COPYRIGHT AMENDMENT (ONLINE INFRINGEMENT) BILL 2015 Explanatory Memorandum
COPYRIGHT AMENDMENT (ONLINE INFRINGEMENT) BILL 2015
2013-2014-2015
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
COPYRIGHT AMENDMENT (ONLINE INFRINGEMENT) BILL 2015
REVISED EXPLANATORY MEMORANDUM
(Circulated by authority of the
Attorney-General, Senator the Honourable George Brandis QC)
THIS MEMORANDUM TAKES ACCOUNT OF AMENDMENTS MADE BY THE
HOUSE OF REPRESENTATIVES TO THE BILL AS INTRODUCED AND
SUPERSEDES THE EXPLANATORY MEMORANDUM TABLED IN THE HOUSE OF
REPRESENTATIVES
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 has discretion to 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 that the Court may take 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
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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.
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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.
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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:
a. the flagrancy of the infringement, or the flagrancy of the facilitation of the
infringement
b. 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
c. 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
d. 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.
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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:
a. the flagrancy of the infringement, or the flagrancy of the facilitation of the
infringement
b. 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
c. the public interest
d. any other remedies available to the copyright owner under the Act, and
e. 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
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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.
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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
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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. The test is also not intended to
capture Virtual Private Networks (VPNs) that are promoted and used for legitimate purposes,
or merely used to access legitimate copyright material distributed in a foreign geographic
market. VPNs have a wide range of legitimate purposes and have no oversight, influence or
control over their customers' activities.
40. The primary purpose test would direct the Court to consider the principal activity for
which the online location exists and the principal intention of users of that online location.
Purpose may be distinct from motive. An online location may have the 'primary purpose' of
infringing, or facilitating the infringement of copyright even if the operator of the location
derives a commercial advantage or profit from the operation of the location. For example,
where an online location has copyright infringement as the principal activity for which it
exists and the principal reason for attracting visits to the online location, the fact that the
motive or incentive of its operator is to draw profits from advertising revenue does not mean
that its primary purpose is to profit from advertising rather than to infringe copyright.
41. 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.
42. 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
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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).
43. The Court would also have the power to order that the parties establish a 'landing
page' at the disabled online location to which internet users who attempted to access the
disabled online location would be diverted. This landing page could state that the online
location has been disabled in accordance with a Federal Court order and detail the terms of
that order. The purpose of a landing page would be to ensure that subscribers are informed of
the reason that they are unable to access a disabled online location, avoiding the need to
contact their CSP for information.
Parties
44. 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
45. 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).
46. 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
47. Proposed subsection 115A(5) would provide a list of matters that the Court may take
into account in determining whether to grant an injunction.
48. The Federal Court would have discretion as to which of these factors to consider and
the appropriate weight to place on each factor.
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49. Proposed paragraph 115A(5)(a) would provide that the Court may 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.
50. Proposed paragraph 115A(5)(b) would provide that the Court may 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.
51. Proposed paragraph 115A(5)(c) would provide that the Court may 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.
52. Proposed paragraph 115A(5)(d) would provide that the Court may have regard to
whether access to the online location has been disabled in another country or territory in
relation to copyright infringement.
53. Proposed paragraph 115A(5)(e) would provide that the Court may 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.
54. Proposed paragraph 115A(5)(f) would provide that the Court may 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.
55. Proposed paragraph 115A(5)(g) would provide that the Court may 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.
56. Proposed paragraph 115A(5)(h) would provide that the Court may 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.
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57. Proposed paragraph 115A(5)(i) would provide that the Court may 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.
58. Proposed paragraphs 115A(5)(j) and (k) would provide that the Court may 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
59. 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
60. 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 the copyright owner, the CSP, the
operator of the online location or a person prescribed by the regulations.
61. 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.
62. 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
63. 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. This is intended to apply in circumstances
where a CSP chooses not to appear and contest an application. It is intended to ensure that a
party will not be penalised and required to bear unnecessary costs where it is fully
cooperating, or not frustrating proceedings. 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.
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64. It is open to the Court to give appropriate directions on the costs of implementing an
order, consistent with the usual practice of a Court in granting an injunction. The Court may
choose to take into account the fact that CSPs are not responsible for copyright infringement
and that the benefit of the order will flow to copyright owners.
65. This provision is not intended to expose CSPs to legal actions by subscribers as a
result of acts done or omitted in compliance with an order. The reasoning of Justice Perram
in Dallas Buyers Club LLC v iiNet (No 3) [2015] FCA 422 at [20] indicates that service
providers acting in compliance with a Federal Court order will not be liable to actions from
subscribers for doing so. It is intended that this provision will not alter the position at
common law that provides CSPs with an effective indemnity against third party actions.
Item 2: Paragraphs 119(a) and 120(1)(b)
66. 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.
67. 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
68. 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
69. 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
70. 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.
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