PAPEL DE LA SOCIEDAD CIVIL EN LA INTEGRACIÓN LOCAL

In the case of illegal file sharing it is indisputable that users are engaged in direct infringement of copyright owners’ exclusive rights. The next issue to be considered is whether any defence may apply to such conduct. The most possible exception that may be argued with respect to users’ infringement is the fair dealing exception in section 13(2)(a) of the CA 1987 which was amended under the Copyright (Amendment) Act 2012.41 _{The effect of the amendment to section 13(2)(a)}

was examined in Chapter 2.42 Briefly, with the amendment, section 13(2)(a) has been converted into an open fair dealing exception, at least with respect to the scope of the permitted purposes. In addition, the new section 13(2A) lists the same four factors found in section 107 of Title 17 of the US Code (hereinafter referred to as ‘the 17 USC’).43 The US case law on fair use arguments in respect of P2P file sharing is therefore relevant to the position in Malaysia in view of the similarities of the legislations.

41 _{Act A1420 which was gazetted on February 9, 2012 and came into force on March 1, 2012 via the notification PU(B) 58 of 22/2/2012.} 42 _{See section 2.4.1 in Chapter 2.}

43 _{Section 107 of the 17 USC provides that in determining fair use the factors to be considered include- (1) the purpose and character of the use,} including whether such use is of a commercial nature or is for non-profit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.

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In A & M Records, Inc. v Napster, Inc.,44 the court rejected the defendant’s fair use arguments for the users’ conduct after considering the factors in section 107 of the 17 USC. It was found that downloading MP3 files was not transformative as it merely involved the transfer of a work in a different medium45 and the use of Napster system was commercial in nature; the musical works and recordings were creative in nature; the copyright works were copied in entirety; and Napster had negative impact on the then and future markets for digital downloading. The defendant argued that their system of P2P file sharing enabled space shifting of music files and thus was a fair use. This was rejected on the ground that space shifting enabled by the defendant’s system ‘simultaneously involve distribution of the copyrighted material to the general public.’46

Transmission of copyright works via P2P file sharing is unlike the case of Recording Indus. Ass’n

of Am. v. Diamond Multimedia Sys. Inc.47 in which the Court of Appeals for the Ninth Circuit held that a portable MP3 player permitted space shifting where the copying involved was a non- commercial personal use; or the case of Sony Corp. v Universal City Studios48 where the US Supreme Court held that time shifting enabled by the Betamax video tape recorders was a fair use. In addition, the specific fair use argument on sampling made by the defendant was also rejected by the court on the ground that the defendant’s users downloaded full, free and permanent copies of the copyright works. Apart from this, the defendant raised the argument that its users were engaged in fair use as regards the authorized distribution of recordings by new and established artists. This argument was not challenged by the plaintiffs. However, in view of the high propensity of P2P file sharing being used for illegal purposes, it is submitted that this argument would be unlikely to defeat the finding on infringement.

44 _{Supra n 7.}

45 _{In UMG Recordings, Inc. v. MP3.com, Inc., supra n 8, it was held that reproducing audio CDs into MP3 format was not transformative.} 46 _{Supra n 7 at para 80.}

47 _{180 F 3d 1072 (9th Cir. 1999) at 1079.} 48 _{464 US 417.}

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The decision of A & M Records, Inc. v Napster, Inc.49 was referred to in BMG Music v Cecilia

Gonzalez50 _{in which the Court of Appeals for the Seventh Circuit considered the fair use argument}

made by the appellant for her act of downloading and keeping copies of music files from the internet via KaZaA, a file sharing program. The appellant contended that she was merely sampling music to decide whether she wanted to purchase the same at retail and argued that music sampling as such was a fair use. The Court of Appeals for the Seventh Circuit opined that ‘A copy downloaded, played, and retained on one’s hard drive for future use is a direct substitute for a purchased copy -- and without the benefit of the license fee paid to the broadcaster.’51 Such copies of copyright works in entirety would seriously damage the ability of copyright owners to derive profit. The court also noted that licensed internet music sellers such as the iTunes Music Store do offer samples to consumers before they determine whether to buy the particular musical works, by paying copyright owners a fee for the right to provide samples. The samples were only a portion of the original works. The court thus concluded that downloading full copies of copyright works without any compensation made to copyright owners could never be fair use.

3.3.3 Conclusion

From the discussion above, it follows that users of P2P file sharing who upload and download copies of copyright works without the copyright owners’ authorization would infringe one or more of the copyright owners’ exclusive rights. It is highly unlikely for the users to seek recourse under

49 _{Supra n 7.} 50 _{430 F 3d 888 (7}th _{Cir. 2005).} 51 _{Id at 890.}

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any exception to infringement under section 13(2) of the CA 1987, particularly where such acts of exploitation are rightly regarded as acts of piracy, which copyright law should combat.52

However, as mentioned earlier, it is extremely impractical for copyright owners to sue each and every individual user of P2P file sharing for copyright infringement on a worldwide scale.53 It is thus crucial to examine whether copyright law gives adequate protection to copyright owners in tackling the problem of illegal P2P file sharing by enabling them to take action against P2P operators instead.