OPINION: Initial observations on the Dotcom decision

Yesterday, the High Court in Auckland upheld a District Court decision to extradite Kim Dotcom and his co-accused. Lowndes Jordon partner and copyright specialist Rick Shera highlights key points from Justice Gilbert's mammoth judgment.

At 363 pages, the decision of Justice Gilbert in the High Court on the extradition appeal by Kim Dotcom, Mathias Ortmann, Bram van der Kolk and Finn Batato is not something to be digested lightly. Apart from the overall decision itself that the appellants are eligible for extradition, a few interesting things leaped out:

• We're already starting to see the impact of the Supreme Court's decision in Dixon (Dixon v R [2015] NZSC 147), that digital files are property. It now becomes a simple matter to find that "property," when referred to in any provision of the Crimes Act, refers to digital material. So, in Dotcom, the High Court finds that the there would be a prima facie case under New Zealand law that the appellants have obtained property (the alleged infringing copies of films) by deception under section 240 of the Crimes Act 1961 and therefore that that provides a "pathway" for extradition. One wonders how long it will be before we see a civil action for conversion of digital files.
   
• Yes, Mr Dotcom and his able attorney, Ira Rothken, are correct in a sense that the main copyright allegation – breach of the criminal section 131 of the Copyright Act 1994 – has been tossed out and does not provide the necessary extradition pathway. If Justice Gilbert is correct, however, that doesn't matter because one can perpetrate a fraud or commit the crime of obtaining digital property dishonestly without having to bother with copyright. Digital files in themselves are property, so one does not need to worry about proving the additional copyright property right in the film, or music, or whatever the file comprises. If this is true, then can we look forward to more criminal prosecutions in New Zealand using this "end run around copyright" as Mr Rothken refers to it?
   
• Also of interest here is the High Court's finding that an "object" referred to in s131 of the Copyright Act means a physical object rather than a digital file. This may have ramifications in other areas (for example, the parallel importation provisions that also refer to "objects").
   
• The analysis of the computer crime provision in s249 of the Crimes Act is interesting and may come as a surprise to some. The section forms part of a series of provisions brought in primarily to deal with hacking and other forms of unauthorised access to, and use of, computer systems. Here, however, the High Court holds that by sending misleading emails to copyright owners, advising that digital files that were the subject of the copyright owners' takedown notices had been removed (when they had not been removed), the appellants have accessed a computer system for a dishonest purpose. That purpose being to mislead the copyright owner into thinking the allegedly infringing digital file has been removed when, in fact, it is retained on the Megaupload or Megavideo platform. There is no need for unauthorised access by the appellants. As long as there is a dishonest purpose and "property, privilege, service, pecuniary advantage, benefit, or valuable consideration" (required under s249), is obtained as a result, it does not matter whose computer system is used. In this case, the appellants were using their own computer systems to send the allegedly misleading emails. One can, therefore, imagine s249 being added to any charge sheet where a computer system has been used and some advantage obtained by deception or dishonesty. Note here that computer system is defined widely and includes the internet.

These are just some initial thoughts but it is clear that no matter what happens on appeal, this case will have significant ramifications in both the copyright and criminal law spheres.

Rick Shera is a partner at Lowndes Jordon. This post originally appeared on Lojo.co.nz