Stevens v
Kabushiki Kaisha Sony Computer Entertainment and Others

Judges: Gleeson CJ
McHugh JJ
Gummow J

Kirby JJHayne JJ
Heydon JJ

Judgment date: 6 October 2005

Canberra

Judgment by:
Kirby J

[163] This appeal raises important questions of copyright law as that law operates in Australia in relation to digital technology. The appeal comes from a judgment of the Full Court of the Federal Court of Australia. ^[99] That judgment, although unanimous as to the outcome, reflects reasons of the participating judges ^[100] that differ in important respects - both as to the approach that should be taken to the contested statutory language ^[101] and as to the merits of two additional contentions urged by the Sony company interests (Sony) in support of their case. ^[102]

[164] Despite these divergences there was unanimity in the Full Court about the meaning to be given, in s 116A of the Copyright Act 1968 (Cth) (the Copyright Act), ^[103] to the expression "technological protection measure" (TPM). Specifically, the Full Court agreed that the measures taken by Sony in the present case fell within the phrase TPM as so defined. ^[104]

[165] This conclusion was sufficient, with other uncontested determinations made at trial, ^[105] to result in the reversal by the Full Court of the judgment entered by the primary judge (Sackville J). He had decided that the claim by Sony under s 116A of the Copyright Act against Mr Eddy Stevens (the appellant) had failed. ^[106] Instead, the Full Court concluded that, on the basis of its view as to the meaning of TPM (as well as the by then uncontested basis of breaches of the Trade Marks Act 1995 (Cth) (the Trade Marks Act) s 120(1)), Sony was entitled to succeed. ^[107]

[166] Against the disturbance by the Full Court of the orders of the primary judge, Mr Stevens appealed to this court. He sought to restore the orders at trial concerning the Copyright Act and to resist the defensive reliance by Sony upon the two additional copyright arguments on which the majority of the Full Court preferred the view accepted by the primary judge.

[167] As to the major point of difference between the primary judge and the Full Court - the meaning of TPM as defined in s 10(1) of the Copyright Act - Lindgren J in the Full Court (correctly in my view) described the issue of construction involved as "finely balanced". According to Lindgren J, no textual argument offered strong support for one construction over the other. ^[108] The factual findings and conclusions of the primary judge were not challenged in this court. ^[109] In this appeal, therefore, this court has before it three points of statutory construction which, like so many others that reach it, involve disputed arguments yielding contestable outcomes.

[168] Conformably with authority, ^[110] this court must identify, and explain, the interpretation that it prefers. It must do so by reference to established sources and tools: by close examination of the statutory text, its language, context and structure; by identification of the purposes suggested by that text; ^[111] and by the use of the statutory history, including available background materials that cast light on the meaning of the text. ^[112] Yet, in construing the Copyright Act there are peculiar difficulties that, in my view, may be traced, ultimately, to the constitutional head of power ^[113] by which the Federal Parliament enjoys the legislative authority to make laws with respect to "copyrights, patents of inventions and designs, and trade marks". That power is granted in a constitutional and legal setting in which competing legal interests must also be upheld by the law, including, generally, free expression and the normal interest of property owners in the undisturbed enjoyment of their property. ^[114]

[169] "Copyright", it has been rightly declared, "is one of the great balancing acts of the law. Many balls are in play and many interests are in conflict". ^[115] To the traditional problems of resolving such conflicts must be added, in the present age, the difficulties of applying the conventional model of copyright law to subject matters for which that model is not wholly appropriate; adjusting it to the "implications of the online environment"; and adapting it to international pressures that may reflect economic and legal interests that do not fit comfortably into the local constitutional and legal environment. "The dance proceeds", as Professor Ricketson has observed; ^[116] but the multiplicity of participants and interests now involved in its rhythms inevitably affect the contemporary judicial task of resolving contested questions of interpretation of the Copyright Act.

[170] Where, as both sides effectively conceded in this appeal, alternative views are available as to the meaning of the disputed provisions of the Copyright Act, the resolution of the task of interpretation is bound to lie (even more than in most cases) in considerations additional to those that can be extracted directly from the statutory text. Although I agree in the conclusion stated in the reasons of Gleeson CJ, Gummow, Hayne and Heydon JJ (the joint reasons) and of McHugh J as to the issues in, and outcome of, this appeal, it is to clarify and elaborate the range of considerations that affect my reasoning that I write separately.

The facts and the legislation

[171] The facts: The essential facts are stated in brief terms in the joint reasons. ^[117] The course of the relevant pleadings; ^[118] a description of the way the circumvention device claim developed; ^[119] and the facts concerning the Sony companies, their PlayStation system and Mr Stevens' activities ^[120] are set out in the reasons of the primary judge, in terms that can be accessed by those who desire more detail.

[172] The appellant accepted that the PlayStation CD ROMs, manufactured and supplied by Sony, incorporated a number of encrypted data (referred to as the "access code") that could not be reproduced by conventional CD recording devices. The access code consisted essentially of a string of characters, stored in a portion of the CD ROM inaccessible to such recording devices. Before the game stored on the CD ROM could be played, this code had to be read by the boot ROM, located within the Sony PlayStation console. In effect, the boot ROM first determines whether there is a relevant access code on the CD ROM and, if there is, what the access code provides. If that code is found by the boot ROM and can be read, the game can be played. If not, the CD ROM cannot be loaded and the game cannot then be played. ^[121]

[173] A copy of a PlayStation CD ROM, made without the licence of Sony (as when "burnt" using a conventional CD "burner"), would not ordinarily be capable of being played on an unmodified PlayStation console. The appellant did not challenge the finding of the primary judge that the boot ROM was intended by Sony to deter, or discourage, the making, importation and distribution of unauthorised (counterfeit) copies of the Sony PlayStation CD ROMs. ^[122] Nor did the appellant contest the related finding of the primary judge that he was aware that the modifications made by him to PlayStation consoles were intended to enable such copies to be played.

[174] Although Sony argued that it was legally irrelevant, the evidence at trial proved that the PlayStation consoles, as manufactured and supplied by Sony, were designed to allow the operation of PlayStation games only as distributed in particular regions of the world. Thus, the boot ROM in a PlayStation console distributed and sold in the United States of America is designed to recognise only the access code on PlayStation CD ROMs sold and distributed in that region. Likewise PlayStation CD ROMs sold and distributed in Japan have a different access code, recognised only by the boot ROM contained in a PlayStation console distributed and sold in that region. A third region, with an access code different again, is constituted by other areas of the world which include Australia, New Zealand and Europe.

[175] From the foregoing it follows that a PlayStation CD ROM sold and distributed in one global region cannot be played on an unmodified PlayStation console sold and distributed in another region. Thus, the purchaser and owner of a PlayStation CD ROM, lawfully acquired, say, in Japan or the United States and brought to Australia, could not play that CD ROM on an unmodified console lawfully acquired, say, in Australia or Europe. ^[123] By their line the Popes of old divided the world into two spheres of influence. Sony, it appears, has divided the world (for the moment) into at least three spheres or markets. By the combined operation of the CD ROM access code and the boot ROM in the PlayStation consoles, Sony sought to impose restrictions on the ordinary rights of owners, respectively of the CD ROMS and consoles, beyond those relevant to any copyright infringement as such. In effect, and apparently intentionally, those restrictions reduce global market competition. They inhibit rights ordinarily acquired by Australian owners of chattels to use and adapt the same, once acquired, to their advantage and for their use as they see fit.

[176] Before this court, Sony ultimately settled for a contention that it was the combination of the access code in the PlayStation CD ROMs and the technological capacity to recognise and respond to such codes in the boot ROM chip in the PlayStation console that amounted to a TPM within s 10(1) of the Copyright Act. Earlier attempts to identify the "protective device" in each of these items separately were abandoned so as to embrace the combined view. On the face of things, the combined operation of the foregoing technology constitutes a "measure" within the Copyright Act that answers to a description of a "device or product, or a component incorporated into a process" which was designed (without some other intervening device, product or component) to prevent access to the use of the game digitally encoded in Sony's CD ROM and capable of being played on its PlayStation console. In my opinion, it is necessary to spell out these features of Sony's "device", "product" and "component" (together the device) in order to appreciate fully the force of Sony's argument that the device fell within the statutory definition of TPM.

[177] It was in response to this added digital component that the appellant offered for sale, sold and installed where necessary, both CD ROMs, copied without Sony's authority using conventional CD recording or copying devices (such as a conventional CD burner), and "mod chips". The latter are programmed computer chips which, when installed in the PlayStation console, override its internal operating system so as to permit the console to load the computer program contained on the copy CD ROMs, although they do not contain the relevant access code. A PlayStation console, modified by the addition in it of a "mod chip", is commonly referred to as a "chipped console". ^[124]

[178] In a world in which owners of copyright in defined works and subject matter involving digital technology have sought to protect their copyright interest by an encoded technological barrier or impediment; where international treaties (to which Australia is a party) have agreed on the adoption of specified national protections for the effectiveness of such measures; where such measures have been thoroughly debated in Australia by experts, parliamentary bodies and eventually the parliament itself resulting in the Digital Agenda Act, it seems, on the face of things, that a broad view of the legislation (including of the definition of TPM in s 10(1) of the Copyright Act) favours Sony in this appeal. A broad view could sustain the conclusion reached by the Full Court and negative the outcome reached by the primary judge. What more (Sony might ask itself rhetorically) could it have done using a technological "device" to protect its interests in the copyright in its works and to keep unauthorised intruders, such as the appellant and his customers, from the unlicensed use of Sony's PlayStation products? Was not this precisely what international treaties and national law were designed to uphold? Do these practical considerations not support Sony's contention that its device is a TPM?

[179] The first statutory issue in this appeal (and the other issues presented by Sony's notice of contention) are not, however, to be decided at the foregoing level of generality. Legal analysis is required. Such analysis must begin with the language, context and apparent purposes of the Copyright Act. The question is not whether Sony, or anyone else, considered that they had implemented a "device" to protect a popular work with valuable copyright features from the activities of "pirates" like the appellant. Self-evidently, that was Sony's aim. The primary question in this appeal is whether, in doing so, Sony is entitled to invoke the Copyright Act, according to its terms, to gain legal remedies against the appellant. That is a legal, not a technological, question. It must be answered using legal tools.

[180] The legislation : The provisions of the Copyright Act that determine the outcome of this appeal are contained, or described, in the joint reasons. ^[125] I will not repeat the language of the Act.

[181] Crucial to the point that differentiated the opinion of the primary judge from the Full Court was the definition of "technological protection measure" in s 10(1) of the Copyright Act. That phrase, which is central to, and incorporated in, the definition of "circumvention device" (and is essential to establishing breach of s 116A(1) of the Act), contains the requirement that the TPM must be "a device or product, or a component incorporated into a process, that is designed, in the ordinary course of its operation, to prevent or inhibit the infringement of copyright in a work" by specified means.

[182] The stated introductory words (the chapeau) to the statutory definition are the legal preconditions to establishing an unlawful measure. Unless they are proved by the evidence to have been fulfilled, all that remains is an intended "circumvention device" and an intended TPM. They may yet have some practical effectiveness to protect the given copyright interests but, unless the conditions are fulfilled, they do not attract the legal protections provided by the Copyright Act that Sony invoked against the appellant in this case.

[183] That the measures in this case did not attract such legal protections was the conclusion reached by the primary judge. However, it was the one point upon which all judges of the Full Court expressed agreement, in reversing the primary judge's orders and upholding Sony's claim. Sony sought to maintain this conclusion which became the focus of most of the argument in this appeal. The remaining issues, raised by Sony's notice of contention, were deployed defensively, in case the primary judge's conclusion on this point was restored and the Full Court reversed.

The issues

[184] Three issues are therefore presented for resolution in the appeal - the first in terms of the appellant's grounds of appeal and the second and third by Sony's notice of contention:

(1)

The technological protection measure issue: Whether, in accordance with s 10(1) of the Copyright Act, Sony's protection device constituted a TPM within the meaning of the definition of that expression in s 10(1) of the Copyright Act.

(2)

The reproduction in material form issue: Whether the playing of a PlayStation game CD ROM on the Sony PlayStation console involved the reproduction in a material form, within s 10(1) of the Copyright Act, of the whole or a substantial part of a computer program, within the meaning of that Act.

(3)

The cinematograph film issue: Whether the playing of such a game on such a PlayStation console involved the making of a copy of the whole, or of a substantial part, of a cinematograph film within the meaning of s 86(a) of the Copyright Act, having regard to the definition of "copy" in s 10(1) of the Act, as supplemented by s 24.

[185] Before the primary judge, Sony failed on all three issues. In the Full Court, Sony succeeded only on the first. Of the judges in the Full Court, Finkelstein J alone would have upheld Sony's arguments on the second and third issues. ^[126]

[186] In this court, the joint reasons prefer the conclusions of the primary judge on the first issue and reject Sony's argument on the second and third issues, as the majority judges did below. ^[127] I agree. The result is that the orders of the primary judge should be restored. I agree with the reasoning of the joint reasons as they concern the second and third issues. However, I wish to express in my own words how I resolve the difficult problem of statutory construction presented by the first issue. I do this out of respect for the unanimous conclusion of the experienced judges of the Full Federal Court, conscious that I am differing from them in a matter where the legislation is susceptible to the meaning which they preferred, which meaning, on balance, I find less persuasive than the one adopted by the primary judge.

TPM: meaning in the Copyright Act

[187] Two meanings : The question for this court is whether the Full Court erred in the approach it took concerning the meaning of the expression TPM. In short, did the Full Court err in substituting its view of that meaning for the contrary view adopted by the primary judge? The resolution of this question depends on the definition of TPM in s 10(1) of the Copyright Act. In turn, that meaning is influenced by the approach adopted to the task of interpretation.

[188] The primary judge focussed his attention on the opening words of the definition. He held that Sony's "device", "product" or "component" was not, as such, in the ordinary course of its operation, designed "to prevent or inhibit the infringement of copyright". This was because, as a matter of application of the words of the Act to the uncontested evidence, the "device", "product" or "component" manifestly did not prevent or inhibit a person from undertaking acts which, if carried out, would or might infringe copyright in the work. The infringement had already occurred, at least when the copy of the CD ROM was made. Indeed, such an infringement was inevitable and even inherent in the circumvention offered by the appellant for the measures adopted by Sony both on the CD ROM and in the boot ROM of the PlayStation console.

[189] The focus of the statutory definition is on the "device" and its consequences, as such. The focus is not on the impact or operation of the device. Nor is it on social facts or human psychology. This is how the primary judge explained his reasoning: ^[128]

[115] The definition, so it seems to me, contemplates that but for the operation of the device or product, there would be no technological or perhaps mechanical barrier to a person gaining access to the copyright work, or making copies of the work after access has been gained, thereby putting himself or herself in a position to infringe copyright in the work. The definition is intended to be confined to devices or products that utilise technological processes or mechanisms to prevent or curtail specific actions in relation to a work, which actions would otherwise infringe or facilitate infringement of copyright in that work ... I do not think the definition is concerned with devices or products that do not, by their operations, prevent or curtail specific acts infringing or facilitating the infringement of copyright in a work, but merely have a general deterrent or discouraging effect on those who might be contemplating infringing copyright in a class of works, for example by making unlawful copies of a CD-ROM.

[190] In its reasoning the Full Court preferred a broader approach. One judge (French J) considered that such an approach was required by the plain language of the Copyright Act, read in its context. ^[129] The other judges (Lindgren J, with whom Finkelstein J concurred on this point) ^[130] considered that there was ambiguity in the text and that reference to the background material sustained the broader approach urged by Sony. In particular, Lindgren and Finkelstein JJ considered that the legislative history, culminating in the Digital Agenda Act, was determinative on the point. ^[131]

[191] Support for the Full Court's approach : There is no point pretending that one interpretation is clearly correct and the other clearly wrong. As with so many similar disputes over statutory interpretation reaching this court, each approach is arguable. ^[132]

[192] The primary judge drew the inference that the Digital Agenda Act contemplated a TPM that itself would prevent or inhibit the infringement of copyright in a work from happening at all. There were other ways of wording the legislation. The statutory texts adopted in other countries indicated as much. ^[133] Yet the Australian legislation adopted a distinct approach. It was one designed to prevent or inhibit infringement of copyright as such, and access to copyrighted works and subject matters as incidental to that purpose. ^[134]

[193] Sony defended the interpretation of TPM favoured by the Full Court by reference to a number of considerations. Thus, Lindgren J disagreed with the primary judge's view, describing it as involving an "unwarranted preconception that the 'access' to which para (a) of the definition of [TPM] refers is limited to access for the purpose of subsequent infringement". ^[135] It was sufficient, upon the Full Court's view, that the "access" denied should be retrospective, as where (in default of the technological devices introduced by Sony or the use of a circumvention device contrary to s 116A of the Copyright Act) the attempted use of the CD ROMs in such consoles would fail to access the game, so denying their users the benefit of any earlier infringement of Sony's copyright.

[194] In support of this broader interpretation of the Copyright Act, Sony relied on textual indications, as well as the extrinsic materials mentioned by Lindgren J in his reasons in the Full Court. ^[136]

[195] As to the textual indications, Sony placed much emphasis (as did the judges in the Full Court) upon the use, in the definition of TPM, of the verb "inhibit" in addition to the word "prevent" in the context of copyright infringement of the work in question. Even if, upon one view, a technological measure to prevent infringement of copyright might be treated as having failed where an unauthorised copy of a CD ROM had been made (without the access code) and inserted in a Sony PlayStation console, inhibition (so it was said) included the interaction between the technological device and social facts or human psychology.

[196] Thus, the effect of the device, in the "ordinary course of its operation", is that the unauthorised copy of the CD ROM (without the access code) would be rejected. Such rejection would deny the would-be player access on the PlayStation console to the game. The result would thus be frustration, disappointment and the conclusion that the "pirate" CD ROM was useless. The intended infringement of the copyright would thereby be defeated. By defeating it, Sony's device might not have prevented the infringement of copyright (if any), such as had occurred in the creation of the unreadable copy of the work or subject matter. However, it would certainly inhibit the infringement of copyright. It would do so by denying a reward to the copier, namely access to the copyrighted work or subject matter. ^[137] As an inhibition, Sony's device, so its argument ran, qualified as a TPM within s 10(1) of the Copyright Act.

[197] As to the extrinsic materials, Sony supported the analysis of the emergence of the Digital Agenda Act explained in the reasons of Lindgren J (with whom Finkelstein J agreed). Much emphasis was placed on the rejection in the definition of TPM of the recommendation of the Australian Parliamentary Committee to the effect that the definition should not have two limbs, one of which allowed copyright owners to control access to their work. ^[138] From this legislative history, Sony drew the conclusion that the definition of TPM in the Act was intended to include protective devices that controlled access alone.

[198] Each of these interpretations is open on the statutory language and differing views as to the legislative process leading to the enactment of the Digital Agenda Act. Both sides invoked extrinsic materials and specifically those relevant to the legislative history. The duty of a court is to give effect to the purpose of the parliament as expressed in the language of its legislation. This is a constitutional duty expressly imposed ^[139] as well as a duty implied in the concept of the rule of law that is inherent in the Australian Constitution. ^[140] No court may frustrate the command of the parliament, as for example because a judge disagrees with the legislative policy; considers that it is too protective of foreign intellectual property interests; or concludes that it needs reconsideration, or that it unduly extends the legal protections of copyright law in a way that disturbs balances of interests hitherto observed by such law. If, after analysis, the meaning of the legislation is established and is sufficiently clear, and if it is constitutionally valid, a court must uphold its meaning and give effect to its command.

[199] Policy and a broad approach : In addition to the arguments deployed in the Full Court, there are a number of general considerations that lend support to the conclusion expressed by the Full Court. In my view, these include that:

(1)

The court is giving meaning to innovative legislation designed to respond to new technological developments as they affect copyright law. To the extent that the court concludes that the text misfires, so that it does not hit its apparent target, it encourages increasingly complex legislative language as the parliament, frustrated by court decisions, attempts to make its purposes unmistakably plain by expressing them in more and more detail; ^[141]

(2)

The definition of TPM in s 10(1) of the Copyright Act was one of a number of changes to the balances hitherto observed in Australian copyright law, influenced by international treaty obligations and by conclusions apparently accepted by the executive government and the parliament. ^[142] In such circumstances, complaints about disturbance of those balances are less convincing than they might otherwise have been. Especially is this so because still further changes to such balances have been made, or foreshadowed, by the Free Trade Agreement between Australia and the United States of America after the events occurred relevant to this appeal; ^[143]

(3)

The conclusion reached by the Full Court is consonant with contemporary decisions overseas in cases bearing some similarities to the present, although concededly based on legislation reflecting important differences; ^[144] and

(4)

Copyright law aims to promote innovation and creativity by protecting new works, according temporary exclusive rights in respect of them, particularly against deliberate uncompensated invasions for the profit of strangers, who have made no arrangement for compensation to the copyright owner, but instead seek financial gain of their own from facilitating deliberate copying of the original works of others. These considerations remain relevant to the contemporary digital environment. They have recently been upheld by the Supreme Court of the United States. ^[145] Any suggestion that the digital environment is in some way to be rendered a copyright-free zone flies in the face of international agreements as well as Australian national legislation adopted after a painstaking process of consultation with relevant interests, parliamentary investigation and debate. ^[146] The outcome of these agreements and national legal changes may reflect compromises. ^[147] However, they also indicate a deliberate global and national resolve to afford effective copyright protection in the digital context. No court has authority to give effect to a contrary objective of its own, or to frustrate laws that have been enacted by the parliament to afford such protection.

TPM: the preferable construction

[200] Accepting an ambiguity : With respect to the contrary opinion of French J, I prefer the view adopted by the other judges in the Federal Court that the definition of TPM in s 10(1) of the Copyright Act is ambiguous. This conclusion requires this court to choose between the available interpretations. That obligation does not confer an unfettered power. It necessitates an interpretative analysis justifying to the relevant interpretative community the conclusion that is reached. That community commonly includes the parties, interested members of the legal profession, the competing interests (including relevant groups and organisations such as the amici curiae ) as well as interested members of the public. Because the legislative words do not, alone, yield a convincing resolution to the problem of interpretation, it is necessary to refer to contextual and extrinsic circumstances that bring the decision-maker to the ultimate resolution.

[201] Relevant textual indications : The task of statutory interpretation is, at least in part, one that involves individual impressions. As many cases demonstrate, different judicial readers, trained in the same tradition, examine the same language yet come to different conclusions. The object of legal analysis is to ensure, so far as possible, that each decision-maker takes into account the same considerations before reaching a conclusion, and that such legal analysis is as candid as exposition of judicial reasons permits, concerning the chief factors that have led to one conclusion rather than another.

[202] Take the present case. The main textual considerations that support the conclusion of the primary judge are as follows. The drafter of the Australian provision has, apparently deliberately, chosen a distinctive way of expressing the prohibition in s 116A of the Copyright Act. This is by using references to technological expressions ("technological protection measure" and "circumvention device") that are defined in s 10(1) of the Copyright Act. Moreover, while a particular "device" might, in general terms, be regarded as a "circumvention device" - just as the primary judge was willing to accept the appellant's modifications were in the present case - they only have the relevant statutory significance in so far as they circumvent, or facilitate the circumvention of, a TPM. The drafting is thus tight. Apparently, it is deliberately expressed in terms of defined measures.

[203] Those measures, in turn, are not described in general terms as measures preventing or inhibiting access to a work or to subject matter entitled to copyright protection under the Act. Instead, two elements are stated as prerequisites to the existence of a TPM, as defined. These are that the TPM must be a "device or product, or a component incorporated into a process" - implying (as the word "technological" in the expression TPM itself suggests) a measure having an ordinary operation of the designated type. Moreover, what is to be prevented or inhibited is not, as such, "access" to a work or subject matter that is entitled to copyright. It is the infringement of copyright in that work that is to be prevented or inhibited; and inferentially, the infringement is to be prevented or inhibited by such technological means.

[204] The parliament having chosen such an elaborate and specific definition for the key provision of the legislative scheme, a court should pause before stretching the highly specific language in order to overcome a supposed practical problem. To do so would not be to construe the text, but to substitute a new and broader text for the one chosen by the parliament after extensive consultation, investigation and debate. Particularly in the context of the object stated in s 3 of the Digital Agenda Act - very much tied into the "new online technologies" and the perceived advantages of the internet ^[148] - the foregoing "technological" interpretation of the definition of TPM causes no surprise. It is one that is grounded in the language of s 10(1) of the Copyright Act. It is strengthened by the postulate of the Digital Agenda Act that technology itself could be invoked to provide protections against breaches of copyright. The difficulty with Sony's interpretation is that it challenges the very assumption upon which the definition of TPM in terms of "devices" would operate to have the designated effect, namely the prevention or inhibition of the infringement of copyright.

[205] The inclusion of the word "inhibit", in the context of a focus upon a self-operating device, does not alter this conclusion. A strict interpretation does not deprive the term "inhibit" in s 10(1) of meaningful content. That word still has work to do in a number of contexts that are not covered by the word "prevent". For example, it will apply to a protective device which regulates access to the mechanism that provides access to a work, rather than access to the work itself. Such a device will not prevent infringement in all cases. This is because a device limiting access to a work does not prevent infringing copies being made once access is legitimately achieved. However, by restricting access to the work in the first place, such a device makes infringement more difficult. Significantly, such an inhibition operates prospectively; the infringement against which the device is designed to protect occurs subsequent to the operation of the protection device in its ordinary course. The description of "device binding" in the reasons of McHugh J ^[149] provides a good example of this category of technological device, which is designed to inhibit, but not prevent, infringement within the meaning of s 10(1).

[206] Secondly, a device that prevents infringement by a particular method, but which is ineffective to protect against infringement by another more complex or involved method, is a device that will not be covered by the term "prevent" in s 10(1). ^[150] This is because infringement will still be possible, through the more complex method, notwithstanding the operation of the device. However, by making infringement more difficult (say by preventing a common or easily available method of infringement), such a device can be seen to inhibit infringement in the technical sense required by the definition. This further demonstrates the utility of the inclusion of the term "inhibit" in s 10(1), consistent with the strict interpretation that I favour.

[207] Had it been the purpose of the parliament, by the enactment of the Digital Agenda Act, to create a right to control access generally, it had the opportunity to say so. It even had overseas precedents upon which it could draw. The Australian Government was pressed to provide protection for all devices that "control access". This is evident in the definition of TPM suggested to the Australian Parliamentary Committee by the International Intellectual Property Alliance. ^[151] Such a definition would effectively have mirrored the provision adopted by the Congress of the United States in the Digital Millennium Copyright Act of 1998. ^[152] By the time the Australian definition of TPM was enacted, the United States Act had been in force for 2 years. Nevertheless, the propounded definition of wider ambit was not accepted. Instead, in Australia, the Parliament chose to focus its definition upon protection from infringement of copyright as such.

[208] The preference inherent in the Australian Act has been viewed as one which "favours the use of protected works", ^[153] by limiting the operation of TPMs in terms of control over infringement of copyright rather than a potentially broader control over access. When the competing legislation of other jurisdictions, giving effect to the relevant international treaties, is contrasted, it appears clear that the distinctive statutory formula adopted in Australia was a deliberate one. It was less protective of copyright than the legal regimes adopted in the United States, the United Kingdom and elsewhere. ^[154] In the face of such a formula, accepted after a long inquiry and contrary submissions made by affected interest groups, the safer course for this court, in giving meaning to the definition of TPM in s 10(1) of the Copyright Act, is to stick closely to the more restricted language of the Act. This approach has a textual foundation. It lies in the meaning to be attributed to the words "designed" and "inhibit" appearing in the definition of TPM in the Copyright Act. ^[155]

[209] If the definition of TPM were to be read expansively, so as to include devices designed to prevent access to material, with no inherent or necessary link to the prevention or inhibition of infringement of copyright, this would expand the ambit of the definition beyond that naturally indicated by the text of s 10(1) of the Copyright Act. It could interfere with the fair dealing provisions in Div 3 of Pt III of the Copyright Act and thereby alter the balance struck by the law in this country.

[210] As the amici submitted to this court, Sony's interpretation of s 116A would enable rights holders effectively to opt out of the fair dealing scheme of the Act. This would have the potential consequence of restricting access to a broad range of material and of impeding lawful dealings as permitted by Div 3 of Pt III of the Copyright Act. The inevitable result would be the substitution of contractual obligations inter partes for the provisions contained in the Copyright Act - the relevant public law. Potentially, this could have serious consequences for the operation of the fair dealing provisions of that Act. This is not an interpretation that should be readily accepted. Especially so where the language of the definition of TPM presents the perfectly acceptable, apparently intentional, and more confined construction expounded by the primary judge. ^[156]

[211] Avoiding over-wide operation : There is an additional reason for preferring the more confined interpretation of the definition of TPM in the Copyright Act. This is because the wider view urged by Sony would have the result of affording Sony, and other rights holders in its position, a de facto control over access to copyrighted works or materials that would permit the achievement of economic ends additional to, but different from, those ordinarily protected by copyright law. If the present case is taken as an illustration, Sony's interpretation would permit the effective enforcement, through a technological measure, of the division of global markets designated by Sony. It would have the effect of imposing, at least potentially, differential price structures in those separate markets. In short, it would give Sony broader powers over pricing of its products in its self-designated markets than the Copyright Act in Australia would ordinarily allow. ^[157]

[212] It may be accepted, as the primary judge concluded, that "[t]he fact that a device can be said to be designed to achieve two or more objectives, only one of which is to prevent or inhibit the infringement of copyright, does not ... of itself ... take the device outside the definition of" a TPM. ^[158] It may also be accepted that Sony's device was not designed primarily to achieve a particular non-copyright purpose. ^[159] Nevertheless, where a choice of interpretation has to be made, the existence of the additional non-copyright purpose of enforcing global market price differentiation does constitute a reason to prefer an outcome that is consistent with the balances ordinarily inherent in copyright legislation over a result that is not.

[213] Upholding fundamental rights : A further reason, not wholly unconnected with the last, is relevant to the choice to be made in selecting between the competing interpretations of the definition of TPM. The interpretation favoured by the primary judge confines that definition and hence the operation of s 116A of the Copyright Act and the civil remedies which that section provides. The Full Court's broader view gives an undifferentiated operation to the provisions of s 116A that clearly impinges on what would otherwise be the legal rights of the owner of a Sony CD ROM and PlayStation console to copy the same for limited purposes and to use and modify the same for legitimate reasons, as in the pursuit of that person's ordinary rights as the owner of chattels.

[214] Take, for example, the case earlier mentioned of a purchaser of a Sony CD ROM in Japan or the United States who found, on arrival in Australia, that he or she could not play the game on a Sony PlayStation console purchased in Australia. In the case postulated, there is no obvious copyright reason why the purchaser should not be entitled to copy the CD ROM and modify the console in such a way as to enjoy his or her lawfully acquired property without inhibition. Yet, on Sony's theory of the definition of TPM in s 10(1) of the Copyright Act, it is able to enforce its division of global markets by a device ostensibly limited to the protection of Sony against the infringement of its copyright.

[215] Ordinary principles of statutory construction, observed by this court since its earliest days, have construed legislation, where there is doubt, to protect the fundamental rights of the individual. ^[160] The right of the individual to enjoy lawfully acquired private property (a CD ROM game or a PlayStation console purchased in another region of the world or possibly to make a backup copy of the CD ROM) would ordinarily be a right inherent in Australian law upon the acquisition of such a chattel. This is a further reason why s 116A of the Copyright Act and the definition of TPM in s 10(1) of that Act should be read strictly. Doing so avoids an interpretation that would deprive the property owner of an incident of that person's ordinary legal rights.

[216] The provisions of the Australian Constitution affording the power to make laws with respect to copyright ^[161] operate in a constitutional and legal setting ^[162] that normally upholds the rights of the individual to deal with his or her property as that individual thinks fit. In that setting, absent the provision of just terms, the individual is specifically entitled not to have such rights infringed by federal legislation in a way that amounts to an impermissible inhibition upon those rights constituting an acquisition. This is not the case in which to explore the limits that exist in the powers of the Australian Parliament, by legislation purporting to deal with the subject matter of copyright, to encumber the enjoyment of lawfully acquired chattel property in the supposed furtherance of the rights of copyright owners. However, limits there are. ^[163]

[217] In Wilson v Anderson ^[164] I said, in words to which I adhere, that fundamental rights will persist in the face of legislation said to be inconsistent with them "'unless there be a clear and plain intention' to extinguish such rights". These remarks were made in the context of a suggested extinguishment of rights ordinary to the ownership and possession of property. I added: ^[165]

It is an old, wise and beneficial presumption, long obeyed, that to take away people's rights, Parliament must use clear language. The basic human right to own property and to be immune from arbitrary dispossession of property is one generally respected by Australian lawmakers. This fundamental rule attributes to the legislatures of Australia a respect for the rights of the people which those legislatures have normally observed, being themselves regularly accountable to the electors as envisaged by the Constitution. In some circumstances, at least in respect of federal legislation depriving people of established property rights, the presumption to which I have referred is reinforced by constitutional imperatives.

[218] To the extent that attempts are made to push the provisions of Australian copyright legislation beyond the legitimate purposes traditional to copyright protection at law, the parliament risks losing its nexus to the constitutional source of power. That source postulates a balance of interests such as have traditionally been observed by copyright statutes, including the Copyright Act.

[219] In the present case, it is legitimate to say that, had it been the purpose of the parliament to push the provisions of the Copyright Act attaching offences and sanctions to circumvention of TPMs in a way that deprived chattel owners of ordinary rights of ownership, such a provision would have been spelt out in unmistakable terms. In the definition of TPM in s 10(1) of the Copyright Act, such unmistakable language does not appear. This fact affords a further reason for preferring the more restricted interpretation that is compatible with the ordinary incidents of ownership of lawfully acquired chattels.

[220] The fact that, in the present case, this approach affords protection, incidentally, to the proved activities of a person such as the appellant, is simply the most recent illustration of the way in which copyright law sometimes operates. Sony will itself be aware of this incidental operation of the law. In Sony Corp of America v Universal City Studios Inc , ^[166] the Supreme Court of the United States held that Sony, as the distributor and seller of the Betamax video cassette recorder, was not liable if users of that recorder infringed the copyright of others in television broadcasts. In that case, it was claimed that Sony, as the manufacturer of the recorder, was liable for the infringement that occurred when purchasers taped copyright programs. It was argued that Sony had supplied the means used to infringe the copyright of others and had constructive knowledge that such infringement would occur.

[221] Because a legitimate basis for the taping of television programmes for viewing at more convenient times (time-shifting) was found by the Supreme Court to be fair and not an infringing use, the claim of infringement against Sony was rejected. ^[167] This interpretation of the United States law reflected the bias inherent in the legal systems of the common law in favour of protecting the rights of copyright owners in a context that also protects other legal interests belonging to other persons. As Breyer J has recently pointed out, in a concurring opinion, ^[168] the rule in the Sony Betamax decision was strongly protective of new technology. It foreshadowed the dramatic evolution of the product's market. It respected the limitations facing judges where matters of complex and novel technology are concerned. And it avoided the introduction of a "chill of technological development" ^[169] in the name of responding to alleged copyright infringement. Many of these considerations apply in the present case to suggest a preference for a stricter, rather than a broader, meaning of the expression TPM in s 10(1) of the Copyright Act.

[222] The legislative option : An additional consideration for avoiding reversal of the Sony rule in the United States Supreme Court was mentioned by Breyer J in the recent opinion to which I have referred. This was, as the decision in Sony in that court had earlier recognised, that "the legislative option remains available. Courts are less well suited than Congress to the task of 'accommodat[ing] fully the varied permutations of competing interests that are inevitably implicated by such new technology'". ^[170]

[223] In the Australian context, the inevitability of further legislation on the protection of technology with TPMs was made clear by reference to the provisions of, and some legislation already enacted for, the Australia-United States Free Trade Agreement. ^[171] Provisions in that agreement, and likely future legislation, impinge upon the subject matters of this appeal. Almost certainly they will require the attention of the Australian Parliament in the foreseeable future. ^[172]

[224] In these circumstances, it is preferable for this court to say with some strictness what s 10(1) of the Copyright Act means in its definition of TPM, understood according to the words enacted by the parliament. If it should transpire that this is different from the purpose that the parliament was seeking to attain (or if it should appear that later events now make a different balance appropriate) it will be open to the parliament, subject to the Constitution, to enact provisions clarifying its purpose for the future. Moreover, the submissions in the present case, as it progressed through the courts, called to attention a number of considerations that may need to be given weight in any clarification of the definition of TPM in the Copyright Act. Such considerations included the proper protection of fair dealing in works or other subject matters entitled to protection against infringement of copyright; proper protection of the rights of owners of chattels in the use and reasonable enjoyment of such chattels; the preservation of fair copying by purchasers for personal purposes; and the need to protect and uphold technological innovation which an over rigid definition of TPMs might discourage. These considerations are essential attributes of copyright law as it applies in Australia. They are integrated in the protection which that law offers to the copyright owner's interest in its intellectual property.

[225] A court, not fully aware of the compromises that have been struck nationally and internationally and of the large debates that have addressed so-called super or "übercopyright", ^[173] is well advised, in the end, to confine itself to offering its best solution to the contested task of statutory interpretation. Whether that construction properly reflects the purpose that the parliament had when it adopted its definition of TPM, or needs modification, is a decision that must be left to others in the executive government and the parliament itself, assisted by the many contesting interests.

[226] Criminal offences : There is one final, although less important, consideration that can be mentioned that favours a somewhat stricter approach to the meaning of TPM in s 10(1) of the Copyright Act than was adopted by the Full Court. This is the consideration that the statutory wrong, and civil action and remedies provided in s 116A of the Copyright Act, which depend upon the key role played in that section by the expression TPM, are reinforced by the provisions of s 132(5A) of the Copyright Act inserted by the Digital Agenda Act. ^[174] That subsection, and associated provisions, make it a criminal offence to provide, promote or advertise a circumvention service or to make, sell, let for hire, distribute, import or make available online a circumvention service or to remove or alter electronic rights management information attached to a copy of a work and otherwise to act in relation to a circumvention device or service in a way prohibited by the Act's new provisions. Given the key part played in these criminal offences by the same phrase (TPM), the appellant urged this court to give a strict meaning to the expression in conformity with the traditional approach to statutory interpretation of provisions imposing criminal sanctions.

[227] In recent years, in this court, there has been a diminished inclination to adopt different rules for the construction of penal legislation, and indeed legislation imposing taxation and other special categories. ^[175] Instead, a uniform approach, aimed to give effect to the purpose of legislation as expressed in its language, has usually replaced the special rules. Such special rules were often relics of literalism in statutory interpretation. ^[176] On the other hand, legislation that radically simplifies the proof of criminal offences against the Copyright Act, ^[177] imposes a limited burden of proof on the defendant ^[178] and provides for criminal penalties, including imprisonment, ^[179] invites an approach to interpretation that reflects the seriousness of the consequences attaching to a criminal conviction. The fact that the phrase TPM appears in the new criminal offences, as well as in the provision for civil remedies under s 116A, pursuant to which the appellant was sued for copyright infringement, lends some weight to a stricter meaning of the contested definition of TPM, in preference to the broader meaning adopted by the Full Court.

[228] Conclusion: strict meaning : For the foregoing reasons, I would resolve the differences about the interpretation of the definition of TPM in s 10(1) of the Copyright Act in favour of the approach adopted at trial by the primary judge. It affords a meaning consonant with the actual language of the Copyright Act. It is consistent with the context of the definition in the provisions introduced by the Digital Agenda Act, being designed to add serious civil and criminal outcomes to circumvention of measures constituted by "devices" which by their own operation prevent or inhibit infringements of copyright. The evidence in the present case showed that the technological devices relied on by Sony were not of that character. On the basis of the evidence accepted by the primary judge, it was open to him to so conclude.

[229] Although it may be accepted that a different construction of the Copyright Act was also reasonably available, the Full Court erred in giving effect to its opinion favourable to that alternative, broader, construction of the Act. The considerations that I have mentioned indicate why I believe it was an error for the Full Court to prefer the broader over the narrower view in this instance. The context and legal policy considerations to which I have referred ought to have caused the Full Court, in a question of statutory construction which it acknowledged to be finely balanced, to uphold the primary judge's analysis and to confirm it.

Contention issues, conclusion and orders

[230] The second and third issues argued in this appeal should be decided in the manner proposed in the joint reasons. ^[180] The result is that the appellant is entitled to succeed in the appeal and to have restored to him the orders entered by the primary judge at trial.

[231] This conclusion leaves outstanding the determination of the remedies to which Sony is entitled against the appellant for the infringement of the Trade Marks Act, found against him at first instance and not challenged in the Full Court or in this court.

[232] I agree in the orders proposed in the joint reasons.