Irvine, T.R. v Carson, A

[1991] FCA 450

Re: THOMAS RICHARD IRVINE
And: ALAN CARSON
No. S G43 of 1991
FED No. 450
Copyright
(1991) AIPC 90-829
22 IPR 107

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIAN DISTRICT REGISTRY
GENERAL DIVISION
Von Doussa J.(1)

CATCHWORDS

Copyright - defendant charged with having in his possession infringing copies of computer programmes for the purpose of distributing the same for the purpose of trade - six counts - defendant convicted on his own plea - consideration of appropriate penalty - order for forfeiture of computers used for making infringing copies

Copyright Act 1968, ss.132, 133

Crimes Act 1914, ss.4K, 16A, 20AB

HEARING

ADELAIDE

#DATE 5:8:1991

Counsel for the Prosecutor : Mr G.R. Niemann

Solicitor for the Prosecutor : Director of Public Prosecutions

Mr Carson appeared for himself

ORDER

The defendant be convicted on 6 counts for breaches of para.132(2A)(b) of the Copyright Act 1968 as charged.

That one penalty be imposed in respect of all offences.

Pursuant to s.20AB of the Crimes Act 1914 the defendant perform 120 hours of community service within 8 calendar months of today.

The defendant report, within two working days of today, at the office of the Department of Correctional Services at 1st Floor, Port Mall, 176 St Vincent Street, Port Adelaide, SA, 5015.

The defendant on or before 31 January 1992 pay to the prosecutor the sum of $500 for the costs of the prosecution and in default of payment the defendant shall be imprisoned for 10 days.

Pursuant to sub.s.133(4) of the Copyright Act 1968 there be delivered up to the Australian Federal Police for destruction:

(i) the infringing copies of the computer programmes (including the disks containing the said programmes) identified on the document titled "Alan's Amiga list" tendered in these proceedings by the prosecution save and except for those programmes the names of which are struck through and marked "P and D".

(ii) the infringing computer programmes (including the disks containing the said programmes) in respect of each of the infringing works particularised in the information herein which are not included in "Alan's Amiga list" referred to in the preceding sub-paragraph.

(iii) all photocopied instruction manuals seized by the Australian Federal Police at 24 Alma Terrace, Seaton in the State of South Australia on 31 May 1990.

Pursuant to sub.s.133(4) of the Copyright Act 1968 there be delivered up to the Australian Federal Police and forfeited to the Commonwealth of Australia the Amiga computer and the Atari computer seized by the Australian Federal Police at 24 Alma Terrace, Seaton aforesaid on 31 May 1990.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

The defendant has pleaded guilty to six counts alleging contraventions of para.132(2A)(b) of the Copyright Act 1968. The charges concern the defendant's possession of infringing copies of computer programmes which were found in his possession at 24 Alma Terrace, Seaton on 31 May 1990 when the Federal Police executed a search warrant at that address. Each count separately concerns infringing copies of computer programmes distributed in Australia by a particular distributor. In four of the counts, the particular distributor held exclusive licence agreements with a number of different copyright holders whose copyright the defendant infringed. In count 1 there are 17 copyright holders named in respect of 28 programmes. In count 2 there are 14 copyright holders named in respect of 30 programmes. In count 3 there are 7 copyright holders named in respect of 18 programmes. In count 4 there is 1 copyright holder named in respect of 13 programmes. In count 5 there are 6 copyright holders named in respect of 11 programmes. In count 6 there is 1 copyright holder named in respect of 1 programme. In all there are 43 copyright holders and the charges cover 101 infringing copies of different computer programmes. The charges laid are representative of a wider course of conduct.

1. The particulars in each count follow a common form, namely that on the day and at the place charged, at a time when copyrights existed in the works, the defendant had in his possession, for the purpose of distributing the articles, for the purpose of trade, articles namely copies of the computer programmes when he knew or ought reasonably to have known the copies to be infringing copies of the works.

2. Pursuant to para.133(1)(a) of the Copyright Act the relevant penalty, on the first conviction of a person for an offence by reason of a contravention of sub.s.132(2A), where the contravention relates to an infringing copy of a work other than a cinematograph film, is a fine, where the defendant is a natural person, of $500 for each article to which the offence relates. By para.133(2)(a) where there is more than one article, and where the person is prosecuted before the Federal Court of Australia, the fine imposed in respect of the offence shall not exceed $50,000. That maximum is reached in the present case.

3. Following the execution of the search warrant the defendant cooperated with the Federal Police and was interviewed on two occasions. He pleaded guilty to the charges on the first return date. Submissions on penalty proceeded on an agreed statement of fact.

4. The defendant is aged 39 years. At the time of the offences he had been unemployed for approximately 18 months, and he remains unemployed. His usual occupation has been that of fitter and turner, and at times he has also worked as a taxi driver. His interest in computers started in about 1980 when he purchased a Commodore 64. It seems however that his interest in accumulating infringing copies of computer programmes followed his acquisition of an Amiga 1000 computer in 1987. After he acquired that unit he sought the purchase of compatible programmes at cheap prices, and was able to acquire them by contacting names and telephone numbers appearing in newspaper advertisements. He bought, and then later copied and swapped, programmes. Over a period of three years prior to the execution of the search warrant he spent about $5,000 on purchasing copied computer programmes both locally, interstate and overseas. He built up a collection of approximately 2,000 infringing programmes which were seized by the Federal Police.

5. The defendant knew that the copied programmes which he acquired, copied and swapped, were infringing copies. However it is agreed that he was not the person responsible for removing the protection from the programmes of copyright holders. He only acquired copy programmes made after the protection had been removed by others. It seems that the defendant was part of a friendly network involving twenty or so friends, and their acquaintances, between whom infringing copy programmes were swapped or sold at not more than $2 to $3 a copy. Record books maintained by the defendant, which were seized by the Federal Police, suggest that there were approximately 100 people within the network who from time to time obtained copied computer programmes from the defendant. At times those seeking infringing copies would produce blank disks to the defendant who would copy the programmes either for free or for a fee of $2 to $3, and at other times the defendant sold infringing disks up to the price of $5 including the value of the disk itself. In the year preceding the intervention of the Police he had sold disks to the value of $3,000-$4,000.

6. A few days before the search warrant was executed the defendant had purchased a new Atari 1040 ST computer. That computer, and an Amiga computer acquired in 1987, were both seized by the Federal Police, along with all the infringing copies of the programmes which the defendant had accumulated. Photocopies of a number of operating manuals, infringing copies of the originals, were also seized.

7. An application has been made by the prosecutor under sub.s.133(4) of the Copyright Act 1968 for an order that the computers, the infringing copy programmes, and the infringing copies of manuals and instructions be forfeited to the Commonwealth. Sub-section 133(4) reads:
   

"133(4) The court before which a person is charged with an offence by reason of a contravention of section 132 may, whether the person is convicted of the offence or not, order that any article in the possession of the person that appears to the court to be an infringing copy, or to be a plate or recording equipment used or intended to be used for making infringing copies, be destroyed or delivered up to the owner of the copyright concerned or otherwise dealt with in such manner as the court thinks fit."

1. The infringing copies of computer programmes and operating manuals are clearly liable to forfeiture to the Commonwealth for destruction. It is contended on behalf of the prosecutor that the computers are also liable to forfeiture by the Court pursuant to sub.s.133(4) as they are "recording equipment used...for making infringing copies". With that submission I agree. An order for forfeiture to the Commonwealth is an order within the power of the court to order that such recording equipment be "dealt with in such manner as the court thinks fit".

2. Like the piracy of many other forms of intellectual property, software piracy is extremely difficult to detect. The cost to those in the community with legitimate interests in the protection of their intellectual property rights is high. It was put to the court in the course of submissions on penalty by the prosecutor that illegal copying costs the software industry in Australia at least $300 million in lost sales each year. Further it was said that in most developed countries software piracy costs more in lost sales than the proceeds of armed holdups. International software piracy costs about $10 billion with most damage being done in Asia and the Pacific Rim. These assertions were not verified by expert evidence, but it may be accepted that the cost in lost sales is very high. The illegal copying of software programmes impacts adversely on those who are endeavouring to develop software programmes. Lost sales result in lost incentive to developers, and higher prices for the purchasers of software packages who are minded to comply with the law.

3. It must be firmly stated that the illegal copying of works protected by copyright, and the illegal trading in infringing copies, are serious crimes. The penalties prescribed reflect that fact. When flagrant breaches of copyright protection are detected, the offenders must realise that the consequences will be heavy and that punishments imposed by the courts will reflect the need, because of the difficulty in detection, to make an example of the offenders by way of general deterrence to others in the community who may also be minded to disregard copyright protection.

4. In the circumstances of the present case I propose to order that not only all of the infringing copies of computer programmes and the infringing copies of the manuals be destroyed, but also to order that the two computers used by the defendant to copy the programmes be forfeited to the Commonwealth. The forfeiture order, and orders of a like kind which may be made in other cases where equipment is used for the purposes of making illegal copies, is likely to re-enforce the salutary warning which the courts must give to mark the seriousness of the offence.

5. In the instant case the orders for forfeiture and destruction will impact considerably on the defendant's difficult financial circumstances. He is still paying for the computer purchased in May 1990. The computers together had a cost price of about $3,700, and the disks to be destroyed, as blank disks, would have cost the defendant in the order of $3,000.

6. I propose to take the losses which the destruction and forfeiture orders will mean to the defendant into consideration in assessing the overall penalty package.

7. There are a number of matters which must be taken into account in accordance with the sentencing principles laid down in s.16A of the Crimes Act 1914 (Cwth). Matters going to the seriousness of the offence are the magnitude of the defendant's operation, and the degree of organisation evident in the defendant's note books used to record the identity of those people involved in the sharing network of which he was part. On the other side of the ledger there are important matters in mitigation which, in my view, make it appropriate to impose a penalty which is less than can be expected in many cases. Firstly, the defendant cooperated with the authorities to a considerable extent, even to the point of returning of his own volition to the Federal Police after he was first interviewed to provide additional information about his activities: cf Pontello v. Giannotis, unreported judgment of Sheppard J. on penalty - 26 July 1989 - judgment no. 680 of 1989. Secondly, the defendant pleaded guilty at the first available opportunity. This has saved the prosecuting authorities very considerable expense which would otherwise have been incurred in presenting the case, including the costs of obtaining proofs and affidavits from copyright holders around the world. Thirdly, the defendant has no previous convictions for any kind of offence. Fourthly, he is not a person who has been guilty of removing the protection from software packages. Finally, the defendant has been unemployed for a long time and there is no reason to believe that he would be able to pay a substantial fine. In this instance, unlike the punishments which would be available had the defendant been previously convicted of a like offence, or if the infringing works were videotapes or other kinds of cinematograph film, imprisonment is not an available option. It would be inappropriate to impose a fine which would be likely to have effect as a sentence of imprisonment, served in default of payment.

8. It should also be said that these offences occurred at a time when public warnings about the seriousness of this kind of offending had not been given by the courts. In future, if warnings, like the one made on this occasion, are not heeded in the community, the courts will be required to impose heavier penalties.

9. The defendant will be ordered to pay the cost of the prosecution in the sum of $500. In view of the defendant's financial circumstances, and the matters in mitigation mentioned above, I do not propose to impose a fine in addition to the costs order. I propose instead to utilise the option provided in s.20AB of the Crimes Act, and to make an order for community service. Pursuant to the requirements of the Criminal Law (Sentencing) Act 1988 (S.A.) it has been ascertained that there will be a placement for the defendant at a community service centre reasonably accessible to the defendant.

10. I propose to impose one penalty pursuant to sub.s.4K(4) of the Crimes Act 1914 in respect of all the offences.

11. The orders of the Court are that:
    

1. The defendant be convicted on 6 counts for breaches of para.132(2A)(b) of the Copyright Act 1968 as charged.

2. That one penalty be imposed in respect of all offences.

3. Pursuant to s.20AB of the Crimes Act 1914 the defendant perform 120 hours of community service within 8 calendar months of today.

4. The defendant report, within two working days of today, at the office of the Department of Correctional Services at 1st Floor, Port Mall, 176 St Vincent Street, Port Adelaide, SA, 5015.

5. The defendant on or before 31 January 1992 pay to the prosecutor the sum of $500 for the costs of the prosecution and in default of payment the defendant shall be imprisoned for 10 days.

6. Pursuant to sub.s.133(4) of the Copyright Act 1968 there be delivered up to the Australian Federal Police for destruction:

(i) the infringing copies of the computer programmes (including the disks containing the said programmes) identified on the document titled "Alan's Amiga list" tendered in these proceedings by the prosecution save and except for those programmes the names of which are struck through and marked "P and D".

(ii) the infringing computer programmes (including the disks containing the said programmes) in respect of each of the infringing works particularised in the information herein which are not included in "Alan's Amiga list" referred to in the preceding sub-paragraph.

(iii) all photocopied instruction manuals seized by the Australian Federal Police at 24 Alma Terrace, Seaton in the State of South Australia on 31 May 1990.

7. Pursuant to sub.s.133(4) of the Copyright Act 1968 there be delivered up to the Australian Federal Police and forfeited to the Commonwealth of Australia the Amiga computer and the Atari computer seized by the Australian Federal Police at 24 Alma Terrace, Seaton aforesaid on 31 May 1990.