The Government announced recently that New Zealand and the United Kingdom have signed a free trade agreement (FTA), which comes into force at the end of this month – on 31 May 2023.
While the spotlight has been on the elimination of tariffs on imports and exports of physical goods like meat, dairy, honey and wine (which is expected to save New Zealand exporters approximately $37 million each year), the FTA goes far beyond that – including some key reforms for New Zealand in the tech, media and IP spaces as discussed below.
What are the key changes?
Extension of copyright term
For many categories of copyright works in New Zealand, including books, screenplays, lyrics and artistic works, New Zealand has agreed to extend the term of copyright for these works by 20 years (changing from “life of the author plus 50 years” to “life of the author plus 70 years”). Where the term is not defined by the life of a person, it will be extended from 50 to 70 years. This will effectively bring New Zealand into line with other OECD countries.
This change won’t happen immediately: there is a 15-year transition period, so the change will need to be implemented by 31 May 2038 at the latest. The change will also only apply to works that are still within their current term of protection at the time the extension is implemented. In other words, it won’t extend the term of copyright protection to works that have already fallen out of protection and are now in the public domain.
Expanded performer rights
The FTA will give additional rights to New Zealand performers – conferring on performers an exclusive right in relation to the playing of sound recordings of their performances in public. This will involve an amendment to s 174B of the Copyright Act 1994. The section currently states that a performer’s rights are infringed by a person who (without consent and by means of a recording), communicates to the public the whole or a substantial part of a performance. The amendment will add a further infringement, being where the person “plays in public the whole or a substantial part of a performance”.
This will apply only to new sound recordings made after the FTA enters into force.
Introduction of an Artist’s Resale Right Scheme
New Zealand is required to introduce an Artist’s Resale Rights Scheme within 2 years of the FTA being in force. These schemes give visual artists a royalty on the resale of their artworks in the secondary art market, for so long as the work is copyright protected. Australia and the UK already have these schemes in place.
It will be up to New Zealand legislation to determine:
o the royalty rate (in Australia, 5%, in the UK, between 0.25% to 4% depending on resale value);
o the threshold value at which the scheme applies, i.e. the minimum resale value (in Australia, $1,000, in the UK, £1,000); and
o the method by which the royalties are collected.
The above changes are particularly relevant to content creators and those looking to use and leverage the output of creative endeavours in New Zealand.
New Zealand has not made any firm commitments in the FTA on the protection of geographical indications (being signs used on products that identify the product as originating from a particular area, like Champagne) – although New Zealand has said in a side letter that the sale of whisky labelled or advertised with representations of Scottish whisky localities (such as Combeltown, Islay, Highland, Lowland or Speyside) will not be permitted in New Zealand, unless the product has been wholly manufactured in Scotland.
The FTA includes further commitments in relation to digital trade, or trade by electronic means. These fall into three groups:
Measures to "boost confidence" among users of digital trade
New Zealand will be required to maintain a legal framework that covers electronic transactions (which it currently has in Part 4 of the Contract and Commercial Law Act 2017), and a framework for the protection of personal information of users of digital trade (which is broadly covered already by the Privacy Act 2020 as the Act is technology agnostic).
The FTA also addresses “unsolicited commercial electronic messages”, being electronic messages sent for commercial or marketing purposes without the recipient’s consent. New Zealand’s current law (the Unsolicited Electronic Messages Act 2007) prohibits the sending of unsolicited commercial electronic messages that have a “New Zealand link” (being, for example, that the message originated in New Zealand, or the recipient was physically present in New Zealand when the message was accessed). The FTA goes further: New Zealand has agreed to ensure that these messages are clearly identifiable, disclose who is sending the messages and enable recipients to have them stopped (free of charge and at any time). Parliament has not yet signalled any change to New Zealand’s Act to reflect these additional commitments.
Addressing practical digital issues
The FTA will prohibit New Zealand from depriving e-contracts of legal effect solely on the basis that they were made electronically. There are similar provisions around the admissibility and legal effect of electronic documents, signatures or authenticating data, and electronic invoices. Many of these commitments are already covered to a large extent by legislation (the Contract and Commercial Law Act 2017, referred to above), but the FTA does reaffirm support for these measures in helping to dismantle unnecessary barriers to digital trade.
New Zealand and the UK have also agreed to allow the cross-border transfer of information (including personal information) by electronic means where it is part of an investor or service supplier conducting business, and to not require an investor or service supplier to use or locate computing facilities in the other’s jurisdiction as a condition for conducting business there. However this does not detract from a business’ obligations under New Zealand's Privacy Act, including the overseas disclosure obligations under IPP12.
Encouragement of co-operation, inclusion and participation
The FTA promotes compatibility between the UK and NZ’s regimes for digital identities (New Zealand’s Digital Identity Services Trust Framework Act 2023 received assent last month). The FTA also recognises and requires both countries to promote “digital inclusion” – that all people and businesses should participate in and benefit from digital trade, including Māori, women, those with disabilities, rural populations and low socio-economic groups.
New Zealand has also agreed not to impose any regulations that would require a supplier of a commercial ICT product that uses cryptography to provide access to any proprietary information relating to cryptography – for instance, ICT suppliers cannot be required to disclose a private key, or algorithm specification. Despite this protection, the FTA is clear that it does not affect the ability of law enforcement agencies to require a supplier to provide access to encrypted or unencrypted communications.
How else will the FTA impact tech, media and IP?
From a tech, media and IP perspective, there are a few more points worth mentioning:
Māori IP interests
New Zealand and the UK have agreed to co-operate to enhance the understanding of matters of interest to Māori relating to intellectual property. The UK has also provided a side letter acknowledging Ngāti Toa Rangatira’s guardianship of the Haka “Ka Mate”, and its particular importance for New Zealand (following recent controversy).
New Zealand has agreed to increase the threshold above which a UK non-government investor must get approval to invest significant business assets in New Zealand to $200m (putting UK investors on the same footing as investors in other nations, such as China and Korea). This is expected to enable a greater level of market access for UK investors. Both New Zealand and the UK have also agreed not to treat investors from the other nation any less favourably than domestic investors, or investors from other global nations.
The FTA has a distinct focus on assisting SMEs (small and medium-sized enterprises), particularly to grow and participate in the area of digital trade. There will be a requirement for information about the FTA to be easily accessible online for New Zealand SMEs that want to trade with the UK.
The FTA is a “first” in that it also includes a chapter on consumer protection. As part of this, the UK and New Zealand have agreed to co-operate to develop ways to enhance access for redress for consumers (including online consumers) in each other’s jurisdictions.
The FTA is, among other things, intended to create more opportunities for Kiwi businesses looking to leverage tech, media and IP assets, and to bring New Zealand in line with other OECD countries in terms of the protections offered to creative output.
If you would like to know more about how the FTA may affect your tech, media or IP transaction, please get in touch.