The perils of downloading from the Internet: do you know what your staff are doing online?
On 1 September 2011 new provisions in the Copyright Act will come into force to try and deal with the problem of illegal file sharing over the Internet. Over the past two years debate has raged over what role an internet service provider (ISP) should have in helping to prevent illegal file sharing. That debate has influenced the shape of the new law. However, the new law doesn’t impact solely on ISPs. The new law can affect any person who has access to the Internet.  Therefore, all businesses need to understand the new law.
When the new provisions of the Copyright Act come into force a copyright owner or its agent (the rights owner) will have a new method for dealing with copyright infringements over the Internet. If someone uses an account to infringe copyright then a rights owner can require the ISP that hosts that account to serve a notice alleging copyright infringement on the account holder. 
There are three types of infringement notice. They are detection, warning, and enforcement notices. You will have to receive all three kinds of notice before a rights owner can apply to the Copyright Tribunal for an order that you pay compensation. If the Copyright Tribunal makes an order for compensation to be paid, then the account holder – not the user – must pay that sum. The Copyright Tribunal cannot suspend an Internet account. However, if the government decides that the new law is not having the desired effect, then it may give a District Court the power to suspend an Internet account in the future.
So why is it important for your business to be aware of this law? 
First, if you are a rights owner then this law change provides a cost effective option to try and stop people from infringing copyright.  Second, the account holder is responsible for how its account is used and for paying any award that the Copyright Tribunal makes. In most situations, that will mean your business and not the employee responsible.
Supporters of the new law say that one of its key purposes is to help educate Internet users about copyright law. The Ministry of Economic Development has also emphasised the importance of using the system to educate Internet users. However, there is a burden on an employer to ensure that employees are aware of the law and of the potential consequences if an employee infringes copyright using the employer’s Internet account.
So as an employer, what should you be doing? 
First, you should educate your staff about what acts infringe copyright and what acts don’t.  Second, you should decide how you will deal with any infringement notices that are sent to you by your ISP.
Some businesses will have computer usage policies in place that prohibit unlawful use of their computer systems.  Some employment contracts will also prohibit any unlawful use of the employer’s computer systems.  However, many businesses may not have those safeguards in place.  Even with those safeguards, an employee may still infringe copyright over the Internet that the business will be liable for.
Therefore, you have to consider whether you need a formal computer usage policy and whether you need to include a term in your employment contracts that prohibits misuse of your computer systems.  You may even want to include a term in your employment contracts which states that an employee must pay any sum awarded by the Copyright Tribunal as a result of the employee infringing copyright.
By far, the best thing you can do is educate your employees on what behaviour isn’t acceptable.  The new law provides an opportunity to educate your staff on basic copyright law. If you wait until you receive an infringement notice or until the Copyright Tribunal makes an order against you then it will be too late. In that case you may have to pay up to $15,000 to a rights owner while at the same time dealing with a potential employment dispute. You can limit the risk of entering that hostile environment with some simple planning and education.
Article by Simon Fogarty, Senior Associate, at A J Park.









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