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REPORT PREPARED FOR:

Critique Group Assignment: Case

REPORT TITLE Copyright and Data Ownership

BY AUTHOR NAME Yidan Deng, Yao Gui

MASTER OF BUSINESS/ POSTGRADUATE DIPLOMA IN BUSINESS

APMG 8119: DIGITAL ENTERPRISE

ASSOCIATE PROFESSOR DR. NITIN SETH

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CONFIDENTIALITY AGREEMENT

You are a student at Unitec enrolled in the Digital Enterprise course (APMG 8119). As part of the course requirements you are expected to contact companies and may receive a briefing on their business activities and digital initiatives of the companies involved in this course (referred to collectively as “the companies”). Some of those materials and information may be commercially sensitive. It is imperative that all such information (referred to as confidential information) is kept confidential. In essence this means you must act in a way which preserves the confidentiality of that information.

If the companies you contact for information require an undertaking from you, please provide this undertaking that the information shared by the company will be used for academic purpose only (for completion of your assignments in APMG8119 Digital Enterprise paper).

By signing this agreement you agree that: 1. The fact you obtained information about the companies while you are studying at Unitec indicates that the information is “confidential information”. This applies to information you hear or read, even if you are not told the information is confidential and even if the information is not marked “secret” or “confidential”. 2. All technical and other confidential information and all notes on, and copies of technical and other confidential information disclosed by any of the companies to you whether in electronic or any other form is confidential information. 3. Confidential Information: • May be used solely for the purposes of the study you are engaged in while you are at Unitec; • Must be kept confidential; and • May be disclosed only to other students on the course who need to know (Group members) that information and to Unitec staff teaching the course. 4. Your obligations in relation to the confidential information will not end when your time at Unitec ends but will continue whether or not you remain a student at Unitec.

I undertake to comply with all the obligations set out in this agreement which I have read and understood.

Name: ------YIDAN DENG ------YAO GUI------

Signature: ------Date: ------Please sign and return or copy to Dr. Nitin Seth, Unitec Institute of Technology and to the respective company.

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AUTHOR CONTACTS

NAME: YIDAN DENG

Mobile: 0223223303 : [email protected] Student ID: 1506344

NAME: YAO GUI

Mobile: 0211362380 Email: [email protected] Student ID: 1502145

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TABLE OF CONTENTS

CONFIDENTIALITY AGREEMENT ...... 错误!未定义书签。

AUTHOR CONTACTS ...... 2

TABLE OF CONTENTS ...... 4

EXECUTIVE SUMMARY ...... 5

MEGAUPLOAD BACKGROUND ...... 6

HOW WAS MEGAUPLOAD WORKS ...... 错误!未定义书签。

MEGAUPLOAD BREACHED U.S COPYRIGHT LAWS ...... 错误!未定义书签。

PERSONAL DATA OWNERSHIP AND IMPLICATIONS ...... 错误!未定义书签。

EDONKEY NETWORK BACKGROUND ...... 8

NEW ZEALAND COPYRIGHT LAWS ...... 8

CUSTOMER AND DATA OWNERSHIP ...... 9

KEY FINDINGS...... 10

THE PRACTICAL IMPLICATION ...... 11

CONCLUSIONS...... 11

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REFERENCE ...... 12

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EXECUTIVE SUMMARY

Nowadays, copy almost cost-free. We can burn a CD within one minute and publish online, and then the whole world can another few minutes. However, we need the , but here must not a place where steal the copyright. The purpose of this report is analysis Megaupload infringe copyright issue under the provisions of New Zealand Copyright Act 1994. And, example a similar case-eDonkey who was failing to prevent infringement. Lastly, service as the widest applied and high-level technology which is the most active to protect the copyrighted work.

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Megaupload Background Megaupload is a US online network hard disk service provider website, which is established in Hong Kong in 2005 by . The website allows users to , download and storage all kind of , includes all non-original movies, TV programs, and music, etc. There are three different membership system: paid member, free member, and guest, different membership has different access limited options, But all of them can download files from Megaupload easily. The guest user they are not allowed to use the manager to upload files, but everyone can register as a free membership simply, they just need to fill some necessary information such as name and email address to become a free membership. Then they can use few tools as Mega manager, file , Maga key, and other services. In January of 2012, the government of the United States of America has prosecuted of Megaupload and its executives for a breach of U.S copyright laws ( ), because the website has a large number of copyright infringement documents and lead to the forced closure.

How was Megaupload works As I mentioned above, there are three different membership system under the Megaupload website. First of all, as a paid member, the member can download or upload any size file at any time, they do have the highest download priority and also have unlimited within 24 hours. For the free membership, Megaupload allowed everyone easily registers as free membership, just need fill in some details about themselves, then the user will have own account under the website. At the beginning stage, only a few files can be downloaded free of charge by new members, after a period of use, when free member want to download more files, the website will have points permission requirements for those new free members. For example, some popular music files, the site will ask you must have 500 points in your account at least. But the thing is where those points come from? They are come from your upload files accumulated. In other words, the website encourages free members to upload more high-quality files to get more points, then use those points for downloaded files for the website. Megaupload website set up this mechanism to allow more and more files or resource to be uploaded online, the website does not care about the file is copyright infringing or not. Then attract more people to visit their website and became

______P a g e | 8 as a user. In one point Megaupload.com was estimated to be the 13th most frequently visited website on the internet (Levin et al., 2012). According to my user experience before, almost members they are share files such as movies, TV programmers and music those copyright infringement files rather than personal files or personal data. Those account holders whose download or upload copyright infringing files still can use their account for a long time through the Megaupload website.

Megaupload Breached U.S Copyright laws On the other hand, when a user wants to download a file, there are usually some advertisements that pop up automatically, user browsing advertising typically occurs when downloading files. Megaupload has more the $175 million annual revenues from premium subscription and online advertising. According to the New Zealand law copyright Act 1994, first of all, every protection applies automatically from when the work is created. (Intellectual Property office of New Zealand, n.d.). Therefore, on the Megaupload website, all non-original files on the website they are sharing which are protected by copyright law when they are generated. And also through the copyright ( infringing ) Amendment Act 2011 (Ministry of Business, Innovation and Employment. 2015). Under this act, only rights owner has the exclusive right to do certain restricted actions, such as publishing, issuing or selling copies of the work to the public, showing and playing the work in public too. (Ministry of Business, Innovation and Employment. 2018 ). In the Megaupload case, because they make revenue from copyright infringing files download or upload on their website, such as adverting revenue, membership subscriptions revenue, etc. therefore, I think obviously Megaupload breached U.S copyright laws under their business operation mode.

Personal data ownership and implications When customers of sites like Megaupload or similar to Megaupload service website, they uploaded personal data. Under the New Zealand copyright act 1994, the creator usually of original work will be the first owner of any copyright in it (Ministry of Business, Innovation and Employment. 2018). Therefore, customer uploaded their personal data to Megaupload, will be the customer owns data copyright. The implications of this mean even

______P a g e | 9 customers upload their personal data to the website, but website not allowed to sharing or showing their data on the public without any copyright owner’s authorized. Those personal data only can be stored on the website under this copyright owner’s account, and it is unacceptable for other customers or users playing or download through this website. eDonkey Network Background In 9th of September 2000, a world-transforming ‘donkey’ was born. Its name is eDonkey, who was one of the most active P2P network sharing service software by founders Jed McCaleb and Sam Yagan. The client and of eDonkey worked on Windows, Linux, MacOS and other operating platforms. eDonkey has become a kind of hugely popular around the planet. Until 2005, eDonkey approximately at two to three million users and sharing about two billion files via 200 servers.

Initially, eDonkey used in sharing music, movie, and software. However, since the problem of copyright issue call for the attention of the media, eDonkey sued by Recording Industry Association of America(RIAA) in September 2005. The reason was cleared that eDonkey advertised to users by saying they could download the file using their software and profit from these infringement files. On 13th September 2006, eDonkey lost the copyright infringement lawsuit out to RIAA and agreed to pay 30 million USD compensation to avoid potential jail time. (Nate Mook, 2006). Whereafter, on 28th of the same month, eDonkey officially announced to discontinued publish client software such as eDonkey, eDonkey2000, eDonkey Overnet and others, as well as closed its door. Six years life of eDonkey came to an end.

New Zealand Copyright Laws

According to New Zealand Copyright Act 1994 Section 92B(2)(a) indicated person uses the internet services of internet service provider (ISP) in infringing the copyright, the provider without infringing any the copyright in work.

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And, Section 92C indicated ISP has a responsibility to sorting infringing material and does not infringe copyright if provider deletes information or prevent to access.

Even in the case of Megaupload or eDonkey, they are just ISPs. Peer-to-peer file hosting or sharing technology allows the person to search and access the file through connected the internet. In New Zealand, the ISP such as that not liable for the copyright infringement. The copyright owner can take enforcement action against the person who infringes copyright.

Section122B(1) and (2) indicated the person who infringes copyright through file sharing would be noticed by Internet Protocol Address Provider(IPAP).

By the way, Section 122C(1) indicated the infringement notice would send to the account holder that identifies an IP address.

Accordingly, in New Zealand local condition, illegal publisher (account holder) is the infringer. The purpose of these provisions is to make the account holders accountable for them infringement whatever any intentionally or accidentally, knowing or unknowing action.

Customer and data ownership

New Zealand Copyright Act 1994 Section 21(1) mentions the creator is the first owner who is the author of any copyright in the work. The owner has the right to publish and broadcast them own work.

Unless section 38(1) mentions, the person would not infringe copyright if he or she get permission or license from the copyright owner.

Combined with the kind of copyright cases, we have two situations about ownership.

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1. If the users upload them own work, the publisher is the only copyright owner. No one has the right to uploading or downloading the work, only if obtain permission or license.

2. If the users upload or download the other people’s work without permission and license, the author or authorizer is the copyright owner of this work. There is no doubt the users breach the Copyright Act 1994.

Key Findings

The same question arises from the cases of Megaupload and eDonkey that dose ISP has the responsibility for its customer?

Based on the New Zealand Copyright Act 1994, when it comes to digital copyright issue, ISP plays the assistance roles for copyright owner but without infringement, if it is not primary infringement. Following Section 122B-I, the internet account holder will be warned three times if illegally uploading or downloading. The copyright owner can force against the internet account holder after the last enforcement notice. eDonkey had to pay 30 million USD and shut down sites for illegal activity. According to Section 122A defined file sharing as uploading and downloading material between multiple users. Although Megaupload is not in the defined a ‘file sharing’ websites by New Zealand legislation, which is more like file hosting service but feature search engine. However, users can no downloading and sharing material that without permission and licensed by the copyright owner. These users who infringe copyright, nevertheless, a continuing dispute is Kim Dotcom to be conviction or not.

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The practical implication to Cloud Storage company

From the early copyright issues like eDonkey case, the society was starting to pay attention to the copyright. Up to now, file sharing and storage sound an alarm for people concern about piracy online.

Besides a similar case like Megaupload leads to detrimental effect. Dozens of ISPs have to alert piracy occurred and emerged new technology. For example . It has a prevent piracy system that can stop users from uploading and sharing the copyrighted work. (Sebastian Anthony, 2014). So required Dropbox hold a great quantity of copyright database, for instance, musical works, artistic works, literary works, films, sound recordings, etc.

Conclusions

The person will infringe copyright If he or she used the copyrighted work without permission or licensed from the work owner. The rights are exclusive to the owner who can take action against the infringer with the assistance of ISPs.

The case of either eDonkey or Megaupload etc. The fact that, even if some ISPs disappeared in this digital time or wield them own power to terminate user accounts. But users can easily jump to another site and continue infringing. The users in this generations have a bit respect for copyrighted stuff and have been conditioned to share freely. Therefore, it is necessary to enhance the consciousness copyright protection by continuously perfecting the relevant laws

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Reference New Zealand Copyright Law 1994, New Zealand Legislation. Retrieved from: http://www.legislation.govt.nz/act/public/1994/0143/latest/DLM345634.html?search=sw _096be8ed817092bb_profit_25_se&p=1

Levin, D., Doran, S., & Maria, L. (2012). Megaupload and criminal charges. Revista Española de Relaciones Internacionales, (4), 23-47.

Intellectual Property Office Of New Zealand. (n.d.). Copyright. Retrieved from https://www.iponz.govt.nz/about-ip/copyright/

Ministry of Business, Innovation and Employment. (2015). Notice process to cover infringing file sharing. Retrieved from https://www.iponz.govt.nz/about-ip/copyright/

Ministry of Business, Innovation and Employment. (2018). Review of the Copyright Act 1994. Retrieved from https://www.iponz.govt.nz/about-ip/copyright/

Nate Mook, (2006), eDonkey Firm to Pay RIAA $30 Million. Retrieved from: https://betanews.com/2006/09/12/edonkey-firm-to-pay-riaa-30-million/

Sebastian Anthony, (2014), How Dropbox knows you’re a dirty pirate, and why you shouldn’t use cloud storage to share copyrighted files. Retrieved from: https://www.extremetech.com/computing/179495-how-dropbox-knows-youre-a-dirty- pirate-and-why-you-shouldnt-use-cloud-storage-to-share-copyrighted-files

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