A few thoughts on iiNet FFC decision

March 17, 2011

On 24 February the iiNet decision generated significant buzz in the media, academy and anyone with an interest in cyber-regulation or copyright. Kimberlee Weatherall first posted the article below on her blog LawFont, and we are reposting it here to provide our audience with her expert exposition. As mentioned in Kimberlee’s article, Fortnightly Review author David Brennan also wrote a piece for The Age, and hopefully the conversation between these analyses will generate some excellent discussion and commentary within our community of readers and authors.

A few thoughts on iiNet FFC decision

By Kimberlee Weatherall

By now, all the copyright nerds in the world know the headlines: the Full Federal Court has handed down its decision in the iiNet case; that the appeal was dismissed in a 2:1 decision (Emmett and Nicholas JJ; Jagot J dissenting). Most people also will know that the reasoning is very, very different from the Trial Judge’s decision, and certainly contemplates, in a way that the Trial Judge didn’t, that in different factual circumstances an ISP could be liable for authorising infringement by its BitTorrenting users. The various major law firms have issued their summaries, I refer you there for an overview. Assoc Prof David Brennan from Melbourne Uni has expressed his succinct, and compelling view.

The decision is really long: it half looks like all three judges wrote as if theirs was to be the main decision (with others concurring or dissenting more briefly). A close reading reveals why. Although it is fair to say that the majority judges reach broadly the same conclusion on broadly similar grounds (namely, that the AFACT notices did not contain enough information to require action on the part of iiNet), they conceptualise the facts quite differently, and demonstrate important differences of approach. My early thoughts are below the fold. This one’s for people generally familiar with the case and Australian copyright law though – beginners need to start, at least, with the law firm case notes.

Conceptualising the facts

Emmett J’s judgment reads like a borderline one to me: it’s almost like he came within a hair trigger of finding authorisation. He emphasises iiNet’s ‘contumelious disregard’ for the rights of the copyright owners, suggests that iiNet ‘tacitly approved’ of the infringements, and highlights the facts that appear to have come quite close to constituting authorisation. Ultimately, Emmett J is not satisfied that sufficient information was provided by AFACT to trigger authorisation. Emmett J also seems concerned that iiNet ought not be required to bear the whole cost of any system.

Nicholas J seems to view iiNet’s behaviour as far less egregious: it is Nicholas J, for example, who emphasises that iiNet’s apparent ‘indifference’ could not simply be characterised as wrongful, based as it apparently was on a belief that iiNet was not legally obliged to act. One has the sense, however, that insofar as Nicholas J was concerned that iiNet not be held liable for taking a position on the law that was not entirely judicially unsupported, his Honour would be less sympathetic in a future case, where an ISP would no longer be able to take that attitude in light of the decisions in iiNet. It is Nicholas J who seems most concerned with the possibility that ISPs will be incentivized to suspend or terminate users all too readily to avoid future litigation.

Jagot J, the dissenting judge, roundly condemns iiNet’s attitude. Her Honour emphasises iiNet’s refusals to cooperate, in effect holding iiNet responsible for any results of its failure to cooperate – including the fact that it had insufficient information to be, perhaps, fully confident that infringement was occurring. ‘Be it on iiNet’s head’, as Jagot J would have it.

Authorisation: Reaffirming the existing case law

The three judges affirm a more traditional conception of authorisation in copyright than that we saw in the Trial Judgment. They confirm that Moorhouse’s phrase, stating that to authorise is to ‘sanction, countenance or approve’ infringement is to be read disjunctively – one is sufficient. The Judges also reject the apparent attempt by the Trial Judge to revive the Justice Jacob reasoning in Moorhouse from the first instance decision: rejecting the idea that there needed to be some ‘sense of official approval or favour’ in order to show authorisation.

On the meaning of authorisation, Emmett J’s judgment is the most wide-ranging, in that it adopts, perhaps affirms, much of the language from cases like Cooper in a series of phrases drawn from earlier cases. I really wish judges would not repeat a series of phrases about the law in this decontextualised way. It seems practically designed to give comfort to the prospective plaintiff in an authorisation case: you can always find a phrase that suits.

On the meaning of authorisation, I recommend the judgment of Justice Nicholas, which is I think, the easier judgment to read and understand, having ‘synthesised’ the precedent more.

‘Means of Infringement’
The three judges – implicitly or explicitly – reject Justice Cowdroy’s threshold test. Under Justice Cowdroy’s approach at trial, iiNet did not provide the ‘means of infringement, in the relevant sense used in Moorhouse, in that it did not extend an invitation to the iiNet users to use its facilities to do acts comprised in the copyright of the Copyright Owners’ and consequently did not authorise infringement. In other words, this question of whether the party provided the ‘means of infringement’ operates as a threshold test, without which authorisation will not be found.

Justice Emmett almost seems determined to politely pass over this approach by the Trial Judge like a polite host ignoring the uncouth table manners of an ill-assorted guest. Emmett J notes the reasoning of the Trial Judge, using the mild epithet of ‘unconventional’ to describe the structure of the reasons. But once Emmett J has described the primary judge’s approach, this phrase never appears again in the judgment. Both Justice Nicholas and Justice Jagot more explicitly reject the Trial Judge’s approach: Jagot J more fulsomely.

The crux of the case: knowledge
Both Emmett J and Nicholas J were dissatisfied with the information provided in AFACT’s notices: this finding lies at the heart of their rejection of AFACT’s case on authorisation. More or less, the notices provided by AFACT gave rise to ‘reason to suspect’ infringements on the part of iiNet’s users, but not knowledge of specific acts of infringement sufficient to warrant iiNet acting to suspend or terminate internet accounts.

Emmett J thought that AFACT’s notices would have to have included:

  1. Information in writing of particulars of specific primary acts of infringement of copyright of the Copyright Owners, by use of particular IP Addresses of iiNet customers; and
  2. Unequivocal and cogent evidence of the alleged primary acts of infringement by use of the iiNet service in question; at least information as to the way in which the material supporting the allegations was derived, that was adequate to enable iiNet to verify the accuracy of the allegations.

Justice Jagot takes a very different view here: stating that the AFACT notices ‘contained prima facie credible evidence of widespread and repeated infringements of the appellant’s copyright by iiNet customers and users’, rising above the level of ‘mere unsubstantiated or unreliable allegations’. What is more, if iiNet did not have sufficient information to judge the accuracy of the notices, that was iiNet’s own fault: having refused to engage with AFACT, it could not then plead its own ignorance.

Did iiNet have the ‘power to prevent’ the infringements?
All three judges consider that iiNet had the technical and contractual power to terminate or suspend its services to subscribers on the basis of copyright infringement; this was relevant, albeit not determinative (cf the Trial Judge who seemed to say that a power to suspend or terminate could not be reasonable and so wasn’t really relevant). On this question, again I think Justice Nicholas’ judgment is the more interesting one: his Honour talks about the difference between ‘direct’ powers to prevent infringement (ie, to stop that particular act) and indirect powers (like taking away internet access so they can’t do anything, let alone infringe, online).

The judges also talk about another statutory factor, the ‘relationship with the infringer’, but it’s not that interesting. I never really know what to make of this factor anyway. There was a contractual relationship – so? Really, most of the action is in the next of the statutory factors in authorisation: whether iiNet took reasonable steps to prevent the infringement.

Reasonable steps

All three judges accept that sending warnings to users ought to be considered a reasonable step. None of the judges was wiling to accept that people when notified of copyright infringement would simply ignore the notice: not all would be aware that such activities infringe copyright; not all would be aware they can be detected.

Worryingly for many, I suspect, is the fact that all three judges also contemplate that suspension or termination of internet service is also a reasonable step. In this respect, a really important consideration that the various judges point to is the Safe Harbours: specifically, the provision that requires parties wanting to take advantage of the Safe Harbours to have, and reasonably implement, a policy for the termination of the accounts of repeat infringers in appropriate circumstances. This is evidence, to the judges, that termination is contemplated as a reasonable step.

iiNet’s protestations concerning the expense, difficulty, and complication of having a system for sending warnings and following up with suspension or termination fell on deaf ears of two judges. Justice Emmett, of the three judges, seems the most ready to count this as an issue, noting the ‘difficult judgments’ involved, the number of notices received, the many, many issues of design choice in such a system (see paragraphs 206-207). Perhaps for this reason, Justice Emmett is the most explicit in practically setting out his own version of a graduated response system. The key paragraph here is paragraph 210. It’s kind of too long to quote here, but go have a look. In summary, it says that ‘before it would be reasonable for iiNet to take steps to suspend or terminate a customer’s account’, AFACT would need to send notices providing ‘unequivocal and cogent evidence’, and undertake to reimburse iiNet for its reasonable costs. But most extraordinary is the way that the Judges say that AFACT’s notices should set out a series of specific steps that it requests. According to the Judge, AFACT should request the following steps:

  1. iiNet should inform its customer of the particulars of the allegations of primary infringement involving the use of that customer’s iiNet account
  2. iiNet should invite the customer to indicate whether the service has been used for acts of infringement as alleged;
  3. iiNet should request the customer either to refute the allegations or to give appropriate assurances that there will be no repetition of the acts of infringement;
  4. iiNet should warn the customer that, if no satisfactory response is received within a reasonable time, perhaps 7 days, the iiNet service will be suspended until such time as a reasonable response is received;
  5. iiNet should warn the customer that if there are continued acts of infringement by use of the service, the service will be terminated;
  6. iiNet should terminate the service in the event of further infringements.

OK, strictly, Justice Emmett is not saying that iiNet would have to follow this procedure: it’s what AFACT should request. But the suggestion is strong that this is what Emmett J thinks a reasonable set of steps looks like.

Um, judicial legislation anyone?

It’s kind of extraordinary that his Honour would set out a system in such detail. These weren’t, after all, the facts before the court. It’s also kind of extraordinary that this is his version of reasonable steps, when this set of conditions doesn’t look anything like what has been legislated in other countries, like France, the UK, South Korea, or New Zealand. Justice Emmett’s ‘reasonable steps’, if that is what these are (and as I said, it’s not entirely clear) have none of the procedural protections found in other places – and specifically contemplate termination of Internet service – something the UK wouldn’t even do without a further order from Parliament and which requires independent decision-makers in France, South Korea, and New Zealand. So, like, wow.

Justice Nicholas, on the other hand, is only prepared to say that ‘an ISP should be given considerable latitude when working out the detail of such a system. It is always possible to argue that a system for the issue of warnings and termination could be tougher than it is. But it would be difficult to criticise an ISP on that account if it acted in good faith to devise and implement a system that involved taking such steps against subscribers who the ISP was satisfied had used (or permitted others to use) its facilities for the purpose of committing flagrant acts of copyright infringement’ (at para 750).

Other interesting stuff

There’s so much more, but this post is already too long. Look out for:

  1. The various judges’ views on whether iiNet ‘encouraged’ infringement, and Justice Nicholas’ discussion of iiNet’s alleged ‘indifference’;
  2. The discussion of the Safe Harbours (no judge thought iiNet could use it);
  3. The judges’ struggles to give s 112E some meaning;
  4. The issue of who bears the cost. Emmett J is explicit: AFACT should offer to reimburse. Justice Jagot thinks that this could have been part of a conversation that should have occurred. I didn’t really see much from Nicholas J on this question (but the judgment is long, maybe I’ve missed something).

Oh, and here’s something interesting. You will look in vain for references to much overseas case law or any of the mound of academic writing on the issues involved. If anything, this suggests to me the continuing isolation of the Australian law of authorisation from the law in other jurisdictions. Too close an examination of overseas case law might reveal the differences too starkly? Of course, it would also have made the judgment even longer than it already is. I suppose we should be grateful for small mercies.

Where to from here?

Interesting question. We’ll have to see if there’s going to be an appeal to the High Court (or rather, application for special leave). Failing that, it’s back to the negotiations. Questions of cost (who bears it) are unresolved. It’s not clear to me whether there is enough guidance here to lead to a ready deal, despite Emmett J’s attempts to write a Code of Conduct for the industry. Termination of service is something I can’t imagine the internet industry is all that keen on, but AFACT’s hand to demand more than the mere passing on of warnings may have been strengthened by the frequent references to the reasonableness of termination as a response. So, much to think about. I suppose I should be pleased…

Kimberlee Weatherall is a senior lecturer at the University of Queensland

This article was cross-posted here at LawFont

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The Trans-Pacific Partnership Agreement (TPPA) IP Chapter

May 6, 2011

By Melissa de Zwart

Nine countries are currently negotiating the Trans Pacific Partnership Agreement: US, Australia, New Zealand, Singapore, Chile, Malaysia, Brunei Darussalam, Vietnam and Peru. Under the terms of this agreement, signatories will be required to amend their domestic intellectual property laws to comply with the terms of the TPPA. The US draft of the intellectual property chapter of the trade agreement was leaked in February 2011 generating significant controversy regarding its draconian terms. The leaked chapter is available here at Michael Geist’s blog.

Some key aspects of the draft are as follows:

Geographical Indications

A party must provide that geographical indications (GIs) are eligible for protection as trademarks. For this purpose geographical indications are defined as ‘indications that identify a good as originating in the territory of a Party, or a region or locality in that territory, where a given quality, reputation, or other characteristic of the good is essentially attributable to its geographical origin. Any sign or combination of signs (such as words, including geographical and personal names, as well as letters, numerals, figurative elements, and colors, including single colors), in any form whatsoever’.

The TPPA provides for a registration of GIs if recognized by a member party. Of course, in Australia, GI protection currently extends only to wine and spirits, under the Wine Australia Corporation Act 1980 (Cth). This scheme was introduced to give effect to Australia’s obligations under TRIPS and, more specifically, the Australia-European Community Agreement on Trade in Wine 2008 (and it is predecessor signed in 1994). It is precisely this sort of agreement (reached in order to secure access to the European market for Australian winemakers) which would be prohibited by the TPPA.

Article 2 (which deals with trademarks and GIs) provides that no party shall (whether pursuant to an agreement with another government or otherwise):

  • Prohibit third parties from using translated versions of the geographical indications for goods other than wines or spirits;
  • Prohibit third parties from using a term that is ‘evoked by’ the geographical indication;
  • Prohibit third party uses of any component of a multi-component geographical indication protected by virtue of the agreement, even if such components are generic or use would not give rise to confusion (Clause 17).

For the purposes of the Agreement, a term is generic if it is customary in common language as the common name for the goods or services associated with the term or GI (Clause 18).

Clause 19 sets out a range of factors which may be taken into account in determining whether the terms is generic, such as whether:

  • persons other than the person claiming the rights use that term as the name for the product; and
  • the product is imported into the relevant country, in significant quantities, from outside the proposed protected region using the same name.

This is contrary to the current Australian regime, and particularly the Australia-EC Wine Agreement, which prohibits the use of certain traditional expressions and required the phasing out of local uses of specific GIs, despite their long-term use in Australia.

Clause 22 provides for the non-misleading use and/or registration of signs or indications that reference a geographical area that is not the true place of origin of the product of the product or services other than for wines or spirits, provided that:

a)     the sign or indication is used in a manner that does not mislead the public as to the geographical origin of the goods or services;

b)     the use does not constitute an act of unfair competition;

c)      use would not cause a likelihood of confusion with an earlier trade mark or GI; and

d)     the request for registration does not relate to a generic term.
This reflects the two tier system for GI protection provided for in Articles 22 and 23 of TRIPS, which recognize a higher level of protection for wine and spirits, extending to non-misleading and translated uses of GIs.

Copyright

Article 4 extends the rights granted to authors, performers and producers of phonograms to all forms of reproduction of their works/ performances including temporary storage in electronic form.  The temporary reproduction right proved particularly controversial during the negotiations that resulted in the WIPO Copyright Treaty (WCT) and ultimately could not be resolved at that meeting. Rather, it was dealt with by way of the Agreed Statement to Article 8. (‘It is understood that the mere provision of physical facilities for enabling or making a communication does not in itself amount to communication within the meaning of this Treaty or the Berne Convention. It is further understood that nothing in Article 8 precludes a Contracting Party from applying Article 11bis(2)’). The inclusion of the temporary reproduction right here in the TPPA without further fanfare or disclosure is particularly tricksy on the part of the US and is likely to cause significant debate!

Other notable expansions of copyright include:

  • Prohibition on parallel importation, even of goods manufactured with authorization of the copyright owner outside of the relevant territory.
  • Copyright terms are extended to life plus 70 years for individuals (already the case in Australia) and between 95 and 120 years for corporate works.

The relevant exceptions and limitations are left blank with only a ‘placeholder’ marking their potential inclusion (an ominous lack of attention to detail, given the foreshadowed expansion of rights) although it is noted with respect to the above, one of the possible exceptions would relate to internet retransmission.

Technological protection measures

Technological protection measures are yet again the focus of strengthening efforts. Parties are required to provide that any act of circumvention or dealing in circumvention devices or services shall be subject to civil and criminal penalties. Criminal penalties apply to anyone other than a non-profit library, archive, educational institution or public noncommercial broadcasting entity, who engages in circumvention ‘for purposes of commercial advantage or private financial gain’. Circumvention gives rise to liability independent from any infringement of copyright.

Exceptions and limitations to the anti-circumvention provisions must be confined to the purposes defined in paragraphs (d) and (e).

The narrowness of these exceptions will require amendment of Australia’s TPM provisions which currently require that a TPM be an ‘access control technological protection measure’ which effectively excludes protection of TPMs which protect region coding and TPMs embodied in machines or devices, not directed primarily to protecting copyright.

ISP liability

Article 16 provides for ‘Special Measures Relating to Enforcement in the Digital Environment’. Notably, Clause 3(a) requires parties to provide ‘legal incentives for service providers to cooperate with copyright owners in deterring the unauthorized storage and transmission of copyrighted materials.’ Given the current global climate regarding ISP liability and the decision of the Full Federal Court in the iiNet decision, this would impose significant pressure on the Australian government to reform the law. This is subject to compliance with the US DMCA safe-harbor provisions.

Conclusions

As expressed in this leaked US draft, the provisions of the TPPA, particularly those relating to copyright, appear to be more restrictive than ACTA. Some commentators have hypothesized that the ambit claims made in the leaked document are so extreme that the US is playing a negotiating tactic that allows them to significantly back down from this position and still come out ahead in terms of outcomes. Whilst this remains to be seen, it has reminded us that the parameters of intellectual property rights remain contested and vulnerable to being traded away in the international trade environment.

Dr Melissa de Zwart is an Associate Professor in Law at the University of Adelaide.

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In this edition #23

March 17, 2011

Kimberlee Weatherall provides ‘A few thoughts on iiNet FFC decision’, the recent Federal Court decision dismissing AFACT’s case against iiNet for authorising copyright infringement of BitTorrent using subscribers.

Similarly, in ‘Weapons in the Piracy Wars: COICA and Domain Name Seizures’, Jake Goldenfein looks at examples of more extreme co-opting of ISPs against online infringement, with new prospective US legislation potentially establishing a piracy based internet blacklist.

Finally, in ‘Patent fees as a tax on so-called ‘monopoly rents’: a response’ David Brennan responds to Shaun Larcom’s article in our last edition concerning the role of fees in patent systems, arguing that higher taxing of patentees though fees may undermine incentives provided by the patent system.


Weapons in the Piracy Wars: COICA and Domain Name Seizures

March 17, 2011

By Jake Goldenfein

You may have encountered this image if you recently tried to stream a sporting event online. Domain name seizures in the US occur under civil forfeiture and seizure provisions in the Crimes and Criminal Procedure title of the United States Code. Being territorially restricted, those provisions allow the US Immigration and Customs Enforcement agency (ICE) to distrain websites with a .com, .net or .org suffix.

Recent seizures of websites linking streamed sporting events (conveniently 10 days before the Super Bowl) were the directive of phase 3 of ICE’s Operation ‘In Our Sites,’ which began in June 2010. The mandate of ‘In Our Sites’ goes beyond sporting events however, and has targeted websites connected to counterfeit goods, child pornography and first-run movies. Although the process and propriety of those seizures have been questioned, presently working its way through the US political system is the Combating Online Infringement and Counterfeits Act (COICA) that will provide an expedited process to block domains and extend ICE’s reach to content hosted outside the US.

COICA (S. 3804) would authorise the Attorney General to obtain injunctions in rem against websites ‘dedicated to infringing activities.’ Sites are defined as dedicated to infringing activities if ‘primarily designed’, have ‘no demonstrable commercially significant purpose or use other than,’ or are ‘marketed by its operator,’ as offering copyright infringing goods.

Effectively, COICA creates an internet blacklist with ‘offending’ websites added by Court order. Originally there was a second blacklist controlled by the Attorney General without judicial oversight, however that was jettisoned in the bill’s latest iteration. By obtaining a Federal Court injunction, the Attorney General orders U.S. domain name registrars to stop resolving blacklisted domains, leading users instead to an error message.

For infringing domains outside of the U.S, the bill demands internet service providers block offending foreign addresses. This does not prevent access outside of U.S territory, but rather is aimed at preventing the importation into the US (censoring) of goods and services offered by websites deemed ‘dedicated’ to infringing activities.

Introduced by Democratic Senator Patrick Leahy in September, the bill received unanimous approval by the Senate Judiciary Committee in November 2010 under Leahy’s chair. Not surprisingly three of Leahy’s top five campaign contributors are large media organisations. Yet substantial opposition from various groups including Internet Engineers, Human Rights Groups, the Net Coalition, some Senators, and law professors has been successful in preventing the bill passing a full vote on the Senate floor, leading to another Judiciary Committee hearing on 16 February, which led to discussion of substantial modification, and likely a follow-up hearing.

Arguments against the bill include:

  • Blacklisting of websites by Justice Department officials without sufficient judicial oversight offends due process and threatens legitimate political speech.
  • Definitions within the bill, including ‘facilitating infringement’ and ‘dedicated to infringing activities’ are very broad.
  • Blacklisting for copyright infringement purposes may undermine U.S. secondary liability law as well as existing copyright exceptions, limitations and defences.
  • The censorship process causes entire domains to vanish, not just infringing pages or files.
  • The bill creates precedent for internet censorship, and congress should consider the effect for countries less protective of citizens’ rights of free expression.
  • The extraterritorial reach of the court prevents a full and fair trial with all interested parties present.
  • The bill may affect legitimate digital services such as cyberlockers if the Department of Justice decides that piracy is ‘central’ to their businesses.
  • Blacklisting may apply to sites that discuss and advocate for P2P technology or piracy because they sometimes link tools and information intended for file sharing, despite the otherwise political nature of their speech.
  • Censorship may undermine the stability of the internet by encouraging the use of circumvention measures and rerouting internet traffic away from the U.S.

But perhaps the most compelling arguments are found in the joint letter from 49 legal academics in the U.S. Citing jurisprudence, they contend ‘the bill amounts to a constitutional abridgment of freedom of speech because it directs courts to impose “prior restraints” on speech, which are the most serious and least tolerable infringement of First Amendment rights.’ They argue such cases ‘require a court, before the material is completely removed from circulation to make a final determination that material is unlawful after an adversary hearing.’

Contrary to that requirement, the professors claim ‘the Act permits the issuance of speech-suppressing injunctions without any meaningful opportunity for any party to contest the Attorney General’s allegations of unlawful content’ because of inadequate notice provisions and the capacity to enter injunctions ex parte. Requiring the shut down of entire domains rather than blocking specific content is described in the letter as ‘burning down the house to roast the pig.’

More profound however, is the academics’ claim that the bill’s ‘egregious Constitutional infirmities… will not survive judicial scrutiny’ suggesting its significance ‘is entirely symbolic.’ This would be the first time the US would require internet service providers to block speech because of its content. Enjoining ISPs to police users’ activities is an issue of growing judicial significance, not simply in circumstances like the iiNet case in Australia, but also for a range of future measures, including filtering, censorship and levying, that may require ISP cooperation.

Content industries have sought this law for years, and view the new capabilities as a magic bullet for copyright enforcement, with the MPAA and RIAA extensively lobbying for its passage. Lauding the legislation, the bill’s proponents emphasize the derisory economic consequences affected by infringing rogue sites. Previous MPAA interim boss Bob Pisano defended the bill, claiming targeted sites ‘exist for one purpose only – to make a profit using the internet to distribute the stolen and counterfeited goods and ideas of others,’ and that the ‘economic impact of these activities – millions of lost jobs and dollars – is profound.’ Pisano argues the First Amendment was not intended as a shield for those who steal, irrespective of the means. ‘Theft is theft, whether it occurs in a dark alley or in the ether, and to attempt to distinguish the two is to undermine the most basic tenets of our criminal laws.’

Clearly rhetoric laden, such speech reverts back to the questionable conflation of tangible and intellectual goods, and co-opts morality for its justification without acknowledging the concomitant censorship issues. However, other Hollywood groups have claimed that concerns of unlawful censorship are an ‘absurd misrepresentation of civic rights’.

For organisations like MPAA and RIAA who maintain a controversial program of prosecuting online copyright infringement, the new law would amount to another weapon in the arsenal of content protection. But beyond copyright, the bill highlights emerging issues in digital censorship and jurisdiction by entrenching in U.S law filtering of international content that offends local laws – a dangerous precedent that may expand to other types of speech. Passage of this bill would mark a substantial shift in lawmakers’ willingness to regulate cyberspace and a fortiori against the principle of the Single Global Internet.

Jake Goldenfein is a PhD candidate at the Melbourne Law School

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Copyright: The Next Generation

December 9, 2010

By Matthew Nicholls

The rise of the Internet, and in particular peer-to-peer file sharing has had a significant impact on the incidence of copyright infringement, particularly in relation to works such as sound recordings and films.

Importantly, in Australia, a person who authorizes the infringement of copyright is treated as if they themselves directly infringed copyright: Roadshow Films Pty Ltd v iiNet Ltd (No 4) (2010) 269 ALR 606 [iiNet] (note the appeal in this case was heard by Full Federal Court in August; judgment is still reserved). Click here for earlier FR post on the case.

Justice Cowdroy at first instance in the iiNet case re-affirmed the traditional approach that:

  • providing Internet access is not the same as “providing the means” to infringe copyright. In that case, the “means” by which the applicants’ copyright was infringed was not by the iiNet Internet service, but by the iiNet user’s use of the BitTorrent system;
  • having regard to the factors set out in section 101(1A) of the Copyright Act, iiNet had not authorized the users’ infringements. Specifically, his Honour found that a scheme for notification, suspension and termination of customer accounts was not a relevant power to prevent copyright infringement pursuant to the Act; nor in the circumstances was there a failure to take reasonable steps within the meaning of the Act; and
  • an ISP in iiNet’s position could not be said to formally or officially “sanction, approve or countenance” the copyright infringement.

The National Broadband Network

The Australian Government’s proposed National Broadband Network (the “NBN”) should it proceed, and Australia’s growing digital economy pose significant challenges to our system of copyright law.

The NBN will create unimagined opportunities for the infringement of copyright.  Emerging digital technology and increased broadband capacity mean that the marginal cost of reproducing and disseminating exact copies of protected digital works is rapidly moving towards zero.

As the cost of reproduction moves towards zero, the cost of enforcement of copyright escalates. With sites such as YouTube boasting 24 hours of new video footage being uploaded every minute, the problems with identifying and pursuing individual copyright infringements make the value of copyright seem hollow. Click here for an earlier posting on Viacom v YouTube).

International Responses to Copyright Infringement – “Three Strikes” System

How Australia deals with online copyright infringement may be referred to the ALRC, but how have other jurisdictions dealt with this issue?

In recognition of the inability of traditional mechanisms of copyright enforcement to address peer-to-peer copyright infringement, several countries, including France, the UK and New Zealand have implemented (or have attempted to implement) a “three strikes”, or graduated response system. Essentially, the three strikes system shifts some of the onus of the enforcement of copyright onto Internet service providers (“ISPs”). (Click here for an earlier report on the UK three strikes system).

However, the three strikes system is highly controversial and has consistently been opposed by interest groups such as the IIA (the Internet Industry Association) and ISPs (such as TalkTalk, the second largest ISP in the UK).

In the Australian context, commentary surrounding the NBN has emphasized the fundamental importance of Internet access. In light of this, the question arises as to whether severance of a person’s Internet account is a proportionate response to copyright infringement.  Note, for instance, the Australian Minister, Senator Conroy’s frequent references to the Internet as being as important as electricity.

Certainly, it is strongly arguable that disabling Internet access is not a proportionate response when one considers the impact that Internet disconnection may have on:

  • students (where many resources are online or where studying by correspondence);
  • the elderly or disabled (who use the Internet for services such as online grocery shopping and banking);

The issue is further complicated in cases of shared living or families where the entire household is disconnected, so it may not only be the person who commits the copyright infringement who is punished.

Does a 3-strikes system fit with iiNet?

Finally, the three strikes system does not sit comfortably with the Federal Court decision in Roadshow v iiNet.  The IIA argues that

“The recent iiNet case established the principle that an ISP who is merely providing the means of access should not be liable for the acts of their users where those users abuse facilities to breach third party rights.  ISPs believe they should not be required to act as enforcer of those rights.”

Is legal intervention the appropriate response?  Changing business models and commoditization

“Commoditization” of copyright works refers to a phenomenon whereby the industry’s mode of competition moves away from innovation of the underlying product (the copyright work) and towards alternative methods of building value.

Under this analysis, as the market matures and barriers to entry erode, competition intensifies and prices for the underlying product are pushed down.  As a result, rights holders look for new ways of leveraging the value work itself to create new revenue streams.

The IIA stresses the need to ensure that policy does not damage Australia’s capacity to innovate and compete in the global digital economy.  It says, “to the extent that Internet users, mainly the young, engage in infringing activities, we suggest the causes may be rooted in market failure more than they are in any regulatory shortfall.”

A recent report by the UK Intellectual Property Office found that, “digital technologies have altered the value chain.  Authors can publish directly in the online world: commercial rights holders can sell product in new ways, and consumers have an enormous quantity of legitimate content at their fingertips, both free and paid for.  For many creative businesses, the changing value chain is making the situation more complex as it is more difficult to realise economic benefits with digital technology, but there may be new opportunities to do so.”

The IIA states that it, “supports the development of new models to facilitate maximum access to content and innovative content based services.  Possible examples include; revenue sharing arrangements with ISPs, ‘hyperdistribution’ where, for example, advertising is embedded in the content, and arrangements like those between YouTube and Warner Music which now permit users (who now number in the tens of millions) to upload self created video content with commercial soundtracks, owned in this case by Warner, in return for a revenue share arrangement on advertising.”

Examples of commoditization of digital content

Not surprisingly, then, business models have emerged which allow the user to use a copyright work for free and rely on advertising, or generating a massive, loyal following (rather than the worth of the product itself), to create revenue.

These models may be contrasted with traditional revenue-generation models, such as buying a CD, or downloading songs from iTunes.

Google (including Gmail, YouTube, etc.) and Android phone technology

Essentially, under the Google model, advertisers pay to be the top hits (“sponsored links”) in any combination of search words (this is done through auction every time a search is conducted) as well as paying for ads in side bars.

This has proved to be a highly effective model, to the point where an estimated 60% of Internet users use Google. This has earned Google billions of dollars in annual revenue and being declared “an economy unto itself”.

And Google has taken the concept further with its Android technology, which is offered as “less than free” to phone companies. That is, Google actually pays phone manufacturers to use the Android operating system, because Google potentially makes money from every click on Google (as advertising is sold on every click).

Guvera – “paid for” (by advertisers) music downloads

Guvera is an Australian initiative (it is an unlisted Queensland-based public company).

Under the Guvera model, advertisers create channels for specified groups of consumers, and then pay for music on behalf of targeted consumers. The initiative is still in its infancy, but Guvera hopes that its website will be “a piracy killer”, emphasizing that its Website was designed in recognition that a whole generation of Internet users believes that downloaded music should be free. (Click here for AFR reportage).

Radiohead – free music downloads

In 2007, British alternative rock band Radiohead offered the entire album In Rainbows through their website: fans were asked to pay whatever amount they wanted to digitally download it.

According to Internet marketing blog DoshDosh, this “donation-style” system is significant because of Radiohead’s reputation and the size of their fan base, which easily reaches into the millions globally.

The band is able to offer their songs in a digital rights management-free mp3 format because they do not have a record label; hence they own complete distribution rights over their music.  This essentially bucks the industry trend of reliance on record companies and marketing teams to produce, commercialize and promote music records.

Alongside the digital download of their album, Radiohead is also selling a £40 box-set which consists of the CD album, vinyl records, additional songs as well as artwork and lyrics.  Whilst this “viral” marketing assault by Radiohead clearly resulted in massive foregone album sales revenue, it also reportedly resulted in enormous revenue in other areas, including a sell-out concert tour, as well as unquantifiable augmentation to their fan loyalty, reputation and brand awareness/strength.

Similarly, rock band The Smashing Pumpkins released their Machina II album for free on the Internet by sending 25 physical copies of it to fans active in the online music community, with explicit instructions for re-distribution.

This approach has been successful for a number of (already highly popular) bands and contrasts with the approach taken by rock band Metallica, who sued Napster in 2000, thereby distancing them from fans and leading to a major public relations disaster for the band.

The following table summarizes some of the models for commercialization of copyright material (music), both traditional and new.  Of particular interest is the fact that not all successful (or potentially successful), non-traditional sales models involve copyright infringement (note that the copyright is held by the musician/record label etc):

Model 

Issue

Licence to use paid for by… Copyright infringed? Encourages artistic innovation? Value lies in… Issues?
Trad. online sales model (e.g. Sony, iTunes) Consumer No Yes The song itself Goes against developing social expectation that Internet materials should (and can) be free
P2P file sharing No-one (no licence to use) Yes – by the person making the song available via P2P and by each person who downloads it No No value Illegal; no reward for those who are creative
New Model (Radiohead) Musician chooses to make music available for free but (in some cases) charges advertisers to place ads on the page where the song is available No Yes – if the song is a success then people will pay more to advertise (analogous to ad breaks in a successful TV show) The sheer number of people d/loading (ad potential) Arguably will only work for bands that are already successful
New Model (Guvera) Advertisers on behalf of consumer No Yes – copyright owner still receives $$$ The sheer numbers of people d/loading (ad potential) Untested as yet; needs industry support to succeed

Conclusion on protection of online copyright works

Policy in relation to the protection of online copyright works is currently in a state of flux. This is largely because the advent of broadband (and projects such as the NBN) is a game changing development and policy-makers are still in “catch-up” mode.

Legislatures and courts in Australia and abroad have so far taken a fairly traditional approach to dealing with the protection of online copyright works. Some novel measures (such as the “three strikes” approach) have been touted, although it is yet to be seen what impact such measures will have, and indeed what counter-measures might be adopted by ever-exuberant copyright users.

Ultimately, however, it is expected that creative creators will continue to think outside the square to develop new business models – and that this group will manage to stay “ahead of the curve” when it comes to generating value (and new revenue streams) from their creative efforts.

This paper is amended from a conference presentation given by Mr Nicholls at the CMCL Conference, Melbourne, November 25-26, 2010

Matthew Nicholls is a principal of Nicholls Legal, contact: matthew@nicholls-legal.com.au.

The assistance of Rebecca Measday, Law Clerk at Nicholls Legal, in preparing this paper is gratefully acknowledged.

(return to the top of this edition)


In this Edition #11…

July 15, 2010

Kim Weatherall analyses last night’s leaked copy of the Anti-Counterfeiting Trade Agreement. Weatherall discusses the controversial issues raised by this critical trade agreement which promises to be a comprehensive rewrite of IP enforcement obligations at an international level.

Dr Melissa de Zwart provides an in-depth analysis of the recent US YouTube decision. In this landmark case, the judge held that general knowledge of “ubiquitous” infringement does not impose a duty on Internet service providers to monitor or search its service for copyright infringement. Dr de Zwart comments on the commonalities of this case with the recent Australian decision of Roadshow v iiNet.

Karin Clarke discusses the concurrent Inquiries into privacy protection in Australia. Major reviews of privacy legislation are on hand that will affect consumer credit and health information. These reviews will also tackle on-line privacy protection in light of social networking sites and data collection activities.

Economists Assoc Profs Beth Webster and Paul Jensen discuss copyright damages. They argue why Larrikin (the owners of the copyright to “Kookaburra”) should not have been awarded damages from Men at Work for use of an infringing flute riff in “Down Under”.


The Safe Harbour UGC Business Model: judicial endorsement in Viacom v YouTube

July 15, 2010

By Dr Melissa de Zwart

From the time that the Internet was opened up to widespread general use, service providers were concerned regarding their potential vicarious liability for end-user copyright infringement, where the service provider had played no active role in the choice of that content.  This was due to the decision in MAI Systems Corporation v Peak Computer 991 F. 2d 511 (1993) in which the United States Court of Appeals, Ninth Circuit, held that when a computer was switched on, causing the operating system to run, the reproduction of that program on the RAM was an act of reproduction within the rights of the copyright owner.

This generated concern within the US Government, then espousing the principles and visions of the Clinton/Gore sponsored A Framework for Global Electronic Commerce, that such potential for liability would act as a roadblock to the uptake of electronic commerce by making business too risky for new ISPs to enter the market. This was despite the decision in Religious Technology Center v Netcom 907 F. Supp. 1361 (N.D. Cal. 1995) where the US District Court held that ISP Netcom should not be liable for the infringing activities of its end user, concluding (at 23) that:

‘The Court is not persuaded by plaintiff’s argument that Netcom is directly liable for the copies that are made and stored on its computer. Where the infringing subscriber is clearly directly liable for the same act, it does not make sense to adopt a rule that could lead to liability of countless parties whose role in the infringement is nothing more than setting up and operating a system that is necessary for the functioning of the Internet. Such a result is unnecessary as there is already a party directly liable for causing the copies to be made.’

(A sentiment echoed fifteen years later by Cowdroy J in the Federal Court in the recent Roadshow Films v iiNet decision ) Click here for our earlier coverage of that case.

The Safe Harbo(u)r Solution

The US took these concerns to the negotiations that resulted in the WIPO Copyright Treaty (WCT) but only succeeded in having the matter of intermediary liability dealt with in the Agreed Statement to Article 8 of the WCT:

‘It is understood that the mere provision of physical facilities for enabling or making a communication does not in itself amount to communication within the meaning of this Treaty or the Berne Convention. It is further understood that nothing in Article 8 precludes a Contracting Party from applying Article 11bis(2).’

In Australia, this resulted in the insertion of Section 39B in the Copyright Act 1968 (Cth).  However in the US it resulted in the introduction of the ‘safe harbor’ provisions in s 512 of the Copyright Act (US) by the Digital Millennium Copyright Act 1998.  That section provides that a service provider’s liability with respect to infringing material hosted on its system or network is limited where:

  • the service provider does not have actual knowledge of infringement and is not aware of facts or circumstances from which the infringement is apparent, and upon receiving such knowledge ‘acts expeditiously to remove, or disable access to, the material’;
  • ‘does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity’; and
  • Upon notification of infringement ‘responds expeditiously to remove, or disable access to’ that material.

As was observed by the US Senate Committee in 1998: ‘by limiting the liability of service providers, the DMCA ensures that the efficiency of the Internet will continue to improve and that the variety and quality of services on the Internet will continue to expand.’

Australia was obliged to introduce a safe harbour regime as a consequence of its entry into the Australia-United States Free Trade Agreement.  This was achieved through the introduction of Division 2AA of Part V of the Copyright Act 1968 (Cth) by the US Free Trade Implementation Act 2004 (Cth) and the Copyright Legislation Amendment Act 2004 (Cth).

The existence of ‘safe harbour’ protection, limiting liability to an obligation to remove infringing content upon receiving appropriate notification of infringement, created the opportunity for the evolution of websites such as YouTube and Flickr, which host content uploaded by end users (the ubiquitous user generated content (UGC)).

Content is uploaded in such quantities that individual scrutiny of the content is impossible (according to the YouTube judgment content is currently being uploaded to YouTube at the rate of over 24 hours of video every minute).  The end user licence agreements that the contributors to such sites agree to with the service provider require users to declare that such content is not infringing.  The service provider will remove infringing content only upon specific notification from the copyright owner, under the provisions of the DMCA safe harbor provisions. Thus the proliferation of user-generated content directly owes its success to the introduction of the safe harbor provisions which legitimise this ‘infringe now, ask questions later’ approach.

The YouTube case is therefore important because it tested the legality of the business model created and facilitated by the safe harbor regime.

Viacom versus UGC (again) –

Viacom International, Inc., v. YouTube, Inc., 2010 WL 2532404 (SDNY June 23, 2010).

Viacom commenced proceedings against YouTube in March 2007 alleging that You Tube (and its parent company Google) were liable for both primary and secondary infringement of copyright.  (As an aside, the involvement of Viacom in this case is interesting as Viacom, owner of several major production houses including Walt Disney, Dream Works, Comedy Central and Nickelodeon, to name but a few, was one of the earliest content owners to take on the first fan created web sites, namely Star Trek, and in doing so, created very bad publicity amongst its fan base.)

YouTube made an application for summary judgment on the basis of the safe harbor provisions, claiming that under the relevant provisions of the DMCA they had insufficient notice of the relevant infringements.  Thus much of the judgment is concerned with what constitutes knowledge or awareness of infringement.

In his judgment, Judge Stanton avoids most of the vicious allegations and abuses which had been aired by the parties in their Memoranda in Support of Summary Judgment in March 2010, particularly those regarding alleged admissions by Google about how much YouTube content was likely to be infringing.  Rather he focuses upon a straightforward interpretation of the notice and take down provisions, in particular, whether the statutory requirement of ‘actual knowledge that the material or an activity using the material on the system or network is infringing’ and ‘facts or circumstances from which infringing activity is apparent’ are satisfied by a general awareness of infringements or whether it requires ‘actual or constructive knowledge of specific and identifiable infringements of individual items’.

Judge Stanton undertakes an extensive consideration of the legislative history of the provisions and concludes that the provisions require ‘knowledge of specific and identifiable infringements of particular individual items. Mere knowledge of prevalence of such activity in general is not enough.’

Out of the millions of works that may be posted on the platform, the service provider cannot be expected to know which works are infringing, nor indeed which are subject to fair use or a licence arrangement.  The Judge declined to shift the burden to the service provider to monitor such content and indeed he observed that each of the video clips in suit had been removed from YouTube, most in response to a DMCA takedown notice, usually within a 24 hour period. He further supports his conclusion with reference to a number of cases, including Perfect 10 Inc v CC Bill LLC 488 F. 3d 1102 (9th Cir 2007) and Tiffany (NJ) Inc v eBay 600 F. 3d 93 (2nd Cir 2010) (which concerns trade mark law and therefore does not involve DMCA considerations) and distinguishing the circumstance of peer to peer file sharing in Grokster , concluding that : ‘General knowledge that infringement is “ubiquitous” does not impose a duty on the service provider to monitor or search its service for infringements.’

Finally, the Judge dealt with a number of other points including the matter of whether the service provider receives a financial benefit directly attributable to the infringing activity, in a case where the service provider has the right and ability to control the activity.  The Judge concludes that the provider must know of the particular case before it can control it.

The decision emphasises the need for the service provider to know of and respond to a specific infringement.  General knowledge of infringements at large is not enough to constitute knowledge for the purposes of the section. It is not clear at this time whether the judgment will be appealed.

Outcomes: Actual Knowledge Required

This outcome is consistent with the approach taken by Cowdroy J in the iiNet decision Click here for our earlier coverage of that case.

Considering the application of the Australian safe harbour provisions, Cowdroy J concluded that iiNet did have a repeat infringer policy which would have entitled it to rely upon the safe harbour limitations had infringement been established.

Consistent with the passive approach to copyright enforcement endorsed by the YouTube decision, Cowdroy J imposed the burden of identifying and establishing infringement clearly on the copyright owners.

Relevance of US Cases?

Importantly, Cowdroy J also observed that US authorities on the safe harbour provisions ‘can provide significant assistance’ in the interpretation of the corresponding Australian provisions.  It should be noted that these observations are obiter, the Court having found that there was no authorisation of copyright infringement by iiNet.

The outcomes of the YouTube case represent an endorsement of the UGC model that has been adopted so enthusiastically by web users and which now represents a vital component of Web 2.0.

Dr Melissa de Zwart is an Associate Professor in Law at the University of South Australia.

(return to the top of this edition)


In this edition (#5)…

April 23, 2010

In this edition, Senior Lecturer Kim Weatherall reflects on the Anti-Counterfeiting Trade Agreement (ACTA), post-negotiations.  And, Associate Professor Melissa deZwart and lawyer Vicki Huang look at the new Digital Economy Act (UK) in light of the iiNet decision and the outlook on attempts to clamp down on online piracy.


The Digital Economy Act (UK) – preview for Down Under?

April 23, 2010

By Melissa de Zwart and Vicki Huang

The Digital Economy Act 2010 (the Act) was given Royal Assent on April 8th, 2010.  The Act regulates digital media and contains many of the suggestions from the Digital Britain Report of June 2009.  The Act is controversial for many reasons.  First, the lack of debate surrounding the Bill left many commentators reeling.  The first reading of the bill was presented to the House of Commons on March 16th 2010, was not debated at length in the Commons and pushed through in the dissolution of Parliament.  Second, whilst the Act touches on many areas of a digital economy such as the regulation of Channel Four, the most contentious parts of the bill are those centred on shutting down online piracy.  The spirit of these provisions is to use Internet Service Providers (ISPs) to police individual users and their use of peer-to-peer file sharing websites.

Under the Act, copyright holders can send a “copyright infringement report” to an ISP with evidence of a copyright infringement.  The ISP has the burden of notifying its subscriber of the alleged infringement (cl.4).  In addition, ISPs must provide copyright holders, upon request, with a “copyright infringement list” outlining each infringement by an individual anonymised user (cl.5).

The Secretary of State may tell OFCOM (the UK communication regulator) to order ISPs to shut down sites, suspend accounts or enforce other limits upon an ISP customer (cl.10).  ISPs that fail to apply technical measures against infringing subscribers can be fined up to £250,000 (cl.14).  The maximum criminal penalty for making copyright-infringing works is raised to £50,000 (cl.42).

Under cl.17, the Secretary of State may make provisions concerning the granting by a court of an injunction forcing ISPs to block access to “a location on the internet which the court is satisfied has been, is being or is likely to be used for or in connection with an activity that infringes copyright”.  In other words, government sanctioned website blocking.

Why the Uproar?

When the Bill was originally touted, there seemed to be widespread panic.  Claims of shutting down You-Tube and restrictions on freedom of speech were widely reported.  Some of the more vocally opposed proposals such as the “three strikes and you’re out” policy for recalcitrant users seem to have been withdrawn but the Act still has many in the UK concerned.  The fears seem based on the prospect of shutting down of sites that host a combination of legitimate and illegal material and the shutting down of sites that may use copyrighted work but in a reportage capacity eg wikileaks.org.  At the extreme, some argue that, the inclusion of the phrase “likely to be used” in cl.17, may mean a site like Google may be blocked based on its assumed intentions rather than its actions.

The concerns from the ISPs seem to relate to their duty to send infringement notices to users and their potential obligation to shut down access.  The problem with the Act from an ISP’s perspective is that whilst copyright holders can link piracy with an IP address, and these may be linked to a household’s internet account, there is no guarantee that the infringer will be identified.  An IP address can be used by many people at once, for example by legitimate users, neighbours, visitors or hijackers.  For cafes and public places with wi-fi, the identification of a user is almost impossible.  This has led to a fear that many innocent account holders will be sent infringement notices.

Proponents say the current procedure of getting a court order before an ISP will identify the infringing user is inefficient and costly.  By making it clear that an ISP is obliged to identify the user and by imposing a penalty of disconnecting the user, the cost of enforcing copyright laws will lessen as owners are not forced to go the court for orders or seek a remedy through the courts.

Piracy in Australia

The legislative approach in the UK is an interesting contrast to the current position in Australia which relies upon ISPs adopting a voluntary repeat infringer policy. The ‘safe-harbour’ provisions, which were introduced into the Copyright Act 1968 as a consequence of the AUSFTA, were considered in the recent case of Roadshow Films Pty Ltd v iiNet  Limited (No. 3) [2010] FCA 24, reviewed in the Fortnightly Review in February and March. In that case the Federal Court held an ISP to be not liable for its user’s peer-to-peer distribution of copyright works.  The case is scheduled for appeal but the approach of the Court to the safe harbour provisions is interesting in the context of the Digital Economy Act.

Three key aspects of the iiNet decision are important in this context:

1. The meaning of the ‘power to prevent’ infringement under section 101(1A) with respect to authorisation liability.

    • Whilst iiNet had the power to suspend or terminate users’ accounts under its customer contract, the Court held that this did not equate to an obligation to suspend or terminate accounts for copyright infringement. The Court observed [at 430] that ‘copyright infringement is not a straight “yes” or “no” question’. Therefore, the concept of who would constitute a repeat infringer was not self-evident, raising the same interpretation issues as outlined above with respect to the Digital Economy Act.

    2. The operation of s112E.

    • Although this section of the judgment is obiter, the Court interpreted this section to have little or no practical effect. The only circumstance in which s112E could have effect is where the person merely provides facilities for the making of the infringement and does nothing more. However, of course, if this is all the person is doing, it would be unlikely they would fall within the concept of authorisation. Any knowledge of infringement would mean that the section is no longer applicable.

    3. The safe harbour provisions.

    • Again, this section of the judgment is obiter as the sections only apply once a finding has been made that the ISP is liable for infringement. The Court confirmed that as compliance with the provisions is voluntary, failure to adopt a repeat infringer policy cannot be evidence that goes to a finding that an ISP is liable for copyright infringement. In order to fall within the limitation of liability provided by the safe harbour provisions, ISPs are required to adopt and reasonably implement a policy that provides for termination in appropriate circumstances of the accounts of repeat infringers.
    • Interestingly, the Court held that iiNet had a repeat infringer policy even if it had not been fully written down nor described to its subscribers: [at 593] ‘It is impossible to fail to notice the complete vacuum of legislative guidance in relation to any category A requirements when compared to the highly prescriptive requirements in relation to categories B-D found in s 116AH(1) and the Regulations. Neither the legislation, the Regulations nor extrinsic materials provide any guidance to the Court as to what the ‘appropriate circumstances’ for termination are, what ‘repeat infringement’ means or what the ‘accounts of repeat infringers’ means. The assumption must be that Parliament left latitude with the CSP to determine the policy, and left the meaning of those words to be determined by the courts.’

    The approach of the Court in this case demonstrates the difficulty of interpreting and applying such concepts, and it is likely that similar confusion may apply in the context of interpretation and application of the Digital Economy Act (UK).

    Outcomes

    Clearly, ISPs make much easier targets for copyright infringement actions than end users, but as a matter of public policy, the question needs to be asked regarding how much accountability and responsibility we wish to place on ISPs for monitoring and enforcing access to certain content. This broader policy question also arises in the context of content regulation and the Australian Government’s proposed introduction of mandatory internet filtering. Whether this is an issue for the courts or rather one for the legislature has to be questioned. The impact of the UK Digital Economy Act will certainly be closely watched by interested parties in Australia.


    In this edition (#3)…

    March 25, 2010

    The Fortnightly Review’s Legal Eagle surveys Australian laws addressing cyber-bullying and sexting.  In our second article, lawyer Michael Crawford reports on a recent conference regarding controversial copyright cases – the Telstra directories case, the Men at Work case and the iiNET case.  Finally Associate Professor Paul Jensen provides an economist’s perspective on what the damages in the Men at Work case should be.


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