Three strikes and you are out – the Copyright (Infringing File Sharing) Amendment Act 2011

Intellectual property | Print Article

[Winter 2011]

We live and work in an internet-based society. This is particularly true of the entertainment industry. There has been pressure for many years for governments to limit the downloading of music and movies but it is not only entertainment protection that is covered by the new Copyright (Infringing Files Sharing) Amendment Act (‘the Act’) which was passed into law by Parliament in April 2011. This part of the Copyright Act has been the subject of attacks by those who believe modern day technology is past the ability for governments to legislate for authors to protect their copyright. But the Act not only covers music and movies – it also extends into the internet area issues that relate to general copyright and any unique works.

The government’s approach

The 2008 amendment to the Copyright Act had an awkward section (Section 92A) which was narrow in its scope and did not provide effective and immediate remedies and penalties for infringement by way of file sharing. Under the Act the Copyright Tribunal and/or the District Court can assess and impose the penalties.


Everything to do with the internet seems to involve acronyms and the Act is no different. Under the old Section 98A, website providers were Internet Service Providers or ISP’s. They are now Internet Protocol Address Providers or IPAP’s. Apart from the similarity of the acronym, the new definition is broader and brings in website providers which were not traditional service providers such as businesses, universities, and anyone who except as an incidental matter to their primary function, provides or allows use of websites by others. In techno speak in the Act they ‘offer transmission routing and providing connections for digital online communications between or among points specified by the user of the material of the user’s choosing; and

  • allocate IP addresses to its account holders;
  • charges its account holders;
  • is not primarily operated to cater for transient users.’

I have recently advised on a community based website set up to cater for the promotion of services and products through its portal. The new Act definition is particularly relevant to any businesses who are offering that type of website base for others.

The Three Strikes regime

The Act now enables rights owners to require IPAP’s to send infringement notices to account holders who have been identified by the rights owner as infringing their copyright through file sharing systems. IPAP’s are permitted to charge the rights owners for the administration service at prescribed and fairly minimal rates.

There are three tiers – following the three strikes proposals of the Sensible Sentencing Trust in New Zealand and the California Courts system perhaps? – which the IPAP’s are required to send.

  • First Infringement – Detection Notice
  • Second Infringement – Warning Notice
  • Third Infringement – Enforcement Notice

There are time frames within which each notice can be sent and challenged. However, when an account holder has received a third infringement notice relating to the same copyright infringement, the rights owner can file proceedings with the Copyright Tribunal or the District Court in terms of the Act.


Remedies available to the rights owner include an order from the Copyright Tribunal for a sum of up to $NZ15,000 or an order from the District Court requiring the IPAP to suspend the account holders internet access for up to six months. However, the suspension right – which has caused major ripples through the internet community, is still to be activated. The government has accepted that while they wish to fall in line with overseas jurisdictions to protect copyright, the suspension of internet access can be catastrophic for businesses and private users.


If you are or are likely to be an IPAP, you will have additional responsibilities and costs.

  • You need to limit the persons using your service in your disclaimer and other notices.
  • If you are caught in the three strikes systems, the existence of a third infringement notice is a presumption of copyright infringement and will enable proceedings to be filed although this is rebuttable by the account holder.
  • Website providers need to take specific advice as to the ability to recover costs and has to limit content.

However, it is too early to say whether the stick rather than carrot approach envisaged by the Act will in practice be workable or effective.

Will the Y and X generations recognise restrictions of their web-based world?