The Copyright Tribunal would be given the power to punish internet users who repeatedly breach copyright under proposals put forward today.
A discussion document from the Economic Development Ministry and interested parties has recommended a three-phase process to allow copyright holders to pursue those who breach their rights.
The final stage would allow the Copyright Tribunal to order damages, injunctions, fines and the termination of internet accounts for persistent breaches of intellectual property.
In the first instance, a rights holder could complain to the internet service provider which would notify the subscriber.
If there was further infringement, a cease-and-desist order would be sent.
If there was further infringement, the rights-holder could apply to the Copyright Tribunal for an order to obtain the subscriber's name and contact details.
The rights-holder could then serve an infringement notice.
If this and mediation failed, the tribunal would convene and could impose penalties ranging from fines to termination of a user's internet account.
Commerce Minister Simon Power said he wanted a fair and efficient process to address copyright offending.
"Unlawful file-sharing is very costly to New Zealand's creative industries and I am determined to deal with it," Mr Power said.
The previous Labour government tried to set up a code of practice to deal with copyright infringements through section 92a of an amended Copyright Act.
Internet users opposed the changes saying it could force the closure of websites following any accusation of breach of copyright, even if it was not proven.
After trying to find a compromise the code of practice idea was withdrawn after one major internet service provider said it would not implement it.
The Government has repeatedly said it would not allow the internet in New Zealand to become a "wild west" where copyright holders had no rights.
The discussion document today advanced an alternate section 92a and seeks comment by August 7.
InternetNZ executive director Keith Davidson described the proposal as a "mixed bag" and said the threat of termination was still over the top.
The first stage of a notice to desist would provide useful education and likely result in a significant reduction of copyright infringement, he said.
"However, the procedures elevating through Phase 2 and Phase 3 create undue complexities and compliance costs for both ISPs and rights holders."
It was disappointing termination remained an option despite the power being moved to the Copyright Tribunal and the Government risked a backlash from internet users.
Labour's communications and IT spokeswoman Clare Curran said the Government was trying to please everyone and would end up pleasing no one.
"A termination policy is unlikely to work. International attempts to introduce similar policies haven't worked to date," Ms Curran said.
"While the involvement of a third party, the Copyright Tribunal, to resolve copyright issues and adjudicate on them is welcome, there is no detail about how this would work."
Labour believed the intention of law to protect copyright in the digital age should be without negative or unintended consequences and the first step was to educate the public about the importance of copyright.
