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Wednesday, 31 December 2014

Breaking down Australia's injunctive online copyright enforcement reforms

Over the past several weeks, there have been several developments concerning Australia's recently-proposed online copyright enforcement reforms. Particularly, the Australian government is in the process of adopting reforms that would allow owners of copyright-protected works and other authorized parties (collectively, "Rights Holders") to petition Australian Courts for an injunctive order to directly block foreign-hosted websites from accessing Australia. Although these proposed measures will arguably provide Rights Holders greater means to enforce rights in their works across borders, they pose a number of potentially problematic issues I reported on in my own blog months ago that have yet to be addressed by the Australian government, not only impacting the potential implementation of these measures, but ultimately their effectiveness as a tool to combat online copyright infringement.

So what are these issues? First, it is important to understand the proposed injunctive reforms.

Last July, the Australian Government released for public comment a number of online copyright protection reform proposals in a discussion paper titled Online Copyright Infringement. Included in these proposals were easier requirements to establish contributory online copyright infringement liability, an expansion of entities qualifying for online service provider infringement safe harbors under Sections 116AA and 116AJ of the Australian Copyright Act, as well as others. However, the most internationally impacting and controversial proposal provided in the July paper was Proposal 2 - Extended Injunctive Relief ("Proposal"), which proposed that a Rights Holder be able to petition an Australian court for an injunctive order against an Internet service provider (ISP) to block access to Australia of a foreign-hosted website. To attain such an order, a foreign website's "dominant purpose" must be to infringe copyright, and if granted, a Rights Holder would be required to bear the particular ISP's costs for giving effect to the order, including the ISP's indemnification against damages claimed by third parties.

Inspired by injunctive powers adopted in the European Union under the Directive on the Harmonisation of Certain Aspects of Copyright and Related Rights in the Information Society (Article 8(3) of Directive No. 2001/29/EC), the Proposal would effectively give Rights Holders tools under Australian law to directly enforce right in their works against foreign-based websites. As I reported previously, the Proposal has substantial potential benefits from a cross-border IP protection standpoint. Beyond providing qualifying Rights Holders limited extraterritorial protection for their work(s) outside of Australia by blocking access to foreign websites that are typically subject to the laws of other jurisdictions, the Proposal also provides Rights Holders the ability to stem the international reach of a particular infringing website to a major market such as Australia. Further, the Proposal appears to be a valuable enforcement alternative in instances where a Rights Holder wishes to enforce rights in their work(s) against a non-Australian based website whose ISP host is unresponsive, or hosted in a country whose legislation or judicial system is unable, or in many cases unwilling, to enforce the Rights Holder’s rights short of prolonged litigation.

Despite these perceived benefits, the Proposal's uncertain financial burdens on Rights Holders may jeopardize its desirability as an enforcement tool. The Proposal is judicial enforcement measure, meaning that unlike notice and takedown provisions under Australia's Copyright Regulations (Regulation 20J), and the U.S.' Digital Millennium Copyright Act (17 U.S.C. § 512(c)), where a Rights Holder can submit a relatively simple notice petition to a ISP to temporarily or permanently remove a hosted infringing website, a Rights Holder likely needs to retain qualified Australian counsel to effectively obtain an injunctive order under the Proposal. Further, the Proposal requires that a Rights Holder “meet any reasonable costs associated with an ISP giving effect to an order” and indemnify an ISP against damages claimed by a third party arising out of the ISP’s enforcement of an order under the Proposal. Such legal and procedural costs, as well as indemnification obligations, make the Proposal a financially riskier proposition for Rights Holders than seeking enforcement under Australia or another nation's notice and takedown procedures as neither Australia nor most notice and takedown jurisdictions require that a Rights Holder indemnify an ISP for any enforcement action taken by the ISP on behalf of a Right Holder absent fraudulent statements by the Rights Holder. Although likely a substantial concern for most Rights Holders who seek to utilize injunctive measures provided under the Proposal, the Australian government has yet to provide further details on such Right Holders' financial obligations, through proposed legislation or otherwise.

Beyond uncertain financial obligations, the Proposal has also recently raised freedom of speech concerns that may ultimately impact its potential adoption into the Australia Copyright Act. Spokespersons for Australian Green Party recently characterized the Proposal  as being a "de facto Internet filter" that their party will not support if brought to the Australian Parliament for consideration. Further, public interest groups, such as the Institute of Public Affairs Australia have criticized the Proposal by calling it a "threat to free speech." 

Ida's dominant purpose
was easy to guess ...
Regardless of these concerns and barriers to implementation, the Proposal's success will hinge on whether it can effectively provide balanced online copyright enforcement. Ultimately, this will be determined by the Proposal's evidentiary burden for enforcement. As mentioned, in order for an Australian Court to grant an injunctive under the Proposal, a Rights Holder will need to establish that a foreign website’s “dominant purpose” is to infringe copyright. Again, the Australian government has yet to provide further direction on what constitutes a dominant purpose. Even if interpreted leniently, it will likely be difficult for a Rights Holder to meet this evidentiary threshold as it would require showing that an infringing website’s main purpose is to infringe copyright instead of merely establishing that the website infringes copyright as provided under most national notice and takedown enforcement systems.  

Based on this higher evidentiary burden, obtaining an injunctive order under the Proposal will likely be more difficult for a Rights Holder to obtain than a notice takedown. Coupled with the legal costs and potential indemnification concerns, the Proposal’s evidentiary burden may potentially hinder the Proposal from becoming a commonly-used and effective tool to fight online copyright infringement in Australia and beyond.

Thank you to Merpel, Jeremy, all of the other cats, and of course you, the readers, for the privilege of being a guest contributor to The IPKat over the past six months. It has truly been an honour!

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