Employer liability for illegal downloading
Monday, 14 November, 2011
Author: Andrea Twaddle
Employers may have dismissed changes to the Copyright Act to address illegal downloading as something only those technologically inclined should bother about. This is not the case. Wise employers will take an active interest.
In the past week, it has been reported that internet provider Orcon became the first internet company to receive copyright infringement notices, two months after the controversial Copyright (Infringing File Sharing) Amendment Act came into effect. Enforcement action, now provided by the legislation, is clearly being put into practice.
How is this relevant to employers? Employer liability arises because when a breach occurs under the Act, for example, an individual illegally downloads movies, music or software in breach of copyright, it is the account holder who is liable for compensation, not the individual user. For employers as the account holder, this means they will be liable in instances where employees use work internet connections to infringe copyright.
Where a copyright infringement is identified, a detection notice will be sent in the first instance, a warning for a second breach and an enforcement notice will follow in the event of a third infringement. The issue of an enforcement notice also enables the copyright owner to apply for an order that the account holder pay compensation up to $15,000.
The Copyright Tribunal may decline to order compensation against the account holder when it is considered that it would be "manifestly unjust" to do so. Although the discretion is yet to be tested, "manifestly unjust" indicates a high threshold must be met for an order to be declined. When combined with the offence being one of strict liability, it is unlikely that the Tribunal would consider an award against an employer manifestly unjust simply because the infringement was committed by an employee.
As a consequence, employers should take a proactive and pragmatic approach to managing these issues:
- Ensure that policies on computer and internet use are up to date and address file sharing, including sharing that arises from remote internet access and use.
- Provide clear information in policies about the consequences for any breach by an employee.
- Consider the inclusion in policy that where any loss is incurred as a result of an employee infringing copyright using the work account, reimbursement may be sought.
- Set up internal investigation processes to manage receipt of an infringement notice. These can be appealed. However, there is a 14 day timeframe within which this must be done, which places urgency on an employer to investigate the allegation and respond.
- Seek IT advice to ensure protections to prevent file sharing are in place and computer usage is monitored.
Preventative steps employers take to avoid conduct in breach of the Act, together with the absence of any employer knowledge or condoning of such conduct, are likely to be factors relevant to the decision of the Copyright Tribunal should an application for compensation be made against an employer. An employer who actively communicates expectations with employees and takes steps to ensure conduct in the workplace is appropriate, will be well placed to defend any allegation of breach.
For further information please contact:
Andrea Twaddle
Phone: 07 834 6684
Email: andrea.twaddle@harkness.co.nz
(Article first published in Waikato Times, 11 November 2011)
