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Copyright Amendment (Online Infringement) Bill 2015

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2013-2014-2015

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

COPYRIGHT AMENDMENT (ONLINE INFRINGEMENT) BIll 2015

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

(Circulated by authority of the

Attorney-General, Senator the Honourable George Brandis QC)

                                                                                                        



 

COPYRIGHT AMENDMENT (ONLINE INFRINGEMENT) Bill 2015

general Outline

1.                   The purpose of this Bill is to introduce a key reform to reduce online copyright infringement.  The scheme is deliberately prescriptive; it is intended as a precise response to a specific concern raised by copyright owners.

2.                   The Bill amends the Copyright Act 1968 (the Act) to enable the owner of a copyright to apply to the Federal Court of Australia for an order requiring a Carriage Service Provider (CSP) to block access to an online location that has the primary purpose of infringing copyright or facilitating the infringement of copyright.

3.                   The Bill provides that copyright owners would be able to apply directly to the Federal Court for an injunction to disable access to an infringing online location, without having to first establish the CSP’s liability for copyright infringement or authorisation of copyright infringement.  This judicial process would be more efficient and avoid implicating CSPs unnecessarily.

4.                   The injunction power would only apply to online locations operated outside Australia. 

5.                   The Court must take into account a number of factors before granting an injunction.  These factors include:

·          the flagrancy of the infringement or its facilitation

·          whether disabling access to the online location is a proportionate response in the circumstances

·          the impact on any person likely to be affected by the grant of the injunction, and

·          whether it is in the public interest to disable access to the online location. 

6.                   The factors to be taken into account set an intentionally high threshold test for satisfaction by the Court. The purpose of the scheme is to allow a specific and targeted remedy to prevent those online locations which flagrantly disregard the rights of copyright owners from facilitating access to infringing copyright content.

7.                   The Bill contains a standalone injunction power which operates as a no-fault remedy.  It would not affect existing laws on infringement, copyright exceptions or limitations, authorisation liability or any of the safe harbour conditions.  Further, the Court granting an injunction would not create a presumption that the CSP has infringed copyright nor authorised the infringement of copyright.    

Background

8.                   Copyright protection provides an essential mechanism for ensuring the viability and success of creative industries by incentivising and rewarding creators.  Online copyright infringement poses a significant threat to these incentives and rewards, due to the ease in which copyright material can be copied and shared through digital means without authorisation.

9.                    Where online copyright infringement occurs on a large scale, copyright owners need an efficient mechanism to disrupt the business models of online locations operated outside Australia that distribute infringing copyright material to Australian consumers.  In addition, a consequence of fewer visitors at the particular online location may also impact the advertising revenue, which is often an integral element of the business models of these types of entities. 

10.               The Bill acknowledges the difficulties in taking direct enforcement action against entities operating outside Australia.  The proposed amendments are intended to create a no-fault remedy against CSPs where they are in a position to address copyright infringement. 

FINANCIAL IMPACT

11.               The introduction of the injunction power was the subject of a short-form regulation impact statement which estimated a total cost of $130,825 to CSPs on an annual basis.  Any costs that copyright owners assume by utilising an injunction would be voluntary.  Once the injunction provision is in force, it would be entirely at the discretion of copyright owners whether they choose to make an application for an injunction.

 



STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Copyright Amendment (Online Infringement) Bill 2015

12.               The Bill would be compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview of the Bill

13.               The Bill introduces amendments to the Act to target the problem of online copyright infringement. 

14.               The proposed amendments would enable copyright owners to apply to the Federal Court for an order requiring a CSP to block access to an online location operated outside Australia that has the primary purpose of infringing copyright or facilitating the infringement of copyright.

15.               The injunction power would only apply to online locations operated outside Australia. 

16.               In considering whether to grant such an injunction, the Court would be required to consider a number of factors, including the flagrancy of the infringement or its facilitation, whether disabling access to the online location is a proportionate response in the circumstances, the impact on any person likely to be affected by the grant of the injunction, and whether it is in the public interest to disable access to the online location. 

Human rights implications

17.               The Bill would engage the following human rights:

·                 the right to freedom of opinion and expression - article 19 of the International Covenant on Civil and Political Rights (ICCPR)

·                 the right to a fair hearing - article 14 of the ICCPR, and

·                 the right to take part in cultural life - article 15 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

Right to freedom of opinion and expression

18.               The proposed amendments would engage the right to freedom of opinion and expression as contained in article 19 of the ICCPR.  Amongst other things, article 19 states that individuals must have the ‘freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers’.  Under article 19(3), the right to freedom of expression may be subject to limitations that are necessary to protect the rights or reputations of others, national security, public order, or public health or morals.  Limitations must be prescribed by law, pursue a legitimate objective, be rationally connected to the achievement of that objective and a proportionate means of doing so.

19.               The Bill would enable the Federal Court to order a CSP to block access to an online location operated outside Australia that facilitates access to infringing content.  The effect of the order would be to prevent Australian subscribers of CSPs that are subject to the order from accessing some online locations.  These subscribers would be denied access to infringing copyright material accessed from those locations such as unauthorised films, television programs and music.  They would also be denied access to any programs or other tools available at these online locations that facilitate the infringement of copyright.

20.               An injunction is a reasonable, necessary and proportionate response to the problem of protecting the rights of creators and their licensees from infringing material being distributed to, or accessed by, persons in Australia.  The injunctions power would be subject to a number of threshold limitations.  The provision would only capture online locations that have the primary purpose of infringing copyright or facilitating the infringement of copyright.  This excludes online locations that are mainly operated for a legitimate purpose, but may contain a small percentage of infringing content. 

21.               It is possible to take direct action against an online location within Australia under the Act (section 115), but it is difficult to take action against the operator of an online location that is operated outside Australia.  The Bill would ensure that only online locations operated outside Australia that are infringing copyright, or facilitating the infringement of copyright would be subject to an injunction.  Consumers would be free to seek access to the copyright material through legitimate avenues.  The Bill would provide for further safeguards against unreasonable curtailment of freedom of expression by requiring the Court to have regard to a wide range of factors before granting an injunction.  The Court would be required to consider the public interest.  The Court would also be required to consider, for example:

·                 the flagrancy of the infringement, or the flagrancy of the facilitation of the infringement

·                 whether disabling access to the online location is a proportionate response.  For example, the Court may consider the percentage of infringing content at the online location compared to the legitimate content, or the frequency in which the infringing material is accessed by subscribers in Australia

·                 the impact on any persons likely to be affected by the grant of an injunction, for example, the operator of the online location or the CSP, and

·                 any other remedies available to the copyright owner under the Act.

Fair trial and fair hearing rights

22.               Article 14 of the ICCPR provides that all persons shall be equal before the courts and tribunals.   Further, in the determination of an individual’s rights and obligations in a suit at law, everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law.  This requires that each party be given the opportunity to contest the arguments and evidence adduced by the other party.

23.               The Bill would ensure the right of due process for CSPs and the operators of affected online locations.

24.               A CSP would be able to contest the making of an injunction in accordance with the general rules and procedures of the Federal Court.

25.               The operator of the online location would also be able to apply to the Federal Court to be joined as a party to the proceedings.  To ensure that the operator of the online location would be able to exercise this right effectively, the copyright owner would be required to notify the operator of  the application.  There may be some circumstances where the copyright owner may not be able to ascertain the identity or address of the operator of the online location despite reasonable efforts. 

26.               The Bill would further require the Court to have regard to a wide range of factors to ensure that the interests of CSPs and the operator of the online location would be taken into account before the Court makes a decision to block access to an online location.  The Court would be required to consider the impact on any persons likely to be affected by the grant of an injunction. For example, this would include the operator of the online location or the CSP.  The Court would also be required to have regard to:

·                 the flagrancy of the infringement, or the flagrancy of the facilitation of the infringement

·                 whether disabling access to the online location is a proportionate response.  For example, the Court may consider the percentage of infringing content at the online locations compared to the legitimate content, or the frequency in which the infringing material is accessed by subscribers in Australia

·                 the public interest

·                 any other remedies available to the copyright owner under the Act, and

·                 any other relevant matter.

Right to take part in cultural life

27.               Article 15 of the ICESCR creates the right to take part in cultural life, to enjoy the benefits of scientific progress and its applications, and to benefit from the protection of the moral and material interests resulting from any scientific, literary or artistic production of which the individual is the author.  The steps to be taken to achieve the full realisation of this right shall include those necessary for the conservation, development and the diffusion of science and culture.  The Committee on Economic, Social and Cultural Rights’ General Comment No. 17 (2005) states that in order to avoid rendering the provision on protection of moral or material interests ‘devoid of any meaning, the protection afforded needs to be effective in securing for authors the moral and material interests resulting from their productions’.

28.               The proposed amendments would promote the right to benefit from the protection of the moral or material interests in a production, by strengthening the protection provided to copyright owners in enforcing their copyright.  In many cases copyright infringement results in lost sales for creators and their licensees, detracting from the protection of the material interests that result from their literary or artistic productions.  The proposed measures would prevent persons in Australia from accessing material from infringing online locations operated outside Australia.  This would ensure that copyright owners are able to receive the full benefits of their creative endeavours.

29.               The proposed amendments are intended to create a no-fault remedy against CSPs to prevent copyright infringement. The granting of an injunction by the Court is not intended to have any impact on whether a CSP has authorised a particular copyright infringement under sections 36 or 101 of the Act.

Conclusion

30.               The Bill is compatible with and facilitates human rights because it promotes rights. To the extent that it may limit human rights, these limitations are of an incidental nature and are reasonable, necessary and proportionate.  

 



NOTES ON CLAUSES

Preliminary

Clause 1 - Short title

31.               Clause 1 is a formal provision specifying the short title of the Bill.  It provides that when the Bill is enacted, it is to be cited as the Copyright Amendment (Online Infringement) Act 2015 .

Clause 2 - Commencement

32.               This clause provides that the Bill would commence on the day after it receives Royal Assent. 

Clause 3 - Schedules

33.               This is a formal clause that enables the Schedules to amend the Act.  It would provide that each Act that is specified in a Schedule is amended or repealed as set out in the applicable items in the Schedule, and that any other item in a Schedule has effect according to its terms.  The Bill contains only one Schedule.

SCHEDULE 1 - AMENDMENTS

Copyright Act 1968

Item 1: After section 115

34.               Item 1 would insert proposed section 115A which provides that upon an application by the owner of a copyright, the Federal Court may grant an injunction requiring a Carriage Service Provider (CSP) to take reasonable steps to disable access to an online location in certain circumstances.

35.               Proposed subsection 115A(1) would set out the criteria to be satisfied before the Court may grant an injunction. 

36.               The Court must be satisfied that the CSP is providing access to an online location operated outside Australia.  Copyright owners have existing avenues to take direct action against an online location operated within Australia, but face difficulties in enforcing their rights against an online location operated outside the jurisdiction.  The term ‘online location’ is intentionally broad and includes, but is not limited to, a website, and would also accommodate future technologies.

37.               The Court must also be satisfied that the online location either infringes the copyright, or facilitates an infringement of the copyright.  For example, this would include circumstances where a website provides torrent files that facilitate the download and upload of copyright material without the permission of the copyright owner.  It would also include websites that provide links to, or host, infringing material, as well as online storage services that are used to store infringing material.  This provision is technology neutral and is intended to capture both existing and future technologies that may be used to facilitate the infringement of copyright.

38.               The Court must also be satisfied that the primary purpose of the online location is to either infringe copyright, or facilitate the infringement of copyright generally.  This is an intentionally high threshold for the copyright owner to meet as a safeguard against any potential abuse.  For example, the ‘primary purpose’ test would prevent an injunction to disable access to an art gallery website operated outside of Australia that may contain an unauthorised photograph. Thus, a website such as www.youtube.com or www.blogger.com would not prima facie satisfy the test as being an online location that infringes or facilitates infringement of copyright. Technology and technological change is not to be chilled or targeted by this amendment.

39.               The primary purpose test would also prevent an injunction to block an online location operated overseas that provides legitimate copyright material to individuals within another geographic location, but are not licensed to distribute that copyright material in Australia.  For example, the United States iTunes store does not operate with the primary purpose of infringing copyright or facilitating the infringement of copyright and therefore access to this online location would not be disabled under an injunction.

40.               Proposed subsection 115A(2) would provide that the effect of the injunction is to require the CSP to take reasonable steps to disable access to the particular online location.  This may include blocking its subscribers from accessing a website operated overseas that facilitates copyright infringement in any such a manner as the Court sees fit.  Section 23 of the Federal Court Act 1976 provides that, in relation to matters in which it has jurisdiction, the Court has power to make orders of such kind, including interlocutory orders, and to issue, or direct the issue of writs of such kinds, as the Court thinks appropriate. 

41.               Consistent with section 23 of the Federal Court Act, the Court would be able to make appropriate orders in granting an injunction.  For example, pursuant to a similar power in the United Kingdom, the Hon Mr Justice Arnold in Twentieth Century Fox Film Corporation & Ors v British Telecommunications Plc [2011] EWHC 2714 (Ch) (26 October 2011) issued detailed orders in relation to the technical means to be adopted by the CSP to block access to the relevant website (see paragraph 56).  Further, section 23 of the Federal Court Act would also enable the Court to order any appropriate indemnities or undertakings to be provided by the parties when granting the injunction. For example, in Cartier International AG & Ors v British Sky Broadcasting Ltd & Ors [2014] EWHC 3354 (Ch) (17 October 2014) Justice Arnold ordered the inclusion of a ‘sunset clause’ to provide that the order ceased to have effect at the end of a defined period unless either the CSPs consented to the orders being continued, or the Court ordered that they should be continued (see paragraph 265).

Parties

42.               Proposed subsection 115A(3) would provide that, in addition to the copyright owner and the CSP being party to the proceedings, the person operating the online location may apply to the Court to be joined as a party.  However, it is ultimately within the Court’s discretion whether to join the party to the proceedings.

Service

 

43.               Proposed subsection 115A(4) would require the copyright owner to notify the CSP and to take reasonable steps to notify the person operating the online location of the application.  Chapter 2, Part 10 of the Federal Court Rules 2011 provides for the notification of parties to a proceeding.  However, in most circumstances, the operator of the relevant online location would not be a party to the proceedings unless an application is made under proposed subsection 115A(3).  This provision would impose the onus of notification on the copyright owner, giving ample opportunity for the operator of the online location to make the appropriate application under proposed subsection 115A(3) if desired.  Generally, the notification of proceedings to an international party is a matter of private international law.  However, in these circumstances, whether the copyright owner took reasonable steps to notify the operator of the online location about the application is one of the factors that the Court must take into account in determining whether to grant an injunction (see proposed paragraph 115A(5)(h) below).

44.               This provision is not intended to alter Chapter 2, Part 9, Division 9.1 of the Federal Court Rules, which includes provisions for joinder of parties and interveners to proceedings.  These Rules provide the Court with discretion to allow persons with standing to become a party or intervene in the proceedings, or if there is no standing, to be added to the proceedings as amicus curiae (a friend of the Court).

Matters to be taken into account

45.               Proposed subsection 115A(5) would provide a list of matters that the Court must take into account in determining whether to grant an injunction.

46.               Proposed paragraph 115A(5)(a) would require the Court to consider the flagrancy of the infringement, or the flagrancy of the facilitation of the infringement.  ‘Flagrancy’ is a subjective element that goes toward the intention of the operator of the online location.  The term ‘flagrancy’ is used in subparagraph 115(4)(b)(i) of the Act in relation to additional damages.  It is intended to be punitive to address wrongful conduct or circumstances where the infringer (or in this case, the operator of the online location) demonstrates a general disregard for copyright.

47.               Proposed paragraph 115A(5)(b) would require the Court to consider how much assistance the online location provides to facilitate the infringement.  Search engines or websites based primarily on user-generated content are not the intended targets of the proposed injunction power.  Rather, the proposed provision is intended to capture online locations that provide programs, links, directories, indexes or other tools to assist copyright infringement.

48.               Proposed paragraph 115A(5)(c)  would require the Court to consider whether the nature of the online location shows a disregard for copyright generally, which will often be clear from the material on the site.

49.               Proposed paragraph 115A(5)(d)  would require the Court to have regard to whether access to the online location has been disabled in another country or territory in relation to copyright infringement.

50.               Proposed paragraph 115A(5)(e) would require the Court to consider whether disabling access to the online location is a proportionate response in the circumstances.  For example, the Court may decide that a website has a substantial or significant non-infringing purpose, so blocking that particular website is unlikely to be a proportionate response.  The Court may also wish to consider the frequency in which infringing material is accessed by consumers in Australia from that particular online location.

51.               Proposed paragraph 115A(5)(f) would require the Court to consider the impact on any person, or class of persons, who is likely to be affected by the grant of an injunction.  Affected persons could include the operator of the online location, the CSP, subscribers of the CSP or users of the online location. Where a single CSP may be the subject of an application, the Court may also wish to consider whether granting the injunction may result in a loss of subscribers to that particular CSP.

52.               Proposed paragraph 115A(5)(g) would require the Court to consider whether it is in the public interest to disable access to the online location, taking into account the public interest in the freedom of expression, and other public interest issues such as, for example, freedom of access to information. 

53.               Proposed paragraph 115A(5)(h) would require the Court to consider whether the copyright owner has complied with proposed subsection 115A(4) concerning notification of the application to the operator of the online location .  In some circumstances, this notification may be difficult, but it is important that the operator of the online location be provided with an opportunity to join the proceedings if desired.  The proposed paragraph would require the Court to take into account the copyright owner’s efforts in attempting to notify the operator of the online location. 

54.               Proposed paragraph 115A(5)(i) would require the Court to consider any other remedies available under the Act.  For example, the copyright owner may have remedies available against the CSP under section 115 of the Act if it is established that the CSP has infringed or authorised the infringement of copyright under section 101 of the Act.

55.               Proposed paragraphs 115A(5)(j) and (k) would require the Court to consider any other matter prescribed by the regulations, and provide the Court with the discretion to consider any other relevant matter respectively.  These proposed provisions are intended to ensure there is sufficient flexibility for additional factors to be taken into account when determining whether to grant an injunction, should issues not contemplated at the time of introduction arise.

Affidavit evidence

56.               Proposed subsection 115A(6) would extend the effect of section 134A of the Act to a class of acts for the purposes of proceedings under proposed section 115A.  This would mean that in a proceeding under proposed section 115A, evidence that an act or a class of acts were done without the licence of the copyright owner or exclusive licensee may be provided by an affidavit.  For example, for the purposes of proposed paragraph 115A(1)(c), the copyright owner may wish to provide evidence by affidavit that a class of acts were facilitated by the online location in order to establish a pattern of infringement. 

Rescinding and varying injunctions

57.               Proposed subsections 115A(7) and (8) would provide a power for the Court to limit the duration of, or rescind or vary an injunction granted under proposed section 115A.  The Court may vary or rescind the injunction on application by a party to the proceedings or a person prescribed by the regulations. 

58.               Proposed subsection 115A(7) is intended to provide an additional safeguard to enable the Court to, for example, rescind an injunction after a certain period of time because an infringing online location may have shifted toward a non-infringing business model. 

59.               Proposed subsection 115A(8) would provide for persons to be prescribed for the purposes of having standing to make an application to rescind or vary an injunction.  It is envisaged that such persons may be the Chair of the Australian Competition and Consumer Commission or the Australian Communications and Media Authority.  It is likely that as the process becomes streamlined over time, CSPs may not oppose applications.  Whether or not contested, in the unlikely circumstance that an injunction is overly wide-reaching or has other unintended consequences, a prescribed person would have the ability to apply to the Court for the appropriate variation or revocation of the injunction.

Costs

60.               Proposed subsection 115A(9) would provide that a CSP is not liable for the costs of the proceedings unless the CSP takes part in them.  The provision is not intended to alter Part 40 of the Federal Court Rules which provide for the Court to make orders as to costs.

Item 2: Paragraphs 119(a) and 120(1)(b)

61.               Item 2 would insert a reference to ‘115A’ within paragraph 119(a).  This would ensure that an exclusive licensee has the same right to bring an action under proposed section 115A as a copyright owner, except against the copyright owner.

62.               Item 2 would also insert a reference to ‘115A’ within paragraph 120(1)(b).  This means that in an action brought under proposed section 115A, an owner or exclusive licensee must be joined as a plaintiff or added as a defendant in any proceedings that are brought by another owner or licensee with concurrent rights.

Item 3: Section 131A

63.               Section 131A of the Act currently contains only one paragraph.  Item 3 would insert a new paragraph number to provide for an additional paragraph to be inserted by proposed item 4.

Item 4: At the end of section 131A

64.               Item 4 would insert a new subsection to provide that only the Federal Court has jurisdiction in relation to an application under proposed section 115A. 

Item 5: At the end of section 131D

65.               In addition to item 4, item 5 would clarify that the Federal Circuit Court of Australia does not have jurisdiction in relation to an application under proposed section 115A.