absolutely necessary some piece of hardware could be developed to extract it and reverse the whole process back." … [Q]: Can an infringing CD copy be made from that information in RAM? [A]: Directly from the information in RAM? [Q]: As it stands as we see it in the machine. Well, we don't see it but it is there? [A]: No, not without developing particular hardware to extract that back from RAM. [Q]: What apart from having to spend $1 million on the equipment? It just can't be done logically? [A]: $1 million is --- [Q]: Well, basically would you say--- HIS HONOUR: I am sorry, what were you going to say about the million dollars? [A]: It would be totally incorrect it would be a lot less than that. MR STEVENS: A figure of speech, your Honour, a figure of speech. Basically the main reason that we couldn't actually extract that information from RAM, do you agree, is that there was no CD-writer actually attached to the PlayStation or part of it? [A]: As the console is supplied that is correct, there is no CD-writer attached. HIS HONOUR: You said CD? MR STEVENS: Writer or burner as they call them, your Honour. So, therefore, it means we can't actually download that information and made an illicit copy to disk from it. [A]: Not as the console is supplied from the factory, no." 170 Sony's device is designed to operate in relation to the playing of PlayStation games on PlayStation consoles as "supplied from the factory". Ex hypothesi, the infringement to be prevented or inhibited is one which would take place at the time of the playing of the games on those consoles but for the operation of the device. With respect, I think it an unrealistic and strained construction to treat the words "can be reproduced" at the end of the definition of "material form" so widely as to encompass "could be reproduced if an additional device, not supplied with the console and not yet available, were to be manufactured and attached to it" or "could be produced if the RAM under consideration formed part of a future modified console". 171 As noted at [161] above, Sony v Edmunds is readily distinguishable on the basis of the text of the United Kingdom Act and Art 4(a) of the EC Council Directive (see [160] above). 172 The United States authorities referred to at [152] - [153] above are also distinguishable, or at least are arguably so. The relevant part of the United States definition of "copies" (set out in [152]) is as follows: "material objects ... in which a work is fixed ... and from which the work can be ... reproduced or otherwise communicated, ... with the aid of a machine or device." (my emphasis) The words emphasised by me suggest that the author of the definition may have contemplated, and provided expressly for, hypothetical circumstances of the kind under consideration in which it would be necessary to introduce "a machine or device" not ordinarily present. In the absence of such express provision, Emmett J in AVRA v Warner and the learned primary judge in the present case were required to go no further than to pose the question for decision in relation to the RAM of an "ordinary" Sony PlayStation console. But even if they were permitted to go further, they were not permitted to go beyond taking into account an additional machine or device already available. The testimony of Mr Nabarro was not that machines or devices were already available which made possible reproduction of the PlayStation games' computer programs out of RAM. Rather, his testimony was that "if it were absolutely necessary some piece of hardware could be developed to extract it and reverse the whole process back". (my emphasis) 173 For the above reasons, I would not allow the appeal on the second ground relied on by Sony. (I have not found it necessary to address other arguments advanced for Mr Stevens, including the argument that the storage in RAM is too ephemeral and volatile to give rise to a "reproduction", and that whatever is stored temporarily in RAM is not a "substantial part" of the computer program.)
CONCLUSION 188 In my opinion, Sony succeeds on the first issue on the appeal but not on the second or third. Accordingly, the appeal should be allowed. There should be orders generally as sought in the notice of appeal. I certify that the preceding one hundred and sixty-one (161) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.
NEW SOUTH WALES DISTRICT REGISTRY N 929 OF 2002
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN: KABUSHIKI KAISHA SONY COMPUTER ENTERTAINMENT
SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LTD (ACN 077 583 183)
AND: EDDY STEVENS
JUDGES: FRENCH, LINDGREN AND FINKELSTEIN JJ
DATE: 30 JULY 2003
PLACE: SYDNEY
REASONS FOR JUDGMENT FINKELSTEIN J: 189 I agree with Lindgren J that Sony should succeed in its first ground of appeal for the reasons he has given. There is nothing I can usefully add to those reasons. Regrettably, however, I differ from him, as I differ from the trial judge, on the remaining two grounds. 190 The second ground of appeal may be summarised in the following way. When a PlayStation CD is installed in the PlayStation console and the console is set to operate, a portion of the computer program (the operating or object code) stored on the CD is downloaded (copied) into the console's random access memory (RAM). As the game is played, the stored data is "flushed" or replaced with the next portion of the game. This process continues until the game is played in full or the console is shut down. This downloading is said to amount to a reproduction of the operating code stored in the CD. Sony's protection measure was developed to prevent copyright infringement by downloading into RAM. Mr Stevens's device circumvents that protection. 191 In order to understand the second ground of appeal it is necessary to examine how a computer functions. As Gibbs CJ said in Computer Edge Proprietary Limited v Apple Computer Inc (1986) 161 CLR 171, 178: "Computer science makes much use of jargon and metaphor, and to enable the matters in issue to be understood it seems desirable to attempt a brief explanation of the meaning of some of the expressions used in that science and to describe the manner in which a computer program is developed". The description which follows is derived substantially from Somma, Computer Technology and the Law (1983); Fuori and Aufiero, Computers and Information Processing (1986); London, Introduction to Computers 5th edn (1986); Hamacher, Vranesic and Zaky, Computer Organization 5th edn (2002); and Tocci and Ambrosio, Microprocessors and Microcomputers: Hardware and Software 6th edn (2003). 192 A computer consists of two principal components: hardware and software. The hardware comprises the physical machinery of the computer and is usually made up of four components: an input device (such as a typewriter-like keyboard); a control processing unit (CPU) which converts raw data into useful information; a memory or data storage device and output devices which include disks, printers or video display terminals. While in operation, these components interact on the instruction of a microprocessor which, in turn, receives its direction or command from a computer program. 193 In general, a computer will only function if the program is loaded into the computer's RAM (one of the data storage devices which temporarily stores data that is currently being processed by the computer). The information in the RAM is in the form of evanescent electrical impulses. It is stored in the form of a charge on a capacitor. The charge can be maintained for only tens of milliseconds. Since the information is required for a much longer period, its contents must be periodically refreshed by restoring the capacitor charge to its full value. Information in RAM can be changed simply by downloading new information. The information will be erased if the computer is turned off; when the computer is turned off, the capacitor begins to discharge both as a result of its own leakage resistance and the fact that it continues to conduct a tiny amount of current. This is why RAM is referred to as having "volatile" memory. (It should be noted that some computers utilise special semiconductor storage devices in RAM that draw almost no power and will preserve the contents indefinitely by using a small battery. This is not, however, the position here). 194 Each time a computer is turned on, a program or a portion of the program, is "loaded" onto the computer's RAM. It is not necessary for any instruction in the computer's program to be downloaded onto RAM. That all depends on what functions the user wants the computer to perform. It may also depend upon the capacity of the computer's RAM. As each instruction of the program is about to be executed, it is copied from RAM to the computer's central processing unit (CPU) which contains storage cells called registers. At this point there are at least two copies of the instructions in the computer. The instructions are then decoded to determine the required operation. The computer then executes each program instruction by issuing the appropriate electronic commands. 195 To summarise, for a computer to operate it must take information from a program (which will take the form of permanent storage, such as a CD-ROM), translate that information and store it in RAM from where it will be transferred to the CPU which will perform the actions called for by the program and send the appropriate directions to other parts of the system. 196 On the basis of these facts, the question that arises is whether downloading a computer program (or, more accurately, the object code) into a console's RAM amounts to a reproduction of the object code and thus infringes the copyright contained in the computer program. There is no clear answer to this question. Whatever approach is taken is likely to cause controversy. 197 The type of reproduction that will constitute a breach of copyright subsisting in a computer program is a "reproduc[tion] … in a material form": Copyright Act 1968 (Cth), ss 31(1)(a)(i) and 36(1). This takes us to two definitions. First, there is the definition of "reproduction". Section 21(1A) provides that: "For the purposes of this Act, a work is taken to have been reproduced if it is converted into or from a digital or other electronic machine-readable form, and any article embodying the work in such a form is taken to be a reproduction of the work" The second definition is of the expression "material form". This is defined in s 10 to include " any form (whether visible or not) of storage from which the work or adaptation, or a substantial part of the work or adaptation, can be reproduced." 198 The issue raised by this ground of appeal is whether downloading a computer program into a console's RAM amounts to a reproduction in material form of the instructions in machine readable language (another way of describing an operating code) contained in a computer program. In answering this question it is convenient to begin by analysing the present state of Australian and overseas authorities on this issue. Of course, when considering overseas cases, it is necessary to keep in mind potentially significant differences in the legislation that these cases are interpreting. Overseas cases therefore, can vary in their utility. On the other hand, there is a good deal of merit in adopting, where possible, a uniform approach to the problem at hand. 199 First, I will deal with the Australian cases. They should be considered in the following context. Before the commencement of the Copyright Amendment Act 1984 (Cth), it was difficult, if not impossible, to obtain copyright protection for a computer program. Pursuant to s 31(1)(a) of the Copyright Act 1968, copyright in a literary work included the exclusive right, among other things (1) to reproduce the work in a material form; and (2) to make an adaptation of the work. In Computer Edge Proprietary Limited v Apple Computer Inc (1986) 161 CLR 171the High Court held that a computer program or source program were literary work for the purpose of the Copyright Act because, despite not being expressed in ordinary language, they "were intended to afford information and instruction": per Gibbs CJ at 182; Mason and Wilson JJ at 192 - 193 and Brennan J at 203. However, the electrical charges which constitute the object programs were not literary works because they were not intended to be perceived by the senses: per Gibbs CJ at 184; Brennan J at 203. By the same reasoning, an object code was not a reproduction of a source code because reproduction in a material form required some degree of physical resemblance between the copyright work and the allegedly infringing work, and there could be no relevant resemblance in a program which could not be seen: per Gibbs CJ at 185. 200 To overcome this state of affairs, the Copyright Amendment Act 1984 made express provision for copyright to subsist in a computer program by, among other changes, providing that a literary work includes a computer program and by inserting a definition for "material form". The Explanatory Memorandum said this of the new definition (at [28]): "The definition of 'material form' is new and makes it clear that material form includes such methods of fixation as storage or reproduction on magnetic tape, read only or random access computer memory, magnetic or laser disks, bubble memories and other forms of storage which will doubtless be developed." 201 To this point, excluding the case under appeal, only three Australian cases have considered whether storage in RAM amounts to a reproduction in material form. The cases are the Full Court decision in Dyason v Autodesk Incorporated (1990) 24 FCR 147 (this case was reversed on other grounds in Autodesk Inc v Dyason (1992) 173 CLR 330); Microsoft Corporation v Business Boost Pty Ltd (t/as Perry Tait's) (2000) 49 IPR 573 and Australian Video Retailers Association v Warner Home Video Pty Ltd (2001) 114 FCR 324 ("AVRA v Warner"). These cases have been discussed by Lindgren J. As that discussion demonstrates, one of the decisions which supports the view that storage in RAM does not amount to a reproduction (Dyason) probably overlooked the Explanatory Memorandum. The decision which came to the opposite view (Microsoft Corporation), based itself substantially on the Explanatory Memorandum. AVRA v Warner accepted that reproduction in material form could include a form of storage such as RAM, but held on the facts that there was no infringement because the contents of the program which had been stored on RAM, could not be reproduced by the particular device under consideration. The trial judge followed this approach and it is the view which has found favour with Lindgren J. 202 The notion that reproduction in RAM may amount to an infringement of copyright finds support in the United States. I accept that the legislative scheme is different in that country. However, as I will shortly demonstrate, the legislation is not so dissimilar that cases interpreting the US provisions are not instructive. In my opinion, the US legislation is based on the same underlying principles which underpin the Australian legislation. Generally speaking, copyright subsists in different categories of work, in particular, in literary, dramatic, musical or artistic works. In order to obtain copyright protection it is necessary for the work to be in some tangible form because there is no protection for ideas: Tate v Fullbrook [1908] 1 KB 821, 832-833. See also Donoghue v Allied Newspapers, Limited [1938] Ch 106, 110 per Farwell J: ("If the idea, however original, is nothing more than an idea, and is not put into any form of words, or any form of expression such as a picture, then there is no such thing as copyright at all"). The same is true in the case of a reproduction; as previously mentioned, the Copyright Act provides that copyright will be infringed by a reproduction that is in "material form". Even when there was no definition of "material form", the reproduction still had to be in a form where it could be seen, and from which its character and scope could be identified: Francis Day & Hunter Ltd v Bron [1963] Ch 587, 617 per Upjohn LJ: ("[T]he plaintiff in a copyright action must show that a substantial part of the original work has been reproduced; … and, although not expressed in the Act, it is common ground that such a reproduction, … must be causally connected with the author"). 203 The US legislation is similar in the following respects. The Copyright Act 1976 states that: "Copyright protection subsists, … in original works of authorship fixed in any tangible medium of expression, … from which they can be perceived, reproduced or otherwise communicated, either directly or with the aid of a machine or device": 17 USC s 102(a). The Copyright Act also provides that: "A work is 'fixed' in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced or otherwise communicated for a period of more than transitory duration": 17 USC s 101. Why must the work be "fixed"? It must be fixed because "[i]t is not susceptible to being copied until it has been put in a form which others can see and read. The statute has not provided for the protection of the intellectual conception apart from the thing produced, however meritorious such conception may be, but has provided for the making and filing of a tangible thing …": White-Smith Music Publishing Company v Apollo Company 209 US 1, 17 (1908). Although the requirement of fixation initially applied only to the original "copy" of the work, it is now also a criterion for reproduction. 204 The leading US decision dealing with RAM is MAI Systems Corp v Peak Computer Inc 991 F2d 511 (9th Cir 1993); cert denied 114 S Ct 671 (1994) ("Peak"). Peak Computer maintained and repaired its client's computers which included computers manufactured by MAI. In order to repair technical problems in MAI computers, technicians would often use the diagnostic software (an error log) that was built into the machines. This software was loaded into the computer's RAM when the computer was turned on. Although not permanently fixed the error log remained on the screen for a sufficient time period to allow Peak technicians to view it. MAI sued Peak Computer Inc alleging that this process constituted an infringement of its copyright. Peak claimed that this reproduction was not a copy as any reproduction in RAM was only temporary and not sufficiently permanent to be considered "fixed" for the purposes of the US legislation. The Court of Appeals held (at 518) that the information downloaded into the computer's RAM was "sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration" and was therefore "fixed". 205 In a later case, Advanced Computer Services of Michigan Inc v MAI Systems Corporation 845 F.Supp 356 (E.D. Va 1994), the US District Court for the Eastern District of Virginia also found that when a computer program is downloaded into RAM and maintained there for a few minutes, it is sufficiently fixed to constitute a copy. The Court said (at 362-363) that: "Although the contents of RAM are, in some respects, ephemeral or transient, it is important to remember that the [Copyright] Act does not require absolute permanence for the creation of a copy. Rather, the Act requires only that the representation created in RAM be a 'material object' that is 'sufficiently permanent or stable to permit it to be perceived, reproduced or otherwise communicated for a period of more than transitory duration' …". The Court reasoned (at 363) that the software program was "stable enough" to meet the statute's criteria because "[o]nce a software program is loaded into a computer's RAM, useful representation of the program's information or intelligence can be displayed on a video screen or printed out on a printer …". The court also held that the fact that a program disappears from RAM the moment the computer is turned off "confirmed rather than refuted" its conclusion. In particular the court said (at 363): "[O]ne need only imagine a scenario where the computer, with the program loaded into RAM, is left on for extended periods of time, say months or years, or indeed left on for the life of the computer. In this event, the RAM version of the program is surely not ephemeral or transient; it is, instead, essentially permanent and thus plainly sufficiently fixed to constitute a copy under the Act. Of course, if a computer is turned off within seconds or fractions of a second of the loading, the resulting RAM representation of the program arguably would be too ephemeral to be "fixed" or a "copy" under the Act. It is unnecessary here to decide precisely where along the time continuum the line should be drawn between RAM representations of a program that are of a sufficient duration to be 'fixed' and those that are not. MAI's copyright infringement claim is not aimed at situations where the power to the computer is turned off and the RAM erased within a second of the completion of loading. Instead, MAI's attack focuses on those situations where the computer is left on for a time measured in minutes, if not longer." 206 These decisions have attracted a great deal of criticism. Although I will not analyse the criticism in any depth, it is worthwhile noting the main points that have been made. They include: (a) That the courts were wrong in principle because loading a computer program onto RAM is only a temporary fixation which is not sufficiently permanent to qualify as a copy; (b) That these results create broader copyright protection than that intended by the legislature and that this protection operates as a restriction on the use of copyright by giving copyright owners similar rights to those of trade secret owners; (c) That the courts were in error in rejecting the defence under s117(1). This provision states that it is an infringement to make or authorise the making of another copy or adaptation of a computer program "if such a new copy or adaptation is created as an essential step in the utilization of the computer program"; (d) That s117(1) was only discussed in Peak in a one sentence footnote, as an afterthought, and without any reasoned analysis; (e) That the courts did not consider whether the doctrine of fair use was available by way of a defence; and (f) That the decisions are anti-competitive and contrary to ss1 and 2 of the Sherman Act (1890) as they may oust third party maintenance providers from the computer maintenance market. 207 Journal articles where these and other criticisms can be found include: T. Arriola, 'Software Copyright Infringement Claims after MAI Systems v Peak Computer', 69 Wash L Rev 405 (1994); K. Levin, 'Intellectual Property Law: MAI v Peak: Should Loading Operating System Software Into RAM Constitute Copyright Infringement?', 24 Golden Gate U L Rev. 649 (1994); R VerSteeg, 'The Herbert Tenzer Memorial Conference: Copyright in the Twenty-First Century: Jurimetric Copyright: Future Shock for the Visual Arts', 13 Cardozo Arts & Ent LJ 125 (1994); M E Johnson, 'The Uncertain Future of Computer Software Users' Rights in the Aftermath of MAI Systems', 44 Duke L J 327 (1994 - 95); B J Nicholson, 'The Ghost In The Machine: MAI Systems Corp v Peak Computer Inc and the Problem of Copying in RAM', 10 High Tech L J 147 (1995); C G Stovsky, "MAI Systems Corp v Peak Computer Inc: Using Copyright Law to Prohibit Unauthorized Use of Computer Software", 56 Ohio St L J 593 (1995); J Boyle, 'Intellectual Property Policy Online: A Young Person's Guide', 10 Harv J Law & Tec 47 (1996); I Brandriss, 'Writing in Frost on a Window Pane: E-Mail and Chatting on RAM and Copyright Fixation', 43 Journal, Copyright Society of USA. 237 (1996); R A Reese, 'Symposium: Intellectual Property Challenges in the Next Century Article: The Public Display Right: The Copyright Act's Neglected Solution to the Controversy Over RAM "Copies"', U Ill L Rev 83 (2001). 208 What should be the position in Australia? The answer to this question requires the resolution of two discrete issues concerning the meaning of the definition of "material form" in s 10 of the Copyright Act. The first issue is whether RAM is a "form (whether visible or not) of storage… ". On one view the answer is obvious. Whatever computer experts may say, the Explanatory Memorandum states that RAM is a method of storage. Moreover, one[k1] [k2]of the objects of the new definition of "material form" was to "focus attention on the content of that which is copyright, rather than the particular form in which it is embodied": Roland Corporation v Lorenzo & Sons Pty Ltd (1991) 33 FCR 111, 118 per Pincus J. It logically follows that if there is no longer a requirement for an allegedly infringing work to be continuously visible, there is no reason why storage in RAM cannot be a relevant form of storage. The legislation should also be construed in a way that accommodates scientific changes. In particular, the meaning to be given to "form … of storage" must keep abreast with the digital age. Furthermore, the transitory nature of the memory in RAM is more complex than it first appears. On the one hand, the information that is stored can be wiped out in a second. On the other, it is possible that it may remain stored in RAM for the life of the computer. To hold that RAM is not a form of storage would be to thwart the legislature's intention. 209 The second issue concerns the requirement in the definition of "material form" that the storage be of a kind from which the work, or substantial part of the work, "can be reproduced". There is no dispute that with appropriate equipment, the work can be reproduced. The question here is whether the ability to reproduce the work from storage must exist at the time the work is placed into storage (the view taken by the trial judge) or whether it is sufficient if the form of storage is of a kind from which the work is capable of being reproduced. The problem can be examined by reference to a hypothetical set of facts. Let us assume that a copyright work, an object code, is downloaded into two computers, computer A and computer B. Computer A is fitted with a device which permits the code to be reproduced immediately. Computer B does not have such a device, but the device can be fitted at any time. On the trial judge's reasoning, downloading the object code into the RAM of computer A would constitute an infringing act, but there will be no infringement when the code is downloaded into computer B. In my view, there is no principled justification for this differential treatment. If desired, the work can be reproduced in both computers. Consistency demands that infringement of copyright should occur in both instances. This can be achieved without any strained reading of the words in the definition. The phrase "can be reproduced" can mean "may be able to be reproduced". This accords with one of the ordinary meanings of the verb "can" in my edition of Webster's dictionary. In my opinion, the context requires the word to be given that meaning. 210 If I were wrong, and the construction proposed by the trial judge is preferred, the requirement that storage be of a kind from which the work can be reproduced may, in any event, have been satisfied. I say, "may" have been satisfied because the issue was not pressed on appeal and does not presently need to be resolved. However, it is worth mentioning for the future. As previously indicated, one of the steps that is involved in the operation of a computer is the storage of the object code in the storage registers of the central processor. This was explained by Mr Nabarro. In an affidavit he deposed that: "If and when the player operates the game controller, the program information stored in RAM is called on and extracted from RAM on instructions of the CPU of the console and the CPU, GPU and video RAM, using instructions from the copy of the game stored in the console's RAM in conjunction with the instructions conveyed to it by the player's operation of the game controller via the sub bus serial communications interface to the CPU, causes the various scenarios and outcomes to be displayed on the television screen. For the purpose of undertaking that task, the electronic copy of the video portion of the game stored in the console's RAM is reproduced, particularly in the video RAM. It would thus be correct to say of the code stored in the RAM that it 'can be reproduced', and, indeed is reproduced, particularly to the GPU and the video RAM." Mr Nabarro expanded on this in his oral evidence: "Q: In your latest affidavit you've described what happens with the statements or instructions which I'll perhaps refer to as game code because you use that expression which is stored on the RAM and how that interacts with the GPU and the video RAM? A: Correct. Q: Can you just indicate if you would or clarify what it is which occurs between firstly the game code on the RAM and the GPU and then between the GPU and the video RAM? A: Basically after the game code has been reproduced into the main system RAM - the main system RAM basically acts like a reserve holding area and then as specific parts of that game code are required they're called off by the central processor, the CPU and fed into the graphics processing unit. The graphics processing unit takes that game code data and manipulates it in such a way as it's demanded by the interaction of the user and what the screen actually finally needs to look like. [S]o the game code goes through a transition during the time it spends in the graphics processing unit. It is then fed into a video random access memory system which is basically RAM as well but a faster version because the … RAM system is the main system RAM and then from the video RAM it's fed into basically a device which converts it into signals which a TV can understand and interpret into TV images." … Q: What I'm just asking about, there's pre the GPU - I think you've indicated the GPU can call up or something can call? A: The GPU can call on the data, pass it through to the GPU, the GPU then processes it. Q: The data which is called upon and passed to the GPU at the interface with the GPU before it's been processed, how does it compare in appearance to what's on the RAM? A: It's effectively the same. Q: When you say appearance what are we talking about here; can you actually see something, can the human eye see anything? A: You can on a digital analysing oscilloscope for example. If you could capture, you can capture [ ] visually using the correct equipment, laboratory equipment, what you see leaving the system, RAM is what you see entering the --- Q: And what do you see when you look through this instrument? A: You see a set of analysis spikes and troughs of digital 1s and zeros and you capture at an extremely fast rate and you can actually freeze at any one point in time and visually see that and print it up." 211 The trial judge criticised the evidence. He said that it was not clear what Mr Nabarro meant by the word "reproduce". He also said that Mr Nabarro "apparently assumed that what was transmitted to the GPU could be regarded as a 'reproduction' even though there was no evidence that it was stored for any discernible period of time." I note that it had been conceded by counsel that reproduction in the GPU would not last for more than perhaps one hundred thousandth of a second. It is unnecessary to determine whether the judge's criticism is well-founded. Nevertheless, it seems to me that Mr Nabarro's evidence is uncontroversial, and may establish the necessary reproduction when the object code is transferred to the GPU. 212 This brings me to the final ground of appeal. Sony contends that each PlayStation game embodies a cinematograph film and that a substantial part of the film is reproduced when it is downloaded into the RAM. Accordingly, Sony's technological protection device prevents a copy of the film being made in RAM whenever the PlayStation is turned on and it is this protection measure that is being circumvented by Mr Stevens's circumvention device. 213 The first premise on which this argument is based is that a cinematograph film (as defined) can be embodied in a computer program. The premise conforms with the decision of the Full Court in Galaxy Electronics Pty Limited v Sega Enterprise Limited (1997) 75 FCR 8 (Galaxy v Sega). The trial judge in this case said (at [157]) that he was only "prepared to assume that the reasoning in Galaxy Electronics v Sega Enterprise applies to the PlayStation games, … [because he was] not entirely sure that the evidence, as distinct from commonsense and intuition, establishes the factual basis for this conclusion." 214 With great respect, I believe that the judge underestimated the effect of the evidence. Simple observation and deduction indicates that visual images and an aggregate of sounds are embodied in a PlayStation game and that when the game is played in the PlayStation console, the visual images are shown as a moving picture. PlayStation games and a PlayStation console were tendered in evidence in the original proceeding where there was a demonstration of their use. In my opinion, the present facts are similar to those in Galaxy v Sega. There the Full Court held that the aggregate of visual images generated at the playing of a Sega video game constituted a cinematograph film for the purposes of s 10(1). 215 Sony, however, failed on this aspect of the case before the trial judge for two reasons. First, because the judge was not satisfied that a "copy" of its cinematograph film had come into existence when the contents of a PlayStation game was stored in RAM. The second reason was that Sony could not show "that the data reproduced in the RAM of the PlayStation console constitutes a copy of a substantial part of the 'aggregate of visual images' constituting the cinematograph film." In both respects the judge relied upon, and applied AVRA v Warner. 216 The first reason raises what, to my mind, is a very difficult issue. For there to be a copy of a cinematograph film there must be an "article or thing in which the visual images or sounds comprising the film are embodied": s 10(1). The sounds or visual images will be taken to have been "embodied" in the article or thing "if the article or thing has been so treated in relation to those sounds or visual images that those sounds or visual images are capable, with or without the aid of some other device, of being reproduced from the article or thing": s 24. Lindgren J says that "s 24 was framed with an article or thing such as celluloid or magnetic tape in mind". He goes on to say that "s 24 requires one to consider the RAM as an article or thing existing outside and independently of the console, and to ask whether it has 'been [previously] treated'" so that images which are stored within the RAM are capable of being reproduced. Lindgren J believes that the answer to this is in the negative. 217 Although there is great force in both the position taken by Lindgren J and the reasons which support his conclusions, in the end I have come to a different view. I have done so because I believe that the Copyright Act (and many other statutes as well) should not be given a meaning that is frozen in time but should be interpreted in a way that takes into account technological advances, provided that the interpretation is consistent with its purpose. I accept that the original meaning of the expression "an article or thing" contained in s 24 was as Lindgren J described it; however, this does not mean that the term's meaning is static. R Dickerson, in his text, The Interpretation and Application of Statutes (1975)said (at 128) that: "The connotations of words define their meanings, whereas their denotations consist merely of specific instances falling within those meanings. Consequently, changes in connotation are changes in meaning, but changes in denotation are not. Freezing the former does not freeze the latter." Therefore, while it is necessary to accept that the connotation of words is fixed at the time of the enactment of a statute, their denotation can change. Indeed, a word's denotation may often be required to change to enable the statute to accommodate things unknown at the time of its enactment. In Gambart v Ball (1863) 143 ER 463, for example, it was held that the Engraving Copyright Act 1734 (UK), which prohibited unauthorised engraving, etching or "in any other manner" copying prints and engravings, applied to photographic reproduction, even though the process was invented more than 100 years after the Act was passed. Erle CJ (at 468) said that he saw "no reason why these very wide and general words should not be construed according to their plain and ordinary meaning, and be held to apply to any mode of copying known at that time and too such modes of multiplying copies as the ingenuity of man may from time to time discover". Adopting this approach, I am of opinion that the phrase "an article or thing" should be subject to an interpretation that is broad or, as some might say, "open-textured". On this approach RAM (which is a device for storage) may be regarded as a "thing". It is no less a "thing" than some other "thing" which exists as a separate or distinct entity with its own individual qualities such as a piece of equipment or as something which may, in a sense, be possessed or owned. Further on this aspect, I note that it is not in dispute that sounds and images which are stored in RAM are capable of being reproduced. 218 An examination of the second reason must commence with AVRA v Warner. That case was concerned with the reproduction of cinematograph film embodied in a DVD disc. Emmett J, the trial judge said (at 338) that it was "… common ground that, in the case of the storage in RAM of the audio, video and caption content of a DVD, only a tiny fraction of the motion picture is stored at any one time." Emmett J further held that simply because tiny parts of a cinematograph film were consequentially stored in the DVD player, did not mean that the film was embodied in the DVD. Indeed, he held that no part of the cinematograph film was embodied in the RAM. 219 I will assume, without deciding, that the analysis in AVRA v Warner is correct. It will only be correct, however, on the special facts of that case which were that "tiny fractions" of the film were reproduced in the RAM and that these "tiny fractions" could not be characterised as a substantial part of the film embodied in the DVD disc. 220 AVRA v Warner can be distinguished from this case. According to Mr Nabarro, depending on the particular game being considered, somewhere between 5 per cent and 15 per cent of the object code in a CD is downloaded in the RAM at any one time. During the hearing of the appeal there was a demonstration of two games, one entitled Motor Racer World Tour and the other Medieval. The Motor Racer game involved a player "riding" a motor bike in races against other motor bikes. The races take place at a number of reconstructions of world famous racing circuits. The demonstration was confined to one particular circuit. If the game is played in its entirety, the race occupies three laps of the circuit. However, as only a portion of the race could be stored in RAM at any one time, only one lap of the circuit is shown when the content of the RAM is kept static. Although, in that circumstance, the player can race over only one lap, he can do so indefinitely or until a power interruption. 221 The judge said that "[i]n the absence of clearer and more detailed evidence as to the nature and quality of the images embodied in the instructions stored in the RAM, accessed in relation to the totality of 'the aggregate of visual images' constituting the cinematograph film," he could not conclude that "'the ephemeral embodiment' of a small proportion of images in the RAM [constituted] the act of making a copy of the cinematograph film for the purposes of s 86(a) of the Copyright Act." 222 I have reached a different conclusion for two reasons. First, the question whether a substantial part of the copyright had been reproduced did not require detailed evidence. In particular, it did not require oral evidence from a witness to describe the relevant technology and, perhaps, express an opinion on the issue of substantiality. In many instances, of which this case is a good example, the judge can make an assessment whether a substantial part of the copyright has been taken by making a simple visual comparison between the copyright work and the allegedly infringing work. Secondly, I do not accept that the judge was confined in his consideration of the issue to what he observed during the demonstration. He had available to him the disks and a PlayStation console and, if necessary, he could have personally played the games in order to assess the nature and the quality of the images stored in the RAM when compared to the totality of the visual images comprising the film. 223 If necessary, this task can be undertaken by a Full Court. Indeed, an "appellate court is obliged to conduct a real review of the trial" and appellate judges must weigh the evidence and draw their own inferences and conclusions from that evidence, especially when, as in this case, they are in as good a position as the trial judge to determine the facts: Fox v Percy (2003) 77 ALJR 989, 994 per Gleeson CJ, Gummow and Kirby JJ. If that requires an appellate court to consider the totality of the evidence in a particular case, then this is what must occur. 224 It is not, however, necessary to view the CDs in their entirety in order to determine whether the portion of the cinematograph film stored at any one time in the RAM is a substantial part of the film embodied in the CD. In saying this, I acknowledge that there seems to be uncertainty as to the appropriate test that is to be applied in deciding whether there has been a taking of a substantial part of the copyright in a cinematograph film. There is some suggestion there may be a distinct test in the case of a work which is not original. For example, in Nationwide News Pty Ltd v Copyright Agency Limited (1996) 65 FCR 399, 418 Sackville J (with whom Jenkinson and Burchett JJ agreed), suggests that, "[i]n relation to a published edition, the quality of what is taken must be assessed by reference to the interest protected by the copyright". This echoes the doctrine of fair use in the United States. In that country, the common law position for many years was that certain infringing uses were "fair" and could thus not be the subject of action. The doctrine can be traced back to the comments of Storey J in Folsom v Marsh 9 Fed Cas 342, 348 (Mass 1841): "In short, we must often, in deciding questions of this sort, look to the nature and objects of the selections made, the quantity and value of the materials used, and the degree in which the use may prejudice the sale, or diminish the profits, or supersede the objects, of the original work." The doctrine was codified in 17 USC s 107. This section identifies a number of purposes which may amount to fair use. In particular, the section states that the factors that a court must consider in determining whether "use made of a work in any particular case is a fair use include": "(1) [t]he purpose and character of the use, including whether such use is of a commercial nature or is for non-profit educational purposes; (2) [t]he nature of the copyrighted work; (3) [t]he amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) [t]he effect of the use upon the potential market for or value of the copyrighted work." It is difficult to state definitively whether the doctrine of fair use simply means that there is an insubstantial similarity between the plaintiff's work and the allegedly infringing work or whether it operates on the assumption that there is a copyright infringement but provides for a defence in the case of a particular purpose. The general consensus is that the latter view is correct: 4 Nimmer on Copyright s 13.03A(2); Goldstein, Copyright, 2nd edn, s 10.1. Prior to the Copyright Act 1911 (UK) there was a substantial body of English case law which had developed an analogous doctrine of fair use. The earliest case seems to be Gyles v Wilcox (1740) 26 ER 489. Now of course the common law doctrine has been overtaken by statute. The Copyright Acts of both England and Australia specify the particular uses which are regarded as fair, and do not constitute an infringement of copyright. In Australia these include ss 103A (criticism or review), 103B (reporting news) and 103C (research or study). For this reason, I am of opinion that the criteria which would ordinarily be considered in determining whether there has been a fair use of the copyright has a limited role in determining whether there is substantial similarity between the copyright and the allegedly infringing work. Rather, the correct test in my opinion requires a comparison of the quantitative and qualitative aspects of the copyright work and the alleged infringing work. For example, in New Boston Television Inc v Entertainment Sports Programming Network Inc 215 USPQ 755 (1981) the defendants copied highlights of the plaintiff's sport's game broadcast. When sued for copyright infringement, the defendant asserted that the use was de minimus because it amounted to no more than two minutes of a long broadcast. District Judge Zobel of the US District Court for the District of Massachusetts found against the defendant. Judge Zobel said (at 757) that although the defendants broadcast a short segment from the plaintiff's film, "it is the quality of the use rather than its quantity which is determinative". He found (at 757) that "the excerpts used by defendants in this case, although of relatively short duration, are the 'highlights' of each broadcast and as such their use may be considered substantial". This accords with the statement in Laddie, Prescott and Vitoria, The Modern Law of Copyright and Designs, 3rd edn (2000) at par 8.37 "…that anything which is not de minimus should be regarded as substantial". It is the test which should be applied in this appeal. When this test is applied to the facts in this case, it is beyond question that that which would have been taken is more than de minimus. 225 I agree in the order proposed by Lindgren J.
I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.
Counsel for the Appellants: D K Catterns QC and R Cobden
Solicitor for the Appellants: Blake Dawson Waldron
Counsel for the Respondent: J Nicholas SC and C Dimitriadis
Solicitor for the Respondent: Gadens Lawyers Counsel for the Australian Competition and Consumer Commission: M Walton SC and M S White
Solicitor for the Australian Competition and Consumer Commission: Australian Government Solicitor
Dates of Hearing: 24 and 25 February 2003
Date of Judgment: 30 July 2003
KABUSHIKI KAISHA SONY COMPUTER ENTERTAINMENT & ORS
EDDY STEVENS
(1983) 50 ALR 581
(2001) 114 FCR 324
(1992) 173 CLR 330
(1993) 176 CLR 300
(1995) 187 CLR 384
(1986) 161 CLR 171
(1991) 172 CLR 319
(1990) 24 FCR 147
(2003) 77 ALJR 989
(1997) 75 FCR 8
(2000) 49 IPR 573
(1996) 65 FCR 399
(1993) 28 IPR 313
(1991) 33 FCR 111
(1996) 69 FCR 268
(2002) 55 IPR 429
(2002) 55 IPR 497
(1984) 1 FCR 549
Appeal allowed. The order dismissing the remainder of Sony's proceeding was set aside. The Court declared that Stevens sold circumvention devices in contravention of s 116A on 8 April 2001, 28 September 2001 and 16 November 2001, restrained further sales in contravention of the provision, ordered Stevens to pay Sony's appeal and first-instance costs, and remitted damages and additional damages to the primary judge.