December 29, 2003, 11:02 AM — The second of the big legislative bricks in the continuing effort to bring New Zealand law reasonably up to date with ICT (information and communications technology) was cemented into place this year, with the Crimes Amendment Act 2003 criminalizing "unauthorized" intrusion into computer systems.
Hacking, in theory at least, is now punishable by a prison term of up to two years, even when no damage has been caused to the system and no gain has accrued to the hacker.
This legislation was acclaimed as a facilitator of electronic commerce, complementary to last year's Electronic Transactions Act. "Crimes Amendment No 6" has been in the works for four years, with industry pundits complaining ever more loudly that electronic commerce would not take off without such elementary user protection.
The act passed the final stages in July. A good deal of media and parliamentary attention during the final stages went on the negative aspects -- the exemptions granted to police and intelligence agencies to intrude into computers and intercept e-mails under warrant.
Unnoticed by many who made a fuss about those particular agencies, a blanket exception was written into the measure at Section 252(3), empowering any government agency to intrude without a warrant "under the authority of any act or rule of the common law".
Parliament denied Green MP Keith Locke's proposed amendment to make a sample of the warrants served during the year open to audit by a neutral authority.
Other parts of the act prohibit the interception of "private communications" and the possession or sale of software for hacking purposes. InternetNZ and others successfully campaigned for this clause to be fine-tuned to exempt security-testing and network administration software.
In the latter part of this year, public concern about official intrusion powers has recrystallized around the Telecommunication (Interception Capability) Bill. This does little more than make technical provision for the execution of the rights conferred in the Crimes Act. But Locke sees entrenching of a technical interception capability as facilitating a slide down the "slippery slope", with police and security agencies likely to request powers for "even greater surveillance of our personal communications".
Moves toward reform of the copyright law to account unambiguously for electronic media proceeded quietly, with evidence that New Zealand officials have forestalled problems in areas such as caching, which continue to trouble Australian law.
Following a discussion paper inviting public responses, Cabinet issued a paper in June with its policy recommendations. These include protection for Internet service providers involved unknowingly in transferring copyright material, and exceptions for caching Web pages, even long-term by educational institutions. Penalties are proposed for making available devices to circumvent digital rights protection mechanisms. This proposal occasioned some controversy regarding over-zealous or clumsy protection, which might prevent users doing legal things such as copying for "fair use".
Amendments to copyright law are planned to come into Parliament next year.
Patent law also came up for re-examination during the year, with proposals to make it tougher to claim a patent for obvious or uninventive developments and a broadening of the search for "prior art" -- previous inventions that negate a patent -- to the international alongside the domestic front.
This was against a background of hurried New Zealand industry moves to object to Canadian company DE Technologies' wide-ranging patent on fundamental aspects of e-commerce and Amazon's patent on the cookie-based "one-click" ordering system.
The definition of software and the rights and value appertaining to it came in for a few tweaks. After some nervous debate in the industry a legal decision firmly established that developers who incorporate in an application for a client code previously developed by them still own that code and can freely reuse it in a new project.
Late in the year came a call from some tax experts for an unambiguous statement in tax regulations of the elements of software that would qualify for depreciation. This followed a finding in favor of the IRD against Actonz Management Services, which ran a software investment scheme found to be, in some respects, a "sham" aimed at income tax and GST avoidance. Some lawyers fear that without clarification the decision could impact legitimate depreciation claims on software.
