Graduated response in Australia: what does the draft code of practice say?

Adrian Storrier
Even IPKat readers based in the Northern Hemisphere will be probably aware that over the past few months how to reform copyright has been subject to intense discussion in Australia. Among other things, eg introducing US-style fair use into Australian copyright law thus replacing current fair dealing approach, debate has focused on ameliorating enforcement in online infringement cases.  

As also The 1709 Blog reported, yesterday Australian ISP and telecommunications industry body Communications Alliance released a draft code of practice establishing a graduated response copyright warning scheme. 

Today the IPKat is delighted to host the analysis of the draft code by Australian Katfriend currently in London Adrian Storrier, a PhD Candidate and Senior Fellow at the Melbourne Law School and Visiting Research Student, Centre for Commercial Law Studies, Queen Mary University of London.

Here's what Adrian writes:

"The code of practice was drafted by the Communication Alliance with input from consumer and rightholder representatives at the request of the Australian Attorney General and Minister for Communications. The Australian government has required that ISPs and rights holders negotiate a graduated response scheme by 8 April 2015, failing which the Australian government has threatened to implement its own scheme. The draft code of practice released by the Communication alliance is not a final agreed position and discussions continue between stakeholders.

Such ‘graduated response’ or ‘three strike’ schemes are designed to reduce online copyright infringements by requiring ISPs (upon notification by copyright holders) to send a series of notifications to users, warning them that their IP address has been allegedly detected infringing copyright. These schemes are often characterised by a series of increasing penalties for users who receive multiple notifications, including the temporary withdrawal of internet access.

Here's how ISP notices will look like
Content of the draft

Under the Code, ISPs would send escalating copyright notices to their customers, described as ‘education’, ‘warning’ and ‘final’ notices. These notices would advise customers that a rightholder had alleged that their IP address may have been used to infringe copyright, and provide links to a copyright information website, which is intended to provide information on ways of accessing authorised content, avoiding copyright infringement online, and ensuring that their internet service is secure from unauthorised access and use.

A customer may challenge a notice within 28 days of receipt before a written adjudication panel upon payment of a waivable (and if successful, refundable) $25 [ie a bit less than £13] fee. That panel will take into account information from the rightholder, ISP and user, including material supporting a claim by the user that someone else caused the notice by using their account without authorisation. At all times during the adjudication process the customer’s personal information must be kept confidential by the ISP. If the customer is successful on the balance of probabilities the ISP is required to treat the notice as if it had never been sent.

Participating ISPs are required to maintain ‘final notice lists’ and provide them to participating rightholders upon request. The lists contain the number of users who have been issued with education, warning and final notices and the IP addresses issued to them at the time of the alleged infringements. While generally the ISP must not disclose the identity or contact details of account holders on the final lists, the rightholder may lodge an application at the Federal Court for Preliminary Discovery seeking to obtain the identify and contact details of the account holders on the list. The ISP must then act reasonably to facilitate and assist the application and must also comply with a final court order to disclose the account holder’s details to the rightholder.

Those of Aussie ISPs will likely
be different client lists
If no final notice is sent to a user within 12 months from the date of receipt of the education notice, then the scheme resets, and the total number of infringement allegations against a user reverts to zero. 

While some reports have suggested that this aspect of the scheme will permit Australian users to download copyright-protected content twice a year with minimal risk of copyright litigation, nothing in the scheme is intended to change the general rights and remedies of copyright holders in relation to allegations of infringement, regardless of whether or not copyright notices have been sent in relation to a particular act of infringement. 

Indeed, the release of the draft code comes in the same week as several Australian ISPs have appeared in an Australian Federal Court resisting an application by the a rightholder of the film Dallas Buyers Club to obtain the customer data over 4,000 internet users allegedly detected torrenting the film.

The proposed three strike system does not apply to mobile internet users, nor does it apply to business users (such as cafés or other small businesses which provide incidental internet access to customers). The scheme also includes a mechanism where the process used by copyright holders to identify potential infringements is to be independently audited and certified before rightholders can send ISPs allegation of copyright infringement.

How does the system compare to other countries’ graduated response systems?

Other countries have considered or implemented similar graduated response systems, either on a legislative basis (including New Zealand and since replaced French scheme) or on a voluntary basis (including the United States and the UK). 

The effectiveness of such schemes is controversial -  while rightholder representatives claim that they lead to significant reductions in online copyright infringement, academic and former 1709 Blog contributor Rebecca Giblin has argued in a recent paper that "[t]here is no evidence demonstrating a causal connection between graduated response and reduced infringement". There has also been international concern that graduated response schemes which cut off internet access raise freedom of expression issues and are generally not proportionate.

The Communications Alliance proposal is more limited than those contemplated in other jurisdictions. Under the current proposal ISPs will not disclose the identity or contact details of their account holders at any stage of the scheme "unless there is a court order or written permission from the account holder expressly authorising such disclosure of personal information". Furthermore, the focus of the notices is educative, and ISPs are not required to take punitive steps towards their customers such as bandwidth shaping, play-penning or internet disconnection.

Next steps

Stakeholders, members of the public and readers of this blog are encouraged to provide comments on the draft Code here before 5.00pm AEDT on 23 March. 

Once finalised the Code will be registered with the Australian Communications and Media Authority, (an Australian Government statutory body with responsibility for internet regulation), and is intended to commence operation at the latest on 1 September 2015. 

It should be noted however that a number of areas of disagreement still exist between rights holders and ISPs, including the way that the scheme will be funded. This is a significant remaining area of dispute as the costs of such systems can be very high. In the UK under the voluntary Vcap scheme, rights holders have reportedly agreed to pay up to £750,000 to each ISP as a set-up fee, and up to £75,000 annually for ongoing administrative costs, reflecting the significant costs involved in establishing and operating graduated response schemes.

While it is not exactly certain to what extent rightholders are in complete agreement with the terms of the draft code of practice and there remains the possibility of changes before the 8 April deadline, the graduated response scheme as drafted is significantly less burdensome on Australian internet users than might have been expected. However whether such a scheme with a predominately educative focus is capable of changing the behaviour of Australian copyright infringers remains to be seen."
Graduated response in Australia: what does the draft code of practice say? Graduated response in Australia: what does the draft code of practice say? Reviewed by Eleonora Rosati on Saturday, February 21, 2015 Rating: 5

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