AIPPI Congress Report 9: The middleman - intermediary liability

The only intermediary blocking the IPKat is interested
 in complying with is that of your computer screen

On Monday, AusKat AIPPI reporter Clare Cunliffe attended the AIPPI World Congress panel session on “The middleman – intermediary liability”. The session delved into the problem created by advanced technologies and increased global access to communication networks bring opportunities to exploit and infringe intellectual property rights online, by a variety of actors.  Clare reports:  

"This panel session discussed intermediary liability in the digital world in key jurisdictions, including the availability of site blocking injunctions and addressed the practical effects and inherent limitations of such injunctions in the digital era.

The session was moderated by Agris Bitāns, of Eversheds Sutherland. The speakers were Remy Chavannes of Brinkhof, Marketa Trimble of the University of Nevada, Justice John Nicholas of the Federal Court of Australia and Martin Hosking of Redbubble (an online retailer of artworks uploaded by users). 

The panel considered:

• What is an intermediary? Mr Chavannes offered a pragmatic definition of an intermediary, being anyone who could help a rights holder either prevent or prosecute an infringer.

• The types of responsibility that might be imposed on an intermediary. Mr Chavannes suggested that these included financial liability, the responsibility to remove or block objectionable material to to prevent re-publication or removed content, the responsibility to identify primary infringers

• Who had the rights and duties to determine infringement: This involved considerations of automation, transparency and redress.

Dr Trimble noted that as the twentieth anniversary of the US Digital Millennium Copyright Act approaches, some observations can be made about the safe harbor regime (The DMCA provides that internet service providers will not be liable for copyright infringement by users, if the internet service provider has, among other things, taken certain steps when it receives notice that infringing material resides on its network; adopted and implemented a policy that provides for termination in appropriate circumstances of users who are repeat infringers; and accommodated standard technical measures that are used by copyright owners to identify and protect copyrighted works). 

Those are:

• The safe harbor regime is very widely used. More than 90,000 entities have registered with the US Copyright Office to claim the protection of the safe harbor provisions.

• The take down provisions are very widely used. Google has reported that it has taken down more than 3 billion pages.

• The landscape has changed. In 1998, there were 2.4 million websites, and by 2015, there were 836 million. Since 1998, we have seen the emergence of Google, Bit Torrent, and Facebook.

• Perceptions of the DMCA have changed. Originally, it was considered that the DMCA would have a chilling effect on free speech. Recently, Google observed that the safe harbor scheme has achieved its objectives (although rights holders have suggested that it is one sided).

Dr Trimble suggested that since legislation traditionally lags behind technology, it may be time to look again at whether the DMCA is striking an appropriate balance between the rights of rights holders and of online service providers. In particular, she observed that there is little incentive for online service providers to implement policing schemes which would result in them having actual knowledge of the infringing acts. She suggested that the scheme should be revisited to create incentives for online service providers to detect infringement, while maintaining the safe harbour protection. 

Dr Trimble also observed that difficult conflict of law issues apply in relation to the issue of intermediary liability. There is scope for clarification of the operation of conflict of laws in the context of intellectual property. 

Clare's very own IP cat

Justice Nicholas observed that in Australia, cases concerning intermediaries in the context of the internet have turned on the communication right and the right of authorisation. He noted that the communication right was introduced very recently, to deal with the online environment, whereas authorisation is a concept that first emerged at the beginning of last century but which has been reinvigorated in the online context. He noted that passive hosts of online content were more likely to have authorised infringement, whereas online service providers that involved themselves in the act of making the content available online might also infringe the communication right. In relation to the right of communication, Justice Nicholas noted that:

• In Australia, the fact that the copyright owner itself has made content available online does not defeat an allegation that an infringer has infringed the communication right; and
• hyperlinking to content hosted on another website will not make that content available (although it might constitute authorisation) 

Justice Nicholas made the following observations about authorisation:

• Depending on the circumstances, sanctioning, approving or countenancing acts of infringement may constitute authorisation. Indeed, inaction or indifferent may rise to the level of authorisation, if the intermediary has the power to prevent the infringement (although this will always involve a fact-specific enquiry).

• Factors that are relevant to assessing authorisation have been codified into the Australian law (in particular, the court is required to consider whether the alleged authoriser has the power to prevent the infringement, the nature of the relationship between the alleged authoriser and the primary infringer, and whether the infringer took reasonable steps to prevent the infringement)

• However, the court has wide latitude in determining whether authorisation has occurred, which can lead to uncertainty.

• The mere provision of facilities will not constitute authorisation.

Justice Nicholas noted that in Australia, the safe harbour provisions are confined to carriage service providers (access providers). The Australian Government is considering whether to expand the scope of protection. 

Justice Nicholas observed that since 2015, it has been possible to obtain site blocking injunctions against access providers, where an online location which is hosted outside Australia (including a website) has the primary purpose of infringing or facilitating infringement. Since the legislation was introduced, there have been four cases. Rights holders seeking to avail themselves of these provisions may be required to pay compliance costs to the access providers.

Remy Chavannes noted that in the EU, there is an ongoing legislative process to update copyright directive to address infringing content on internet platforms, and an ongoing dialogue between the CJEU and the national courts in relation to the implementation of existing rules on intermediary liability, copyright, and intellectual property enforcement. As part of this dialogue, the CJEU has recognised that intellectual property rights are fundamental rights, but that there are other important fundamental rights. Where they collide, national legislators and the courts must achieve a fair balance. This involves considering three factors

• the scope of exclusive rights,

• the scope of exceptions and limitations and

• the extent and method of enforcement.

The CJEU has rejected a proposal that infringing content should be filtered, on the basis that this solution breaches privacy, freedom of expression and freedom of enterprise. However, it has expressed the view that an order to block access to infringing services is potentially permissible, even if it is not 100% effective, provided appropriate safeguards are in place. 

Martin Hosking explained that his company, Redbubble, is a marketplace for user generated content, which makes $200 million in annual sales and hosts more than 11 million images from over 600,000 artists. Because of the nature of Redbubble’s business, it is on the leading edge of the law in relation to intermediary liability.

Mr Hosking expressed the view that Australia’s copyright law is outdated, and ill-equipped to deal with the reality of user generated content. He noted that the Australian Law Reform Commission and the Productivity Commission have both proposed the expansion of Australia’s safe harbour scheme to include more online service providers. He opined that in the absence of an expanded scheme, companies like Redbubble are exposed to expensive litigation, and that contributors and consumers are disadvantaged. 

He said that from an industry perspective, it was necessary to ensure that the laws were stable, and that an appropriate balance between the rights of industry and the rights of service providers is struck. In particular, the law should articulate clear requirements in relation to the takedown of infringing content and in relation to repeat infringers, and build in an expectation of continued infringement. He considered that such a system would be in the interests of all parties, because it would enable artists and contributors to gain distribution, provide mechanisms for easy redress for rights holders, give consumers access to user generated content, and ensure that innovative companies remained in Australia. He expressed the view that in the future, automated takedown procedures would facilitate rights enforcement."