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Police v Island Rock Co. Ltd [2011] WSSC 3 (24 January 2011)

IN THE SUPREME COURT OF SAMOA
HELD AT MULINU'U

BETWEEN:

POLICE
Prosecution

AND

ISLAND ROCK CO. LTD of Togafuafua.
Defendant

Counsel: L Taimalelagi for prosecution
L R Schuster for defendant

Sentence: 24 January 2011

SENTENCE BY SAPOLU CJ

The charges

1. This is another case of a police prosecution for copyright infringement. It came before the Court at the same time as the police prosecution for copyright infringement in Police v Romeo Ah Chong (sentence passed on 20 January 2011). It involves 6 charges of copyright infringement by way of sale of copyright audiovisual works, namely, digital video disks (DVDs) of movies, without the authorisation of the copyright owners. In terms of s.27 (1) of the Act, the maximum penalty for each charge is a fine not exceeding 250 penalty units, which appears from the prosecution's summary of facts to be equivalent to $25,000, or a maximum term of imprisonment not exceeding 5 years, or both.
   
2. The defendant, which is a company, had initially entered a not guilty plea to all the charges against it. However, on the morning of the trial the prosecution withdrew quite a number of those charges. In consequence, the defendant vacated its not guilty plea and entered a plea of guilty to the 6 remaining charges. It is on those remaining charges that the defendant is to be sentenced today.
   

The relevant provisions of the Copyright Act 1998

3. The relevant provisions of the Copyright Act 1998 for present purposes are ss. 2,3,6,27, and 33.
   
4. The term "audiovisual work" is defined in s.2 of the Act as follows:
   

" 'Audiovisual work' means a work that consists of a series of related images which impart the impression of motion, with or without accompanying sounds, susceptible of being made visible, and where accompanied by sounds, susceptible of being made audible"

5. A film or movie consists of a series of visible images of a motion picture. It is a motion picture. When it is accompanied by sounds, it is susceptible of being made audible. It follows that a digital video disk (DVD) of a movie would be an "audiovisual work" in terms of the definition of that term in s.2.
   
6. Section 3 of the Act then provides a list of the literary and artistic works which are protected under the Act. These protected works include audiovisual works. However, s.3 does not classify which works are "literary works" and which works are "artistic works". It is also questionable whether it is appropriate to classify audiovisual works which include films and videos as literary works or artistic works. I simply wish to note these points concerning s.3 but I do not need to explore them here.
   
7. Section 6(1) of the Act gives the "owner of copyright", as that term is defined in s.2, certain exclusive economic rights. In terms of s.6(1) (d), these exclusive economic rights of the owner of copyright include the exclusive right to carry out or authorise the first public distribution of the original and each copy of a work by way of sale. It is this economic right of the owner of copyright that is alleged by the prosecution to have been infringed by the defendant.
   
8. Section 27(1) of the Act then provides:
   

"(1) Any infringement of a copyright under this Act, if committed willfully or by gross negligence and for profit-making purposes, shall be punished by a maximum fine of not exceeding 250 penalty units where the offence involves the breach of copyright relating to a computer or computer program, and in every other case, or to imprisonment for a term not exceeding five years or both. The amount of the fine shall be fixed by the Court, taking into particular account the defendant's profits attributable to the infringement".

9. Section 27(3) then empowers the Court to apply in criminal proceedings the measures and remedies referred to in ss. 25 and 26 if no decision has been taken on such remedies in a civil proceeding.
   
10. Section 33 of the Act which applies the provisions of an international treaty on copyright to which Samoa is a party, to Samoan domestic law provides:
    

"The provisions of any international treaties in respect of copyright and related rights to which Samoa is a party shall apply to matters dealt with in this Act and, in the case of conflict with provisions of this Act, shall prevail over the latter".

11. Pursuant to s.33, counsel for the prosecution cited Article 5 of the Berne Convention for the Protection of Literary and Artistic Works 1886 ("Berne Convention"). Article 2 of the Berne Convention defines the expression "literary and artistic works" to include cinematographic works.
    
12. The Berne Convention implements the world's copyright laws and governs and regulates copyright at an international level. Counsel for the prosecution informed the Court that Samoa is already a signatory to the Berne Convention so that in terms of s.33 of the Copyright Act 1998 the Convention applies to Samoa. I do not, however, see any conflict between the copyright protection provided in the provisions of the Copyright Act 1998 already referred to and the provisions of Article 5 of the Convention cited by counsel for the prosecution. Nonetheless, it is helpful to know that Samoa has become a signatory to the Berne Convention because of s.33 which provides that an international treaty on copyright to which Samoa is a party applies to matters dealt with in the Copyright Act 1998 and in the event of a conflict the provisions of the international treaty shall prevail over the provisions of the Act.
    
13. Before leaving the relevant provisions of the Act, I wish to point out that the Act does not provide a definition of "copyright" even though it deals with copyright.
    

Justifications for copyright protection

14. A copyright is a property right. It is an intangible right. Under copyright legislations generally, the owner of copyright is given economic rights and moral rights. This is also the case under our Copyright Act 1998 which provides the owner of copyright with economic rights under s.6 and moral rights under s.7.
    
15. In an article entitled "Technological Protection Measures and Fair Dealing: Maintaining the Balance Between Copyright Protection and the Right to Access Information [2003] DTLJ 1 by E Dellit and C N Kendall, the learned authors have this to say about the justifications for copyright protection:
    

"Rationales for Copyright Protection

"25. Broadly, there are two types of argument for copyright protection – moral and economic. Moral justifications include the need to reward labour, the author's right to control what she or he has created and the need to discourage theft of property. Economic justifications include the need to provide an incentive to create new works and the need to remunerate for the cost of creating them.

"Moral justifications

"26. One of the main purposes of copyright law is to give the authors the reward due to them for their contribution to society: Copyright For the Nineties (1989) 3rd ed at 14 by A Latman et al. It is long established that authors should be entitled to the fruit of their labours: S Breyer, The uneasy case for copyright: a study of copyright in books, photocopies and computer programs (1970) 84 Harvard Law Review 281 at 284 – 91. Similarly, authors should be entitled to control the use of their works. This is consistent with the notion of copyright as property. Just as owners of physical property are able to sell it or grant a license over it, so should owners of intellectual property be able to do so.

"27. Sterling [in World Copyright Law (1999) at 43] suggests that another reason why authors should be able to control use is because the author's own creations are associated with the author's personality. This idea has significantly influenced the copyright laws of civil countries. It is also the foundation of moral rights laws, which are a fundamental aspect of the copyright law in civil law countries, but were introduced into common law countries at a much later stage. Moral rights protect the author's right to be known as the author of the work, not to have any work falsely attributed to her or him, and not to have the work subject to derogatory treatment.

"Economic Justifications

33. The main economic justification for copyright protection is that which is referred to as the 'incentive argument', explained by Sterling as follows"
    

"Creation of works involves investment of time, patience, skills, creative endeavour and money. Such investment should be protected. If it is not protected, the author loses the incentive to undertake the project. Production of works benefits society. Consequently it is necessary to give authors the incentive to carry on their work by providing, through copyright, the means to ensure their livelihood": World Copyright Law (1999) at 57.

"34. Clearly, if there were no copyright laws, authors would be unable to recoup their costs because anyone would be able to freely copy their work without having to remunerate the author. For example, the first purchaser of a book could produce multiple copies of the book and sell them at a lower price than the author because they would only need to cover the cost of printing the book. The authors would then be discouraged from investing their time and resources in the production of work. As Ricketson explains, 'copyright is a defence against large-scale free-riders who wish to benefit from the creation and distribution of intellectual works of authorship without bearing a share of the underlying costs of authorship: S Ricketson and M Richardson, Interllectual Property: Cases and Commentary (1998) 2nd ed at 72.

35. Now that copying technology has reached the stage where it is impossible in many cases to distinguish between an authorised and an unauthorised reproduction, it is even more important that authors be provided with sufficient incentive to create new works. Copying technology is becoming increasingly more available and has substantially dropped in price. In that regard, copyright law is necessary to prevent 'free-riders' from copying music CDs, for example, and selling them cheaply so that they cut into the profits of those who own copyright in the music (presumably the recording companies and artists)".
    

"The Public Interest

"37. In some ways, copyright laws may be seen to be in the public interest. Indeed, one of the important aims of copyright law is the encouragement of learning and the promotion of culture: J A Sterling, World Copyright Law (1999) at 43. Copyright encourages authors to create works and release them to the public. This further allows us to build upon the ideas and information available to the public and contributes to the development of culture: J A Sterling, World Copyright Law (1999) at 58. Copyright laws also promote the economy by providing economic incentives and benefits to copyright owners. Obviously the public benefits from a society with more information, a more intellectually vibrant culture and a stronger economy".

16. In R v Houston (2006) (CRI 2004 – 92 – 14030; judgment of the New Zealand District Court at Manukau delivered on 25 August 1960) cited by counsel for the prosecution, Harvey DCJ said at paras [14] and [15]:
    

"[14] There is a significant community interest as far as copyright infringement is concerned. Our copyright regime is set up to protect those who as a result of their initiative and innovation produce products which other people can enjoy. The onset of the digital age means that copying items when they are produced in digital format like DVDs is very, very easy indeed...

"[15] The artists, the actors, the producers, the authors, the composers, all provide material for the benefit of the community both for enjoyment, and more importantly, for cultural advancement. Underlying copyright is a very heavy element of cultural protection and cultural development. Those who involve themselves in copyright infringement matters of that nature prejudice not only the makers of the product, the authors, the movie makers, the artists, the bands, the record companies, but they also prejudice the greater community because what happens as a result of the piracy is that prices must increase, access to material becomes difficult and of course the desire of authors and innovators to engage in creative activity becomes lessened if they feel that people are going to be ripping them off".

17. In the Australian copyright infringement case of Vu v New South Wales Police Service [2007] FCA 1508, Rares J says at paras 33 and 34:
    

"33. One purpose of providing copyright protection to those who own or have the right to licence copyright material is to enable that person to exploit an exclusive legal right to earn a return from it. That right among other things, enables authors or the creators of original works such as films or other entertainments to receive royalties. Copyright protects their intellectual property from being appropriated and sold by persons who have no legal right to use or exploit it. In particular the protection of the copyright owner's rights which the [Copyright] Act creates is intended to prevent strangers using the copyright material without providing any recognition or return to those who created it or did the work to produce it.

"34. In a colloquial, but real, sense, to counterfeit, sell or hire DVDs is equivalent to stealing the author's, creator's or owner's work which is contained in the reproduction..."

The facts

18. According to the proseuction's summary of facts, the defendant company operates a video shop at Togafu'afu'a. On Wednesday evening 22 August 2007, the police executed a search warrant on the defendant's premises following reports of DVD piracy. The word "pirate" was coined in 1706 by Daniel Defoe the author of the famous novel Robinson Crusoe and by the author Joseph Addison to refer to those people who benefited from wrongful commercial interference with their works: R v Houston (2006) (CRI 2004 – 92-1040; judgment of the New Zealand District Court at Manukau by Harvey DCJ) at para [1]. The term "piracy" is used in the context of copyrights to refer to dealing in commercial copyright infringement: R v Houston (supra) at para [2].
    
19. From the DVD copies seized by the police from the defendant's video shop, it was discovered that six of those DVDs were infringing copies of various movie titles which were reproduced and sold by the defendant to members of the public at $10 each without the authorisation of the owners of the copyrights in the movies. The owners of the copyrights in the said movies are Paramount Pictures NZ Ltd, Twentieth Century Fox Corporation, and Roadshow Films Ltd. The infringing DVD copies were of the movies "300", "Transformers", "Ocean 13", "Harry Potter", and "Die Hard 4". The unauthorised sales took place from 27 March 2007 to 14 August 2007 which was before the official release dates of the said movies.
    
20. Counsel for the defendant conceded that the six infringing DVD copies for which the defendant is charged and is appearing for sentence were sold at $10 each and the total revenue earned by the defendant from the sale of those DVDs was $60. According to counsel for the defendant, that is also the total profit made by the defendant from those unauthorised sales.
    

Aggravating factors

21. This is a case of commercial infringement of copyright. The infringing DVDs were reproduced in the defendant's video shop and sold to members of the public from the same premises. The reproduction of the infringing DVDs is a process that requires a high level of sophistication so that this operation must have involved a high degree of premeditation.
    
22. Copyright infringement also involves dishonesty. It is analogous to theft. In the case of R v Houston (2006) (CRI 2004 – 92 – 14030; judgment of the New Zealand District Court at Manukau), Harvey DCJ at para 29 describes copyright infringement of a movie as "film theft". In R v Carter (1992) 13 Cr App R (S) 576, the English Court of Appeal, Criminal Division, said at p.577:
    

"[To] make and distribute pirate copies of films is to steal from the true owner of the copyright, the property for which he has to expend money in order to possess it. It is an offence really of dishonesty".

23. In R v Duckett [2009] EWCA Crim 88; [1998] 2 Cr App R (S) 59 at p.60, the English Court of Appeal, Criminal Division, said:
    

"Infringement of copyright is widespread. It does, in an ethical sense, involve stealing other men's property"

24. Even though the total amount of profit derived from the sale of pirated DVDs in this case is modest, it is the motive for unlawful profit at the expense of the owner of copyright, the high degree of premeditation involved in this type of offending, and the actual and potential impact which may follow that make this type of offending very serious. If the defendant had purchased the pirated material legitimately, it would have cost it a lot more money. But that was deliberately avoided by pirating the infringing material and selling it at a cheap price in order to increase profit. In other words, the defendant had deliberately and unlawfully reaped the fruits of other people's labour.
    
25. The detrimental impact of the present offending on its immediate victim the Magik Cinemas Ltd, the complainant in this matter and which seems to be the authorised local distributor for the copyright owners of the pirated movies, is also to be taken into account.
    

Mitigating factors

26. The defendant's plea of guilty to the charges, though belated, is a mitigating factor. I say this because the number of charges against the defendant that were withdrawn suggests that it might have pleaded guilty earlier if those charges had been withdrawn earlier than the morning the trial was to start.
    
27. The defendant is also a first offender.
    

The decision

28. Prior to Police v Romeo Ah Chong (sentence passed on 20 January 2011) and this case, there had been only one prosecution under the Copyright Act 1998. That was in the case of Police v Falevalu [2007] WSSC 63 which was concerned with the copyright infringement of a musical work that involved the unauthorised reproduction and sale of compact disks (CDs). So there is very little guidance as to sentencing in this area of Samoan law. Some assistance is given by the prosecution seeking a monetary fine.
    
29. Given the aggravating and mitigating factors in this case and bearing in mind that the defendant is a company, I am of the opinion that a monetary fine is appropriate. In saying so, I have not overlooked the very serious nature of this type of offending which is also reflected in the high maximum penalties of $25,000 fine or 5 years imprisonment or both provided by Parliament. I have also not overlooked the extent of the offending and the fact that it covered a period of about 5 months from 27 March to 14 August 2007.
    
30. I also have to bear in mind the need for special deterrence so that the offender will be deterred from re-offending as well as the need for general deterrence so that potential offenders will be deterred from being tempted to commit copyright infringement.
    
31. I also have to take into account the total gravity of the offending. This is not a case of one but six separate charges of copyright infringement over a period of about 5 months. Applying the totality principle, I impose the same fine of $2,500.00 as I did in Police v Romeo Ah Chong (supra) which has mitigating factors not relevant to the present defendant which is a company. This fine is to be paid in four weeks. The infringing DVDs as well as any burner or software tools used in the commission of these offences and were seized by the police are to be destroyed.
    
32. Finally, I want to thank counsel for the prosecution for producing the decision in R v Houston by Harvey DCJ and the other sentencing decisions on copyright infringement by the same Judge. I have found those decisions very helpful.
    

CHIEF JUSTICE

Solicitor
Attorney General's Office, Apia for prosecution
Schuster Law Firm for defendant