Kabushiki Kaisha Sony Computer Entertainment v Stevens - [2003] FCAFC 157

FEDERAL COURT OF AUSTRALIA
KABUSHIKI KAISHA SONY COMPUTER ENTERTAINMENT & ORS
v
EDDY STEVENS
N 929 OF 2002
SUMMARY
In accordance with the practice of the Federal Court in certain cases of public interest, we have prepared this brief summary to accompany the Reasons for Judgment that are being delivered today. But the only authoritative pronouncement of our reasons is that contained in the full Reasons for Judgment. This summary is necessarily incomplete.
This appeal concerns amendments made to the Copyright Act 1968 (Cth) (“the Copyright Act”) by the Copyright Amendment (Digital Agenda) Act 2000 (Cth) (“the Digital Agenda Act”).
Section 116A of the Copyright Act, which was introduced by the Digital Agenda Act, gives a right of action to the owner or exclusive licensee of the copyright in a work or other subject matter which is protected by a “technological protection measure”. The right of action is against a person who makes, sells, or does certain other acts in relation to, a “circumvention device” capable of circumventing, or facilitating the circumvention of, the technological protection measure.
The Sony companies (“Sony”) manufacture and sell PlayStation games which are capable of being played on ordinary domestic television sets by means of a PlayStation console, which Sony also manufactures and sells. The games are embodied in computer programs which are contained in CD-ROMs (“CDs”). Sony owns the copyright in the computer programs. Insertion of a PlayStation CD into the PlayStation console enables the game to be played.
There is an “access code” contained within a track on each CD, and a chip described as a “Boot ROM” is located on the circuit board of the PlayStation console. They have the effect that a game can be played only with the authority of the owner or licensee of the copyright. The reason is that an unauthorised copy of a Sony PlayStation CD does not replicate the access code and therefore the Boot ROM of the console denies it access: it cannot be used in the console.

The respondent, Mr Stevens, sold “mod chips” or “converter chips” and installed them in PlayStation consoles. Their purpose and effect was to overcome Sony’s device. But they would constitute “circumvention devices”, and Sony would have a right of action against Mr Stevens under the new s 116A, only if Sony’s device itself constituted a “technological protection measure” as defined in subs 10(1) of the Copyright Act.
The learned primary judge held that it did not. His Honour held that the definition required that in order to be a technological protection measure, a device must be designed to prevent or inhibit post-access infringement of copyright.
In this respect, we respectfully disagree with his Honour’s interpretation of the definition. We think it sufficient that Sony’s device inhibits infringement by rendering the resulting unauthorised copies unusable.
For this reason Sony’s appeal succeeds.
By majority, however, we agree with his Honour’s resolution of two other issues against Sony. French and Lindgren JJ (Finkelstein J dissenting) agree with his Honour:
· that there is not a reproduction of the computer programs in the Random Access Memory (“RAM”) of the PlayStation console when a game is played; and
· that there is not a copy of the game, regarded as a “cinematograph film”, made in RAM when a game is played.

For the reason first mentioned above, we are allowing the appeal and granting to Sony a declaration and an injunction as well as an order for costs.
The primary judge dealt with the issue of liability but not, at this stage, that of damages. The questions of damages and additional damages are remitted to his Honour.
The full text of the Court’s judgment, reported as Kabushiki Kaisha Sony Computer Entertainment v Stevens [2003] FCAFC 157, will shortly be available on the Court’s website at LINDGREN AND FINKELSTEIN JJ
30 July 2003

FEDERAL COURT OF AUSTRALIA
Kabushiki Kaisha Sony Computer Entertainment v Stevens [2003] FCAFC 157
COPYRIGHT – circumvention device – “technological protection measure” – “PlayStation” games on CD-ROMs, playable on purpose-specific PlayStation console – manufacturer of console and CD-ROMs (“Sony”) builds access code into CD-ROMs and Boot ROM into console, to prevent unauthorised copies of the CD-ROMs from being played on the console – by preventing the playing of counterfeit CD-ROMs, the device would discourage the making and selling of unauthorised copies of the CD-ROMs – whether, in these circumstances, the device “inhibited” infringement of the copyright in the computer programs for the games, contained in the CD-ROMs, for the purpose of definition of “technological protection measure” in subs 10(1) of Copyright Act 1968 (Cth) – whether the “infringement” referred to in that definition was limited to infringement which would occur after access – whether playing of game involved a reproduction of its computer program in the Random Access Memory (“RAM”) of the PlayStation console – whether playing of game involved making of a copy of a “cinematograph film” in the RAM of the PlayStation console.
WORDS AND PHRASES – “technological protection measure” – “inhibit” – “embody”
Copyright Act 1968 (Cth) ss 10(1) (“circumvention device”, “technological protection measure”, “material form”, cinematograph film”, “copy”, “computer program”), 21(1A), 24, 116A
Copyright Amendment (Digital Agenda) Act 2000 (Cth)
Copyright Amendment Act 1984 (Cth)
Acts Interpretation Act 1901 (Cth) ss 15AA, 15AB
Advanced Computer Services of Michigan Inc v MAI Systems Corporation 845 F Supp 356 (ED Va 1994) discussed
Apple Computer Inc v Computer Edge Pty Ltd (1983) 50 ALR 581 referred to
Australian Video Retailers Association Ltd v Warner Home Video Pty Ltd (2001) 114 FCR 324 discussed
Autodesk Inc v Dyason (No 1) (1992) 173 CLR 330 referred to
Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 referred to
CIC Insurance Ltd v Bankstown Football Club (1995) 187 CLR 384 cited
Computer Edge Proprietary Limited v Apple Computer Inc (1986) 161 CLR 171 referred to
Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 cited
Dyason v Autodesk Inc (1990) 24 FCR 147 discussed
Folsom v Marsh 9 Fed Cas 342 (Mass 1841) referred to
Fox v Percy (2003) 77 ALJR 989 cited
Francis Day & Hunter Ltd v Bron [1963] Ch 587 referred to
Galaxy Electronics Pty Ltd v Sega Enterprises Ltd (1997) 75 FCR 8 discussed
Gambart v Ball (1863) 143 ER 463 referred to
Gyles v Wilcox (1740) 26 ER 489 referred to
Jefferys v Boosey (1854) 4 HLC 815 (10 ER 681) referred to
Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 referred to
MAI Systems Corporation v Peak Computer Inc 991 F2d 511 (9^th Cir 1993) referred to
Microsoft Corporation v Business Boost Pty Ltd (2000) 49 IPR 573 not followed
Nationwide News Pty Ltd v Copyright Agency Ltd (1996) 65 FCR 399 referred to
New Boston Television Inc v Entertainment Sports Programming Network Inc 215 USPQ 755 (1981) referred to
Nintendo Co Ltd v Golden China TV Game Centre (1993) 28 IPR 313 referred to
Roland Corporation v Lorenzo & Sons Pty Ltd (1991) 33 FCR 111 referred to
Sega Enterprises Ltd v Galaxy Electronics Pty Ltd (1996) 69 FCR 268 referred to
Sony Computer Entertainment v Edmunds (t/as Channel Technology) (2002) 55 IPR 429 distinguished
Tate v Fullbrook [1908] 1 KB 821 referred to
White-Smith Music Publishing Company v Apollo Company 209 US 1 (1908) cited
Fuori and Aufiero, Computers and Information Processing, Prentice-Hall, New Jersey, 1986
Goldstein, Copyright, 2^nd edn, § 10.1
Hamacher, Vranesic and Zaky, Computer Organization 5th edn, McGraw-Hill, Boston, 2002
Laddie, Prescott and Vitoria, The Modern Law of Copyright and Designs, 3^rd edn, Butterworths, London, 2000
London, Introduction to Computers 5^th edn, Faber and Faber, Boston, 1986
4 Nimmer on Copyright § 13.03A(2)
Dickerson, The Interpretation and Application of Statutes, Little, Brown, Boston 1975
Somma, Computer Technology and the Law, McGraw-Hill, New York, 1983
Tocci and Ambrosio, Microprocessors and Microcomputers: Hardware and Software, 6^th edn, Prentice-Hall, New Jersey, 2003
KABUSHIKI KAISHA SONY COMPUTER ENTERTAINMENT
& ORS v STEVENS
N 929 OF 2002
FRENCH, LINDGREN & FINKELSTEIN JJ
SYDNEY
30 JULY 2003

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 929 OF 2002

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

KABUSHIKI KAISHA SONY COMPUTER ENTERTAINMENT
FIRST APPELLANT

SONY COMPUTER ENTERTAINMENT EUROPE LIMITED
SECOND APPELLANT

SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LTD (ACN 077 583 183)
THIRD APPELLANT

AND:

EDDY STEVENS
RESPONDENT

JUDGES:

FRENCH, LINDGREN AND FINKELSTEIN

DATE OF ORDER:

30 JULY 2003

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1. The appeal be allowed.
2.Order 9 made on 16 August 2002 (“The application be otherwise dismissed”) in proceeding N 738 of 2001 in this Court be set aside.
THE COURT DECLARES THAT:
1.On 8 April 2001, 28 September 2001 and 16 November 2001 the respondent sold circumvention devices, as defined in subs 10(1) of the Copyright Act 1968 (Cth), for use in association with “PlayStation” computer consoles and the CD-ROMs for “PlayStation” computer games, in contravention of s 116A of that Act.

THE COURT FURTHER ORDERS THAT:
3.The respondent shall not, by himself, his servants or agents, sell circumvention devices as defined in subs 10(1) of the Copyright Act 1968 (Cth), for use in association with “PlayStation” computer consoles and the CD-ROMs for “PlayStation” computer games in contravention of s 116A of that Act.
4.The respondent pay the appellants’ costs of the appeal.
5.The respondent pay the costs of the appellants as applicants in proceeding N 738 of 2001 in this Court.
6.The matter be remitted to the primary judge for determination of the appellants’ claims for damages pursuant to subs 116D(1) of the Copyright Act 1968 (Cth) and for additional damages pursuant to subs 116D(2) of that Act.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 929 OF 2002

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

KABUSHIKI KAISHA SONY COMPUTER ENTERTAINMENT
FIRST APPELLANT

SONY COMPUTER ENTERTAINMENT EUROPE LIMITED
SECOND APPELLANT

SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LTD (ACN 077 583 183)
THIRD APPELLANT

AND:

EDDY STEVENS
RESPONDENT

JUDGES:

FRENCH, LINDGREN AND FINKELSTEIN JJ

DATE:

30 JULY 2003

PLACE:

SYDNEY

REASONS FOR JUDGMENT
FRENCH J:
Introduction

Two years ago Mr Eddy Stevens sold unauthorised copies of computer games on CD-ROMs for use on Sony PlayStations. He also supplied and installed modifying chips in PlayStation consoles so that the unlawfully copied games could be played on them without the non-reproducible access codes that are normally the means by which a device in the consoles, known as a Boot ROM, recognises lawful copies. By supplying and installing the modifying chips he was said to be liable, under s 116A of the Copyright Act 1968 (Cth) to the three Sony companies who produce and distribute the PlayStation consoles and associated games. Section 116A confers upon copyright owners a right of action against persons supplying devices to circumvent technological protection measures which are designed to prevent or inhibit the infringement of copyright by the use of access codes or copy control mechanisms. Sackville J held that the Sony device, comprising the access codes in the CD-ROMs, and the Boot ROM in the console, did not constitute a technological protection measure within the meaning of s 116A. On that basis his Honour denied relief to the Sony companies under the Copyright Act. He reasoned that the Sony device only deterred or discouraged infringement of copyright in the computer games by rendering unauthorised copies unplayable. It did not “prevent or inhibit” infringement by reproduction of the CD-ROMs in the physical sense which he considered the Act requires.
On appeal from his Honour’s decision, it is the opinion of all of us that the broader construction of the definition of “technological protection measure” is to be preferred and that, on that basis, the appeal brought by the Sony companies should be allowed.
Two other bases for the application of s 116A were advanced by the Sony companies and rejected by his Honour. The first was that the Sony device prevents infringement by preventing the transient reproduction of parts of the computer game on the internal Random Access Memory or RAM of the PlayStation console. The second was that it prevents infringement of copyright in the cinematograph film comprised in images and sounds forming part of the computer game which would be uploaded into the console’s RAM and thereby reproduced if it were not for the Boot ROM and access code. On these two matters we are of divided opinion. I agree with Lindgren J, for the reasons which he has expressed, that the learned primary judge’s conclusions rejecting the Sony companies’ arguments on RAM reproduction and cinematograph film reproduction were correct.
History of the Proceedings
In 2001, Mr Stevens sold and supplied unauthorised copies of CD-ROMs containing computer games for use on PlayStation consoles manufactured and distributed by Kabushiki Kaisha Sony Computer Entertainment (“Sony Japan”) and its subsidiaries, Sony Computer Entertainment Europe Limited (“Sony Europe”) and Sony Computer Entertainment Australia Pty Ltd (“Sony Australia”). Ordinarily a person selling an unauthorised copy of a CD-ROM for use on a Sony PlayStation would be selling a useless product because the CD-ROMs manufactured by Sony Japan bear an access code or a number of encrypted sectors of data that cannot be reproduced by conventional CD recording or copying devices generally known as CD-ROM “burners”. The CD-ROM inserted into a PlayStation console will not operate the console unless the access code or encrypted data on it has been read by a Boot ROM which is located in the console.
The unauthorised CD-ROMs sold by Mr Stevens did not contain the requisite access codes or encrypted data. However he provided a service that sidestepped that difficulty. He sold and installed in PlayStation consoles programmed computer chips designed to override the console’s internal operating system to allow it to load the software on an unauthorised CD-ROM. Such chips are known as “mod chips” or “converter chips”. A console in which such chips have been installed is known as a “chipped console”.
Mr Stevens was sued by the three Sony companies. They alleged that he infringed the registered trade marks of Sony Japan, engaged in misleading or deceptive conduct in contravention of the Fair Trading Act 1987 (NSW) and was liable to action under s 116A of the Copyright Act. The infringement of the Sony trade marks was said to have arisen because the games sold by Mr Stevens bore electronically stored representations of the trade marks which became visible when the games were played. The misleading or deceptive conduct was said to be constituted by representations, arising from Mr Stevens’ supply of Sony PlayStation games, to the effect that:
(i)they were manufactured by one or more of the Sony companies;
(ii)they were of the same standard and quality as those supplied or offered for sale by the Sony companies;
(iii)they were compatible with the PlayStation computer game console distributed in Australia by Sony Australia; and
(iv)that Mr Stevens and/or the games which he supplied or offered for sale had the sponsorship approval or affiliation of one or more of the Sony companies.
The liability under s 116A was said to arise because Mr Stevens’ supply and installation of mod chips in Sony PlayStations involved him in selling or offering to sell circumvention devices capable of circumventing technological protection measures comprised by the use of the access codes and Boot ROMs referred to earlier.
The technological protection measures were defined, for the purpose of these proceedings, in par 25 of the amended statement of claim thus:
“…
(i)Each of the computer games for use with the Sony PlayStation® computer game console embodying the Works is programmed with an access code which is contained within a track on each of the CD-ROMs on which each of the Works is contained.
(ii)Each Sony PlayStation® computer game console manufactured by the First Applicant and on which the computer games are intended to be played features a device which is designed in the ordinary course of its operation to inhibit the infringement of copyright in the Works and the Films by ensuring that access to the Works and the Films is available solely by use of the access code referred to in subparagraph (i) above.”
The copyright protected by these measures was said to subsist in the computer programs embodied in the Sony PlayStation computer games. These programs were referred to as “the Works”. In addition the games were said to embody images constituting cinematograph films within the meaning of the Act.
After a trial of issues going to liability only, Sackville J made the following findings on 26 July 2002:
1.Mr Stevens infringed the registered trade marks of Sony Japan by selling unauthorised copies of computer games which stored in electronic form representations of those trade marks. The trade marks were reproduced when the unauthorised copies were played on chipped PlayStation consoles ([64] of primary judgment). The claim for infringement of the Sony Japan trade marks succeeded.
2.Mr Stevens did not, as alleged, misleadingly represent that the unauthorised copies of PlayStation games sold by him had the sponsorship or approval of any of the Sony companies or that he was affiliated with them. The claim of misleading or deceptive conduct in contravention of s 42 of the Fair Trading Act failed.
3.The protection devices relied upon by the Sony companies did not constitute a “technological protection measure” as that expression is used in s 116A(1) of the Copyright Act. The mod chips installed by Mr Stevens therefore did not constitute circumvention devices. The claim for relief under s 116A(5) therefore failed.
On 16 August 2002, his Honour made a declaration that Mr Stevens had infringed the Sony Trade Marks, awarded injunctive relief, made a delivery up order and directed that an account be taken of the profits earned by Mr Stevens from the sale of infringing goods. Orders ancillary to the order for an account of profits were made and the application was otherwise dismissed. The three Sony companies appeal from that part of the judgment of his Honour which held that their claim under s 116A of the Copyright Act failed.
The Copyright Act Provisions
The reasons for judgment of Lindgren and Finkelstein JJ set out in detail the findings of fact, the relevant statutory provisions and their legislative history. It is therefore not necessary for me to repeat what they have said. It is however useful to refer to the essential elements of s 116A of the Copyright Act.
Section 116A(5) of the Copyright Act confers upon the owner or exclusive licensee of copyright in a work or other subject matter a right to bring an action against a person who makes to sell or offers for sale a circumvention device capable of circumventing or facilitating the circumvention of a technological protection measure by which the work or other subject matter is protected. Central to the case brought by the Sony companies under this provision was the definition of “technological protection measure” in s 10(1) of the Copyright Act which is:
“… 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 or other subject-matter by either or both of the following means:
(a)by ensuring that access to the work or other subject matter is available solely by use of an access code or process (including decryption, unscrambling or other transformation of the work or other subject- matter) with the authority of the owner or exclusive licensee of the copyright;
(b)through a copy control mechanism.”
“Circumvention Device” is defined as:
“… a device (including a computer program) having only a limited commercially significant purpose or use, or no such purpose or use, other than the circumvention, or facilitating the circumvention, of an technological protection measure.”
The Issues on Appeal

The issues arising in this appeal are conveniently identified by reference to the groupings of the grounds in the Notice of Appeal. It may be noted at the outset that the issue whether the access code on Sony CD-ROMs by itself constitutes a technological protection measure, as part of the computer program in which copyright subsists, was raised by grounds 5, 6 and 7 each of which was abandoned at the hearing of the appeal. The remaining live issues and the grounds which raised them were as follows:
1.Whether the definition of technological protection measure in s 10(1) of the Copyright Act covers a mechanism which deters or discourages the copying of works to which it relates and, relevantly to the present case, the copying of PlayStation games prior to playing them on PlayStation consoles (grounds 8 to 11 inclusive).
2.Whether the protection devices used by the Sony companies directly prevented infringement of copyright in their works by preventing reproduction of the game or a substantial part of it from an unauthorised CD-ROM on to the random access memory (RAM) within the console. Such internal reproduction is part of the normal operation of the PlayStation console. The argument depended upon the proposition that this internal reproduction was reproduction of the work on the CD-ROM in a “material form” as defined in s 10 of the Copyright Act (grounds 12 to 18 of the Notice of Appeal).
3.Whether the protected devices used in the Sony PlayStation directly prevented infringement by preventing infringing reproduction, within the PlayStation console, of a cinematograph film by reproduction of images from the CD-ROM onto the RAM. This argument depended upon the proposition that the embodiment of images in the RAM constituted the making of a copy of a cinematograph film within the meaning of s 86(a) of the Act.
On the first of these I agree with the conclusions of Lindgren J, with whom Finkelstein J also agrees. However I wish shortly to state my own basis for that agreement as we differ from the carefully reasoned conclusions of the learned primary judge in this respect.
Whether a “technological protection measure” includes a device which has the practical effect of discouraging infringement
The Sony companies submitted to the learned trial judge that the definition of “technological protection measure” in s 10(1) of the Copyright Act should be read so as to include a device which has the practical effect of discouraging infringement of copyright. His Honour observed that the focus of the definition of “technological protection measure” was on a technological device or product designed to bring about a specified result, namely preventing or inhibiting the infringement of copyright in a work, by a particular means. His Honour did not think the definition was concerned with devices or products that did not, by their operations, prevent or curtail specific acts infringing or facilitating the infringement of copyright in a work, but which merely had 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.
After referring to the legislative history of s 116A and its travaux preparatoires, including the July 1997 Discussion Paper released by the Commonwealth Attorney-General’s Department, Copyright Reform and the Digital Agenda, his Honour concluded:
“There seems to be nothing in the legislative history to support the view that a technological measure is to receive legal protection from circumvention devices if the only way in which the measure prevents or inhibits the infringement of copyright is by discouraging infringements of copyright which predate the attempt to gain access to the work or to copy it.” [117]
His Honour therefore held that the protective devices relied upon by the Sony companies could not be regarded as technological protection measures if the only way in which they inhibited infringement of copyright in PlayStation games was by discouraging people from copying these games as a prelude to playing them on PlayStation consoles. He said:
“It is necessary for the applicants to demonstrate that the protective devices are designed to function, by their own processes or mechanisms, to prevent or hinder acts that might otherwise constitute an infringement of copyright.” [118]
The Sony companies say that, in so holding, his Honour erred. They say that he ought to have held that the protective devices, the access codes and the Boot ROMs are technological protection measures within the meaning of the Act because they inhibit the infringement of copyright by discouraging people from copying PlayStation games prior to playing them on PlayStation consoles (appeal ground 11).
It is necessary to begin with a consideration of the ordinary meaning of the words used to define “technological protection measure” in s 10(1) of the Act. This consideration must also have regard to the statutory context in which the words appear, both in that definition and in the application of the defined term in s 116A.
A technological protection measure must answer the description of “a device or product or a component incorporated into a process …”. The ordinary meaning of the word “device” includes relevantly “… a thing designed for a particular function or adapted for a purpose; an invention, a contrivance …” – Shorter OED. A device may comprise more than one part and, as in the present case, embrace the two elements of the access code on the Sony PlayStation CD-ROM and the Boot ROM in the console. Alternatively, the combination of access code and Boot ROM is arguably “a component incorporated into a process” although each by itself would probably more comfortably fit within that description. The choice of words “device”, “product” and “component” bespeaks a mechanism whose elements are physical, a characterisation that covers codes or instructions in electronic form. The device, product or component must be “designed, in the ordinary course of its operation, to prevent or inhibit the infringement of copyright in a work or other subject matter…”. It is the “design” of the device, product or component that is critical. The verb “design” is used in the purposive sense of construction in order to achieve a particular outcome.
In this case the outcome for which the device must be designed is “to prevent or inhibit the infringement of copyright…”. The ordinary meanings of these words “prevent” and “inhibit” overlap. So “prevent” means, inter alia, to “stop, hinder or avoid … forestall or thwart by previous or precautionary measures … make impracticable or impossible by anticipatory action … stop from happening … frustrate, defeat, make void” – Shorter OED. Inhibit means relevantly, “restrain or prevent” – Shorter OED. The scope of these two verbs, in their ordinary meanings, is wide enough, in my opinion, to cover an intended result of deterring or discouraging infringement by rendering the infringing copy useless for the purpose for which it was made. The term “prevent” encompasses forestalling or thwarting infringement by previous or precautionary measures and making infringement “impracticable” by anticipatory action. The requirement that the device be designed to prevent or inhibit the infringement of copyright “in the ordinary course of its operation” excludes the case of a device which produces that outcome only in a special or unusual application. In a sense it reinforces the requirement that the device be designed for the requisite purpose. It does not qualify or limit the nature of the prevention or inhibition of infringement contemplated by the definition.
The question then is whether the remainder of the definition and its statutory context require the narrower view which found favour with the learned trial judge. The fact that the device, product or component has a physical existence in the sense described above does not of itself indicate that “prevent” and “inhibit” are to be confined in their application to the physical prevention or inhibition of infringement by reproduction of the copyright work or other subject matter. If such a constraint exists, it must be found elsewhere. The means of prevention or inhibition of infringement specified in the definition of “technological protection measure” are:
(a)by ensuring that access to the work or other subject matter is available solely by use of an access code or process (including decryption, unscrambling or other transformation of the work or other subject matter) with the authority of the owner or licensee of the copyright;
(b)through a copy control mechanism.
If these means are confined to physical mechanisms, as it appears they are, that no more requires a narrow “physical” construction of “prevent or inhibit the infringement of copyright …” than does the fact that the technological protection measure must consist of a physical device product or component. In my opinion par (a) is logically entirely consistent with the notion that the practical denial of access to a work or other subject matter by the use of an access code may prevent or inhibit the use of copying devices which cannot reproduce that code. For infringement is to that extent prevented or inhibited according to the ordinary meaning of those words. Reference to a “copy control mechanism” in par (b) does not imply any additional constraint.
Section 116A, in which the term “technological protection measure” is used, does not in terms impose any constraint upon the kind of prevention or inhibition of infringement that it may be designed to achieve. It is of importance to bear in mind that the section appears in Div 2A of Pt V of the Copyright Act which deals with remedies and offences generally. Although Div 2A was introduced into the Act by the Copyright Amendment (Digital Agenda) Act 2000, concerned, according to the Revised Explanatory Memorandum, with the question of copyright protection “in the online environment”, its application was not confined to that environment or to particular technologies. The Digital Agenda Act had, as one of its objectives, set out in the Memorandum:
“To replace technology specific rights with technology-neutral rights so that amendments to the Act are not needed each time there is a development in technology.”
It is no doubt for that reason that the protection afforded by s 116A and the definitions of “technological protection measure” and “circumvention device” are applicable generally to “works” or “other subject matters” in which copyright may subsist. They are not limited to works or subject matters stored electronically or in any particular way.
Section 116A also operates with respect to the full range of acts which may constitute infringement of a work or other subject matter under the Act. That range goes beyond reproduction. It extends to knowingly selling or offering for sale articles, the making of which constituted an infringement of copyright (s 38). The conduct covered by the term “infringement” must have a bearing upon the ways in which a device may prevent or inhibit that conduct. Prevention or inhibition of infringement is relevant not only to reproduction of a work in a material form, but also to its sale or offering for sale. If a device such as an access code on a CD-ROM in conjunction with a Boot ROM in the PlayStation console renders the infringing copies of computer games useless, then it would prevent infringement by rendering the sale of the copy “impracticable or impossible by anticipatory action”.
I therefore agree with Lindgren J as to the proper construction of the term “technological protection measure” and that the appeal should be allowed on the grounds which relate to the first issue in the appeal. I agree also with his Honour’s reasoning in relation to the notice of contention filed by Mr Stevens relating to s 47C of the Act.
The parties provided the Court with comprehensive materials covering what may broadly be called the travaux preparatoires and the legislative history of s 116A. It is, with respect, entirely appropriate to refer to those matters for a better understanding of the broad historical context in which the provision came into being. It may also assist the Court in attaining a clearer understanding of its purpose. Purposive construction is mandated by s 15AA of the Acts Interpretation Act 1901 (Cth) and reference to extrinsic material is authorised by the same Act on the conditions set out in s 15AB. As was said in the joint judgment of Brennan CJ, Dawson, Toohey and Gummow JJ in CIC Insurance Ltd v Bankstown Football Club (1995) 187 CLR 384 at 408:
“… the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses ‘context’ in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy.”
Nevertheless, when considering resort to extrinsic materials it is important to have regard to the cautionary directive contained in s 15AB(3) of the Acts Interpretation Act which provides:
“In determining whether consideration should be given to any material in accordance with subsection (1), or in considering the weight to be given to any such material, regard shall be held, in addition to any other relevant matters, to:
(a)the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; and
(b)the need to avoid prolonging legal or other proceedings without compensating advantage.”
Those who are subject to the law and those who apply it are entitled to expect that it means what it says. The ordinary and grammatical sense of the words of a statute is the starting point of all construction:
“… for, after all, those who are subject to the law’s commands are entitled to conduct themselves on the basis that those commands have meaning and effect according to ordinary grammar and usage.” – Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 at 340 per Gaudron J
That ideal may seem far removed from the complexities of contemporary statutes. It is not, for that reason, to be abandoned. It is mandated by s 15AB(3) of the Acts Interpretation Act as a consideration of weight in statutory construction.
The more complex and extensive the travaux preparatoires and legislative history considered in the construction of a statute and the greater the influence they have on its construction, the less accessible is that construction to the ordinary intelligent reader and, perhaps more importantly, to anyone other than the specialist practitioner in intellectual property law. So the law develops its own access codes requiring special readers. This may be good for the special readers. It is not necessarily good for the law.
In my opinion the proper construction of s 116A and the definition of “technological protection measure” flows from a consideration of the ordinary and grammatical meaning of its language. There may be all manner of powerful policy considerations which can be extracted from the legislative history and other materials referred to in this case which favour the narrower reading of the definition of “technological protection measure” preferred by the learned primary judge. Limitations upon the extension of the bounds of effective copyright protection and related issues of competition policy have been pressed upon the Court as well as the uncertain boundaries of anything less precise than physical prevention or inhibition of infringement by reproduction. In the end, in my opinion, it is for the legislature to spell out the limiting words which may respond to such considerations. It is not for the Court to cage the ordinary meaning of the words which have been adopted by reference to policy considerations of its own divining.
The Determination of the Second and Third Issues
The second and third issues agitated on the hearing of this appeal raised alternative bases for holding that the Sony device is a technological protection measure. Given that the Court is unanimously of the view that, upon a proper construction of the definition of that term, the device answers that description, it is unnecessary to proceed to the second and third issues on appeal. Powerful arguments on either side of those issues have been set out by Lindgren and Finkelstein JJ. In my opinion, however, on both matters the reasoning and conclusions of Lindgren J, which accord with those of the learned primary judge, are to be preferred. I agree with his Honour that on the second and third issues the Sony companies do not succeed.
Conclusion
For the preceding reasons, I agree that the appeal should be allowed on the basis of the grounds relating to the definition of “technological protection measure”.

I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French.
Associate:
Dated: 30 July 2003

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 929 OF 2002

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

KABUSHIKI KAISHA SONY COMPUTER ENTERTAINMENT
FIRST APPELLANT

SONY COMPUTER ENTERTAINMENT EUROPE LIMITED
SECOND APPELLANT

SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LTD (ACN 077 583 183)
THIRD APPELLANT

AND:

EDDY STEVENS
RESPONDENT

JUDGES:

FRENCH, LINDGREN AND FINKELSTEIN JJ

DATE:

30 JULY 2003

PLACE:

SYDNEY

REASONS FOR JUDGMENT
LINDGREN J:

The appellants (I will use the word “Sony” to refer to them collectively and to that one of them relevant to the particular context) appeal from that part of the judgment of a judge of the Court ((2002) 55 IPR 497) that dismissed Sony’s claim under s 116A of the Copyright Act 1968 (Cth) (“the Act” – unless the context indicates otherwise, references to sections and paragraphs are references to sections and paragraphs of the Act). Section 116A was introduced into the Act by the Copyright Amendment (Digital Agenda) Act 2000 (Cth) (“Digital Agenda Act”), which commenced on 4 March 2001. The section is designed to safeguard “technological protection measures” against circumvention. The proceeding at first instance, and now this appeal, have raised questions as to the proper construction and application of the definition of the expression “technological protection measure” in s 10 of the Act.
The proceeding concerned Sony’s “PlayStation” computer games (“the PlayStation games”). Sony alleged that the respondent (“Mr Stevens”) sold and installed circumvention devices which were intended to facilitate the use of pirated copies of PlayStation games.
At first instance, Sony claimed that the PlayStation games were protected by a technological protection measure and that in contravention of s 116A Mr Stevens sold and installed devices designed to circumvent the technological protection measure. As a result, counterfeit PlayStation games could be played on the purpose built console manufactured by Sony (“the PlayStation console”), notwithstanding the technological protection measure.
The hearing before his Honour was limited to the issue of liability.
Sony also claimed infringement of trade marks and contraventions of the Fair Trading Act 1987 (NSW). It succeeded on the former claim and failed on the latter. Those results are not challenged: the appeal concerns only the failure of Sony’s claim under s 116A.
Mr Stevens was not represented before the primary judge. Subject to conditions, his Honour granted leave to the Australian Competition and Consumer Commission (“ACCC”) to appear as amicus curiae on the ground that the case was likely to present important questions of construction concerning s 116A. On the appeal, Mr Stevens was represented by senior and junior counsel. Nonetheless, we granted the ACCC leave to make written submissions.
LEGISLATION
Computer program as a literary work

Subsection 32(1) of the Act provides that, subject to certain conditions, copyright subsists in an original literary work that is unpublished. The expression “literary work” is defined by subs 10(1) to include “a computer program or compilation of computer programs”. The expression “computer program” is defined in that subsection to mean:
“a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result.”
Subsection 36(1) of the Act provides that, relevantly, the copyright in a literary work is infringed by a person who, not being the owner of the copyright and without the licence of the owner, does or authorises the doing of any act comprised in the copyright. Copyright in a work is also infringed by a person who sells, or, by way of trade, offers or exposes for sale an article if the seller knew, or ought reasonably to have known, that the making of the article constituted an infringement of copyright: subs 38(1).
Section 31 defines copyright, in relation to a work. In relation to a literary work, it is defined as the exclusive right to do all or any of certain specified acts, including the right “to reproduce the work in a material form”. In so far as the proceeding relates to Sony’s copyright in the computer programs embodied in the CD-ROMs for the PlayStation games, it relates to Sony’s exclusive right to reproduce in a material form the sets of statements or instructions embodied in those CD-ROMs.
Subsection 21(1A) of the Act provides as follows:
“For the purposes of this Act, a work is taken to have been reproduced if it is converted into or from a digital or other electronic machine-readable form, and any article embodying the work in such a form is taken to be a reproduction of the work.”
The expression “material form” is defined in subs 10(1), in relation to a work or an adaptation of a work, to include
“any form (whether visible or not) of storage from which the work or adaptation, or a substantial part of the work or adaptation, can be reproduced.”
Subsection 14(1) of the Act provides as follows:
“In this Act, unless the contrary intention appears:
(a)a reference to the doing of an act in relation to a work or other subject-matter shall be read as including a reference to the doing of that act in relation to a substantial part of the work or other subject-matter; and
(b)a reference to a reproduction, adaptation or copy of a work shall be read as including a reference to a reproduction, adaptation or copy of a substantial part of the work, as the case may be.”
It follows from the above provisions that the copyright in the set of statements or instructions embodied in the CD-ROM for a PlayStation game includes the exclusive right to store them or a substantial part of them in a form of computer storage from which they, or a substantial part of them, can be reproduced in another digital or electronic machine-readable form.
Part V, Div 2A (ss 116A–116D) was also introduced into the Act by the Digital Agenda Act. Division 2A is headed “Actions in relation to circumvention devices and electronic rights management information”. Section 116A provides, relevantly, as follows:
“(1) Subject to subsections (2), (3) and (4), this section applies if
(a)a work or other subject-matter is protected by a technological protection measure; and
(b)a person does any of the following acts without the permission of the owner or exclusive licensee of the copyright in the work or other subject matter:
(i)makes a circumvention device capable of circumventing, or facilitating the circumvention of, the technological protection measure;
(ii)sells, lets for hire, or by way of trade offers or exposes for sale or hire or otherwise promotes, advertises, or markets, such a circumvention device;
(iii)distributes such a circumvention device for the purpose of trade, or for any other purpose that will affect prejudicially the owner of the copyright;
…; and
(c)the person knew, or ought reasonably to have known, that the device or service would be used to circumvent, or facilitate the circumvention of, the technological protection measure.
…;
(5)If this section applies, the owner or exclusive licensee of the copyright may bring an action against the person.
(6)In an action under subsection (5), it must be presumed that the defendant knew or ought reasonably to have known, that the circumvention device …to which the action relates would be used for a purpose referred to in paragraph (1)(c) unless the defendant proves otherwise.” (my emphasis)
Subsections (2), (3), (4) and (4A) (omitted above) provide for circumstances in which s 116A does not apply. It is noteworthy that the use of a circumvention device is not referred to in par 116A(1)(b), and that apart from the making of a circumvention device, that paragraph refers to trading activity only (and the making of a circumvention device can be expected often to be a trading activity). Accordingly, s 116A does not apply to enable the copyright owner to bring an action against the ordinary user of a circumvention device, and, subject to what is said about the reproduction in RAM and cinematograph film arguments below, a user does not infringe copyright any more than the reader of a book infringes the copyright in the literary work embodied in it.
“Circumvention device” is defined to mean
“a device (including a computer program) having only a limited commercially significant purpose or use, or no such purpose or use, other than the circumvention, or facilitating the circumvention, of an effective technological protection measure.”
The expression “technological protection measure”, which lies at the heart of the present appeal, is defined in subs 10(1) to mean:
“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 or other subject-matter by either or both of the following means:
(a)by ensuring that access to the work or other subject matter is available solely by use of an access code or process (including decryption, unscrambling or other transformation of the work or other subject-matter) with the authority of the owner or licensee of the copyright;
(b)through a copy control mechanism.”
As will be seen below, drafts of the legislation included the expression “effective technological measure” and a definition of “effective”, but the word “effective” in that expression and the definition of “effective” were not retained. However, through oversight, the definition of “circumvention device” retained the expression “effective technological measure”. Since the primary judge’s decision, the word “effective” has been removed from the definition of “circumvention device” by the Copyright Amendment (Parallel Importation) Act 2003 (Cth), s 3, Schedule 3, item 1. That Act was assented to on 15 April 2003 but the amendment mentioned commenced retrospectively immediately after the commencement of the Copyright Amendment (Digital Agenda) Act 2000 (Cth): see s 2, table, item 4. (The Copyright Amendment (Parallel Importation) Act 2003 amended the definition of “technological protection measure” in another respect with retrospective effect from the same date: it omitted the word “licensee” and replaced it with the words “exclusive licensee”: see s 3, Schedule 3, item 3, and for its commencement, again, s 2, table, item 4.)
Section 116D provides for the remedies that are available in actions under s 116A. I need not refer to them.
Cinematograph film
The learned primary judge noted the following provisions of the Act which were relevant to the cinematograph film argument:
“cinematograph film means the aggregate of the visual images embodied in an article or thing so as to be capable by the use of that article or thing:
(a)of being shown as a moving picture; or
(b)of being embodied in another article or thing by the use of which it can be so shown;
and includes the aggregate of the sounds embodied in a sound-track associated with such visual images” (subs 10(1)).
“copy, in relation to a cinematograph film, means any article or thing in which the visual images or sounds comprising the film are embodied” (subs 10(1)).
“For the purposes of this Act, sounds or visual images shall be taken to have been embodied in an article or thing if the article or thing has been so treated in relation to those sounds or visual images that those sounds or visual images are capable, with or without the aid of some other device, of being reproduced from the article or thing” (s 24).
Generally speaking, the maker of a cinematograph film is the owner of any copyright subsisting in the film by virtue of Part IV of the Act (subs 98(2)). Section 131 provides as follows:
“Where the name of a person appeared on copies of a cinematograph film as made available to the public in such a way as to imply that the person was the maker of the film…that person shall, in an action brought by virtue of this Part, be presumed, unless the contrary is established, to be the maker of the film…”.
Subsection 86(a) provides that for the purposes of the Act, copyright, in relation to a cinematograph film, is the exclusive right to
“do all or any of the following acts:
(a)to make a copy of the film…” (my emphasis)
Subsection 101(1) provides that subject to the Act, copyright subsisting by virtue of Pt IV is infringed by a person who, not being, or having the licence of, the owner of the copyright, does, or authorises the doing, in Australia, of any act comprised in the copyright.
Subsection 21(6) provides that for the purposes of the Act a cinematograph film is taken to have been copied if it is converted into or from a digital or other electronic machine-readable form, and any article embodying the recording or film in such a form is taken to be a copy of the recording or the film.
Subsection 14(1) was set out at [39] above. It follows from that provision and the others noted above that a person infringes copyright in a cinematograph film if he or she, without the licence of the copyright owner, makes an article or thing from which a substantial part of the visual images and sounds comprising the film can be reproduced.
SONY’S CASE BEFORE HIS HONOUR
The Pleading
Sony pleaded its claim generally along the following lines. The first appellant (“Sony Japan”) manufactured and distributed PlayStation consoles and computer games for use with them. The second appellant (“Sony Europe”) was a subsidiary of Sony Japan. The third appellant (“Sony Australia”) was a subsidiary of Sony Europe.
Mr Stevens sold computer games for use with PlayStation consoles. Those games were not manufactured by or with the licence of Sony.
Sony Europe was the owner or exclusive licensee of copyright in a range of computer programs (“the Works”) or, alternatively, cinematograph films (“the Films”) embodied in the PlayStation games for use with the PlayStation console. More than 150 PlayStation games for use with the PlayStation console embodying the Works or, alternatively, the Films, had been released in the United Kingdom and other countries in Europe by Sony Europe, including the PlayStation games named in Schedule 1 to the amended statement of claim.
Sony Australia was the licensee of the copyright in the Works and the Films. Each of the PlayStation games embodying the Works and the Films was protected by a “technological protection measure”. There are two components to the technological protection measure: an “access code” contained within a track on each of the CD-ROMs on which a Work is contained, and a device within the PlayStation console itself, which ensures that access to the Works and the Films is available solely by use of the access code.
Mr Stevens sold devices known as “mod chips” or “converters” which he installed in PlayStation consoles and which had a limited commercially significant purpose or use, or no such purpose or use, other than the circumvention, or facilitation of the circumvention, of the technological protection measure described. Mr Stevens knew, or ought reasonably to have known, that the devices which he sold and installed would be used to circumvent, or to facilitate the circumvention of, the technological protection measure.
Nature of appellants’ claim before primary judge under s 116A and issues arising
Senior counsel who appeared for Sony before his Honour identified the elements of Sony’s primary claim under s 116A as follows:
“(i)     a work (s 116A(1)(a))
(ii)      is protected by a technological protection measure (s 116A(1)(a))
(iii)     and a person (s 116A(1)(b)
(iv)without the permission of the owner or exclusive licensee of the copyright in the work (s 116A(1)(b))
(v)       sells or distributes a circumvention device (s 116A(1)(b)(ii) and (iii))
(vi)capable of circumventing or facilitating the circumvention of, the technological protection measure (s 116A(1)(b)(i))
(vii)and the person knew, or ought reasonably to have known, that the device…would be used to circumvent, or facilitate the circumvention of, the technological protection measure (s 116A(1)(c)).”
As to (i), the relevant “work” was the original computer program stored on each of the CD-ROMs constituting a PlayStation game identified in Schedule 1 to the amended statement of claim. On this basis, it was not in dispute that Sony Europe was the owner or exclusive licensee of the copyright in the literary works constituted by those computer programs.
As to (ii), senior counsel said that each work was protected by a “technological protection measure”. Sony identified the technological protection measure as:
·     the chip, described in evidence as the “Boot ROM”, located on the circuit board of the PlayStation console which reads and verifies the access code stored on a genuine PlayStation game;
·     the access code stored on the CD-ROM for each PlayStation game; or
·     a combination of the Boot ROM and the access code.
Sony’s case before his Honour was that one or other of these devices, or both of them in combination, functioned by “ensuring that access to the work [the computer program] [was] available solely by use of an access code or process … with the authority of the owner or licensee of the copyright”.
But was the protection device designed in the ordinary course of its operation “to prevent or inhibit the infringement of copyright in a work”? Sony submitted that it was, on either of two alternative theories. The first was that the device inhibited the making of infringing copies of PlayStation games by rendering the making of them financially pointless. The protective device rendered infringing copies of PlayStation games unusable and therefore unsaleable.
The alternative basis on which Sony contended that the device was designed in the ordinary course of its operation “to prevent or inhibit the infringement of copyright in a work” depended on the evidence that, in the course of the playing a PlayStation game, the console stored an electronic copy of a portion of the computer program on the console’s RAM (Random Access Memory), and so permitted the game, or a portion of it, to be played, even after the CD-ROM was removed from the console. It was argued that the computer program, or a substantial part of it, was reproduced in RAM, and that, in this way, there was an infringement of Sony’s copyright in the computer program. Sony submitted that the protective device was designed to prevent the infringement that would take place upon the playing of the infringing copy by reason of a substantial part of the computer program stored on the CD-ROM being reproduced in RAM.
As to elements (iii), (iv), (v), (vi) and (vii) referred to in [56] above, Mr Stevens was the person who sold and distributed the “mod chip” or “converter chip” which he installed in PlayStation consoles. The mod chip had no purpose or use, or only a limited commercially significant purpose or use, other than the circumvention, or facilitating the circumvention, of the Boot ROM, or the access code, or both of them in combination, and the mod chips installed by Mr Stevens were, in fact, capable of doing so as Mr Stevens knew. In any event, Sony was entitled to the benefit of the presumption created by subs 116A(6) of the Act, namely, that Mr Stevens knew or ought to have known that the devices he installed would be used for the purpose identified in par 116A(1)(c).
By a late amendment, Sony contended before his Honour that the PlayStation games embodied cinematograph films. They relied on the Full Court decision of this Court in Galaxy Electronics Pty Ltd v Sega Enterprises Ltd (1997) 75 FCR 8 (“Galaxy v Sega”), for the proposition that the aggregate of the visual images shown upon the playing of a PlayStation game constituted a “cinematograph film” within the definition of that expression subs 10(1) of the Act (set out at [46] above), and were therefore the subject of copyright under Part IV of the Act.This was because the aggregate of the visual images was “embodied” in the computer program stored on the CD-ROM. Consistently with Galaxy v Sega, it was no objection to this conclusion that the images appearing on the screen were dependent on player input, or that the computer program was or could also be a literary work the subject of copyright by virtue of Part III of the Act. Since Sony did all things necessary for the production of the first copy of the Films, Sony was the maker of them and owned any copyright in them: see subs 22(4) and s 90. In any event, since Sony Europe’s name appeared on each copy of the Films, Sony was presumed to be the maker of the them: s 131.
Again, Sony relied on the storing in RAM of a substantial part of each of the Films. Sony’s argument was that this constituted the making a copy of the Film since, with the aid of the Central Processing Unit (“CPU”), the images are capable of being reproduced on screen from RAM. The Boot ROM or access code, or both in combination, prevent infringement of copyright in the Films by this form of copying, just as they prevent infringement of copyright in the computer program by the same form of copying, that is to say, storage in RAM.
It was not in dispute that Sony Europe was the owner or exclusive licensee of the copyright in the computer programs for the PlayStation games involved in the proceeding, or that Sony Australia was the licensee of that copyright in Australia. The CD-ROMs in which the computer programs were embodied and the packaging for the games bore a notice warning that unauthorised copying and other infringements of copyright were prohibited.
His Honour found that Mr Stevens sold mod chips for installation in PlayStation consoles on, relevantly, 8 April 2001, 28 September 2001 and 16 November 2001, knowing:
· that the purpose of installing the chip was to enable the console to play copies of the PlayStation games that did not carry the access code; and
· that many, if not all, such copies would have been made without the authority or licence of Sony.
REASONING OF THE PRIMARY JUDGE
The learned primary judge gave an account of the historical background to the enactment of s 116A of the Act. Rather than summarise that account here and supplement it later with my own observations, I will give an expanded account of it later under “My Reasoning on the Appeal”.
I will summarise his Honour’s reasons by reference to the headings that he used which remain relevant to the appeal.
The Work
His Honour had no difficulty in regarding the computer programs stored in the PlayStation game CD-ROMs as sets of statements or instructions to be used directly or indirectly in a computer (the PlayStation console) to bring about a particular result, namely, the playing of the PlayStation games. Accordingly, the set of statements or instructions for each game was a “computer program” and therefore a “literary work”. The “certain result” which the use of the set of instructions in the PlayStation console was to bring about was the conversion of the original content of the CD-ROM into a form which enabled the consumer to have the visual and aural experience of playing the game (his Honour referred to Australian Video Retailers Association Ltd v Warner Home Video Pty Ltd (2001) 114 FCR 324 (“AVRA v Warner”) at [71] of the reasons of Emmett J). His Honour discussed, but did not need to resolve, the question whether the access code, embedded in the CD-ROM, itself formed part of the relevant computer program.
The Regional Access Code Issue

The learned primary judge did not accept a submission by the ACCC to the effect that in order to be a “technological protection measure”, the only purpose of the device must be to prevent or inhibit infringement of copyright. His Honour thought that a device might be within the definition even though it had another purpose as well, such as the purpose of limiting a console to the playing of PlayStation games with the “correct” regional access code. His Honour acknowledged that there might be a question as to whether a device designed primarily to achieve a particular non-copyright purpose by specified means was within the definition simply because it incidentally prevented or inhibited the infringement of copyright, but he did not find it necessary to resolve that question. His Honour referred to the reasoning of Jacob J in Sony Computer Entertainment v Edmunds (t/as Channel Technology) 55 IPR 429 (“Sony v Edmunds”).
His Honour inferred that the protective device was intended by Sony to deter or otherwise discourage copyright infringement by the unlawful making, importation and distribution of its PlayStation games. He also inferred that the existence and use by Sony of that device did have the practical effect of doing so. He found nothing in the evidence to suggest that the major purpose or objective of the protection device, from Sony’s perspective, was to ensure that the PlayStation consoles could be used to play only PlayStation games lawfully acquired in Australia or Europe.
The above inferences left open the question whether they were enough to warrant a conclusion that the Boot ROM or access code, or both in combination, constituted a “technological protection measure” within the statutory definition.
Technological Protection Measure
The “Practical Effect” Argument
Senior counsel for Sony pointed out that the word “inhibit”, which is used in the definition of “technological protection measure”, has a dictionary meaning of “to restrain, hinder, arrest or check” (Macquarie Dictionary). Sony accepted that where a person simply played a “pirated” copy of a PlayStation game on a PlayStation console, the person did not infringe copyright in the computer program constituting the game, and that any infringement would have occurred previously. Sony also accepted that it was not an infringement for a person to play a PlayStation game lawfully acquired in one region of the world, such as a game acquired in the United States, on a PlayStation console purchased in a different region, such as a console purchased in Australia, even though the game lacked the regional access code which would allow it to be played on such a console. But, according to Sony’s submission, it was not to the point that a protective device, by its own processes or mechanisms, was not capable of physically preventing an infringement from occurring: it sufficed that “as a practical matter”, it removed the incentive for persons to infringe. Sony contended that its protective devices did so by rendering infringing copies unsaleable (unless the devices could be circumvented).
The learned primary judge addressed this issue and expressed his conclusion on it in the following paragraphs:
“[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. In other words, a “technological protection measure”, as defined, must be a device or product which utilises technological means to deny a person access to a copyright work, or which limits a person’s capacity to make copies of a work to which access has been gained, and thereby “physically” prevents or inhibits the person from undertaking acts which, if carried out, would or might infringe copyright in the work. It is in this sense that the device or product must be designed, in the ordinary course of its operation, to prevent or inhibit the infringement of copyright in a 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.
[116]   I appreciate that it is a general principle of statutory construction that all words in a section must be given some meaning and effect: D C Pearce and R S Geddes, Statutory Interpretation in Australia (5^th edn 2001), at par 2.22 and cases cited there. However, I think the construction I have adopted gives the word “inhibit” in the definition work to do. There may be devices which are not necessarily designed, in the ordinary course of their operation, to prevent the infringement of copyright, but to inhibit such infringement. A copy control mechanism, for example, might not prevent all copying that infringes copyright, but might limit the extent of unlawful copying that can take place, for example by reducing the quality of copies that can be made of the copyright work. Such a device could properly be said to be designed, in the ordinary course of its operation, to “inhibit” the infringement of copyright in a work, rather than to prevent such infringement. It may be that access to only part of a work is restricted by a process requiring decryption or unscrambling. In this situation, too, it might be more appropriate to say that the process is designed to inhibit rather than prevent the infringement of copyright in the work.
[117]   The legislative history of s 116A and of the definition of “technological protection measure” is not conclusive on the question of construction. It is, however, consistent with the interpretation I have adopted. From at least the 1997 Digital Agenda Discussion Paper, the emphasis has been on penalising or discouraging the commercial distribution of devices for circumventing “locks” or protective devices which deny unauthorised access to materials stored in electronic form, including Internet sites, or which prevent unauthorised copying of such materials. The EC Directive, which has proved influential in the drafting of the current legislation, was intended to provide legal protection against commercial activities facilitating the circumvention of specific technological measures such as those requiring a code for a user wishing to gain access to the work. This emphasis suggests that what the drafter of s 116A (and its accompanying definitions) had in mind was to provide legal protection to devices that use technological or mechanical means to thwart acts which, if committed, would infringe copyright in the work. There seems to be nothing in the legislative history to support the view that a technological measure is to receive legal protection from circumvention devices if the only way in which the measure prevents or inhibits the infringement of copyright is by discouraging infringements of copyright which predate the attempt to gain access to the work or to copy it.
[118]   It follows that the protective devices relied on by the applicants cannot be regarded as technological protection measures if the only way in which they inhibit infringement of copyright in PlayStation games is by discouraging people from copying these games as a prelude to playing them on PlayStation consoles. It is necessary for the applicants to demonstrate that the protective devices are designed to function, by their own processes or mechanisms, to prevent or hinder acts that might otherwise constitute an infringement of copyright.
The Reproduction in RAM Argument
His Honour did not accept Sony’s argument that the protection device prevented a user of an infringing PlayStation game from reproducing a substantial part of the game’s computer program in RAM. His Honour thought Sony’s submission gave rise to the following question (at [119]):
“whether the temporary storage of part of a computer program in the RAM of a computer (in this case, the PlayStation console) can be said to constitute reproduction of a substantial part of the computer program “in a material form” and thus infringe copyright in the computer program (Copyright Act, ss 31(1)(a)(i)), 36(1)).”
The primary judge referred to the fact that the storage in RAM was “temporary” or “volatile” in the sense that when the computer is turned off the contents of the RAM are lost. His Honour referred to United States cases in which it has been held that the loading of computer software into RAM constitutes the making of a “copy” for the purposes of the Copyright Act 1976 (17 USC § 101): MAI Systems Corporation v Peak Computer Inc 991 F2d 511 (9^th Cir 1993) (“MAI v Peak”) and Intellectual Reserve Inc v Utah Lighthouse Ministry Inc 75 F Supp 2d 1290 (D Utah 2000).
The primary judge thought “the better view, on the rather patchy evidence” to be that, although only a very small proportion of the PlayStation game’s computer program was stored in the console’s RAM at any one time, what was stored had the quality of originality, since it allowed the game to be played, albeit at one level only. He said (at [125]): “... the instructions stored in the RAM ordinarily incorporate some elements of the game that give it originality”. His Honour therefore concluded that Sony had shown that a substantial part of the computer program for a PlayStation game was temporarily stored in RAM when the game was played. The storage was temporary because the contents of the RAM would be lost if power to the console was disconnected, and, in any event, the content was lost as new instructions were downloaded into RAM.
His Honour considered three Australian cases in which the present question had been considered. They were the decision of the Full Court of this Court in Dyason v Autodesk Inc (1990) 24 FCR 147 (“Dyason v Autodesk”) (reversed on other grounds in Autodesk Inc v Dyason (No 1) (1992) 173 CLR 330); the decision of Tamberlin J in Microsoft Corporation v Business Boost Pty Ltd (2000) 49 IPR 573; and Emmett J’s decision in AVRA v Warner, above. It seemed to his Honour that the reasoning of Emmett J in AVRA v Warner was precisely in point. His Honour noted that Emmett J had proceeded on the basis that the definition of “material form” in subs 10(1) of the Act could not be satisfied “unless the copyright work (the computer program), or a substantial part of it, can be reproduced from the data temporarily stored in the computer’s RAM” (at [137]). His Honour found that this requirement was not satisfied in the present case.
The primary judge noted a submission by Sony that the definition of “material form” in s 10 of the Act was inclusory, and that the program had been reproduced “in a material form” as a matter of ordinary language. But his Honour thought that expression not apt to describe a storage in RAM of what were essentially incorporeal electronic impulses. His Honour continued as follows (at [148]):
“On the face of things, it might seem surprising that the reproduction in electronic or digital form of a computer program is not necessarily an infringement of copyright in the computer program. The scheme of the legislation, however, seems to be that reproducing a work in electronic or digital form infringes copyright, pursuant to ss 31(1)(a)(i) and 36(1) of the Copyright Act, only if the form in which the work is reproduced is itself capable of further reproduction.”
His Honour thought that subs 21(1A) (set out at [37] earlier) did not avail Sony because it speaks only of circumstances in which a work is “taken to have been reproduced”, not “taken to have been reproduced in a material form”.
The Cinematograph Film Argument
Sony submitted that each PlayStation game CD-ROM embodied a cinematograph film and that a copy of a substantial part of the film was made in RAM. The instructions stored in RAM then generated the sounds and the visual images on the screen. According to the submission, Sony’s protection device prevented the copy being made in RAM or, in the alternative, the visual images from being generated from the instructions stored in RAM.
His Honour was prepared to assume that the reasoning in Galaxy v Sega applied to the PlayStation games. However, he was not satisfied that the data reproduced in RAM constituted a copy of a “substantial part” of the “aggregate of visual images” constituting the cinematograph film. His Honour followed Emmett J in AVRA v Warner, in which Emmett J rejected an argument that the means by which the DVD disc was played, which included the sequential decompression of the audio, video and caption content and storage in RAM, constituted the making of a copy of the whole or a substantial part of the embodied cinematograph film. In particular, his Honour quoted at [158] the following passages from Emmett J’s reasons in AVRA v Warner ([59]—[65]):
“Does a person who plays the Bait DVD Disc or the Romeo Must Die DVD Disc make a copy of the whole or a substantial part of the embodied cinematograph film in the course of playing the respective disc on either a DVD player or a personal computer?
…
62 Warner's contention raises the question of whether audio, video and caption content stored in RAM is capable of being reproduced. The storage of the motion picture is volatile in the sense that it is lost if the DVD player is switched off. In the ordinary course, a DVD player will be configured such that the whole of the contents of its RAM will be volatile. It will not be possible to reproduce its contents. In such a case, the temporary storage of the motion picture in the RAM of a DVD player will not involve a reproduction of the computer program in a material form. On the other hand, a DVD player could be modified such that it would be possible to study or use the RAM for the purpose of reproducing its contents. In that case there could be a reproduction of sounds and images.
63 The statutory scheme…requires that it be possible to identify, at the time of the act referred to in s 86(a), an article or thing in which the cinematograph film or motion picture, namely the visual images or sounds comprising it, is embodied. It is not sufficient that the visual images and sounds comprising the cinematograph film or motion picture have at some time been embodied in the article or thing. There must be a point at which an article or thing can be identified in which the visual images and sounds are embodied.
64 Section 14(1) provides that a reference to the doing of an act in relation to a work or other subject-matter, including making a copy of a cinematograph film, is to be read as including a reference to the doing of the act in relation to a substantial part of the work or subject-matter. The phrase ‘substantial part’ refers to the quality of what is taken, rather than the quantity - Autodesk Inc v Dyason [No.2] (1993) 176 CLR 300 at 305. However, an inquiry should also take into account the purpose of the copying - Nationwide News v Copyright Agency Limited (1996) 65 FCR 399 at 418-419. It is common ground that, in the case of the storage in RAM of the audio, video and caption content of a DVD, only a tiny fraction of the motion picture is stored at any one time. The purpose of the storage is to display the motion picture. The storage is volatile.
65 I consider that the ephemeral embodiment of tiny fractions of the visual images and sounds that comprise a cinematograph film or motion picture sequentially does not constitute the act of making a copy of the motion picture or cinematograph film within the meaning of s 86(a). It is clear that neither the whole nor any substantial part of a cinematograph film or motion picture is ever embodied in the RAM of a DVD player or personal computer at any given time. The mere fact that, over a period of time, being the time taken to play the motion picture or cinematograph film, tiny parts are sequentially stored in the RAM of the DVD player or personal computer does not mean that the motion picture or cinematograph film is embodied in such a device. As a result, a consumer, by playing a DVD disc, does not, for the purposes of the Act, make a copy of the whole or a substantial part of the motion picture or cinematograph film embodied in that DVD disc.”
The learned primary judge considered that, although the present case was not identical to AVRA v Warner, because the film in the present case did not comprise simply audio, video and caption content intended to be viewed sequentially, the evidence nonetheless suggested that only a very small proportion of the images and sound comprising the cinematograph film were “embodied” in the PlayStation console’s RAM at any given time. Moreover, his Honour accepted as applicable the observation of Emmett J that the purpose of the storage in RAM was to display the images and to allow the game to be played.
While the question of substantiality in relation to the reproduction of a computer program is to be assessed by reference to the “originality” of that which is taken, this approach is not applicable to the copying of a cinematograph film, since originality is not a condition for the subsistence of copyright under Part IV of the Act. According to the primary judge, the question was rather one of the “quality” of what was reproduced (at [160]). His Honour concluded as follows (at [160]):
“In the absence of clearer and more detailed evidence as to the nature and quality of the images embodied in the instructions stored in the RAM, assessed in relation to the totality of ‘the aggregate of visual images’ constituting the cinematograph film, I cannot conclude (to adopt the language of Emmett J) that ‘the ephemeral embodiment’ of a small proportion of images in the RAM constitutes the act of making a copy of the cinematograph film for the purposes of s 86(a) of the Copyright Act.
In my opinion, on the evidence before me, the argument founded on s 86(a) of the Copyright Act must be rejected.”
Circumvention Device
In view of Sony’s failure to establish that the copyright work was protected by a technological protection measure, it was not necessary for his Honour to determine whether the mod chips installed by Mr Stevens in PlayStation consoles were otherwise “circumvention devices” within the Act. However, his Honour said that on the evidence he would have held that the chips had only a limited commercially significant use other than that of circumventing or facilitating the circumvention of Sony’s device. Accordingly, if that device had been a “technological protection measure”, the chips would have been circumvention devices.
GROUNDS OF APPEAL
In substance, Sony submitted that his Honour erred in not accepting:
1.Sony’s construction of the definition of “technological protection measure” in subs 10(1) of the Act;
2.Sony’s submission that when a PlayStation game was played, the literary work consisting of the computer program contained in the CD-ROM for the game was reproduced in a material form in RAM;
3.Sony’s submission that when a PlayStation game was played, a copy of the cinematograph film concerned was made in RAM.
I will address these issue in turn below.
MY REASONING ON THE APPEAL
1. First issue on the appeal – construction of the definition of “technological protection measure” in subs 10(1) of the Act
(a) The text
I find the issue of construction finely balanced. Nothing in the text of the definition of “technological protection measure” persuades me strongly to one construction or the other. The definition is ambiguous. Therefore, consideration may be given to extrinsic materials: Acts Interpretation Act 1901 (Cth) s 15AB. Ultimately the learned primary judge resolved the ambiguity by reference to the text of the definition. But he gained from it more assistance than I do, and from the extraneous materials, less assistance than I do.

The US legislation is similar in the following respects. The Copyright Act 1976 states that: “Copyright protection subsists, … in original works of authorship fixed in any tangible medium of expression, … from which they can be perceived, reproduced or otherwise communicated, either directly or with the aid of a machine or device”: 17 USC § 102(a). The Copyright Act also provides that: “A work is ‘fixed’ in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced or otherwise communicated for a period of more than transitory duration”: 17 USC § 101. Why must the work be “fixed”? It must be fixed because “[i]t is not susceptible to being copied until it has been put in a form which others can see and read. The statute has not provided for the protection of the intellectual conception apart from the thing produced, however meritorious such conception may be, but has provided for the making and filing of a tangible thing …”: White-Smith Music Publishing Company v Apollo Company 209 US 1, 17 (1908). Although the requirement of fixation initially applied only to the original “copy” of the work, it is now also a criterion for reproduction.
The leading US decision dealing with RAM is MAI Systems Corp v Peak Computer Inc 991 F2d 511 (9^th Cir 1993); cert denied 114 S Ct 671 (1994) (“Peak”). Peak Computer maintained and repaired its client’s computers which included computers manufactured by MAI. In order to repair technical problems in MAI computers, technicians would often use the diagnostic software (an error log) that was built into the machines. This software was loaded into the computer’s RAM when the computer was turned on. Although not permanently fixed the error log remained on the screen for a sufficient time period to allow Peak technicians to view it. MAI sued Peak Computer Inc alleging that this process constituted an infringement of its copyright. Peak claimed that this reproduction was not a copy as any reproduction in RAM was only temporary and not sufficiently permanent to be considered “fixed” for the purposes of the US legislation. The Court of Appeals held (at 518) that the information downloaded into the computer’s RAM was “sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration” and was therefore “fixed”.
In a later case, Advanced Computer Services of Michigan Inc v MAI Systems Corporation 845 F.Supp 356 (E.D. Va 1994), the US District Court for the Eastern District of Virginia also found that when a computer program is downloaded into RAM and maintained there for a few minutes, it is sufficiently fixed to constitute a copy. The Court said (at 362-363) that:
“Although the contents of RAM are, in some respects, ephemeral or transient, it is important to remember that the [Copyright] Act does not require absolute permanence for the creation of a copy. Rather, the Act requires only that the representation created in RAM be a ‘material object’ that is ‘sufficiently permanent or stable to permit it to be perceived, reproduced or otherwise communicated for a period of more than transitory duration’ …”.
The Court reasoned (at 363) that the software program was “stable enough” to meet the statute’s criteria because “[o]nce a software program is loaded into a computer’s RAM, useful representation of the program’s information or intelligence can be displayed on a video screen or printed out on a printer …”. The court also held that the fact that a program disappears from RAM the moment the computer is turned off “confirmed rather than refuted” its conclusion. In particular the court said (at 363):
“[O]ne need only imagine a scenario where the computer, with the program loaded into RAM, is left on for extended periods of time, say months or years, or indeed left on for the life of the computer. In this event, the RAM version of the program is surely not ephemeral or transient; it is, instead, essentially permanent and thus plainly sufficiently fixed to constitute a copy under the Act. Of course, if a computer is turned off within seconds or fractions of a second of the loading, the resulting RAM representation of the program arguably would be too ephemeral to be “fixed” or a “copy” under the Act. It is unnecessary here to decide precisely where along the time continuum the line should be drawn between RAM representations of a program that are of a sufficient duration to be ‘fixed’ and those that are not. MAI’s copyright infringement claim is not aimed at situations where the power to the computer is turned off and the RAM erased within a second of the completion of loading. Instead, MAI’s attack focuses on those situations where the computer is left on for a time measured in minutes, if not longer.”
These decisions have attracted a great deal of criticism. Although I will not analyse the criticism in any depth, it is worthwhile noting the main points that have been made. They include: (a) That the courts were wrong in principle because loading a computer program onto RAM is only a temporary fixation which is not sufficiently permanent to qualify as a copy; (b) That these results create broader copyright protection than that intended by the legislature and that this protection operates as a restriction on the use of copyright by giving copyright owners similar rights to those of trade secret owners; (c) That the courts were in error in rejecting the defence under §117(1). This provision states that it is an infringement to make or authorise the making of another copy or adaptation of a computer program “if such a new copy or adaptation is created as an essential step in the utilization of the computer program”; (d) That §117(1) was only discussed in Peak in a one sentence footnote, as an afterthought, and without any reasoned analysis; (e) That the courts did not consider whether the doctrine of fair use was available by way of a defence; and (f) That the decisions are anti-competitive and contrary to §§1 and 2 of the Sherman Act (1890) as they may oust third party maintenance providers from the computer maintenance market.
Journal articles where these and other criticisms can be found include: T. Arriola, ‘Software Copyright Infringement Claims after MAI Systems v Peak Computer’, 69 Wash L Rev 405 (1994); K. Levin, ‘Intellectual Property Law: MAI v Peak: Should Loading Operating System Software Into RAM Constitute Copyright Infringement?’, 24 Golden Gate U L Rev. 649 (1994); R VerSteeg, ‘The Herbert Tenzer Memorial Conference: Copyright in the Twenty-First Century: Jurimetric Copyright: Future Shock for the Visual Arts’, 13 Cardozo Arts & Ent LJ 125 (1994); M E Johnson, ‘The Uncertain Future of Computer Software Users’ Rights in the Aftermath of MAI Systems’, 44 Duke L J 327 (1994—95); B J Nicholson, ‘The Ghost In The Machine: MAI Systems Corp v Peak Computer Inc and the Problem of Copying in RAM’, 10 High Tech L J 147 (1995); C G Stovsky, “MAI Systems Corp v Peak Computer Inc: Using Copyright Law to Prohibit Unauthorized Use of Computer Software”, 56 Ohio St L J 593 (1995); J Boyle, ‘Intellectual Property Policy Online: A Young Person’s Guide’, 10 Harv J Law & Tec 47 (1996); I Brandriss, ‘Writing in Frost on a Window Pane: E-Mail and Chatting on RAM and Copyright Fixation’, 43 Journal, Copyright Society of USA. 237 (1996); R A Reese, ‘Symposium: Intellectual Property Challenges in the Next Century Article: The Public Display Right: The Copyright Act’s Neglected Solution to the Controversy Over RAM “Copies”’, U Ill L Rev 83 (2001).
What should be the position in Australia? The answer to this question requires the resolution of two discrete issues concerning the meaning of the definition of “material form” in s 10 of the Copyright Act. The first issue is whether RAM is a “form (whether visible or not) of storage… ”. On one view the answer is obvious. Whatever computer experts may say, the Explanatory Memorandum states that RAM is a method of storage. Moreover, one[k1] [k2]of the objects of the new definition of “material form” was to “focus attention on the content of that which is copyright, rather than the particular form in which it is embodied”: Roland Corporation v Lorenzo & Sons Pty Ltd (1991) 33 FCR 111, 118 per Pincus J. It logically follows that if there is no longer a requirement for an allegedly infringing work to be continuously visible, there is no reason why storage in RAM cannot be a relevant form of storage. The legislation should also be construed in a way that accommodates scientific changes. In particular, the meaning to be given to “form … of storage” must keep abreast with the digital age. Furthermore, the transitory nature of the memory in RAM is more complex than it first appears. On the one hand, the information that is stored can be wiped out in a second. On the other, it is possible that it may remain stored in RAM for the life of the computer. To hold that RAM is not a form of storage would be to thwart the legislature’s intention.
The second issue concerns the requirement in the definition of “material form” that the storage be of a kind from which the work, or substantial part of the work, “can be reproduced”. There is no dispute that with appropriate equipment, the work can be reproduced. The question here is whether the ability to reproduce the work from storage must exist at the time the work is placed into storage (the view taken by the trial judge) or whether it is sufficient if the form of storage is of a kind from which the work is capable of being reproduced. The problem can be examined by reference to a hypothetical set of facts. Let us assume that a copyright work, an object code, is downloaded into two computers, computer A and computer B. Computer A is fitted with a device which permits the code to be reproduced immediately. Computer B does not have such a device, but the device can be fitted at any time. On the trial judge’s reasoning, downloading the object code into the RAM of computer A would constitute an infringing act, but there will be no infringement when the code is downloaded into computer B. In my view, there is no principled justification for this differential treatment. If desired, the work can be reproduced in both computers. Consistency demands that infringement of copyright should occur in both instances. This can be achieved without any strained reading of the words in the definition. The phrase “can be reproduced” can mean “may be able to be reproduced”. This accords with one of the ordinary meanings of the verb “can” in my edition of Webster’s dictionary. In my opinion, the context requires the word to be given that meaning.
If I were wrong, and the construction proposed by the trial judge is preferred, the requirement that storage be of a kind from which the work can be reproduced may, in any event, have been satisfied. I say, “may” have been satisfied because the issue was not pressed on appeal and does not presently need to be resolved. However, it is worth mentioning for the future. As previously indicated, one of the steps that is involved in the operation of a computer is the storage of the object code in the storage registers of the central processor. This was explained by Mr Nabarro. In an affidavit he deposed that:
“If and when the player operates the game controller, the program information stored in RAM is called on and extracted from RAM on instructions of the CPU of the console and the CPU, GPU and video RAM, using instructions from the copy of the game stored in the console’s RAM in conjunction with the instructions conveyed to it by the player’s operation of the game controller via the sub bus serial communications interface to the CPU, causes the various scenarios and outcomes to be displayed on the television screen.
For the purpose of undertaking that task, the electronic copy of the video portion of the game stored in the console’s RAM is reproduced, particularly in the video RAM. It would thus be correct to say of the code stored in the RAM that it ‘can be reproduced’, and, indeed is reproduced, particularly to the GPU and the video RAM.”
Mr Nabarro expanded on this in his oral evidence:
“Q:In your latest affidavit you’ve described what happens with the statements or instructions which I’ll perhaps refer to as game code because you use that expression which is stored on the RAM and how that interacts with the GPU and the video RAM?
A: Correct.
Q:Can you just indicate if you would or clarify what it is which occurs between firstly the game code on the RAM and the GPU and then between the GPU and the video RAM?
A:Basically after the game code has been reproduced into the main system RAM – the main system RAM basically acts like a reserve holding area and then as specific parts of that game code are required they’re called off by the central processor, the CPU and fed into the graphics processing unit. The graphics processing unit takes that game code data and manipulates it in such a way as it’s demanded by the interaction of the user and what the screen actually finally needs to look like. [S]o the game code goes through a transition during the time it spends in the graphics processing unit. It is then fed into a video random access memory system which is basically RAM as well but a faster version because the … RAM system is the main system RAM and then from the video RAM it’s fed into basically a device which converts it into signals which a TV can understand and interpret into TV images.”
…
Q:What I’m just asking about, there’s pre the GPU – I think you’ve indicated the GPU can call up or something can call?
A:The GPU can call on the data, pass it through to the GPU, the GPU then processes it.
Q:The data which is called upon and passed to the GPU at the interface with the GPU before it’s been processed, how does it compare in appearance to what’s on the RAM?
A:It’s effectively the same.
Q:When you say appearance what are we talking about here; can you actually see something, can the human eye see anything?
A:You can on a digital analysing oscilloscope for example. If you could capture, you can capture [ ] visually using the correct equipment, laboratory equipment, what you see leaving the system, RAM is what you see entering the ---
Q:And what do you see when you look through this instrument?
A:You see a set of analysis spikes and troughs of digital 1s and zeros and you capture at an extremely fast rate and you can actually freeze at any one point in time and visually see that and print it up.”
The trial judge criticised the evidence. He said that it was not clear what Mr Nabarro meant by the word “reproduce”. He also said that Mr Nabarro “apparently assumed that what was transmitted to the GPU could be regarded as a ‘reproduction’ even though there was no evidence that it was stored for any discernible period of time.” I note that it had been conceded by counsel that reproduction in the GPU would not last for more than perhaps one hundred thousandth of a second. It is unnecessary to determine whether the judge’s criticism is well-founded. Nevertheless, it seems to me that Mr Nabarro’s evidence is uncontroversial, and may establish the necessary reproduction when the object code is transferred to the GPU.
This brings me to the final ground of appeal. Sony contends that each PlayStation game embodies a cinematograph film and that a substantial part of the film is reproduced when it is downloaded into the RAM. Accordingly, Sony’s technological protection device prevents a copy of the film being made in RAM whenever the PlayStation is turned on and it is this protection measure that is being circumvented by Mr Stevens’s circumvention device.
The first premise on which this argument is based is that a cinematograph film (as defined) can be embodied in a computer program. The premise conforms with the decision of the Full Court in Galaxy Electronics Pty Limited vSega Enterprise Limited (1997) 75 FCR 8 (Galaxy v Sega). The trial judge in this case said (at [157]) that he was only “prepared to assume that the reasoning in Galaxy Electronics v Sega Enterprise applies to the PlayStation games, … [because he was] not entirely sure that the evidence, as distinct from commonsense and intuition, establishes the factual basis for this conclusion.”
With great respect, I believe that the judge underestimated the effect of the evidence. Simple observation and deduction indicates that visual images and an aggregate of sounds are embodied in a PlayStation game and that when the game is played in the PlayStation console, the visual images are shown as a moving picture. PlayStation games and a PlayStation console were tendered in evidence in the original proceeding where there was a demonstration of their use. In my opinion, the present facts are similar to those in Galaxy v Sega. There the Full Court held that the aggregate of visual images generated at the playing of a Sega video game constituted a cinematograph film for the purposes of s 10(1).
Sony, however, failed on this aspect of the case before the trial judge for two reasons. First, because the judge was not satisfied that a “copy” of its cinematograph film had come into existence when the contents of a PlayStation game was stored in RAM. The second reason was that Sony could not show “that the data reproduced in the RAM of the PlayStation console constitutes a copy of a substantial part of the ‘aggregate of visual images’ constituting the cinematograph film.” In both respects the judge relied upon, and applied AVRA v Warner.
The first reason raises what, to my mind, is a very difficult issue. For there to be a copy of a cinematograph film there must be an “article or thing in which the visual images or sounds comprising the film are embodied”: s 10(1). The sounds or visual images will be taken to have been “embodied” in the article or thing “if the article or thing has been so treated in relation to those sounds or visual images that those sounds or visual images are capable, with or without the aid of some other device, of being reproduced from the article or thing”: s 24. Lindgren J says that “s 24 was framed with an article or thing such as celluloid or magnetic tape in mind”. He goes on to say that “s 24 requires one to consider the RAM as an article or thing existing outside and independently of the console, and to ask whether it has ‘been [previously] treated’” so that images which are stored within the RAM are capable of being reproduced. Lindgren J believes that the answer to this is in the negative.
Although there is great force in both the position taken by Lindgren J and the reasons which support his conclusions, in the end I have come to a different view. I have done so because I believe that the Copyright Act (and many other statutes as well) should not be given a meaning that is frozen in time but should be interpreted in a way that takes into account technological advances, provided that the interpretation is consistent with its purpose. I accept that the original meaning of the expression “an article or thing” contained in s 24 was as Lindgren J described it; however, this does not mean that the term’s meaning is static. R Dickerson, in his text, The Interpretation and Application of Statutes (1975) said (at 128) that:
“The connotations of words define their meanings, whereas their denotations consist merely of specific instances falling within those meanings. Consequently, changes in connotation are changes in meaning, but changes in denotation are not. Freezing the former does not freeze the latter.”
Therefore, while it is necessary to accept that the connotation of words is fixed at the time of the enactment of a statute, their denotation can change. Indeed, a word’s denotation may often be required to change to enable the statute to accommodate things unknown at the time of its enactment. In Gambart v Ball (1863) 143 ER 463, for example, it was held that the Engraving Copyright Act 1734 (UK), which prohibited unauthorised engraving, etching or “in any other manner” copying prints and engravings, applied to photographic reproduction, even though the process was invented more than 100 years after the Act was passed. Erle CJ (at 468) said that he saw “no reason why these very wide and general words should not be construed according to their plain and ordinary meaning, and be held to apply to any mode of copying known at that time and too such modes of multiplying copies as the ingenuity of man may from time to time discover”. Adopting this approach, I am of opinion that the phrase “an article or thing” should be subject to an interpretation that is broad or, as some might say, “open-textured”. On this approach RAM (which is a device for storage) may be regarded as a “thing”. It is no less a “thing” than some other “thing” which exists as a separate or distinct entity with its own individual qualities such as a piece of equipment or as something which may, in a sense, be possessed or owned. Further on this aspect, I note that it is not in dispute that sounds and images which are stored in RAM are capable of being reproduced.

An examination of the second reason must commence with AVRA v Warner. That case was concerned with the reproduction of cinematograph film embodied in a DVD disc. Emmett J, the trial judge said (at 338) that it was “… common ground that, in the case of the storage in RAM of the audio, video and caption content of a DVD, only a tiny fraction of the motion picture is stored at any one time.” Emmett J further held that simply because tiny parts of a cinematograph film were consequentially stored in the DVD player, did not mean that the film was embodied in the DVD. Indeed, he held that no part of the cinematograph film was embodied in the RAM.
I will assume, without deciding, that the analysis in AVRA v Warner is correct. It will only be correct, however, on the special facts of that case which were that “tiny fractions” of the film were reproduced in the RAM and that these “tiny fractions” could not be characterised as a substantial part of the film embodied in the DVD disc.
AVRA v Warner can be distinguished from this case. According to Mr Nabarro, depending on the particular game being considered, somewhere between 5 per cent and 15 per cent of the object code in a CD is downloaded in the RAM at any one time. During the hearing of the appeal there was a demonstration of two games, one entitled Motor Racer World Tour and the other Medieval. The Motor Racer game involved a player “riding” a motor bike in races against other motor bikes. The races take place at a number of reconstructions of world famous racing circuits. The demonstration was confined to one particular circuit. If the game is played in its entirety, the race occupies three laps of the circuit. However, as only a portion of the race could be stored in RAM at any one time, only one lap of the circuit is shown when the content of the RAM is kept static. Although, in that circumstance, the player can race over only one lap, he can do so indefinitely or until a power interruption.
The judge said that “[i]n the absence of clearer and more detailed evidence as to the nature and quality of the images embodied in the instructions stored in the RAM, accessed in relation to the totality of ‘the aggregate of visual images’ constituting the cinematograph film,” he could not conclude that “‘the ephemeral embodiment’ of a small proportion of images in the RAM [constituted] the act of making a copy of the cinematograph film for the purposes of s 86(a) of the Copyright Act.”
I have reached a different conclusion for two reasons. First, the question whether a substantial part of the copyright had been reproduced did not require detailed evidence. In particular, it did not require oral evidence from a witness to describe the relevant technology and, perhaps, express an opinion on the issue of substantiality. In many instances, of which this case is a good example, the judge can make an assessment whether a substantial part of the copyright has been taken by making a simple visual comparison between the copyright work and the allegedly infringing work. Secondly, I do not accept that the judge was confined in his consideration of the issue to what he observed during the demonstration. He had available to him the disks and a PlayStation console and, if necessary, he could have personally played the games in order to assess the nature and the quality of the images stored in the RAM when compared to the totality of the visual images comprising the film.
If necessary, this task can be undertaken by a Full Court. Indeed, an “appellate court is obliged to conduct a real review of the trial” and appellate judges must weigh the evidence and draw their own inferences and conclusions from that evidence, especially when, as in this case, they are in as good a position as the trial judge to determine the facts: Fox v Percy (2003) 77 ALJR 989, 994 per Gleeson CJ, Gummow and Kirby JJ. If that requires an appellate court to consider the totality of the evidence in a particular case, then this is what must occur.
It is not, however, necessary to view the CDs in their entirety in order to determine whether the portion of the cinematograph film stored at any one time in the RAM is a substantial part of the film embodied in the CD. In saying this, I acknowledge that there seems to be uncertainty as to the appropriate test that is to be applied in deciding whether there has been a taking of a substantial part of the copyright in a cinematograph film. There is some suggestion there may be a distinct test in the case of a work which is not original. For example, in Nationwide NewsPty Ltd v Copyright Agency Limited (1996) 65 FCR 399, 418 Sackville J (with whom Jenkinson and Burchett JJ agreed), suggests that, “[i]n relation to a published edition, the quality of what is taken must be assessed by reference to the interest protected by the copyright”. This echoes the doctrine of fair use in the United States. In that country, the common law position for many years was that certain infringing uses were “fair” and could thus not be the subject of action. The doctrine can be traced back to the comments of Storey J in Folsom v Marsh 9 Fed Cas 342, 348 (Mass 1841): “In short, we must often, in deciding questions of this sort, look to the nature and objects of the selections made, the quantity and value of the materials used, and the degree in which the use may prejudice the sale, or diminish the profits, or supersede the objects, of the original work.” The doctrine was codified in 17 USC § 107. This section identifies a number of purposes which may amount to fair use. In particular, the section states that the factors that a court must consider in determining whether “use made of a work in any particular case is a fair use include”: “(1) [t]he purpose and character of the use, including whether such use is of a commercial nature or is for non-profit educational purposes; (2) [t]he nature of the copyrighted work; (3) [t]he amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) [t]he effect of the use upon the potential market for or value of the copyrighted work.” It is difficult to state definitively whether the doctrine of fair use simply means that there is an insubstantial similarity between the plaintiff’s work and the allegedly infringing work or whether it operates on the assumption that there is a copyright infringement but provides for a defence in the case of a particular purpose. The general consensus is that the latter view is correct: 4 Nimmer on Copyright § 13.03A(2); Goldstein, Copyright, 2^nd edn, § 10.1. Prior to the Copyright Act 1911 (UK) there was a substantial body of English case law which had developed an analogous doctrine of fair use. The earliest case seems to be Gyles v Wilcox (1740) 26 ER 489. Now of course the common law doctrine has been overtaken by statute. The Copyright Acts of both England and Australia specify the particular uses which are regarded as fair, and do not constitute an infringement of copyright. In Australia these include ss 103A (criticism or review), 103B (reporting news) and 103C (research or study). For this reason, I am of opinion that the criteria which would ordinarily be considered in determining whether there has been a fair use of the copyright has a limited role in determining whether there is substantial similarity between the copyright and the allegedly infringing work. Rather, the correct test in my opinion requires a comparison of the quantitative and qualitative aspects of the copyright work and the alleged infringing work. For example, in New Boston Television Inc v Entertainment Sports Programming Network Inc 215 USPQ 755 (1981) the defendants copied highlights of the plaintiff’s sport’s game broadcast. When sued for copyright infringement, the defendant asserted that the use was de minimus because it amounted to no more than two minutes of a long broadcast. District Judge Zobel of the US District Court for the District of Massachusetts found against the defendant. Judge Zobel said (at 757) that although the defendants broadcast a short segment from the plaintiff’s film, “it is the quality of the use rather than its quantity which is determinative”. He found (at 757) that “the excerpts used by defendants in this case, although of relatively short duration, are the ‘highlights’ of each broadcast and as such their use may be considered substantial”. This accords with the statement in Laddie, Prescott and Vitoria, The Modern Law of Copyright and Designs, 3^rd edn (2000) at par 8.37 “…that anything which is not de minimus should be regarded as substantial”. It is the test which should be applied in this appeal. When this test is applied to the facts in this case, it is beyond question that that which would have been taken is more than de minimus.
I agree in the order proposed by Lindgren J.

I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.
Associate:
Dated: 30 July 2003

Counsel for the Appellants: D K Catterns QC and R Cobden

Solicitor for the Appellants: Blake Dawson Waldron

Counsel for the Respondent: J Nicholas SC and C Dimitriadis

Solicitor for the Respondent:
Gadens Lawyers

Counsel for the Australian Competition and Consumer Commission:
M Walton SC and M S White

Solicitor for the Australian Competition and Consumer Commission:
Australian Government Solicitor

Dates of Hearing: 24 and 25 February 2003

Date of Judgment: 30 July 2003
[k1]
[k2]

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY			N 929 OF 2002
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:	KABUSHIKI KAISHA SONY COMPUTER ENTERTAINMENT FIRST APPELLANT SONY COMPUTER ENTERTAINMENT EUROPE LIMITED SECOND APPELLANT SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LTD (ACN 077 583 183) THIRD APPELLANT
AND:	EDDY STEVENS RESPONDENT
JUDGES:		FRENCH, LINDGREN AND FINKELSTEIN
DATE OF ORDER:		30 JULY 2003
WHERE MADE:		SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY		N 929 OF 2002
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:	KABUSHIKI KAISHA SONY COMPUTER ENTERTAINMENT FIRST APPELLANT SONY COMPUTER ENTERTAINMENT EUROPE LIMITED SECOND APPELLANT SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LTD (ACN 077 583 183) THIRD APPELLANT
AND:	EDDY STEVENS RESPONDENT
JUDGES:	FRENCH, LINDGREN AND FINKELSTEIN JJ
DATE:	30 JULY 2003
PLACE:	SYDNEY

Counsel for the Appellants:	D K Catterns QC and R Cobden
Solicitor for the Appellants:	Blake Dawson Waldron
Counsel for the Respondent:	J Nicholas SC and C Dimitriadis
Solicitor for the Respondent:	Gadens Lawyers
Counsel for the Australian Competition and Consumer Commission:	M Walton SC and M S White
Solicitor for the Australian Competition and Consumer Commission:	Australian Government Solicitor
Dates of Hearing:	24 and 25 February 2003
Date of Judgment:	30 July 2003