Judge rules no copyright issue but fraud valid for extradition in Dotcom case

A judge has ruled in favour if Kim Dotcom on there being no equivalent “copyright” crime in New Zealand, but also ruled that Dotcom could be extradited on fraud charges.

NZH: Kim Dotcom legal saga: Extradition to US over Megaupload still on cards but he claims court ruling is a ‘major victory’

This latest legal milestone is this afternoon’s ruling from Justice Murray Gilbert who had been asked to overturn a decision that Dotcom was eligible for extradition to face criminal charges in the United States.

After five months of deliberation, Gilbert found that Dotcom remained eligible for extradition to the US – but not on copyright charges.

The judge found in favour of arguments put by Dotcom’s legal team, led by Ron Mansfield, that there was no equivalent “copyright” crime in New Zealand that would activate the extradition treaty.

However, the ruling also saw Justice Gilbert finding in favour of the US argument that Dotcom – and his three co-accused – could be extradited because it was at essence a “fraud” case and there was such a crime in the extradition treaty.

Dotcom, Mathias Ortmann, Bram van der Kolk and Finn Batato face decades in a US prison after a 2012 raid brought down the Megaupload file-sharing super-site Megaupload they set up and ran.

In an interview with the Herald, Dotcom said the ruling was a “major victory” because it ruled that there was no New Zealand equivalent to the US criminal charges of copyright violation.

“The major part of this litigation has been won by this judgment – that copyright is not extraditable.

It may be a major battle win, but the war against extradition could still be lost.

The ruling today has created an unusual bureaucratic contradiction – the warrant which was served on Dotcom when he was arrested on January 20, 2012, stated he was being charged with “copyright” offences.

Likewise, the charges Dotcom will face in the US are founded in an alleged act of criminal copyright violation.

Mansfield also claimed victory, saying the case was no longer the “largest criminal copyright case”.

“As we have said all along, there is no such offence under our Copyright Act. We were right.

“To win the major plank of the case but to get that outcome is extremely disappointing. It is hard to accept the logic that, if the conduct that all accept at its heart relates to assertions of breach of copyright … how it can nonetheless be massaged into a general fraud offence.”

Lawyers acting for the US began referring to the case as one of “fraud” after months of hearings.

By the time of the extradition hearing in late 2015, it was a main plank of the case with the lawyer acting for the US, Christine Gordon QC, telling Judge Nevin Dawson: “When distractions are stripped away, the evidence boils down to a central scheme of fraud. The scale of that fraud and the way it was conducted might indeed be novel. This is mainly as a result of the reach of the internet and the behaviour of mass audiences.

“Yet the dishonesty at the core of Megaupload’s operation can be expressed in straight-forward terms. The basic features do not differ significantly from earlier cases of fraud against copyright owners.

“The respondents were part of a conspiracy. They deliberately attracted copyright infringing material to their website. They deliberately preserved it, deliberately took steps to profit from that material and made vast sums of money which they applied to various purposes knowing it had been unlawfully acquired.”

Both sides are expected to challenge aspects of the ruling before the Court of Appeal – and eventually the Supreme Court, if it accepts the case.

If the Supreme Court upholds the decisions of the District and High Court, the Minister of Justice is then able to sign the extradition order – which itself can be challenged in the courts.

On that basis, there are at least two years of Dotcom hearings yet to run.

It was five years ago, in 2012, that Dotcom and his associates were arrested in an over the top raid on his ‘mansion’.

 

Eight Mile Style v National Party

A summary of the copyright case Eight Mile Style v National Party was released today.

The Court found Eight Mile Style is entitled to damages on a “user principle” basis in the
sum of NZ$600,000, with interest, from 28 June 2014.

The National party have indicted they will make a claim against the supplier of the music they used.


What the case is about

The key issue for determination by the Court was whether a “sound-alike” production track, called Eminem Esque, used by the National Party in its 2014 election campaign advertising, is sufficiently similar to the 2002 music of Eminem’s hit song, Lose Yourself, so as to constitute a breach of copyright.

Lose Yourself was composed by Marshall Mathers III (Eminem), Jeffrey Bass and Luis Resto (all called Eight Mile Style) in 2002. The composition is regarded by Eight Mile Style as the most valuable work in their catalogue and has only rarely been licensed for use, and never as part of a political campaign.

Eight Mile Style, who own the copyright in Lose Yourself, sought damages against the
National Party after Eminem Esque featured in Party advertisements played on television, the internet and at a Party conference in the lead up to the 2014 election. Between 20 to 30 August 2014, the advertisements, with Eminem Esque synchronised to them, were played 186 times on New Zealand television. Eminem Esque was also played eight times during a 15 minute opening broadcast on TV1, occurring on 23 August 2014.

This proceeding is being heard in two parts. The first, a hearing to determine the liability of the National Party and the quantum of damages, if any, was held in the High Court at
Wellington over eight days between 1 May and 12 May 2017. The second part concerns a
separate hearing to determine third party liability, if any.

This decision deals with the first hearing only, namely, the issues of liability and quantum against the National Party as the alleged publishers of the infringing work. The third-party liability hearing awaits the outcome of this trial.

The Court’s key rulings

Is Lose Yourself an original work capable of protection under the Act and were the
elements of Lose Yourself referenced in Eminem Esque also original?

The Court found that copyright does subsist in the musical work Lose Yourself as it meets the definition and low threshold of being an original work under the Act.

Although Lose Yourself met the low threshold of an original work under the Act, the Court was also required to determine how original the work is and whether there are features in the work that are not original. To establish infringement, there must be substantial copying of the original parts of the work. Any copying of a part of the work, which by itself has no originality, will not normally be protected.

Cull J found Lose Yourself also met the higher threshold of an original work in the case law. Her Honour concluded:

[154] The distinctive sound of Lose Yourself is not limited by a “melodic” line, but is a
combination of the other instruments, particularly the guitar riff, the timbre, the strong hypnotic rhythm and the recurring violin instrumentation and the piano figure. It is no coincidence that Lose Yourself received the 2003 Academy Award for Best Original Song. I find that Lose Yourself is a highly original work.

Was there copying of Lose Yourself?

The Court found Eminem Esque was a copy of Lose Yourself for three reasons.

First, Cull J determined Eminem Esque has substantially copied Lose Yourself. The
differences between the two works are minimal; the close similarities and the indiscernible differences in drum beat, the “melodic line” and the piano figures, make Eminem Esque strikingly similar to Lose Yourself. Eminem Esque substantially reproduces the essence of Lose Yourself. The parts of Eminem Esque used in the National Party’s campaign advertisements also substantially reproduce Lose Yourself.

Second, Eminem Esque is objectively similar to Lose Yourself as there are minimal
discernible differences. The inquiry into objective similarity is a test of hearing and ear recognition; Eminem Esque sounds like a copy and is a copy of Lose Yourself. Eminem Esque was designed to “sound like” Eminem and Lose Yourself as production music and a sound-alike track.

Finally, there is a causal connection between Lose Yourself and Eminem Esque. It was no
coincidence that the works sounded the same and the undeniable inference to be drawn from the evidence is that the composer of Eminem Esque had Lose Yourself in front of him at the time of composition. The similarities between the works overwhelmingly support a finding of copying. The original title Eminem_abbr; the title of Eminem Esque; and the fact that Eminem Esque is a sound-alike track, reinforces the finding that there is a causal connection between the two works, supporting a finding of copying.

Did the copying constitute a breach of the Act?

The Court found the National Party committed three restricted acts amounting to copyright infringement.

The National Party communicated a copy of Lose Yourself to the public without licence;
authorised the copying of Lose Yourself; and authorised the use and/or deployment of the relevant advertisements and opening broadcast.

Was Eight Mile Style entitled to damages?

The Court found Eight Mile Style is entitled to damages on a “user principle” basis in the
sum of NZ$600,000, with interest, from 28 June 2014.

This sum was determined under the user principle, being the hypothetical licence fee that would reasonably have been charged for permission to use a copy of Lose Yourself in the National Party’s campaign advertising.

The relevant factors considered in assessing this hypothetical licence fee included that Eight Mile Style have retained exclusive control of licensing and rarely grant permission to use Lose Yourself in advertising; the purpose for use in the present case was political use in an unassociated country, which is not what Eminem or Eight Mile Style would endorse; the use was confined over 11 days, with 186 television viewings, as well as being uploaded to the internet; and the National Party wanted the sound of Lose Yourself or an equivalent.

Although copyright infringement did occur, the National Party’s actions were taken after
receiving professional, commercial and media advice and were not reckless or contumelious of the rights of the copyright owner. No additional damages are awarded.


Media Release

This summary is provided to assist in the understanding of the Court’s judgment. It does not comprise part of the reasons for that judgment. The full judgment with reasons is the only authoritative document.

Full Judgment

This judgment of the High Court includes links to audio and video files that were adduced in evidence by the parties during the hearings. They are made available to assist in understanding the judgment. The re-use, capture, storage, re-editing or redistribution of this footage in any form is not permitted.

 

 

Craig’s poem back in court

Colin Craig is back in court this week, appealing a High Court decision that found his copyright claim on publication of a poem he wrote was vexatious.

Most media seem to have had enough of Craig in court but NZ City covers it:  Colin Craig’s poem lawsuit back in court

Judge Mary Beth Sharp threw Mr Craig’s copyright lawsuit out in December, calling it “vexatious”, “improper” and a “deception perpetrated on the court”.

On Wednesday, lawyers for Craig appealed that decision in the High Court at Auckland, saying a literary work didn’t have to reach “Tolstoy’s standards” to be protected and that there were legal arguments that still needed to be heard.

Lawyer Kevin Glover said the case shouldn’t have been thrown out over a procedural error made by Mr Craig – who failed to file a reply to a document – because he had been arguing the case for himself as a “layperson”.

“Mr Craig should have had a bit more slack cut to him,” he said.

There had been no other agenda behind the lawsuit as found by the judge, Mr Glover said, adding the decision had been “coloured” by media coverage of other legal cases Mr Craig was involved in.

“He has a legitimate claim for infringement of copyright.”

But this claim was opposed.

But Mr William’s lawyer, Peter McKnight, told Justice Mark Woolford the case could not be considered independently of Mr Craig’s numerous other legal proceedings, reading out a long list.

“He’s had his day in court. In fact, he’s had seven-and-a-half weeks,” Mr McKnight said.

And counting. But court decisions aren’t based on quotas. Slater’s  days in court must be clocking up too – most not of his choice, but he has certainly stretched out some procedures.

Mr Slater’s lawyer, Brian Henry, said Mr Craig had chosen to run the case himself and could have easily hired lawyers as he had done in past.

That’s an odd point to pick out. The item concludes:

The hearing continues.

But ‘Whaleoil staff’ state:

The judgement was entered in favour of Mr Craig, who now gets to pursue his copyright claim in a separate court case.

I have no idea why Craig continues with all his legal crusades. he seems to think that his honour is at stake but I don’t think he is enhancing his fairly tattered reputation – the wrecking of which seems to have been the aim of Williams and Slater. They have succeeded, but they didn’t help their own reputations in the process.

Whale Oil is again allowing criticisms and comments against Craig in relation to ongoing court proceedings they are involved in. I think this is unwise, and find it highly hypocritical given their accusations and threats here over the last few days. ‘Albert’ posted “The last few months have been a free for all in your comments against Slater “, which is not true, while they allow a virtual free for all against Craig to continue.

Eminem v National in court today

Pythagoras posted: Eminem vs the National Party case begins in court today
https://en.wikipedia.org/wiki/Eminem_vs_New_Zealand_National_Party

More from NZ Herald: Eminem and National Party set for court battle

Eminem, aka Marshall Mathers, aka Slim Shady has taken New Zealand’s governing political party to court, accusing it of using backing music to his song Lose Yourself in its 2014 election campaign TV advertisements.

A three week trial is set to begin in the High Court at Wellington tomorrow, with lawyers for the American rapper seeking damages for copyright infringement.

Unfortunately, Eminem is not expected to make an appearance at the trial.

Eight Mile Style LLC and Martin Affiliated LLC, Detroit-based publishers of Eminem’s copyrights, initiated the proceedings in September 2014.

“Eminem’s publishers were not approached for permission to use any of Eminem’s songs for this campaign advertisement,” said Joel Martin, speaking on behalf of the publishers at the time.

The National Party has flatly denied the allegations and said the music came from an Australian-based production outfit and had been used by others without complaint.

Three weeks is a lengthy trial for this. It has taken nearly three years to get to trial.

‘Lose Yourself’ doesn’t sound like an appropriate song title to use for an election campaign.

Dotcom to appeal after High Court judgment

As expected Dotcom will appeal.


Media Statement From Dotcom Legal Team.

This case is no longer the “largest criminal copyright case”, 1 at least as far as New Zealand is concerned. As we have said all along, there is no such offence under our Copyright Act. We were right. However, this afternoon the High Court judgment 2 was issued and, ultimately, although it concluded we are right, 3 the Court concluded that Kim is still eligible for surrender.

To win the major plank 4 of the case but to get that outcome is extremely disappointing. However, we are far from defeated. It is hard to accept the logic that, if the conduct that all accept at its heart relates to assertions of breach of copyright is not an offence under that Act, how it can nonetheless be massaged into a general fraud offence. In fact, that thinking has been rejected outright in the Supreme Court in the United States.

The High Court has accepted that Parliament made a clear and deliberate decision not to criminalise this type of alleged conduct by internet service providers, 5 making them not responsible for the acts of their users. For the Court to then permit the same conduct to be categorised as a type of fraud in our view disrupts Parliament’s clear intent. The High Court decision means that Parliament’s intended protection for internet service providers is now illusory. That will be a concern for internet service providers and impact on everyone’s access to the internet.

The last hurdle to what we say is the correct outcome – no extradition – will now need to be determined by the Court of Appeal. We remain confident that this last point, which would prevent extradition in this complex and unprecedented legal case, will be resolved in Kim’s favour in a manner consistent with Parliament’s intent, international law and, importantly one might think, the United States’ own law.

Whilst many have struggled to get beyond the United States’ hype in this politically charged and misunderstood case, an objective observer will now realise that there is much more to this case than they were previously informed of from the District Court judgment.

Whether Kim has committed an offence under New Zealand copyright law has finally now been answered in his favour; he has not. Whether our law should still permit him to be extradited to the United States under an Act that has no interest in copyright, is the question that remains now to be answered by our Courts. We say no and we are confident that this must be right.

Whether you are a supporter of Kim’s or not, these are important principles of law for us all and the very issues that we need our justice system to grapple with if we want a credible and safe process for extradition to any requesting country, including those with whom we have a close commercial and political relationship.

Ron Mansfield, Barrister

Dotcom Legal Team

1 https://www.justice.gov/opa/pr/justice-department-charges-leaders-megaupload-widespread-online-copyright-infringement

2 Ortmann & Ors v United States of America [2017] NZHC 189.

3 See paragraphs [169]-[192] (in particular [192]).

4 See paragraph [591].

5 See paragraph [183].

High Court: Dotcom and co-accused eligible for extradition

The High Court has just released a decision saying that Kim Dotcom cannot be extradited for copyright infringement, but there are grounds for extradition on “general criminal law fraud provisions”.

NZ Herald: Kim Dotcom and co-accused eligible for extradition to US, says High Court

In the High Court finding released today, Justice Murray Gilbert upheld a decision by the District Court that there were grounds for the quartet to be extradited,

But the judge has also supported an argument made by Dotcom’s legal team that he and his former Megaupload colleagues cannot be extradited on copyright infringement grounds.

He said that was because “online communication of copyright protected works to the public is not a criminal offence in New Zealand”.

He said it meant the accused could not be extradited to the US on copyright grounds.

Instead, Justice Gilbert said there were “general criminal law fraud provisions” which covered the actions of the accused and they could be extradited on that basis.

He said he agreed with District Court judge Nevin Dawson that there was enough information to make the decision based on accepting a “record of the case” put forward by the US which detailed the evidence it claimed to hold against the Megaupload accused.

Dotcom’s lawyer is claiming a victory.

Dotcom’s lawyer Ron Mansfield claimed victory from the ruling, saying the case was no longer the “largest criminal copyright case”.

“As we have said all along, there is no such offence under our Copyright Act. We were right.”

That may be so, but if Dotcom can be still be extradited that is hardly a victory.

And it probably won’t be the last attempt to prevent extradition. I presume there are appeal steps yet to come.

NZ Herald has an interview with Dotcom on this: Kim Dotcom legal saga: Extradition to US over Megaupload still on cards but he claims court ruling is a ‘major victory’

Craig versus Slater gets more bizarre

Colin Craig has escalated his legal battle with Cameron Slater with a new court action, seeking 13,000 for Slater publishing a poem written by Craig.

Slater says this legal action is “very sad and very mad”. It’s hard to disagree with that, Craig is drawing attention to something that appears to be very embarrassing for him regardless of whether he succeeds or fails.

But Slater has re-published the poem, which also seems very silly. It may not be helpful to his defence if Craig turns out to have the law on his side.

Stuff reports: Poet, songwriter, and politician: Colin Craig sues Slater for publishing his poem.

Colin Craig has tabled legal papers seeking more than $13,000 from blogger Cameron Slater for publishing the former politician’s romantic poetry on his blog.

Craig, who identifies himself as a secret songwriter, poet and fiction author, says he wants to set the record straight after suffering humiliation when his poem The Two Of Me was published on the Whaleoil site last year.

In a statement of claim provided by Slater, the former Conservative Party leader states only two copies existed of the poem. One Craig kept stored in his “personal literary archive”, the other was owned by his former press secretary, Rachel MacGregor.

Jordan Williams, the executive director of the Taxpayers Union, is named as a second defendant.

“Mr Craig has elected to forego publishing his creative writing for consumption by the public in order to, amongst other reasons, preserve his privacy,” the document states.

The legal claim, lodged with the North Shore District Court last week, went on to say Craig did not intend the poem to be seen by the public.

Slater’s company, Social Media Consultants Ltd, had “flagrantly infringed Mr Craig’s copyright in the poem to garner notoriety and/or derive revenue”.

Bizarre, whether legally justified or not.

Slater has posted in response to this article (not linked for legal reasons).

Yes, Colin Craig is a man who doesn’t want anyone to know just precisely what he gets up to. So he uses his wealth to bully and silence people. This is just another forlorn claim, one that won’t stand up in court, but I still have to waste time defending it, and that is his real angle. Soak up time, money and effort in defending against his vexatious claims.

That’s highly hypocritical of Slater, considering his involvement in legal action just like this (that was vexatious and farcical, and thrown out by the judge).

And it’s fair to point out that (I believe) Slater is taking defamation against Craig.

Colin Craig described himself in the papers as “formerly an aspiring politician”.

Slater is a still aspiring political activist, but his politically credibility has been shot in the foot as much as Craig’s.

This whole ongoing saga is sad and self defeating for both of them.

The crux of the Dotcom case?

Dotcom case: It’s not over yet at NZ Herald may have highlighted one of the key aspects of the Dotcom extradition case.

Dotcom and his co-accused – Mathias Ortmann, Bram van der Kolk and Finn Batato – strenuously denied the allegations of copyright infringement, money laundering, racketeering and wire fraud.

But Judge Nevin Dawson, who heard the case over nine weeks in the Auckland District Court, ruled yesterday that there was a case to answer in the US.

There was an “overwhelming preponderance of evidence” presented by the Crown on behalf of the US Government, he said.

Judge Dawson was quick to dismiss Dotcom’s claims Hollywood influenced American politicians to have him dragged before the court.

“In essence, [Dotcom] is alleging the US movie studios have used credit they have built up with the Democrat Party administration in the USA to have him extradited from New Zealand to face prosecution in the USA,” the judge said in his 270-page judgment.

“He submits that the prosecution of him has a political motive and this court should use its discretion to stop his surrender for extradition.”

Judge Dawson said the case against the defendants saw copyright holders claiming $175 million in losses.

“That Mr Dotcom has a different point of view about the use of the internet from others, including the US movie studios, does not have the hallmarks of what is ordinarily regarded as political persecution for political beliefs. It is a difference of opinion about a business matter, the use of the internet and the application of copyright law,” he said.

That may be the crux of the inevitable appeal – a different point of view  about a business matter, the use of the internet and the application of copyright law.

The full relevant paragraphs of Judge Dawson’s ruling:

[695] Mr Dotcom through his counsel’s submissions and his affidavit filed in support of his evidence during the hearing of the stay application during this hearing, alleges that the United States movie studios provide very large sums of money to the Democrat and Republican political parties, and to the Democrat Party in particular. The present President of the United States of America is a Democrat. He alleges that highly placed US movie studio executives have often met with highly placed US politicians, including the Vice President of the United States of America, Mr Joe Biden. He says that his views on the use of the internet and its future use is very different from the views of the US movie studios and he is being attacked by them because of his views. In essence he is alleging the US movie studios have used credit they have built up with the Democrat Party administration in the USA to have him extradited from New Zealand to face prosecution in the USA. He submits that the prosecution of him has a political motive and this Court should use its discretion to stop his surrender for extradition.

[696] The primary application which is the subject of this hearing has already been found to have a legal basis as a prima facie case has been established by the applicant. The charges are not trivial in nature pursuant to s 8(1)(a) as they allegeserious misconduct involving approximately US$175 million claimed to be lost by 270 the copyright owners. As a prima facie case exists, it is proper that the copyright owners should be heard at trial.

[697] That Mr Dotcom has a different point of view about the use of the internet from others including the US movie studios does not have the hallmarks of what is ordinarily regarded as political persecution for political beliefs. It is a difference of opinion about a business matter, the use of the internet and the application of copyright law. There is a prima facie case providing a legal basis for his extradition for these issues to be heard at trial. There is therefore no basis for finding the first respondent not eligible for surrender based upon either sections 7 or 8 of the Act.

http://www.courtsofnz.govt.nz/from/decisions/judgments

David Farrar has some interesting quotes at Kiwiblog: The 271 page Dotcom judgment

‘St Leonards’ copyrighted?

An item in my suburban news sheet sounds ridiculous – a city called St Leonards on the USA got a copyright on the name and are now telling other St Leonards around the world they can no longer use the name, including my neighbouring suburb in Dunedin (and a suburb of Hastings).

The Rothesay News reports (not online):

As a result of legal action nearly 12,000 kilometres away the Dunedin City Council is to poll the residents of St Leonards on a potential name change.

Not only is the US State of Texas the second most populous state in the union it is also the home to the rapidly growing city of St Leonards which had the foresight 22 years ago to copyright the city’s name.

Senator Flora Poil who represents the city in Congress put a motion to the State Senate establishing the name as copyright protected back in 2012, and late last year the motion was accepted as law.

Law in Texas, not law in World.

During the past few months the city has officially notified 112 other St Leonards throughout the world that they will have to rename their villages, towns and cities by May 2018.

St. Leonards Roman Catholic Church in New England built by Italian immigrants in 1873 was recently renamed after Bostonians lost a recent case in the United States Court of Appeal.

This sounds ludicrous. And it is.

I’m not making this up, but maybe someone is. It’s in the April edition of Rothesay News – but April Fools tricks are usually confined to am on the 1st.

However I can’t find a St Leonards in Texas and I can’t find a Senator Flora Poil. So it looks like a month long spoof. Especially when you rearrange the letters of the Senator’s name.