news corp australia`s position regarding extending safe harbour to

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news corp australia`s position regarding extending safe harbour to
SUBMISSION TO DEPARTMENT OF COMMUNICATIONS REGARDING THE EXPOSURE DRAFT OF THE
COPYRIGHT AMENDMENT (DISABILITY AND OTHER MEASURES) BILL 2016
17 FEBRUARY 2016
INTRODUCTION
News Corp Australia welcomes the opportunity to make a submission regarding the Exposure Draft of the
Copyright Amendment (Disability and Other Measures) Bill 2016 (the Bill)1.
This submission focuses solely on Schedule 2 of the Bill, a proposed amendment to the Copyright Act 1968
(the Act) that would extend safe harbour to service providers.
We have the following significant process concerns regarding Schedule 2 of the Bill. We are of the view that
the Bill suffers significantly due to these critical shortcomings:
 The Government has not articulated the reasons for the inclusion of Schedule 2 of the Bill – the
evidence of the problem and/or the policy rationale; and
 The Government has not engaged in stakeholder consultation regarding the inclusion and details of
Schedule 2 of the Bill.
As a result, the Bill includes – and/or is deficient by the absence of – the following:
 The definition of ‘service provider’ is overly broad and overreaches the intended parameters to
whom safe harbour schemes apply globally. The definitions are so loose that safe harbour would be
granted to piracy websites;
 The sections of the Act that Schedule 2 proposes to amend are not stand-alone provisions in the Act,
they are interrelated with other sections and parts of the Act that comprise the safe harbour
scheme, the online intermediary liability provisions and subordinate legislation such as Regulations
under the Act. These associated provisions are essential to making the safe harbour scheme and
online intermediary liability elements of the Act function properly and as intended;
 Such an inconsistent approach substantially increases the complexity and inconsistency of the
application of provisions of the Act; and
 Further to the point above, whatever the Government’s rationale for proposed Schedule 2 and
extending safe harbour from carriage service provider (CSP) to service provider, we note other
provisions in the Act that apply to CSPs and are not proposed to extend to service providers – for
example the June 2015 inclusion of section 115A – injunctions against carriage service providers
providing access to online locations outside Australia. We question why it is not proposed, that
these too – and particularly section 115A – be extended to service providers.
Lastly, we also note that the US Copyright Office is currently reviewing the US safe harbour scheme and the
European Commission is considering issues of intermediary liability in light of new technologies, the digital
economy, and the market effects of such. It would seem prudent to understand and learn from the issues
raised in those international jurisdictions to help to inform Australian domestic policy.
1
https://www.communications.gov.au/have-your-say/updating-australias-copyright-laws
1
RECOMMENDATION
If the Government intends to proceed to introduce the Bill into Parliament2 we recommend that Schedule 2
be removed from the Bill and not be introduced to Parliament at this stage.
Rather, the Government should undertake a meaningful consultation regarding the issue, including
distributing a discussion paper containing reasons for the amendment, and inviting comments from
interested stakeholders. Such an approach would also give the Government the opportunity to include the
complementary and interrelated elements of the safe harbour eco-system for consultation; and ensuring
sound public policy outcomes and the avoidance of unintended consequences.
That way, the issue of Schedule 2 can be explored fully, while allowing all other provisions of the Bill – which
News Corp Australia understands have been the subject of appropriate and adequate stakeholder
consultation – to proceed to be introduced to Parliament in the Government’s intended timeframe.
THE ISSUES: SIGNIFICANT PROCESS CONCERNS
The Government has not articulated the reasons for the inclusion of Schedule 2 of the Bill
Due to the lack of explanation in the Bill and associated documentation, it is not at all transparent what the
problem is that the Government ascertains that Schedule 2 it attempting to solve, nor can an assessment be
made that if the problem is known, that the response – including the definition of service provider in this
case – is proportionate to the problem and an appropriate response.
We are of the view that the lack of explanation and articulation the evidence of the problem and/or the
policy rationale does not fit with sound policy-making practices, and can lead to unintended consequences –
including increasing the risk to creativity generated by those that rely on property rights. Again, however, it
is unclear if such has been considered, or not, as there is no rationale provided as to why Schedule 5 has
been included in the Bill.
The most recent inclusion of safe harbour as an issue for exploration was in the Attorney-General’s
Department’s Online Copyright Infringement Discussion Paper of mid-2014. The context in which the
concept of an extension to safe harbour was raised in that paper was as one of three proposals, including
injunctive relief and authorisation liability.
The Government pursued a legislative amendment to a well-understood, evidenced and articulated problem
– for injunctive relief (now section115A of the Act). However, the highly contentious issues of extension of
safe harbour and authorisation liability remain as they were at the close of submissions to that Discussion
Paper – without a Government response – in spite of Schedule 2 being included in the Bill.
It is also of significant concern that while the Bill is being circulated for comment, it is also listed to be
introduced in the Autumn sittings of Parliament – indicating that it is the intention of the Government to
press ahead on the Bill, including Schedule 2, without the Government articulating why it is doing so.
We recommend that to overcome this issue, and to ensure any amendments are given due consideration,
that Schedule 2 of the Bill be removed and not be introduced to Parliament at this stage.
2
29 January 2016, Legislation proposed for introduction in the 2016 Autumn Sittings 2016, Department of Prime
Minister and Cabinet, https://www.dpmc.gov.au/sites/default/files/files/2016_autumn_public_list-Introduction.pdf
2
Rather there should be an appropriate consultation to ensure sound public policy outcomes and the
avoidance of unintended consequences.
Lack of stakeholder consultation regarding Schedule 2 of the Bill
Exacerbating the lack of transparency about reasons for the hurried, and lack of articulation for the inclusion
of Schedule 2, is that lack of consultation, including the lack of any questions regarding Schedule 2 in the
Guiding Questions3 companion document to the Bill, which purports to provide ‘background and context
about the proposed amendments’.
It could be the case that a lack of stated reasons for Schedule 2 might give rise to the issue of a lack of
stakeholder consultation. However, two wrongs do not make a right. Regardless, we find this lack of
consultation curious, particularly as it is acknowledged that what Schedule 2 is intending to do is highly
contentious amongst stakeholders. In contrast we note the various consultations that continue to occur
regarding other contentious issues the Government is considering, including but not limited to media policy
reform.
While we make no comment on the provisions in the Bill other than Schedule 2, we are aware that there has
been a level of stakeholder consultation regarding the other provisions, but none regarding Schedule 2.
We recommend that to overcome these issues, and to ensure any amendments are given due consideration,
that Schedule 2 of the Bill be removed and not be introduced to Parliament at this stage.
Rather there should be an appropriate consultation to ensure sound public policy outcomes and the
avoidance of unintended consequences.
THE ISSUES: THE BILL INCLUDES – AND/OR IS DEFICIENT BY THE ABSENCE OF:
The definition of ‘service provider’ is overly broad and overreaches the intended parameters to whom safe
harbour schemes apply globally
The definition of ‘service provider’ as currently drafted is overly broad and overreaches the intended
parameters of safe harbour schemes globally – being the provision of limited liability for passive services, not
all services, and particularly not for commercial services that can then exploit the safe harbour to nurture
and build commercial services at the expense of content creators.
This is an important element of safe harbour schemes, that it apply on a limited basis to passive service
providers – those that only innocently and not-for-profit facilitate the communication of content.
Arguably all website operators are service providers including the operators of copyright piracy and torrent
websites. AS such the amendments could make copyright piracy lawful in Australia.
It would seem that the definition would be helped by an explanation of the ‘problem’ that Schedule 2 was
seeking to ‘fix’.
Notwithstanding the lack of transparency of the problem, we understand that the Music Rights Australia
submission includes proposed drafting of the definition to ensure that it reflects the underlying policy of safe
harbour. We urge the Government to consider this within a separate consultation process for Schedule 2 as
3
https://www.communications.gov.au/have-your-say/updating-australias-copyright-laws
3
recommended previously in this submission.
The sections of the Act that Schedule 2 proposes to amend are not stand-alone provisions in the Act
As we detailed in our submission to the AGD Online Copyright Infringement Discussion Paper, the safe
harbour and online intermediary liability are inextricably linked, and also work in concert with subordinate
legislation such as Regulation 20B of the Act.
These associated provisions are essential to making the safe harbour scheme and online intermediary
liability elements of the Act function properly and as intended – it is an eco-system.
To labour the point, the safe harbour scheme provides an incentive for limiting liability for carriage service
providers (in the form of limiting the remedies available against carriage service providers) if they are found
liable under the authorisation provisions of the Act.
As described in the AGD Safe Harbour Consultation Paper4:
In 2006, the Copyright Act 1968 was amended to provide a scheme offering legal incentives for
Carriage Service Providers (CSPs) to cooperate with copyright owners in deterring copyright
infringement on their networks. The scheme is commonly referred to as the ‘safe harbour scheme’
and limits the remedies available against CSPs for copyright infringements that take place through
their systems and networks that they do not control, initiate or direct.5
It is therefore the case that the safe harbour scheme is inextricably linked to the authorisation provisions of
the Act, and therefore Schedule 2 is ill conceived and will have significant unintended consequences.
Illustrating this with the common image of a set of scales – on one side of the scales would be the benefit (or
incentive), and on the other side of the scales would be the obligation. The Act intends for the sides of the
scales to be balanced. Schedule 2 does not achieve this balancing act outcome as intended.
Therefore, Schedule 2 merely gifts the safe harbour to an unwarranted and overly-expanded set of parties
(as per the definition of service provider in the Bill) without requiring the countervailing obligation of taking
reasonable steps to actually claim the safe harbour.
We note that the October 2011 Safe Harbour Consultation Paper stated:
The expanding scope of the safe harbour scheme is not intended to alter the existing balance of the
scheme.6
Such an inconsistent approach substantially increases the complexity and inconsistency of the application
of provisions of the Act
Furthermore, there provisions other than those included in Schedule 2 of the Bill that apply to carriage
service providers – that without understanding the reasoning of Schedule 2 could and perhaps should also
extend service providers.
As outlined above, there are a number of provisions that are instrumental for the intended functioning of
the safe harbour scheme that must also be amended to extend to service providers, such as sections 101
4
https://www.ag.gov.au/Consultations/Documents/Revising+the+Scope+of+the+Copyright+Safe+Harbour+Scheme.pdf
Ibid, p3
6
Ibid, p5
5
4
and 36.
What this is illustrating moreover is that the cherry-picking approach taken by the Government to change
the application of a provision – particularly without explaining why it should be so – from one set of entities
to another, leads inconsistency and complexity in the Act.
We also note that some of the proponents for the extension of safe harbour are vocal in claiming that the
Act is complex and inconsistent, and needs a good rewrite – including a broad safe harbour provision.
However, it is interesting that those same entities are also vocal that authorisation provisions should not be
extended to service providers, while safe harbour provisions are – thereby promoting greater inconsistency
within the Act – for which they want fair use to ‘fix’.
Additional provisions should be reviewed to extend to service provider
Further to the point above, whatever the Government’s rationale for proposed Schedule 2 and extending
safe harbour from carriage service provider to service provider, we note other provisions in the Act that
apply to CSPs and are not proposed to extend to service providers.
We draw particular attention to section 115A that was passed by the Parliament in 2015, providing for no
fault injunctions against carriage service providers providing access to online locations outside Australia. We
question why it is not proposed, that these too – and particularly section 115A – be extended to service
providers.
We recommend that section 115A be extended to service providers.
NEWS CORP AUSTRALIA’S POSITION REGARDING EXTENDING SAFE HARBOUR TO SERVICE
PROVIDERS
Our principled position on such a proposition as Schedule 2, extending safe harbour to service providers,
remains unchanged since our submission to the Attorney-General’s Department’s Online Copyright
Infringement Discussion Paper of 2014.
For convenience the News Corp Australia submission to that Discussion Paper is attached at Appendix A to
this submission.
To restate that position, safe harbour can be extended to service providers – only if there is also an
obligation for service providers to act reasonably to deter copyright infringement on a service provider’s
network, and an explicit liability if this is not met. Only then will the ‘balance’ between authorisation liability
(the legal obligation or risk) and safe harbour (the benefit of taking reasonable steps) be struck.
This requires amendments to the Act in addition to those currently drafted in the Bill. Specifically,
amendment to sections 101 and 36 regarding authorisation – to ensure they apply to service providers.
There is also an issue which arises regarding ‘how’ the entity claiming safe harbour would meet the
requirement, and these are contained in, and would require amendments to, Regulation 20B of the Act.
This will also enable the Government to meet its only stated intention of the amendment, being to provide
safe harbour to service providers ‘if they comply with conditions designed to reduce online copyright
5
infringement’7.
Also, if the Government is to meet the stated goals of the Bill – that the ‘draft amendments are designed to
modernise and streamline the Copyright Act 1968’8 and to ‘update and improve the operations of existing
legislation’9 – it must take time to review Division 2AA of Part V of the Act and subordinate legislation such
as Regulation 20B. Additionally, the Government must also consult and review other interdependent
elements of the safe harbour scheme within the Act, including authorisation provisions at sections 101 and
36 of the Act, and other provisions such as section 115A that is currently limited in application to carriage
service providers.
Only if full and adequate consultation occurs and required amendments made – including amendment to the
definition of service provider, and to ensure the scheme functions as intended, do we support the safe
harbour scheme being expanded to service providers.
7
15 January 2016, Have your say on copyright amendments, Media Release from the Minister for Communications,
Senator the Hon Mitch Fifield,
http://www.minister.communications.gov.au/mitch_fifield/news/have_your_say_on_copyright_amendments#.VsPD_kv6
BZg
8
Ibid.
9
Op. cit.
6
APPENDIX A:
SUBMISSION TO ATTORNEY-GENERAL’S DEPARTMENT, ONLINE COPYRIGHT INFRINGEMENT
DISCUSSION PAPER
5 SEPTEMBER 2014
INTRODUCTION
News Corp Australia welcomes the opportunity to make a submission to the Attorney General’s Department
Online Copyright Infringement Discussion Paper (the Paper)10.
We support the general thrust of the Government’s approach to legislative amendment to help address
online copyright infringement in Australia, to rectify the deficiencies in the Copyright Act 1968 (the Act) and
provide rights holders with the ability to efficiently and effectively take steps to protect their copyright.
However, we do recommend changes to the proposals to ensure that the Government’s goal of a legal
framework – that provides certainty regarding legal liability; a streamlined process for rights holders to seek
a court order to block access to websites providing infringing material; and incentives for the parties to work
together to address online copyright infringement – will be fulfilled.
Reform of this area of the copyright regime is long overdue. Failure to address this pressing issue will put at
risk the significant contribution that copyright industries make to Australia‘s cultural and economic
landscape. As the Paper records, these are the jobs of over 900,000 people and an economic value of more
than $90 billion, including $7 billion in exports.11
As we have said previously, there is no silver bullet to online copyright infringement. However it is
important that the three elements of legitimate/licensed products and services, consumer awareness and
education, and a well-functioning legal framework work in concert to support the copyright associated
industries’ ongoing contribution to Australia’s economy and culture.
10
July 2014, Australian Government Online Copyright Infringement Discussion Paper (The Paper),
http://www.ag.gov.au/Consultations/Documents/OnlineCopyrightInfringement/FINAL%20%20Online%20copyright%20infringement%20discussion%20paper%20-%20PDF.PDF
11
PwC (2012), The Economic Contribution of Australia’s Copyright Industries 1996-97 to 2010-11, Prepared for the
Copyright Council, http://www.copyright.org.au/pdf/PwC-Report-2012.pdf
7
STRUCTURE OF THE SUBMISSION
Section 1 – Recommendations
Section 2 – Overview of the issue
Section 3 – The goal and how it will be achieved
Section 4 – The toolkit required to address online copyright infringement
o Legitimate/licensed products and services
o Availability of unlawful content
o Consumer awareness and education
Section 5 – Analysis of Proposals contained in the Paper
o Including recommendations; and
o Responses to corresponding questions posed in the Paper
Section 6 – Responses to questions posed in the Paper
Appendices
A. Digital Content Guide press release
B. Thank You campaign press release
C. Music Matters press release
D. Hadopi – Danaher et al study
E. Overview of European Court of Justice ruling, kino.com case
F. Overview of cases and jurisprudence of early UK site blocking cases
8
RECOMMENDATIONS
News Corp Australia supports the general thrust of the Government’s approach to legislative amendment to
help address online copyright infringement in Australia.
We make the following specific recommendations regarding the Proposals in the Paper.
PROPOSAL 1 – RECOMMENDATION
While we support the overarching intent of Proposal 1, we recommend that Proposal 1 does not proceed in
its current form.
Rather, Proposal 1 must deliver a legislative amendment that ensures an effective legal framework and legal
incentives for service providers and rights holders to work together, and ensure the Act works as originally
intended.
This will require amendment to the authorisation provisions of the Act such that:
1. It is explicit that a service provider that fails to take reasonable steps, when placed on notice of
infringing behaviour on its network, is liable under the authorisation provisions of the Act; and
2. Expand the authorisation liability provisions to service providers and intermediaries.
This will also require a definition of ‘service provider’ in the Act. This definition should be appropriate to
capture entities acting in their capacity to function as a service provider.
This definition should be appropriate to capture entities such as universities, schools and libraries, only if
they are acting as a service provider.
This will meet the goals of the Government, assist in meeting Australia’s international trade obligations,
ensure the Act works as intended including rectifying the unintended deficiencies as identified in the iiNet
case, and align Australia with international jurisdictions.
The expansion to incorporate service providers and intermediaries is essential if the safe harbour provisions
(at Proposal 3) are to be expanded.
PROPOSAL 2 – RECOMMENDATION
While we support the overarching intent of Proposal 2, we recommend that Proposal 2 does not proceed in
its current form.
Rather, Proposal 2 must deliver a legislative amendment that ensures a streamlined process that allows the
court to determine an order for injunction. Expanding injunctive relief will enable rights holder/s to apply to
the court to have service provider/s block access to websites operated outside Australia that provide access
to material that infringes copyright.
It is unnecessary, and very likely counterproductive and undermining, to stipulate the matters for the court
to take account of in determining the order. Rather, it is appropriate that the matters outlined in Proposal 2
are determined by the court in considering the evidence of the case before it.
9
This will require amendment to the Act such that:



The court is granted the power to determine such a request for injunction;
The matters referred to in Proposal 2 not be included in the legislation – these are more
appropriately determined by the court in considering the evidence brought before it; and
Extend injunctive relief to service providers and intermediaries.
This will also require a definition of ‘service provider’ in the Act.
This will meet the goals of the Government, assist in meeting Australia’s international trade obligations,
ensure the Act works as intended, and align Australia with international jurisdictions.
Giving the court the power to determine a request for equitable relief of this kind, without directing the
court to take into account specific matters, is consistent with powers already invested in the court.
PROPOSAL 3 – RECOMMENDATION
We recommend that Proposal 3 does not proceed in its current form, particularly in light of Proposal 1 (as
per the paper) not being extended to include service providers.
Rather, Proposal 3 may proceed – in that safe harbour can be extended to service providers – only if the
approach outlined at Proposal 1 is implemented. That is, that there is an obligation to act reasonably to
deter copyright infringement on a service provider’s network, and explicit liability if this is not met. Only
then will the ‘balance’ between authorisation liability and safe harbour by struck.
Only if the above occurs can the safe harbour scheme be expanded to service providers.
Only then will the Proposal 3 meet the goals of the Government, assist in meeting Australia’s international
trade obligations, ensure the Act works as intended, and align Australia with international jurisdictions.
10
OVERVIEW OF ONLINE COPYRIGHT INFRINGEMENT
1.
THE ISSUE
As is well understood, the Act does not currently provide rights holders with the ability to easily take steps to
protect their copyright against current and evolving forms of digital copyright infringement.
This manifests in increased business investment risk, which detrimentally impacts investment in new and
innovative services, and therefore reduces benefits to consumers. It also undermines revenue streams to
Australian artists. Reform of this area of the copyright regime is long overdue.
Failure to address this pressing issue will put at risk the significant contribution that copyright industries
make to Australia‘s cultural and economic landscape. As the Paper records, these are the jobs of over
900,000 people and an economic value of more than $90 billion, including $7 billion in exports.12
CURRENT SITUATION IN AUSTRALIA
There are currently two major types of online copyright infringement:

Peer-to-peer (P2P) – the Act is unable to deal with the problems of P2P online infringement as it
presents today. This was acknowledged by the High Court in the iiNet case.13
Rectifying the current deficiencies in the Act, via the authorisation provisions, and ensuing industry
schemes or commercial agreements and appropriate regulatory measures would be an appropriate
approach.

Websites that illegally make available content by streaming or download – there is currently no
mechanism for rights holders to apply for a court order for carriage service providers (CSPs),
including internet service providers (ISPs), to limit consumer access to overseas sites that make
available material that infringes copyright. Therefore rights holders are not able to protect their
rights, or take steps to protect consumers, from these sites.
Amending the Act to give the power for the court to hear an application from rights holder/s for an
order for service providers, including ISPS, to block access to such websites in overseas jurisdictions,
would also be an appropriate approach.
LEGISLATIVE AMENDMENT IS REQUIRED IN AUSTRALIA
We are clear that legislative amendments are required as the Act currently does not provide rights holders
with the ability to efficiently and effectively take steps to protect their copyright against these types of
infringements, including in these ways.
Similar measures have been implemented in international jurisdictions including the United Kingdom,
Europe and the United States.
PwC, The Economic Contribution of Austrlaia’s Copyright Industries 1996-97 to 2010-11; Prepared for the Copyright
Council (2012), http://www.copyright.org.au/pdf/PwC-Report-2012.pdf
13 Roadshow Films Pty Ltd v iiNet Ltd [2012] HCA 16, http://www.austlii.edu.au/au/cases/cth/HCA/2012/16.html, at
[79]
12
11
3.
THE GOAL AND HOW IT WILL BE ACHIEVED
Before undertaking detailed analysis and assessment of the proposals included in the Paper, it is useful to
review the Government’s goal as stated in the Paper, which the proposals must serve. That goal is:
‘to provide a legal framework within which rights holders, ISPs and consumer representatives can
develop flexible, fair and workable approaches to reducing online copyright infringement.’14
News Corp Australia supports the goal outlined by the Government.
The Paper also acknowledges that Australia has a range of international obligations to provide protections
for copyrighted material, including bilateral trade agreements, for example with the United States, and also
multilateral treaties made under the World Intellectual Property Organisation and the World Trade
Organisation.15
The Paper goes on to state that the framework aims to:
‘provide certainty as to legal liability, streamline the process by which rights holders can seek relief
from the courts to block access to websites providing infringing material, and provide an incentive for
market participants to work together to address online copyright infringement.’16
The Paper proposes three elements to achieve the goal, those being:



Proposal 1: extended authorisation liability;
Proposal 2: extended injunctive relief; and
Proposal 3: extended safe harbour scheme.
News Corp Australia supports – and stresses – that the only way in which to achieve the goal and the aims of
the framework is by amending the Copyright Act 1968 (the Act).
Detailed analysis of each Proposal is at Section 5 of this submission.
14
The Paper, p1
Ibid, p1
16
Ibid, p1
15
12
4.
THE TOOLKIT REQUIRED TO ADDRESS ONLINE COPYRIGHT INFRINGEMENT
The Introduction to the Paper17 also outlines three factors that contribute to online copyright infringement
in Australia, including the availability and affordability of lawful content, the ease with which consumers can
access unlawful material, and consumer awareness of legitimate services.
The Paper is accurate in outlining that any response to online copyright infringement cannot just come from
Government. Therefore, we provide the following information regarding:



Legitimate/licensed products and services;
Availability of unlawful content; and
Consumer awareness and education.
As we have said previously, there is no silver bullet to online copyright infringement. However it is
important that the three elements of legitimate/licensed products and services, consumer awareness and
education, and a well-functioning legal framework work in concert to support the copyright associated
industries’ ongoing contribution to Australia’s economy and culture.
LEGITIMATE/LICENSED PRODUCTS AND SERVICES
There is an ever expanding and wide array of authorised channels and delivery platforms available for
Australians to enjoy content, including movies, TV, books and music. The recently launched Digital Content
Guide is a useful tool to provide information regarding the depth and breadth of legitimate content and
services.
Notwithstanding the range of services available, we offer the following examples, both of which utilise digital
delivery mechanisms to continue to innovate and deliver the entertainment that people want, where and
when they want it.

Movies and television – Foxtel
Foxtel offers a range of innovative products and services that deliver entertainment to consumers,
across various devices and at a range of price points, including:
o
Foxtel Play18
Foxtel Play enables consumers to choose where and when you want to be entertained. It
streams over the internet and offers a range of live TV, catch-up TV and movies, and TV and
movies on demand.
It is available on a range of different devices including Sony PlayStation, Xbox 360, PCs and
Macs, Smart TVs and Blu-Ray players.
Foxtel Play subscribers also receive access to the Foxtel Go app that allows access on smart
phones and tablets.
o
17
18
Foxtel Go19
Ibid, p1
http://www.foxtel.com.au/foxtelplay/howitworks/default.htm
13
If a consumer has a Foxtel residential account or a Foxtel Play Account, they also have access
to Foxtel Go. Up to three devices can be registered on the account, and customers can have
two devices running Foxtel Go simultaneously. There is also the flexibility to change device
choices once a month.
Foxtel Go is available on a range of devices including Apple and Samsung portable devices,
PCs and Macs, and Android.
o
Foxtel Express from the US20
Express from the US offers the most popular US dramas from major producers, including
HBO, to customers within hours of their broadcast in the US. Express from the US
entertainment available for September 2014 includes the final seasons of Boardwalk Empire
and Sons of Anarchy.
o
Presto21
Presto is a stand-alone movie service offered over the internet that offers Foxtel movie
channels and access to a library of movies available on-demand. Foxtel recently announced
a new 'all-you-can-eat' flat rate movie subscription price of $9.99 per month on a no lock-in
contract.22 It is available on televisions via Chromecast, tablets, and PCs and Macs. The
Presto app is available on the Apple and Samsung app stores and on Google Play.
Foxtel recently announced that more than 20 percent of Presto views have been via
Chromecast since Presto’s arrival on the device in July this year. 23

Music
There are more than 30 licensed online music services in Australia. These offer a vast range of
music, accessible via licensed download and subscription services, ubiquitously across a range of
devices at a range of price points including $0.
In February 2014 the Australian Recording Industry Association (ARIA) released its annual wholesale
figures for the local recorded music industry, showing the rapid growth and development of digital
music services in 2013, with digital music product overtaking physical music product for the first
time.24
ARIA Chairman Denis Handlin AM, said:
‘As our industry continues to embrace the digital landscape, it is increasingly important that
we have the business and rights protection environment in place to support our local artists
19
https://www.foxtel.com.au/discover/foxtelgo/default.htm
http://www.foxtel.com.au/whats-on/foxtel-insider/express-from-the-us-september-2014-236090.htm
21
https://www.presto.com.au
22
http://www.foxtel.com.au/about-foxtel/communications/hey-presto-for-9-99-per-month-218129.htm
23
http://www.foxtel.com.au/cms/groups/webcontent/@fox/@corporate/@dotcom/documents/webcontent/pr_chromecastpresto_140821.pdf
2424
28 February 2014, ARIA Wholesale Figures 2013, http://www.aria.com.au/pages/documents/MediaRelease2013ARIAWholesaleFigures.pdf
20
14
and record labels, which make such a valuable contribution to our country’s cultural identity
and creative economy.’25
AVAILABILITY OF UNLAWFUL CONTENT
Notwithstanding the plethora of legitimate licensed services available across all entertainment genres,
unlawful content remains abundantly available.
This is best illustrated by the music industry. As outlined above, the music industry offers a range of
products and services, with music available at the same time around the world, on a range of devices and
across a range of price points – including $0 – yet still there is a significant issue with unlawful music
availability and ensuing online copyright infringement of music globally.
In fact, the IFPI Digital Music Report 201426 reports that 26 percent of internet users worldwide regularly
access unlicensed services. This figure applies on to desktop-based services and does not include
smartphone and tablet-based music infringement.
The music industry experience annihilates what some may claim, that if only the content was ‘available and
affordable,’ or ‘available at a comparable price,’ or ‘available at the same time as overseas’, or some other
combination of ‘availability and price’ then people would not infringe copyright. Price and availability are
important tools, but these alone cannot address the issue.
As outlined in the Introduction to this submission, there are currently two main sources of infringing
content, that being via P2P network, and also websites that make available content for streaming and/or
download that infringes copyright.
Regarding the latter category, many of these sites are funded by advertising revenue, with the content
element of the site merely the material that operators use to draw people to the website, and in turn serve
advertising. Again product responses, including price and availability, cannot alone address the supply of
unlawful content. Additional legislative measures are required to assist in dealing with the issue of the
supply, or availability, of unlawful content.
In Good Money Gone Bad – digital thieves and the hijacking of the online ad business,27 a report into the
profitability of ad-supported content infringement, it is reported that the websites researched make about
US$227 million in ad revenue annually; and the 30 largest sites researched that are supported exclusively by
ads average US$4.4 million each annually – with the largest BitTorrent portal sites making over US$6 million.
This data illustrates the quantum of the issue of the monetary lure of the supply of unlawful content, and
that even when licensed content is available for $0, it remains the case that the availability of unlawful
content remains and users access that unlicensed content. This illustrates the need to complement
legitimate content initiatives in the marketplace, and consumer awareness and education with legislative
amendment to address the supply of unlawful content via site blocking orders determined by the court.
25
Ibid
March 2014, http://www.ifpi.org/downloads/Digital-Music-Report-2014.pdf, p40
27
February 2014, research conducted by MediaLink for the Digital Citizens Alliance
http://www.digitalcitizensalliance.org/cac/alliance/content.aspx?page=FollowTheProfit
26
15
CONSUMER AWARENESS AND EDUCATION
For some years rights holders and their representative groups have undertaken programs and research to
raise awareness of the importance and value of content. Some of these initiatives are outlined below.

Digital Content Guide
Recently a group of rights holders and their associations worked together to develop and launch the
Digital Content Guide at www.digitalcontentguide.com.au. It is a free service designed to help
consumers find legitimate sources on content. It can also be used as a tool for cross-referencing and
checking that digital content sources, for example responses to online searches, are
legitimate/licensed and not infringing. This will help consumers to increase their awareness and
understanding of the range of legitimate digital content services, and also more confidently
ascertain the bona fides of a website or source before accessing the content.
The press release associated with the launch of the Digital Content Guide is attached at Appendix A.

Thank You
In August 2012 the Australian screen community launched a campaign to say thank you to
consumers for choosing to watch film and television via legitimate channels. Produced and
distributed by the IP Awareness Foundation (IPAF)28, the campaign was supported by actors,
production crew, distributors, exhibitors and a wide range of local businesses.
Australian actor, Susie Porter, who featured in the campaign, said:
‘I chose to personally become involved in this campaign because our industry relies on the
good will of our audience for any show to be a success. It’s important to once in a while say
‘thank you’ to Australians who chose to support our work by going to the cinema, buying or
renting DVDs, watching TV or viewing our shows on a genuine online website, because
without them we wouldn’t be able to invest in the production of all of our great shows. Good
on you for watching!’29
Nic Holland, director of the Thank You commercial, said:
‘Like all productions, creating this consumer message was a labour of love. It takes an army
of talented individuals, each with their own special skill, to come together as a team and
create quality screen content, and the production of this ‘Thank You’ video was no different.
However, the common motivation for everyone’s involvement was a commitment to thank
Australians for watching our shows the way we intended them to be viewed. While we are
blessed to be working in a field we love, it has its fair share of challenges, and we can only
continue to make quality films and TV shows with the support of the paying public.’30
When launched, Thank You ran in cinemas nationally, on Foxtel, on select new release DVDs, on
Quickflix home delivery DVD envelopes, and via a wide range of film and television industry
websites. It is currently running in cinemas, on Foxtel and selected channels including Sky News, and
on free-to-air television networks.
28
http://www.ipawareness.com.au/
20 August 2012, Thank You campaign press release, http://www.ipawareness.com.au/media-release/screencommunity-launches-thank-you-campaign-at-movie-convention
30
Ibid
29
16
The press release associated with the launch of the Thank You campaign is attached at Appendix B.

Music Matters
The Music Matters campaign originated in the UK in 2010, and launched in Australia and New
Zealand in 2011. The site is at http://anz.whymusicmatters.org and is also on YouTube, Facebook
and Twitter.
Music Matters is a collective of people across the music community, including artists, songwriters,
labels, managers, publishers and music stores, formed to remind listeners of the value and
significance of music. One of the central tenants of the ongoing campaign is described as:
‘We all know that music is important. But with music more available than ever before, it’s
worth reminding ourselves of that fact. It’s easy to forget about the extraordinary lengths
that performers, songwriters and musicians can go to create music and the powerful effect
that music has on each and every one of us.
We believe it is important to support the musicians and all those involved in making
incredible music, and that is why we’ve set up the Music Matters campaign in Australia and
New Zealand.’31
There is also a Music Matters trust mark that acts as a guide to identifying legitimate sites in
Australia, New Zealand and other territories worldwide. The trust mark is an important element of
Music Matters, because:
‘In an evolving digital landscape we think that music fans like to know that the site they are
using is legitimate, supporting the artists, musicians, songwriters and everyone involved in
creating the music.’32
The press release associated with the launch of Music Matters in Australia and New Zealand is
attached at Appendix C.

IP Awareness Foundation
The IP Awareness Foundation33 is an initiative of the Australian film and television community aimed
at promoting the benefits of screen copyright and the legal accessing of film and television content.
The IP Awareness Foundation's core activities include:
o
Education – producing and delivering educational programs and resources for Australian
secondary schools and facilitating classroom discussions around the issues of creativity and
copyright – which has been occurring since 2007;
o
Research – conducting annual national research regarding the attitudes and behaviours of
Australians in relation to accessing digital content. The research is conducted by
independent market research organisation Sycamore Research & Marketing, in conjunction
with Newspoll; and
31
http://anz.whymusicmatters.org/why-music-matters
Ibid
33
http://www.ipawareness.com.au/
32
17
o
Consumer awareness and campaigns – creating consumer awareness campaigns to inform
Australians about the impact of copyright infringement and establish the connection
between online behavior and the effect on the local film and TV industry – such as the Thank
You campaign outlined above.
The information above is only a snapshot of some of the legitimate products and services, and consumer
awareness and campaigns undertaken including market and publicity. However it is evident that rights
holders and their representative groups continue to invest in their evolving services as they strive to meet
the needs of consumers in the digital era, and in turn continue to innovate and create even more content for
consumers.
However, it is also evident in this Section that while rights holders continue to produce innovative content
and evolve the ways in which this is delivered, and educate people about the importance of sourcing that
content from legitimate sources, there are some that exploit the hard work and investment of others for
their own gain – and do not return a cent to the creators, be they big or small. Continuing to supply
legitimate content and undertaking consumer awareness is not deterring the operators of the websites
overviewed on this Section from supplying content that infringes copyright. Pointing to price and availability
of legitimate and licensed content and services, as some tend to do, does not impact the operators of such
sites. The experience of the music industry story tells us so – again, price and availability are moot points,
and still 26 percent of internet users worldwide regularly access unlicensed services.
Therefore it is with much resolve that we support the goal of the Government, to provide a legal framework
and legal incentives for market participants to cooperate to deter online copyright infringement. The
Government’s goal and framework are focused correctly on dealing with both the supply of unauthorised
content – extending injunctive relief; and the demand for unauthorised content – extending authorisation
liability.
In the proceeding Section we analyse the details of each of the Proposals contained in the Paper.
18
5.
ANALYSIS OF PROPOSALS CONTAINED IN THE PAPER
PROPOSAL 1 – EXTENDED AUTHORISATION LIABILITY
THE PROPOSAL
Proposal 1 entails amending the Copyright Act 1968 to ‘clarify the authorisation liability under sections 36
and 101 to ISPs.’34 The Proposal suggests that this would be achieved by the following legislative
amendments to those respective sections:
Section 36 – Infringement by doing acts comprised in the copyright
(1) Subject to this Act, the copyright in a literary, dramatic, musical or artistic work is infringed by a person
who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in
Australia, or authorises the doing in Australia of, any act comprised in the copyright.
(1A) In determining, for the purposes of subsection (1), whether or not a person has authorised the doing in
Australia of any act comprised in the copyright in a work, without the licence of the owner of the
copyright, the matters that must be taken into account include the following:
(a) the extent (if any) of the person's power to prevent the doing of the act concerned;
(a) the nature of any relationship existing between the person and the person who did the act
concerned;
(b) whether the person took any reasonable steps to prevent or avoid the doing of the act, including;
whether the person complied with any relevant industry codes practice.
(i) the extent (if any) of the person’s power to prevent the doing of the act concerned;
(ii) whether the person or entity was complying with any relevant industry schemes or
commercial arrangements entered into by relevant parties;
(iii) whether the person or entity complied with any prescribed measures in the Copyright
Act Regulations 1969; and
(iv) any other relevant factors.
(2) The next three succeeding sections do not affect the generality of this section.
And section 101 – Infringement by doing acts comprised in copyright
(1) Subject to this Act, a copyright subsisting by virtue of this Part is infringed by a person who, not being
the owner of the copyright, and without the licence of the owner of the copyright, does in Australia,
or authorises the doing in Australia of, any act comprised in the copyright.
(1A) In determining, for the purposes of subsection (1), whether or not a person has authorised the doing
in Australia of any act comprised in a copyright subsisting by virtue of this Part without the licence of
the owner of the copyright, the matters that must be taken into account include the following:
34
The Paper, p4
19
(a) the extent (if any) of the person's power to prevent the doing of the act concerned;
(a) the nature of any relationship existing between the person and the person who did the act
concerned;
(b) whether the person took any other reasonable steps to prevent or avoid the doing of the act,
including; whether the person complied with any relevant industry codes of practice.
(i) the extent (if any) of the person’s power to prevent the doing of the act concerned;
(ii) whether the person or entity was complying with any relevant industry schemes or
commercial arrangements entered into by relevant parties;
(iii) whether the person or entity complied with any prescribed measures in the Copyright
Act Regulations 1969; and
(iv) any other relevant factors.
(2) The next two succeeding sections do not affect the generality of the last preceding subsection.
(3) Subsection (1) applies in relation to an act done in relation to a sound recording whether the act is done
by directly or indirectly making use of a record embodying the recording.
(4) Subsection (1) applies in relation to an act done in relation to a television broadcast or a sound
broadcast whether the act is done by the reception of the broadcast or by making use of any article or thing in
which the visual images and sounds comprised in the broadcast have been embodied.
While News Corp Australia supports an amendment to the authorisation liability provisions of the Act to
enable the Act to operate as it was intended, and to enable industry schemes and commercial arrangements
to satisfy the ‘reasonable steps’ requirement, we do not support the approach outlined in Proposal 1 for the
following reasons.
Proposal 1 does not meet the goal
It is important to link this back to the Government’s stated goal of providing a legal framework to reduce
online copyright infringement – by ‘providing certainty as to legal liability’ and ‘provide an incentive for
market participants to work together to address online copyright infringement.’
Unfortunately the proposed amendments contained in Proposal 1 do not meet the Government’s goal. Nor
do they overcome address the issues raised by the High Court in Roadshow Films Pty Ltd v iiNet Limited,
particularly:
‘This final conclusion shows that the concept and the principles of the statutory tort of authorisation
of copyright infringement are not readily suited to enforcing the rights of copyright owners in respect
of widespread infringements occasioned by peer-to-peer file sharing, as occurs with the BitTorrent
system. The difficulties of enforcement which such infringements pose for copyright owners have
been addressed elsewhere, in constitutional settings different from our own, by specially targeted
legislative schemes, some of which incorporate co-operative industry protocols, some of which
require judicial involvement in the termination of internet accounts, and some of which provide for
the sharing of enforcement costs between ISPs and copyright owners.’35
35
[2012] HCA 16 at [79]
20
Nor do the proposed amendments overcome:
‘The history of the Act since 1968 shows that the Parliament is more responsive to pressures for
change to accommodate new circumstances than in the past. Those pressures are best resolved by
legislative processes rather than by extreme exercise in statutory interpretation by judicial
decisions.’36
It could be said that what the Proposal actually does is reshuffle the deck chairs that are the factors of
consideration for establishing authorisation liability. It remains the case however that the Proposal does
nothing to address the deficiencies of the Act in this area and meet the goal.
News Corp Australia therefore does not support the proposal in the current form.
Proposal 1 risks undermining the established factors of authorisation and increased litigation

Risk of undermining established factors of authorisation
Proposal 1 appears to risk undermining the inclusive, but not exclusive, list of factors at sections
36(1A) and 101(1A) that must be taken into consideration in determining if a person has authorised
the doing of an act comprised in copyrights.
These factors were established by the Copyright Amendment (Digital Agenda) Act 2000, which, as
outlined in the Explanatory Memorandum to that Act:
‘The inclusion of these factors in the Act essentially codifies the principles in relation to
authorisation that currently exist at common law (see in particular University of New South
Wales v Moorhouse (1975) 133 CLR 1). They are intended to provide a degree of legislative
certainty about liability for authorising infringements.’37

Risk of increased litigation
It therefore follows that undermining the established factors of authorisation risks the re-litigation
of cases previously decided where those cases include consideration of authorisation liability.
It is also the case that ISPs and rights holders – if they were so minded – would have no avenue
other than considering further rounds of protracted and expensive litigation. While we do not
believe that such outcomes are the intention of the Government, it is the case that if Proposal 1 was
to proceed, then these outcomes would be likely.

Risk of undermining legitimate businesses
It also flows that a range of businesses and business models have been established and are
predicated on the basis of the outcomes of the various cases and case law regarding these
provisions. Increased risk and uncertainty associated with the legal under-pinning of those,
including as a result of potential re-litigation posed by Proposal 1, flows through into risk for those
legitimate businesses.
36
[2012] HCA 16 at [120]
Revised Explanatory Memorandum, Copyright Amendment (Digital Agenda) Act 2000,
http://parlinfo.aph.gov.au/parlInfo/download/legislation/ems/r910_ems_426f8e74-8b69-432b-8ebe87e490e88bb6/upload_pdf/33832rem.pdf;fileType=application%2Fpdf, at [57]
37
21
Deficiency of authorisation liability provisions makes safe harbour scheme redundant
The flaws in the current provisions, and also Proposal 1, do nothing to re-balance the current operation of
the safe harbour scheme.
The safe harbour scheme, at Part V Division 2AA of the Act, was enacted in 2006 following the finalisation of
the Australia United States Free Trade Agreement (AUSFTA). It provides incentives for CSPs, in the form of
limited liability for authorisation, for cooperating with rights holders in deterring copyright infringement on
their networks.38
Illustrating this with the common image of a set of scales – on one side of the scales would be the benefit (or
incentive), and on the other side of the scales would be the obligation. The Act intends for the sides of the
scales to be balanced.
If the Act was properly functioning, the benefit to CSPs – limited liability (under the safe harbour provisions);
would be balanced by CSPs meeting the obligation – cooperating with rights holders to deter copyright
infringement (under the authorisation provisions). Thus the safe harbour provisions of the Act are
inextricably linked with the authorisation provisions of the Act.
However, as CSPs have not cooperated with rights holders to deter copyright infringement on their networks
by taking reasonable steps – due largely to their being no incentive to do so, and a therefore a lack
consequence of not doing so under the authorisation liability provisions themselves – the safe harbour
provisions are not actually activated, used or relied upon.
The issue of safe harbour is investigated further in this submission.
The amendment is not technology neutral
Proposal 1 specifies that the Act would be amended to ‘clarify the application of authorisation liability under
sections 36 and 101 to ISPs.’39
Such an amendment is constrained because it specifies ISPs only, rather than allowing for the broad range of
parties, be they intermediaries or service providers or others, whose services may be used by third parties to
infringe copyright.
This issue is intensified in combination with Proposal 3 – the extension to safe harbour – whereby it is
proposed that the same broad range of parties as described in the preceding paragraph, would be awarded
‘safe harbour’ without being obliged by the law to have to do anything, such as taking ‘reasonable steps,’ to
be able to obtain a limited liability from authorisation liability. It is absurd that parties would be given ‘safe
harbour’ and an ability to limit liability arising from authorisation, without having an obligation under the
authorisation provisions to do something to offset claims for authorisation.
Constraining the application of Proposal 1 to ISPs also undermines a technology neutral approach in enabling
this important amendment to meet the goal in a streamlined manner, and therefore would fail to amend the
issue that is raised in the iiNet judgement as referenced previously in this submission.
October 2011, AGD Revising the Scope of the Copyright ‘Safe harbour Scheme’ Consultation Paper, (The Safe
Harbour Consultation Paper)
http://www.ag.gov.au/Consultations/Documents/Revising+the+Scope+of+the+Copyright+Safe+Harbour+Scheme.pdf,
p3
39
The Paper, p4
38
22
We therefore do not support the extension of authorisation liability to ISPs only.
News Corp Australia supports legislative amendment that would fulfil the goal of ensuring an effective legal
framework and legal incentives for service providers and rights holders to work together – and ensure that
the authorisation liability provisions of the Act operate as originally intended.
Proposal 1 does not rectify – and could likely exacerbate – the imbalance between the authorisation liability
provisions and the safe harbour provisions of the Act. This was not the manner in which these provisions
were designed to operate, and it should not continue to be so.
For the reasons outlined above, individually and in aggregate, News Corp Australia does not support the
detail of Proposal 1.
23
PROPOSAL 1 – RECOMMENDATION
While we support the overarching intent of Proposal 1, we recommend that Proposal 1 does not proceed in
its current form.
Rather, Proposal 1 must deliver a legislative amendment that ensures an effective legal framework and legal
incentives for service providers and rights holders to work together, and ensure the Act works as intended.
This will require amendment to the authorisation provisions of the Act such that:


It is explicit that a service provider that fails to take reasonable steps, when placed on notice of
infringing behaviour on its network, is liable under the authorisation provisions of the Act; and
Expand the authorisation liability provisions to service providers and intermediaries.
This will also require a definition of ‘service provider’ in the Act. This definition should be appropriate to
capture entities acting in their capacity to function as a service provider.
This definition should be appropriate to capture entities such as universities, schools and libraries, only if
they are acting as a service provider.
This will meet the goals of the Government, assist in meeting Australia’s international trade obligations,
ensure the Act works as intended including rectifying the unintended deficiencies as identified in the iiNet
case, and align Australia with international jurisdictions.
The expansion to incorporate service providers, and entities acting in their capacity as a service provider, is
essential if the safe harbour provisions (at Proposal 3) are to be expanded.
NEWS CORP AUSTRALIA RECOMMENDATION – AMEND THE AUTHORISATION LIABILITY
PROVISIONS TO ENSURE THEY OPERATE AS INTENDED
News Corp Australia supports legislative amendment that would fulfil the goal of ensuring an effective legal
framework and legal incentives for service providers and rights holders to work together – and ensure that
the authorisation liability provisions of the Act operate as intended.
This also includes the interaction of authorisation liability and the safe harbour scheme, which is investigated
further in this submission.
Legislative amendment must rectify lack of incentives

Explicit liability required
We believe that what is lacking under the current authorisation liability provisions is the certainty of
legal liability and the incentive for service providers, including ISPs, to work with rights holders – that
being explicit liability for failure to take reasonable steps when placed on notice of infringing
behaviour on its network. This also remains the case under Proposal 1.
24
In short, under the existing provisions and also Proposal 1, there is a lack of incentive for ISPs to take
reasonable steps to prevent infringing behaviour on their networks, and a lack of incentive for ISPs to
cooperate with rights holders – because there is no explicit liability for not doing so.
Until this is rectified there remains no incentive to compel ISPs to work with rights holders to agree
how these issues will be addressed. This was evidenced most recently through the protracted ‘round
table’ meetings facilitated by the Attorney-General’s Department which did not achieve an outcome.
We cannot countenance more of the same.
The most efficient manner of rectifying this situation is for there to be an obligation for service
providers, including ISPs, to act when placed on notice; and failure to act in such circumstances will
subject the service provider/s to claims for authorisation. Only then will there be an effective legal
framework, and incentives for ISPs and rights holders to come together to decide what would
constitute ‘reasonable steps.’

Only then will the environment be conducive to the parties reaching agreement on appropriate
industry schemes or commercial arrangements
As we have said for some time, it will only be once legislative amendment is achieved, delivering an
effective legal framework and incentives for the parties to work together, that the environment will
be conducive for the parties to – for the first time – engage in meaningful and constructive
negotiations to develop the ‘reasonable steps’ required to meet the legislative requirements. This
will be because there will be explicit liability for service providers, including ISPs, who fail to take
reasonable steps, including wilful inactivity, to prevent infringing behaviour on their networks when
placed on notice of the infringing behaviour – that they will be subject to claims for authorisation.
Rectifying incentives to cooperate will assist the safe harbour scheme to operate as intended
As outlined previously in this submission, due to the deficiencies in the authorisation liability provisions of
the Act, the safe harbour scheme does not operate as it was designed to do – that being ‘offering legal
incentives for Carriage Service Providers to cooperate with copyright owners in deterring copyright
infringement on their networks.’40
Therefore, rectifying the incentives for service providers, including ISPs, to cooperate with rights holders
under the authorisation provisions of the Act will also assist the safe harbour scheme to operate as it was
intended.
It is vital that an appropriate amendment to authorisation liability is made to ensure that both the
authorisation liability provisions and the safe harbour provisions of the Act interact and operate as originally
intended. This is exceptionally important in light of the Government’s Proposal 3, to extend the safe
harbour scheme to service providers.
A definition of service provider that encompasses all entities and avoids unintended consequences
We suggest that the Act will require a definition of ‘service provider’ that is sufficiently broad to encompass
a range of entities. However, we foresee that it is important that such a definition would apply to the
entities in their capacity as service providers. This is an appropriate mechanism to minimise any concerns
regarding unintended consequences and so-called ‘chilling effects.’
40
The Safe Harbour Consultation Paper, p3
25
International experience
In jurisdictions around the globe market participants and government are undertaking actions to address the
supply and demand side of consumers access unauthorised copyright material. The underpinning legislative
and regulatory environments, and therefore the approaches, do vary.
These international experiences offer a very useful learning environment to inform the Australian context
and the Government’s approach to legislative amendments and the outcomes being sought. To that end we
also provide an overview of some international experiences further in this section of the submission.
The legislative approach to achieving this outcome
While we do not prescribe in this submission how this may be achieved, we understand that some rights
holders, such as Music Rights Australia and the Australian Screen Association, may put forward more
detailed proposals and approaches regarding legislative amendments.
While these more detailed proposals for legislative amendment from other rights holders may take differing
approaches, they achieve the same goal – that is to ensure an effective legal framework and legal incentives
for service providers and rights holders to work together, and ensure the Act works as originally intended.
26
RESPONSE TO PROPOSAL 1 QUESTIONS
These comments are predicated on the recommendations in this submission being adopted, in this case
being referred to as Amended Proposal 1.
We note that it appears to be somewhat premature to respond to questions regarding the specifics of the
industry schemes and/or commercial models that would meet the legislative and/or regulatory
requirements of Amended Proposal 1 in advance the legislation being implemented. However, we offer the
following comments.
Question 1: What could constitute ‘reasonable steps’ for ISPs to prevent or avoid copyright infringement?
Regarding what would constitute ‘reasonable steps’ for ISPs to prevent or avoid copyright infringement, we
recommend an industry scheme that comprises a graduated response approach to notifying ISP customers
when their accounts have been used to infringe copyright online. Our preferred model for such an industry
scheme is the US Copyright Alert System (CAS)41.
Such an industry scheme would be competitively neutral, and include:






Identification of alleged copyright infringement (IP addresses only);
Rights holders investing in systems to identify and verify potentially infringing material on P2P
networks;
A series of notices which ISPs send to their customers;
Appropriate mitigation measures designed to deter ongoing infringing behaviour;
Each party should bear their own costs – therefore ensuring each party has an incentive to introduce
as efficient a system as possible (see response to Question 2 below); and
A right of review for customers who believe that notification of alleged infringement has been
mistakenly sent.
Overview of the Copyright Alert System
The CAS is a collaboration between rights holders – Motion Picture Association of America and its members
(Walt Disney Studios, Paramount Pictures, Sony Pictures, Twentieth Century Fox, Universal Studios and
Warner Bros) and the Recording Industry Association of America and its members (UMG Recordings, Warner
Music, Sony Music and EMI Music); and ISPs (AT&T, Verizon, Comcast, CSC and Time Warner) to reduce
digital copyright infringement through a progressive series of six graduated notifications. The system aims to
educate consumers when unlawful activity appears to be occurring on their internet accounts and provide
them information to avoid such infringement.
The CAS is administered by the US Center for Copyright Information (CCI).42 The CAS began operating in
March 2013, under the auspices of an MOU signed by all parties, which also states that each party to the CAS
bears its own costs.

The launch of the CAS
In February 2013, the CCI and CAS members provided the Congressional Internet Caucus Advisory
Committee with an overview of the CAS. Speakers included CCI Executive Director, Jill Lesser and
members of the CCI Advisory Board; Verizon’s Vice President & Deputy General Counsel, Global
41
42
http://www.copyrightinformation.org/the-copyright-alert-system/
http://www.copyrightinformation.org
27
Strategy and Head of International Public Policy, Tom Dailey; and representatives of the Recording
Industry association of America and the Motion Picture Association of America. That overview, a
video of which is available at http://www.c-span.org/video/?311398-1/online-piracy provides much
information about the cooperative way that the CAS operates.

How CAS operates
The process takes the following course:
o
o
o
o
o
o
Content owners use software to locate copies of copyright infringing content (efor example
movies, TV shows, music) on P2P networks – identifying IP addresses only;
Copyright owners then send notification of alleged copyright infringement to ISPs;
ISPs match the IP address with customer details and send ‘Copyright Alerts’ to their
subscriber under their own brand;
The Alert includes date, time, time zone and title of the copyrighted content that is alleged
to have been unlawfully distributed via P2P on the subscriber’s account;
An ISP subscriber will be sent a maximum of six (6) alerts with an increasing degree of
seriousness; and
An appeals process for customers who believe that notification of alleged infringement has
been mistakenly sent.
In general, the tiers of the six (6) Copyright Alerts are:
o
o
o
Alert 1 and 2: educational alerts which make account holders aware that unlawful content
sharing may have happened using their internet account;
Alert 3 and 4: acknowledgement alerts where the account holders are required to
acknowledge the Alerts; and
Alert 5 and 6: mitigation alerts which notify the subscriber that a mitigation measure will be
implemented after 14 calendar days – these impose minor consequences to emphasise the
seriousness of the problem.
o
This framework of Alerts offers a suite of measures that can be selected from, and it is up to each ISP
to implement to suit their individual operations. For example, Verizon implemented the following
approach:
o
o
o
Education: Alert 1 and 2 are sent to subscribers email, and are spaced by 1 week (if Alert 2 is
triggered);
Acknowledgement: Alert 3 and 4 consist of an online pop-up which requires the subscriber
to watch a short video regarding the seriousness of online copyright infringement, and
acknowledge the alert (not liability); and
Mitigation: Alert 5 notifies that the subscriber’s internet account will be slowed to 256kbps
for two (2) allocated days; and Alert 6 notifies that the subscriber’s internet account will be
slower to 256kbps for three (3) allocated days.
There is a useful FAQ section at http://www.copyrightinformation.org/resources-faq/copyrightalert-system-faqs/.
We stress that the legislative amendments at Amended Proposal 1 are essential to achieving such a scheme,
as Amended Proposal 1 is key to delivering the legal framework and legal incentives to bring the parties
together to establish such an industry scheme. We have outlined the reasons for this above and will not
reiterate here.
28
Efficacy of the CAS
On 28 May 2014 the CCI released the first report regarding the US Copyright Alert System, The Copyright
Alert System: Phase One and Beyond,43 about the first 10 months of the CAS operation.
The CCI acknowledges that the data it has on the success of the CAS is limited by the short time the program
has been running. However, CCI believes that the results are encouraging and 'support the view that an
educational program like the CAS can make a material difference in influencing the behaviour of digital
content consumers once the possibility of copyright infringement on their account is bought to their
attention.’44

Key data from the report
o
o
o

More than 2 million notices of alleged infringement were sent to ISPs and more than 1.3
million alerts were sent to 722,820 customer accounts;
The majority of alerts, 72 percent, were educational alerts (Alerts 1 and 2); 17 percent of
alerts were acknowledgment alerts (Alerts 3 and 4); and 11 percent were mitigation alerts
(Alerts 5 and 6); and
There were only 265 appeals, of which only 47 were successful – and the vast majority of
which were based on an unauthorised use of an account.
Consumer research
The CCI also engaged in qualitative and quantitative customer research into consumer awareness in
relation to online piracy and found the following:
o
o
o
79 percent of respondents who use P2P software said that knowing someone who got into
trouble for copyright infringement would be ‘somewhat to very’ influential on their own
behaviours;
Consumers would like more guidance about how to engage online legally; and
57 percent of users surveyed by CCI would stop engaging in copyright infringement
immediately upon receiving an alert.
In a panel overview, similar to that undertaken on the cusp of the operation of the CAS, the CCI and
CAS members provided the Information Technology and Innovation Foundation with an overview of
the CAS after the first year of operation. Speakers again included CCI Executive Director, Jill Lesser
and members of the CCI Advisory Board; and Verizon’s Vice President & Deputy General Counsel,
Global Strategy and Head of International Public Policy, Tom Dailey. A video of this overview is
available at http://www.itif.org/media/copyright-alert-system-year-one-review#video.
43
44
http://www.copyrightinformation.org/wp-content/uploads/2014/05/Phase-One-And_Beyond.pdf
Ibid, p10
29
REPONSES TO ADDITIONAL PROPOSITIONS
Some may say…

Graduated response schemes ‘don’t work’
News Corp Australia does not agree with this statement. We offer the following data available from
international scemes.
o
US – Copyright Alert System
On 28 May 2014 the Centre for Copyright Information (CCI) released the first report
regarding the US Copyright Alert System, The Copyright Alert System: Phase One and
Beyond45, about the first 10 months of the CAS operation.
The CCI acknowledges that the data it has on the success of the CAS is limited by the short
time the program has been running. However, CCI believes that the results are encouraging
and 'support the view that an educational program like the CAS can make a material
difference in influencing the behaviour of digital content consumers once the possibility of
copyright infringement on their account is bought to their attention.’46
Key data from the report and also the results of consumer research are outlined above.
o
France – Hadopi
In 2009 France introduced the Hadopi (or Creation and Internet) Law to promote the
distribution and protection of creative works on the internet – specifically regarding the
impact of illegally downloading via P2P networks.
The law and supporting regulations provide a graduated response notice system to educate
consumers, and therefore encourage compliance with copyright laws. It involves content
providers, ISPs and the authority, Hadopi, working in concert.

The Effect of Graduated response Anti-Piracy Laws on Music Sales: Evidence from an
Event Study in France47 – An independent study by Danaher et al, 2012
This independent study analysed the impact of the Hadopi law and its impact on
consumer behaviour since April 2009.
The study found that the combination of increased awareness of the law, the
illegality of piracy, and the potential penalties were important elements in changing
consumer behaviour – and reinstating the legitimate protections that copyright
provides to content creation and distribution. Specifically, the study found that
public awareness of HADOPI law caused:

iTunes song sales in France to increase by 22.5% above the sales increase of
a control group of five European countries;
45
http://www.copyrightinformation.org/wp-content/uploads/2014/05/Phase-One-And_Beyond.pdf
Ibid, p10
47 2012, Danaher, Smith, Telang and Chen, The Effect of Graduated Response Anti-Piracy Laws on Music Sales:
Evidence from an Event Study in France, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1989240
46
30


A 25% increase in iTunes album unit sales above the change in the control
group; and
Sales increases (30%) were much higher in genres that, prior to HADOPI,
experienced high piracy levels, for example Rap and Hip Hop; than sales
increases (7%) for less pirated genres, for example Christian, Classical, and
Jazz.
Further data and findings from the Danaher study are at Appendix D.

HADOPI, 1 ½ year after the launch48
A report from the French Government, undertaken 18 months after the launch of
the Hadopi scheme states:
‘Benchmarking studies covering all of the sources available shows a clear
downward trend in illegal P2P downloads;’ and ‘at the same time, the wide
range of legal content offers are gaining visibility and some offers have
posted excellent progress.’49
The study also found that over a wide range of metrics:


17 to 29% decrease in audiences of websites offering links to peer-to-peer
files and applications; and
43 to 66% decrease in illegal data sharing.50
We note that there exists a paper that concludes that graduated response is a flawed process that
cannot work. It appears that this paper applies a threshold of perfect outcome or 100%
effectiveness. If the schemes cannot reach this threshold, then they are classified as ineffective and
failing. Such an approach applies a theoretical and therefore unrealistic hurdle, over which it
unlikely any scheme or approach will pass.
Some may also say…
i.
Proposal 1 changes decades of Australian case law and understanding of authorisation liability, and
in turn increases legal uncertainty and risk
News Corp Australia concurs that this is a risk posed by Proposal 1, which in addition does
not fulfil the goal of providing certainty of legal liability. Therefore, as set out in more detail
above, we do not support the detail of Proposal 1. However this is where a common view
ends.
We hold that the current deficiencies of the authorisation provisions of the Act must be
rectified – and therein provide a legal framework and legal incentives to bring the parties
together, which requires amendment to authorisation liability provisions to be explicit about
liability.
48
March 2012, HADOPI, 1 ½ year after the launch, A report by the French Government,
http://www.hadopi.fr/sites/default/files/page/pdf/note17_en.pdf
49
Ibid, p1
50
Ibid, p3
31
As we have also detailed above, due to the interrelation of the authorisation liability
provisions and the safe harbour provisions, there is a requirement to re-balance safe
harbour. Therefore Amended Proposal 1 provides a better outcome as it meets the goal of
providing certainty of legal liability, and does not pose the risks of Proposal 1.
While we say that the authorisation liability provisions should be fixed so that they operate
as originally intended, others may say that it would be better to leave the authorisation
liability provisions alone, and allow the parties to come together of their own volition. We
disagree with this approach and address this at the next point.
As we have also detailed above, due to the interrelation of the authorisation liability
provisions and the safe harbour provisions, there is a requirement to re-balance safe
harbour therefore Amended Proposal 1 better outcome – meets the goal and does not pose
the risks of Proposal 1
ii.
Following from the point above, some may say that ‘stand-alone arrangements would be better’
These parties would say that no changes to the current authorisation liability provisions are
necessary. News Corp Australia does not agree for a number of reasons, including those
outlined in detail previously. We recap some of those points below.
It is well known to the parties involved that the previous ‘round-table’ discussions did not
result in cooperative measures to deter ISP customers from online copyright infringement,
particularly via P2P networks. This has particularly been the case since the High Court
decision in the iiNet case.
As we have expressed above, until there is a legal framework and legal incentives for the
parties to cooperate. Again, in our view the most efficient manner of rectifying this situation
is for there to be explicit liability for service providers, including ISPs, who fail to take
reasonable steps, including via wilful inactivity, to prevent infringing behaviour on their
networks when placed on notice of the infringing behaviour – that they be liable for
authorisation. Only then will there be an effective legal framework, and legal incentives, for
ISPs and rights holders to come together to decide what would constitute ‘reasonable steps.’
Regardless of this, some may claim that Australia has a history of self-regulation and coregulation. We are not disputing that there are a range of regulatory tools at the
Government’s disposal. However, what we do dispute is that the environment is conducive
to self-regulatory outcomes in absence of a functioning legal framework and legal incentives.
Hence Amended Proposal 1 is required.
While there are ‘stand-alone’ schemes in place in other jurisdictions, one does need to look
at the context. It is impossible to consider the Australian context without taking account of
the decision in the iiNet case.
Lastly, we note that if safe harbour is extended – and we stress that this should only be the
case if Amended Proposal 1 is adopted – then those service providers will have the benefit
of the safe harbour, and therefore should also be required to meet the obligations of wellfunctioning authorisation liability provisions. We note that many parties that advocate for
an extended safe harbour scheme oppose, or are at least silent, the corresponding extension
of authorisation liability.
32
iii.
Following on from this, some may point to the New Zealand model, suggesting it is a good model
because it is ‘stand-alone’; others may say it is a good model because it is a notice scheme that is
paid for by rights holders; and others say it is a good model because it can end up with individual
consumers being sued
News Corp Australia notes the elements of the New Zealand model, however, for a range of
reasons we and other rights holders do not believe it is an appropriate model for efficiently
and effectively addressing rampant online copyright infringement.
We understand that some rights holder representative groups have first-hand data about
the New Zealand model that is being incorporated into their respective submissions. We
refer to those submissions regarding the issues of concern with the New Zealand model.
What we do note, however, is that taking individuals to court and suing them is not an
efficient or effective deterrent to online copyright infringement, nor does it address the
deficiencies of the current authorisation provisions as identified in the iiNet case, and
therefore does not meet the goal including clarity regarding legal liability.
iv.
Some may say that a range of businesses and institutions will be concerned if authorisation liability is
amended as per Amended Proposal 1
a. News Corp Australia reiterates that the provisions would only apply to an entity in its
capacity as a service provider, and hence the importance of the definition regarding this.
As we understand it, a number of the entities that may be ‘concerned’ and/or oppose the
terms of Amended Proposal 1 –in that they do not want to be captured by an extension to
service providers; support an extension of the safe harbour scheme to include service
providers.
Because of the interaction between authorisation liability and safe harbour, and the detailed
analysis supporting Amended Proposals 1 and 3 – including their interaction – we hold that it
is a fair and equitable outcome for service providers who receive a benefit to also be
required to meet an obligation.
Also, given the technological specificity highlighted by the iiNet case, it is appropriate for
authorisation liability to apply to service providers to foster technological neutrality.
v.
Some may say that service providers don’t have a contractual relationship with users and therefore
‘reasonable steps’ as outlined for ISPs won’t work
a. News Corp Australia acknowledges that a range of commercial models exist in the
marketplace.
b.
Notwithstanding this, we advocate for a short, but reasonable timeframe – say three (3)
months – between legislative amendments receiving Royal Assent and the law commencing,
thereby providing time for industry schemes and/or commercial arrangements to develop.
33
We note that some service providers have already developed, and make known, measures
to deter online copyright infringement on their networks.51 These may also include terms of
use of services, including where the relationship between the service and the user is not a
contractual one.
Question 2: How should the costs of any ‘reasonable steps’ be shared between industry participants?
News Corp Australia recommends that the most efficient manner for costs to be allocated are with each
party bearing its own costs. This is the approach taken in the US CAS model.
Question 3: Should the legislation provide further guidance on what would constitute ‘reasonable steps’?
News Corp Australia recommends that any guidance in relation to what would constitute ‘reasonable steps’
should be set out in regulations that support the legislative provisions. Those regulations could include
guidance as to the elements that industry schemes and/or commercial arrangements should encompass.
Such an approach would allow sufficient flexibility to enable amendments to accommodate current and
future evolutions – some of which are unknown to us now.
Question 4: Should different ISPs be able to adopt different ‘reasonable steps’ and, if so, what would be
required within a legislative framework to accommodate this?
News Corp Australia stresses here that it is important that the legislative framework fulfils the goal of
ensuring an effective legal framework and legal incentives via explicit legal liability, for service providers and
rights holders to work together – and ensure that the authorisation liability provisions of the Act operate as
originally intended.
In fulfilling this, it is critical to restate the importance of competitive neutrality. Regarding the preferred
industry scheme for ISPs, it should apply to all ISPs. While the regulations should be clear about the
elements of a scheme, it may be that the scheme itself – developed by the applicable parties – will
incorporate some flexibility into ‘how’ the legislative and regulatory requirement is to be met in agreement
with the parties.
Question 5: What rights should consumers have in response to any scheme or ‘reasonable steps’ taken
buy ISPs or rights holders? Does the legislative framework need to provide for these rights?
News Corp Australia suggests that the preferred model of an industry scheme, the US CAS, incorporates a
consumer appeal process, enabling customers to appeal notices when in the mitigation stage. It is envisaged
that under Amended Proposal 1 that there be a consumer appeals process available.
51
Examples include How Google Fights Piracy, http://googlepublicpolicy.blogspot.com.au/2013/09/report-how-googlefights-piracy.html, https://docs.google.com/a/google.com/file/d/0BwxyRPFduTN2dVFqYml5UENUeUE/edit; and How
eBay Protects Intellectual Property (VeRO), http://pages.ebay.com.au/help/tp/programs-vero-ov.html
34
PROPOSAL 2 – EXTENDED INJUNCTIVE RELIEF
News Corp Australia supports an amendment to the Act to enable rights holders to apply for a court order to
block access to internet sites operated extra-territorially that make available content for streaming and/or
download that infringes copyright.
Again, we believe that it is important to link this back to the Government’s stated goal of providing a legal
framework to reduce online copyright infringement – by ‘streamlining the process by which rights holders
can seek relief from the courts to block access to websites providing infringing material.’
We are therefore concerned that:

Some matters expressed in Proposal 2 do not support ‘streamlining the process’ to seek relief from
the courts. We believe that such matters, outlined below, are more appropriately determined by
the court rather than being included in legislative provisions – as the court is already well placed to
do in considering evidence brought before it. This is how such provisions and courts operate in
jurisdictions where streamlined processes are in place and operating effectively and efficiently, such
as in the United Kingdom and Ireland; and

The approach outlined is technology specific and references only ISPs rather than taking a more
technology neutral approach, as is the case in international jurisdictions, which acknowledge
‘intermediaries.’
Matters appropriately determined by the courts in deciding an application for court order
The following specific matters are raised within the overview of Proposal 2 and/or contained in Proposal 2.
Based on the usual processes of the court, and also international experience and jurisprudence, we
recommend that the court before which the application for injunction is made, based on the evidence
presented, most appropriately determines these matters.

Freedom of expression
The overview to Proposal 2 contemplates the court would be required to consider factors such as
‘the importance of freedom of expression.’52
This should not be a threshold question and it should not be included in the legislation. Rather, it is
an issue appropriate for a court to determine in considering the evidence of the case before it. This
particularly the case when the objective is to deliver a streamlined process.
o
International experience
This issue is not a threshold question, and therefore not included in the legislation of
European nations, such as the UK and Ireland, that enables rights holders to apply for a court
order in similar circumstances.

52
European Court of Justice
The Paper, p6
35
Of particular interest is the judgement of the European Court of Justice (CJEU) in its
March 2014 decision on copyright site blocking injunctions in UPC Telekabel v
Constantin Film (the kino.com case) (Case C-314/12).
The Court stated:
‘Even though the measures taken when implementing an injunction such as
that at issue in the main proceedings are not capable of leading, in some
circumstances, to a complete cessation of the infringements of the
intellectual property right, they cannot however be considered to be
incompatible with the requirement that a fair balance be found, in
accordance with Article 52(1), in fine, of the Charter, between all applicable
fundamental rights, provided that (i) they do not unnecessarily deprive
internet users of the possibility of lawfully accessing the information
available and (ii) that they have the effect of preventing unauthorised access
to protected subject-matter or, at least, of making it difficult to achieve and
of seriously discouraging internet users who are using the services of the
addressee of that injunction from accessing the subject-matter that has been
made available to them in breach of the intellectual property right.’53
In summary, the CJEU said that site blocking injunctions do not infringe the freedom
of information as the ISP’s manner of meeting the requirement of the injunction
must not affect lawful access to information.
An overview of the kino.com case is at Appendix E of this submission.

UK copyright law expert and law firm Partner, Andrew Forbes, recently wrote about
the matter and noted that with 41 websites blocked under court orders in the UK,
the internet continues to operate. He wrote:
‘The music industry, together with other creative industries, have been
granted court orders requiring UK internet providers to block 41 illegal
websites. Has the internet been broken by this activity? Far from it.’54

Commercial scale
The overview to Proposal 2 contemplates that a law is required to provide rights holders with an
efficient mechanism to disrupt sites operated outside of Australia where ‘online copyright
infringement is occurring on a commercial scale.’55
This should not be a threshold question and it should not be included in the legislation. Rather, it is
an issue appropriate for a court to determine in considering the evidence of the case before it. This
is particularly the case when the objective is to deliver a streamlined process.
Separately, we note that the Act makes reference to ‘commercial scale.’ However this arises in
relation to criminal liability and increased financial sanctions, of which neither is an appropriate link
for the context of Proposal 2.
53
at [63] of judgement
30 July 2014, Andrew Forbes, Will blocking illegal music download sites ruin the internet?
http://themusic.com.au/opinion/music/2014/07/30/does-blocking-illegal-websites-break-the-internet/
55
The Paper, p5
54
36

Dominant purpose
Proposal 2 proposes limiting sites to be blocked to those which have a ‘dominant purpose56’ to
infringe copyright.
This term, if prescribed and included as a bright line parameter, would likely frustrate legitimate
cases brought by rights holders as it is open to gaming by parties to avoid being subjected to the law.
It is also important to note here that such a limitation has been problematic in cases brought
previously in Australia, for example, Stevens v Sony57. In that case, the High Court said:
‘In the selection of a sole or dominant "purpose," there is a risk of unintended consequences,
particularly where, as here, the substratum of the legislation is constantly changing
technologies.’58
Some legitimate businesses may say that legislative provisions to enable court orders would need to
be as narrow and targeted as possible, for example, a website should ‘have primary purpose’ to
infringe copyright; or it should apply to websites that ‘get their main revenue source from infringing
content;’ or similar. We do not support such an approach for the reasons outlined above.
o International practice
We refer to the legislative provisions in the United Kingdom and Ireland that give the court
the power to issue similar orders. These provisions, at section 97A of the Copyright, Designs
and Patents Act 1988 (IE)59 and sections 40 and 205 of the Copyright and related Rights Act
2000 (IE)60 respectively, consist of open language against which the court determines key
factors in cases.
The jurisprudence established by the UK cases, particularly Twentieth Century Fox Film
Corporation & Ors v British Telecommunications PLC (20C Fox v BT)61, is instructive as to the
discretionary factors taken into consideration by the court based on the evidence put before
it. This includes the claim made by BT that the studios were not interested in the whole of
the Newzbin2 website, as movies and television did not comprise all of the material on the
Newzbin2 website.62
Justice Arnold, Judge of the High Court, said in his judgement:
It can be seen from the figures quoted in paragraph 53 above that films and
television programmes comprise about 70% of the material accessible via Newzbin2,
while about 30% of that material consists of other types of content. Furthermore,
while the Studios own or control the copyrights in a large proportion of the films and
television programmes indexed by Newzbin2, it is clear that other rightholders are
also substantially affected by it. Counsel for BT submitted that in these circumstances
56
The Paper, p5
[2005] HCA 58, http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/HCA/2005/58.html
58
Ibid at [34]
59
http://www.legislation.gov.uk/ukpga/1988/48/section/97A
60
http://www.irishstatutebook.ie/2000/en/act/pub/0028/
61
20C Fox v BT [2011] EWHC 1981 (Ch) http://www.bailii.org/ew/cases/EWHC/Ch/2011/1981.html
62
20C Fox v BT at [53]
57
37
it would be wrong in principle to grant an injunction which extended beyond the
films and television programmes in which the Studios have rights, and to require BT
to prevent its subscribers visiting any part of the Newzbin2 website for any purpose.
In my judgment, subject to the points that remain to be considered, the Studios have
established their entitlement to an injunction under section 97A. It appears from the
evidence that the Studios form the biggest single group of rightholders interested in
obtaining such relief. In any event, it is clear that the Studios' rights are being
infringed on a massive scale. In those circumstances, I consider that they have a
sufficient interest to justify the making of the order sought. It is true that the order
sought will also benefit other rightholders, but I do not regard this as a reason for
refusing the order. On the contrary, I consider that it supports the making of the
order. So far as the groups of rightholders referred to in paragraph 4 above are
concerned, they all support the application. It is immaterial that they have not
formally joined in the application. So far as other rightholders are concerned, their
rights under Article 1 of the First Protocol are also engaged and there is no reason to
believe that they would not be equally supportive of the application.
Finally, I recognise that the order would potentially prevent BT subscribers from
making use of Newzbin2 for non-infringing uses. On the evidence, however, the
incidence of such uses is de minimis.’63
And:
‘In general, I am satisfied that the order sought by the Studios is a proportionate one.
It is necessary and appropriate to protect the Article 1 First Protocol rights of the
Studios and other copyright owners. Those interests clearly outweigh the Article 10
rights of the users of Newzbin2, and even more clearly outweigh the Article 10 rights
of the operators of Newzbin2. They also outweigh BT's own Article 10 rights to the
extent that they are engaged. The order is a narrow and targeted one, and it
contains safeguards in the event of any change of circumstances.’64
The case which preceded this, Twentieth Century Fox Film Corporation v Newzbin Ltd65
(known as Newzbin1) established that the Newzbin website infringed the Studios’ copyright
on a large scale. Justice Kitchen said in his judgement:
‘I also consider it significant that a very large proportion of the content of the Movies
category is commercial and so very likely to be protected by copyright.’66
An overview of the jurisprudence resulting from some of the early UK site blocking cases,
including relating to the discretion of the court in 20C Fox v BT as presented by Justice
Arnold at a UK Intellectual Property Office seminar, is at Appendix F of this submission.
This case law demonstrates that courts in jurisdictions comparable to Australia are quite capable of
ruling on questions of proportionality without the need for this matter to be enshrined in law. There
is a very serious risk that if such a concept is enshrined in law it will be gamed by ISPs, and quite
possibly websites, and the effectiveness of the law neutered.
63
20C Fox v BT at [185-186]
20C Fox v BT at [200]
65
20C Fox v Newzbin [2010] EWHC 608 (Ch), http://www.bailii.org/ew/cases/EWHC/Ch/2010/608.html
66
20C Fox v Newzbin at [101]
64
38

Reasonable costs
Proposal 2 states that rights holders ‘would be required to meet any reasonable costs associated
with an ISP giving effect to an order.’67
Again, this should not be a threshold question or a direction to the court, and therefore it should not
be included in the legislation. Rather, it is an issue appropriate for a court to determine in
considering the evidence of the case before it. This is particularly the case when the objective is to
deliver a streamlined process.
Further to the matter of undermining the delivery of a streamlined process, if the matter of
reasonable costs was stipulated in the legislation, it could be envisaged that ascertaining what would
be the ‘reasonable costs’ of all ISPs listed as respondents could be a cumbersome process and could
be open to gaming and delay tactics.
o
International practice
We refer again to the legislative provisions in the United Kingdom and Ireland that give the
court the power to issue similar orders, as cited above, that consist of open language against
which the court determines key factors in cases, including costs.
Further, the jurisprudence established by the UK cases, particularly 20C Fox v BT, is
instructive as to the discretionary factors taken into consideration by the court based on the
evidence put before it, including proportionality (as referenced above) and the costs of
implementing the order. Specifically, Justice Arnold stated:
‘The cost of implementation to BT would be modest and proportionate.’68
In the second judgement69, Justice Arnold explicitly dealt with the claims before the court
regarding costs of the case, including costs of implementing the order. He said:
‘Each side contends that the other should pay the costs of implementing the order. In
my judgment the costs of implementing the order should be borne by BT. The Studios
are enforcing their legal and proprietary rights as copyright owners and exclusive
licensees, and more specifically their right to relief under Article 8(3). BT is a
commercial enterprise which makes a profit from the provision of the services which
the operators and users of Newzbin2 use to infringe the Studios’ copyright. As such,
the costs of implementing the order can be regarded as a cost of carrying on that
business. It seems to me to be implicit in recital (59) of the Information Society
Directive that the European legislature has chosen to impose that cost on the
intermediary. Furthermore, that interpretation appears to be supported by the Court
of Justice’s statement in L’Oréal v eBay at [139] that such measures “must not be
excessively costly”. The cost of implementing the order is a factor that can be taken
into account when assessing the proportionality of the injunction, and in the present
case I have done so: see the main judgment70 at [200]. Indeed, my conclusion there
67
The Paper, p6
20C Fox v BT at [200]
69
20C Fox v BT [2011] EWHC 2714 (Ch), Second Judgement
http://www.bailii.org/ew/cases/EWHC/Ch/2011/2714.html
70
20C Fox v BT http://www.bailii.org/ew/cases/EWHC/Ch/2011/1981.html
68
39
that the cost to BT “would be modest and proportionate” is supported by the
evidence subsequently filed by BT, which estimates the initial cost of implementation
at about £5,000 and £100 for each subsequent notification.’71
For these reasons ‘reasonable costs’ – or indeed cost/s more generally – should not be a threshold
question and should not be included in the legislation. Rather, it is an issue appropriate for a court
to determine in considering the evidence of the case before it. This particularly the case when the
objective is to deliver a streamlined process.
In summary, News Corp Australia opposes the matters outlined above being included in the legislation. We
recommend that matters such as these are most appropriately determined by the courts in the course of
deciding an application for injunction. Such an approach would be consistent with international jurisdictions
such as the United Kingdom and Ireland.

Lack of requirement for indemnification
Proposal 2 specifies that the Act would be amended to ‘indemnify the ISP against any damages
claimed by a third party.’72
Again, this should not be a threshold question or a direction to the court, and therefore it should not
be included in the legislation.
In extending injunctive relief to this context, by its nature, it precludes claims by third parties against
ISPs that implement the orders of the court. In short, in blocking a site the ISP is actioning a court
order. To not do so would be in contempt. It is the case that it is not required to consider the
matter of indemnification further.
To the extent that parties believe the matter of indemnification requires addressing, it would be
most appropriately determined by the court in the course of assessing the evidence before it.
o
International practice
It may be useful to reflect on international experience in this regard. The matter of
indemnification was raised in 20C Fox v BT. In that case BT requested the inclusion of crossundertaking in damages, requiring the Studios to undertake to comply with any order the
court may make if the court was to find, at a later stage, that the order caused a loss to BT,
and the Studios should compensate BT for that loss. Alternatively, BT sought an indemnity
against losses caused by the order, particularly against third party claims.73
Justice Arnold considers these claims in detail74, including regarding the request for crossundertaking of damages:
‘In my view there is no reason to require the Studios to give a cross-undertaking in
damages. There is no analogy between an order under Article 8(3) and an interim
injunction. An interim injunction is granted before the parties’ legal rights and
liabilities have been ascertained. The original and main purpose of the cross
undertaking in damages was and remains to attempt to protect the party enjoined if
71
20C Fox v BT, Second Judgement, at [32]
The Paper, p6
73
20C Fox v BT, Second Judgement, at [34]
74
20C Fox v BT, Second Judgement, at [34 to 52]
72
40
it subsequently transpires that no injunction should have been granted because the
party applying for the injunction did not have the rights claimed or they were not
infringed or for some other reason… An order under Article 8(3) is a final injunction,
and accordingly there is no warrant for a cross-undertaking.’75
Justice Arnold also considered in detail the matter of the request for indemnity against
damages claimed by third parties at [42 to 52]. Justice Arnold concluded:
‘I do not consider that a BT subscriber could bring a claim against BT for breach of
contract as a result of BT’s compliance with the order. It appears unlikely that any
subscriber would have a claim against BT for breach of contract anyway, for two
reasons. First, BT’s broadband service terms incorporate its Acceptable Use Policy.
This states that “You must not infringe the rights of others, including ... copyright”.
Thus a subscriber could not claim against BT for being prevented from accessing
Newzbin2 for the purpose of obtaining infringing content. Secondly, BT’s terms
contain a series of limitations and exclusions…
As for third parties who are not subscribers, my conclusion is the same. In any event,
I find it very difficult to see the basis on which such a third party could have a claim in
tort against BT. Counsel for BT suggested that a third party might have a claim for
interference with contractual relations, but he did not explain how an order against
BT could result in BT interfering with the contractual relations of a third party with a
fourth party.’76
The amendment is not technology neutral
Proposal 2 specifies that the Act would be amended to ‘enable rights holders to apply for a court order
against ISPs to block access…’77
Such an extension to injunctive relief is constrained because it specifies ISPs only, rather than a broad
description of the category (of which ISPs may be but one) with the ability to block access to third parties
that infringe copyright.
The approach taken in Proposal 2 therefore undermines a technology neutral approach in enabling this
important amendment to meet the goal effectively and efficiently.
We note that the Paper acknowledges that the EU Directive applies to intermediaries – ‘ensure that rights
holders are in a position to apply for an injunction against intermediaries whose services are used by a thirdparty to infringe a copyright or related right.’78 We support a similar and consistent approach being
implemented in Australia.
Given the sound reasons outlined above, individually and in aggregate, News Corp Australia does not
support a number of the detailed elements of Proposal 2.
75
20C Fox v BT, Second Judgement, at [35]
20C Fox v BT, Second Judgement, at [51 to 52]
77
The Paper, p6
78
The Paper, p5, citing EU Directive No. 2001/29/EC of the European Parliament, http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:167:0010:0019:EN:PDF
76
41
PROPOSAL 2 – RECOMMENDATION
While we support the overarching intent of Proposal 2, we recommend that Proposal 2 does not proceed in
its current form.
Rather, Proposal 2 must deliver a legislative amendment that ensures a streamlined process that allows the
court to determine an order for injunction. Expanding injunctive relief will enable rights holder/s to apply to
the court to have service provider/s block access to websites operated outside Australia that provide access
to material that infringes copyright.
It is unnecessary, and very likely counterproductive and undermining, to stipulate the matters for the court
to take account of in determining the order. Rather, it is appropriate that the matters outlined in Proposal 2
are determined by the court in considering the evidence of the case before it.
This will require amendment to the Act such that:



The court is granted the power to determine such a request for injunction;
The matters referred to in Proposal 2 not be included in the legislation – these are more
appropriately determined by the court in considering the evidence brought before it; and
Expand the extension of injunctive relief to providers and intermediaries.
This will also require a definition of ‘service provider’ in the Act.
This will meet the goals of the Government, assist in meeting Australia’s international trade obligations,
ensure the Act works as intended, and align Australia with international jurisdictions.
Granting the court the power to determine a request for equitable relief of this kind, without directing the
court to take into account specific matters, is consistent with powers already invested in the court.
NEWS CORP AUSTRALIA RECOMMENDATION – AMEND THE ACT TO ENABLE RIGHTS HOLDERS TO
APPLY TO A COURT FOR AN ORDER AGAINST SERVICE PROVIDERS TO BLOCK ACCESS TO
WEBSITE/S OPERATED OUTSIDE AUSTRALIA THAT PROVIDE ACCESS TO MATERIAL THE INFRINGES
COPYRIGHT
A definition of service provider that encompasses all entities and avoids unintended consequences
We suggest that the Act will require a definition of ‘service provider’ that is sufficiently broad to encompass
a range of entities. However, we foresee that it is important that such a definition would cover this broad
range of entities in their capacity as service providers. This is an appropriate mechanism to minimise any
concerns regarding unintended consequences and so-called ‘chilling effects.’
International experience
In jurisdictions around the globe market participants and government are undertaking actions to address the
supply and demand side of consumers accessing unauthorised copyright material. The underpinning
legislative and regulatory environments, and therefore the approaches, do vary.
These international experiences offer a very useful learning environment to inform the Australian context
and the Government’s approach to legislative amendments and the outcomes being sought.
42
It is with these learnings in mind that we prefer the legislative approach taken in Ireland, whereby the
service provider does not have to have actual knowledge of the infringement before the application for the
court order is made. The UK experience, particularly the jurisprudence, is very instructive for a range of
matters referenced above and below in this section. We also look to the European Court of Justice and the
decision in the kino.com case for guidance on critical elements of these cases that is now applied across the
European Union.
Efficacy of site blocking
We offer the following data points associated with court orders to block access to sites:

Impact of Third Party Orders on Traffic to Infringing Sites
The Motion Picture Association (MPA) has undertaken analysis of the impact of third party orders of
traffic to infringing sites in Impact of Third Party Orders on Traffic to Infringing Sites using Alexa and
comScore data. That analysis, and methodology, is contained in the Annexure to the submission
made by the Australian Film/TV Bodies. Rather than reproducing that analysis here, we refer to the
Annexure of that submission.
However we include here the following graphs which illustrate the effectiveness of blocking orders
in the Newzbin 2 case (Graph 1) and also 20C Fox v BT (Graph 2).
BT was ordered to block access to the Newzbin2 website in July 11. Similar orders were
subsequently made against other ISPs. As illustrated in Graph 1, Newzbin2 lost two-thirds of its
visitors within 12 months of the blocking orders being put into effect, despite changes in IP address
and domain name.
Graph 1: Effect of site blocking on UK visitors to Newzbin
Source: NetNames
43
Major ISPs were ordered to block The Pirate Bay website in April 2012. Graph 2 below illustrates the
impact of the court ordered blocking in the significant reduction in UK visitors to The Pirate Bay
website.
Graph 2: Effect of site blocking on UK visitors to ThePirateBay
Source: NetNames

IFPI Digital Music Report
The IFPI Digital Music Report79 states that website blocking orders implemented by ISPs have been
effective. Supporting data states that BitTorrent use declined by 11 percent between January 2012
and July 2013 in European countries where site blocking orders are in place, while an BitTorrent use
in countries without site blocking orders increased 15 percent.80
The report also says that effect was especially pronounced in UK and Italy – where the highest
number of illegal services have been blocked
o UK – BitTorrent traffic declined 20 percent; and
o Italy – BitTorrent traffic declined 13 percent.81
The legislative approach to achieving this outcome
While we do not prescribe in this submission how this may be achieved, we understand that some rights
holders, such as Music Rights Australia and the Australian Screen Association, may put forward more
detailed proposals and approaches regarding legislative amendments.
While these more detailed proposals for legislative amendment from other rights holders may take differing
approaches, they achieve the same goal – that is to ensure an effective legal framework and legal incentives
for service providers and rights holders to work together, and ensure the Act works as originally intended.
79
IFPI Digital Music Report, p42
Based on comScore / Nielsen data
81
IFPI Digital Music Report, p42
80
44
RESPONSE TO PROPOSAL 2 QUESTIONS
Question 6: What mattes should the Court consider when determining whether to grant an injunction to
block access to a particular website?
As outlined above, in granting the court the power to consider applications for the equitable remedy of
injunctive relief of this kind, we do not support a list of determinative factors – whether that list is
exhaustive or non-exhaustive – being included in the legislation. We believe that such matters should not be
threshold issues, rather be left to the discretion of the court.
Threshold issues would be open to gaming
If matters such as, but not limited to, commercial scale/dominant purpose/primary purpose, freedom of
expression, cost/reasonable costs and indemnification were included in the legislative provisions, it is likely
to undermine the intent of the Proposal because parties to the matter – be they service providers or
websites – may well game the approach and subvert the intent of the Proposal.
Threshold issues would fetter the power of the court
Additionally, the inclusion matters in such a threshold manner such would fetter the power of the court,
which is best placed to weigh up all of the factors brought before it in an application for an order of this kind.
Inconsistent with international legislative provisions
Also, as expressed above, directing the court as to the matters that the Court should consider when
determining whether to grant an injunction to block access to a particular website would be consistent with
international jurisdictions, such as the United Kingdom and Ireland.
We refer again to the legislative provisions in those particular jurisdictions that give the court the power to
issue similar orders, contained in the Copyright, Designs and Patents Act 1988 (UK) and the Copyright and
Related Rights Act 2000 (IE). These consist of open language against which the court determines key factors
in cases.
International jurisprudence is evidence of courts taking a range of matters into consideration
Also as outlined above, the jurisprudence established by the UK cases, particularly 20C Fox v BT is instructive
as to the discretionary factors taken into consideration by the court based on the evidence put before it. We
shall not repeat those here as they are addressed above in our detailed analysis. As referenced previously,
an overview of the jurisprudence resulting from early UK cases is at Appendix F of this submission.
Additionally, the European Court of Justice in the kino.com case confirmed that:




ISPs are intermediaries – and held that this finding is not undermined by a lack of a contractual
relationship between the infringer (website) and the intermediary;
Site blocking injunctions do not infringe the freedom of business right as there is an obligation to
implement proportionate measures;
Site blocking injunctions do not infringe the freedom of information as; and
Site blocking measures do not need to be a ‘perfect fix,’ rather it should seriously discourage users
from accessing the site while not impacting the ability to access to legal services.
As referenced previously, an overview of the kino.com case is at Appendix E of this submission.
45
REPONSES TO OTHER PROPOSITIONS
Some may say…
Lastly, some may say that Proposal 2 must be narrow and targeted, and a range of matters including but not
limited to those addressed above – for example, commercial scale/dominant purpose/primary purpose,
freedom of expression, cost/reasonable costs, indemnification – should be specified in the legislative
provision. We believe that we have discharged these matters in the detailed evidence above.
Therefore, as stated previously in our analysis of Proposal 2, we recommend that matters such as these are
most appropriately determined by the courts in the course of deciding an application for injunction –
without being specifically included in the legislation.
46
PROPOSAL 3 – EXTENDED SAFE HARBOUR SCHEME
As overviewed previously in this submission (at Proposal 1) the safe harbour scheme, at Part V Division 2AA
of the Act, was enacted in 2006 following the finalisation of the Australia United States Free Trade
Agreement (AUSFTA).
Proposal 3 would amend the Act to extend the application of the safe harbour scheme from CSPs to service
providers for the four categories of relevant activity as set out in sections 116AC, 116AD, 116AE and 116AF.
We note that this issue was the subject of previous consultation, most recently being the Attorney-General’s
Department October 2011 Consultation Paper, Revising the scope of the Copyright ‘Safe harbour Scheme’
(the Safe Harbour Consultation Paper)82. It proposed extending the application of the safe harbour scheme
to include entities providing network access and online services.
The safe harbour scheme is inextricably linked to the authorisation provisions of the Act
Before commenting on Proposal 3, it is important to note that the safe harbour scheme provides an
incentive for limiting liability for CSPs (in the form of limiting the remedies available against CSPs) if they are
found liable under the authorisation provisions of the Act.
As described in the Safe Harbour Consultation Paper:
In 2006, the Copyright Act 1968 was amended to provide a scheme offering legal incentives for
Carriage Service Providers (CSPs) to cooperate with copyright owners in deterring copyright
infringement on their networks. The scheme is commonly referred to as the ‘safe harbour scheme’
and limits the remedies available against CSPs for copyright infringements that take place through
their systems and networks that they do not control, initiate or direct.83
It is therefore the case that the safe harbour scheme is inextricably linked to the authorisation provisions of
the Act, and therefore linked to Proposal 1 of the Paper.
Safe harbour scheme does not function as intended
It is supposed to be that the ‘safe harbour’ is only required if the CSP is found liable under the authorisation
provisions. As above, the safe harbour scheme provides incentives for CSPs, in the form of limited liability
for authorisation, for cooperating with rights holders in deterring copyright infringement on their
networks.84
Illustrating this with the common image of a set of scales – on one side of the scales would be the benefit (or
incentive), and on the other side of the scales would be the obligation. The Act intends for the sides of the
scales to be balanced.
If the Act was properly functioning, the benefit to CSPs – limited liability (under the safe harbour provisions);
would be balanced by CSPs meeting the obligation – cooperating with rights holders to deter copyright
82
The Safe Harbour Paper,
http://www.ag.gov.au/Consultations/Documents/Revising+the+Scope+of+the+Copyright+Safe+Harbour+Scheme.pdf,
p3
83
Ibid, p3
84
Ibid, p3
47
infringement (under the authorisation provisions). Thus the safe harbour provisions of the Act are
inextricably linked with the authorisation provisions of the Act.
However, as CSPs have not cooperated with rights holders to deter copyright infringement on their networks
by taking reasonable steps – due largely to their being no incentive to do so, particularly following the iiNet
case, and a lack of consequence for not doing so under the authorisation liability provisions themselves – the
safe harbour provisions are not actually activated, used or relied upon.
The combined realities of a flawed safe harbour scheme and the unintended deficiencies of the
authorisation provisions of the Act are untenable independently and collectively.
News Corp Australia therefore does not support the extension of the safe harbour scheme on the basis that
the current safe harbour scheme does not operate as intended – the scales are not balanced and therefore
the scheme does not work as a whole.
In fact, Proposal 3 could likely exacerbate the imbalance between the authorisation liability provisions and
the safe harbour provisions of the Act – giving safe harbour benefits to a broader range of parties while not
obliging them to do anything to claim the safe harbour. The matter that the safe harbour scheme does not
function – in that the safe harbour provisions are not actually activated, used or relied upon – is not a reason
to wave through the extension in Proposal 3. Rather, it is a sound policy reason as to why not.
No case has been made as to why the safe harbour provisions require ‘extending’
Notwithstanding the above, it remains the case that the case for extending the safe harbour provisions has
not been made.
COMBINATION OF PROPOSALS 1 AND 3
Extending the application of the safe harbour scheme does not fix authorisation liability – rather it worsens
the imbalance, and highlights and aggravates the deficiencies
Proposals 1 and 3 in combination do not rectify – rather highlight and aggravate – the deficiencies of the
authorisation liability provisions of the Act, and worsens the ensuing imbalance between the authorisation
liability and the safe harbour provisions of the Act. This was not the manner in which these provisions were
designed to operate, and it should not continue to be so.
To step through this, if Proposals 1 and 3 were implemented:
 the safe harbour scheme would extend to service providers; and
 the authorisation provisions would not be amended to rectify the current issues; and
 the authorisation provisions would not be extended to service providers.
Therefore, the outcome merely ‘gifts’ the ‘safe harbour’ to an expanded set of parties such as internet
intermediaries, universities, schools and libraries, without requiring the countervailing obligation of taking
reasonable steps to actually claim the safe harbour.
We note that the October 2011 Safe Harbour Consultation Paper stated:
48
The expanding scope of the safe harbour scheme is not intended to alter the existing balance of the
scheme.85
However, as we have explained, the so-called balance between authorisation liability and safe harbour is
theoretical at best as outlined previously in this submission. Therefore the impact of Proposals 1 and 3 in
aggregate – which was also proposed in the Safe Harbour Consultation Paper, in that it proposed expanding
safe harbour but did not contemplate expanding the countervailing authorisation liability provisions to
service providers – does alter the ‘balance’ of the scheme, even in a theoretical sense.
It would be a suboptimal policy approach if the safe harbour scheme was expanded under Proposal 3 on the
basis that as the ‘balance’ is theoretical – that it is unlikely that authorisation liability would be established
and therefore the safe harbour provisions would not need to be met; therefore expanding the safe harbour
would make little, if any, material difference. This would, of course, beg the question, that if the safe
harbour was theoretical, why is it needed at all?
Given the sound reasons outlined above, News Corp Australia does not support the extension of the safe
harbour scheme.
PROPOSAL 3 – RECOMMENDATION
We recommend that Proposal 3 does not proceed in its current form, particularly in light of Proposal 1 (as
per the paper) not being extended to include service providers.
Rather, Proposal 3 may proceed – in that safe harbour can be extended to service providers – only if the
recommendations outlined regarding Proposal 1 are implemented. That is, that there is an obligation to act
reasonably to deter copyright infringement on a service provider’s network, and explicit liability if this is not
met. Only then will the ‘balance’ between authorisation liability and safe harbour by struck.
To recap:
Proposal 1 must deliver a legislative amendment that ensures an effective legal framework and legal
incentives for service providers and rights holders to work together, and ensure the Act works as originally
intended.
This will require amendment to the authorisation provisions of the Act such that:


It is explicit that a service provider that fails to take reasonable steps, when placed on notice of the
infringing behaviour, is liable under the authorisation provisions of the Act; and
Expand the authorisation liability provisions to service providers and intermediaries.
This will also require a definition of ‘service provider’ in the Act. This definition should be appropriate to
capture entities acting in their capacity to function as a service provider.
The expansion to incorporate service providers and intermediaries is essential if the safe harbour provisions
(at Proposal 3) are to be expanded.
Only if the above occurs should the safe harbour scheme be expanded to service providers.
85
Ibid, p5
49
Only then will the Proposal 3 meet the goals of the Government, assist in meeting Australia’s international
trade obligations, ensure the Act works as intended, and align Australia with international jurisdictions.
NEWS CORP AUSTRALIA RECOMMENDATION – THE SAFE HARBOUR SCHEME CAN BE EXTENDED
TO SERVICE PROVIDERS ONLY IF THE RECOMMENDATIONS OUTLINED REGARDING PROPOSAL 1
ARE IMPLEMENTED
News Corp Australia notes that the case for extending the safe harbour provisions has not been made.
Notwithstanding the above, we support an extension to the safe harbour scheme to include service
providers, only if the approach we outline at Proposal 1 is implemented.
Should the amendments as recommended regarding Proposal 1 not be implemented, we cannot
countenance expansion of the safe harbour scheme to service providers. This is because the safe harbour
scheme is contingent on functioning authorisation liability provisions – which is currently not the case; and
the balanced jurisdictions – such that those parties to whom authorisation liability applies can have an
opportunity to claim the safe harbour if the requirements of the authorisation liability provisions are met.
Therefore, we restate here the elements of the News Corp Australia recommendation regarding Proposal 1
in full.
Legislative amendment must rectify lack of incentives

Explicit liability required
We believe that what is lacking under the current authorisation liability provisions is the certainty of
legal liability and the incentive for service providers, including ISPs, to work with rights holders – that
being explicit liability for failure to take reasonable steps when placed on notice of the infringing
behaviour. This also remains the case under Proposal 1.
In short, under the existing provisions and also Proposal 1, there is a lack of incentive for ISPs to take
reasonable steps to prevent infringing behaviour on ISP networks, and a lack of incentive for ISPs to
cooperate with rights holders – because there is no explicit liability for not doing so.
Until this is rectified there remains no incentive to compel ISPs to work with rights holders to agree
how these issues will be addressed. This was evidenced most recently through the protracted
‘round table’ meetings facilitated by the Attorney-General’s Department which did not achieve an
outcome. We cannot countenance more of the same.
The most efficient manner of rectifying this situation is for there to be explicit liability for service
providers, including ISPs, who fail to take reasonable steps, including wilful inactivity, to prevent
infringing behaviour on their networks when placed on notice of the infringing behaviour – that they
be liable for authorisation. Only then will there be an effective legal framework, and incentives, for
service providers and rights holders to come together to decide what would constitute ‘reasonable
steps.’

Only then will the environment be conducive to the parties reaching agreement on appropriate
industry schemes or commercial arrangements
50
As we have said for some time, it will only be once legislative amendment is achieved, delivering an
effective legal framework and incentives for the parties to work together, that the environment will
be conducive for the parties to – for the first time – engage in meaningful and constructive
negotiations to develop the ‘reasonable steps’ required to meet the legislative requirements. This
will be because there will be explicit liability for service providers, including ISPs, who fail to take
reasonable steps, including wilful inactivity, to prevent infringing behaviour on their networks when
placed on notice of the infringing behaviour – that they be liable for authorisation.
Rectifying incentives to cooperate will assist the safe harbour scheme to operate as intended
As outlined previously in this submission, due to the deficiencies in the authorisation liability provisions of
the Act, the safe harbour scheme does not operate as it was designed to do – that being ‘offering legal
incentives for Carriage Service Providers to cooperate with copyright owners in deterring copyright
infringement on their networks.’86
Therefore, rectifying the incentives for service providers, including ISPs, to cooperate with rights holders
under the authorisation provisions of the Act will also assist the safe harbour scheme to operate as it was
originally intended.
It is vital that an appropriate amendment to authorisation liability is made to ensure that both the
authorisation liability provisions and the safe harbour provisions of the Act interact and operate as intended.
This is exceptionally important in light of the Government’s Proposal 3, to extend the safe harbour scheme
to service providers.
A definition of service provider that encompasses all entities and avoids unintended consequences
We suggest that the Act will require a definition of ‘service provider’ that is sufficiently broad to encompass
a range of entities. However, we foresee that it is important that such a definition would apply to the
entities in their capacity as service providers. This is an appropriate mechanism to minimise any concerns
regarding unintended consequences and so-called ‘chilling effects.’
The legislative approach to achieving this outcome
While we do not prescribe in this submission how this may be achieved, we understand that some rights
holders, such as Music Rights Australia and the Australian Screen Association, may put forward more
detailed proposals and approaches regarding legislative amendments.
While these more detailed proposals for legislative amendment from other rights holders may take differing
approaches, they achieve the same goal – that is to ensure an effective legal framework and legal incentives
for service providers and rights holders to work together, and ensure the Act works as originally intended.
86
Ibid, p3
51
RESPONSE TO PROPOSAL 3 QUESTIONS
Question 7: Would the proposed definition adequately and appropriately expand the safe harbour
scheme?
We note that it appears to be somewhat premature to respond to this question regarding the specifics of
Proposal 3 due to the interconnected nature of these provisions with Proposal 1, and therefore in advance
of legislation being implemented. However, we offer the following comments.
As stated previously in this submission, News Corp Australia notes that the case for extending the safe
harbour provisions has not been made.
Again, as above, we support an extension to the safe harbour scheme to include service providers, only if the
approach we outline at Proposal 1 is implemented.
Should the amendments as recommended regarding Proposal 1 not be implemented, we cannot
countenance expansion of the safe harbour scheme to service providers. This is because the safe harbour
scheme is contingent on functioning authorisation liability provisions – which is currently not the case; and
the balanced jurisdictions – such that those parties to whom authorisation liability applies can have an
opportunity to claim the safe harbour if the requirements of the authorisation liability provisions are met.
We suggest that the Act will require a definition of ‘service provider’ that is sufficiently broad to encompass
a range of entities. However, we foresee that it is important that such a definition would apply to the
entities in their capacity as service providers. This is an appropriate mechanism to minimise any concerns
regarding unintended consequences and so-called ‘chilling effects.’
Question 8: How can the impact of any measures to address online copyright infringement best be
measured?
Again, we note that it appears somewhat premature to respond to this question as it is unclear as to the
details of the legislative framework, industry schemes, and the goals of each of the programs and/or
measures put in place. However, we offer the following comments.
It is useful to look to international examples that point to the following:



Consumer awareness of programs (such as the graduated response) and licensed services
Consumer attitudes
Use of unlicensed services
We emphasise that it will be important that the methods of measuring impact of the initiatives put in place
to address online copyright infringement be fit for purpose.
Question 9: Are the alternative measures to reduce online copyright infringement that may be more
effective?
As outlined at Section 4, there is no silver bullet to ‘solve’ online copyright infringement. It requires a
multifaceted approach – a toolkit – that includes legitimate products and services, consumer awareness and
education, and legislative measures that assist in addressing the availability, or supply, of unlawful content,
and also legal measures that incentivise parties to work together to deter consumer demand for such
content.
52
Section 4 includes a snapshot of legitimate and innovative products and services, and consumer awareness
and education measures developed by the market. This is not a static situation, and the market responses
continue to develop and evolve.
There are no ‘alternatives’ to a well-functioning legal framework
We stress however, that these market-based initiatives are not alternatives to the requirement for the
amendments required to deliver the Government goal:
‘to provide a legal framework within which rights holders, ISPs and consumer representatives can
develop flexible, fair and workable approaches to reducing online copyright infringement’87
to:
‘provide certainty as to legal liability, streamline the process by which rights holders can seek relief
from the courts to block access to websites providing infringing material, and provide an incentive for
market participants to work together to address online copyright infringement.’88
News Corp Australia therefore urges the Government to adopt Amended Proposals 1, 2 and 3 to deliver on
this goal and the aim of the framework.
Work in progress
Work in progress includes an initiative being led by Music Rights Australia, with the Audited Media
Association of Australia, to develop industry guidelines in the form of an industry code to ensure that each
section of the online advertising value chain has in place practical processes and guidelines to reduce the
instances of brands placing their advertising on illegal streaming and downloading sites.
According to international report Good Money Gone Bad – digital thieves and the hijacking of the online ad
business,89a report on the profitability of ad-supported content theft for the Digital Citizens Alliance, the
content theft websites researched make about US$227 million in ad revenue annually. According to the
report, the 30 largest content theft sites that are supported exclusively by ads make on average US$4.4
million annually, and the largest BitTorrent portal sites top US$6 million – by relying on the works of others.
The development of an industry code in Australia would complement similar international initiatives. More
details about these local and international initiatives are included in the Music Rights Australia submission to
the Paper.
As outlined in this submission and supported with detailed analysis, in concert with these market responses
across products and services and awareness and education Australia requires a legal framework that
supports and respects the decisions of creators and rights holders.
REPONSES TO OTHER PROPOSITIONS
Some may say…

There are more sustainable approaches than legislation
87
The Paper, p1
Ibid, p1
89
February 2014, Good Money Gone Bad – digital thieves and the hijacking of the online ad business, Research
conducted by MediaLink for the Digital Citizens Alliance
http://www.digitalcitizensalliance.org/cac/alliance/content.aspx?page=FollowTheProfit
88
53
As we have detailed, non-exhaustively, in Section 4, rights holders and content creators have – and
continue to – innovate and deliver products and services to meet consumer demand.
As outlined in this submission and supported with detailed analysis, in concert with these market
responses across products and services and awareness and education – which continue to evolve –
Australia requires a legal framework that supports and respects the decisions of creators and rights
holders.

Follow the money is the best approach
As above, some work in this area is being undertaken. That work could only benefit from the
involvement of the parties advocating, and with international experience, in these initiatives.
Like other initiatives however, it must be acknowledged that this is not a silver bullet and not an
alternative. It is however a complement, and another tool in the toolkit of deterring online
copyright infringement through disrupting the business models of the beneficiaries of this activity.

Some may say that the problem of infringement would be solved/fixed with ‘better’ availability and
pricing
As outlined in Section 4, pricing and availability are elements of the product response being
continually evolved and delivered by the market.
Some that advocate for ‘pricing and availability’ say that people wouldn’t pirate content if these
were ‘fixed’ or even that online piracy is primarily an availability and pricing problem.90 As evidenced
previously, and restate here, the experience of the music industry – with ubiquitous access including
at price points of $0 – is that still 26% of internet users worldwide regularly access unlicensed
services.91
We acknowledge that price and availability are important tools, but these alone cannot address the
issue. However, as above and akin to other market-based initiatives, it must be acknowledged that
‘pricing and availability’ is not a silver bullet, and is certainly not an alternative to what the Paper is
seeking, that being legislative amendment and a well-functioning legal framework to support other
measures to address online copyright infringement.
We note here that Telstra CEO, David Thodey, in responding to a question posed at a media briefing
following Telstra’s FY14 results, said:
‘Piracy of content is theft…I hold a very strong view on that. You can’t justify it because of the
price of content.’92
Also, Minister Turnbull, in blog post regarding online copyright infringement said:
‘A part of the solution is making content available in Australia at the same time, or very
shortly after, it is released overseas and at a comparable price…Now let me make this clear.
90
17 December 2013, Google correspondence to Minister for Communications,
http://www.communications.gov.au/__data/assets/pdf_file/0009/214983/Google.pdf
91
March 2014, http://www.ifpi.org/downloads/Digital-Music-Report-2014.pdf, p40, Note – this figure applies on to
desktop-based services and does not include smartphone and tablet-based music infringement.
92
14 August 2014, http://www.businessinsider.com.au/david-thodey-telstra-has-a-role-to-play-in-stopping-contentpiracy-2014-8
54
The owners of copyright material, music, movies or whatever, are able to determine the price
at which they sell it and when they sell it. That’s their call.’93
93
http://www.malcolmturnbull.com.au/media/copyright-the-internet-and-piracy
55
6.
RESPONSE TO QUESTIONS POSED IN THE PAPER
Section 5 of this submission includes responses to questions posed for Proposals 1, 2 and 3. However, for
reference, those responses are repeated below, in addition to questions posed regarding the Regulation
Impact Statement.
QUESTIONS REGARDING EXTENDED AUTHORISATION LIABILITY
These comments are predicated on the recommendations in this submission being adopted, in this case
being referred to as Amended Proposal 1.
We note that it appears to be somewhat premature to respond to questions regarding the specifics of the
industry schemes and/or commercial models that would meet the legislative and/or regulatory
requirements of Amended Proposal 1 in advance the legislation being implemented. However, we offer the
following comments.
Question 1: What could constitute ‘reasonable steps’ for ISPs to prevent or avoid copyright infringement?
Regarding what would constitute ‘reasonable steps’ for ISPs to prevent or avoid copyright infringement, we
recommend an industry scheme that comprises a graduated response approach to notifying ISP customers
when their accounts have been used to infringe copyright online. Our preferred model for such an industry
scheme is the US Copyright Alert System (CAS)94.
At Section 5 above we outline that such an industry scheme would be competitively neutral, and the
elements that should be included. We also provide at Section 5:


Overview of the CAS
o The launch
o How it operates
o Overview of the Alerts
Efficacy of the CAS
o Key data
o Consumer research
Question 2: How should the costs of any ‘reasonable steps’ be shared between industry participants?
News Corp Australia recommends that the most efficient manner for costs to be allocated are with each
party bearing its own costs. This is the approach taken in the US CAS model.
Question 3: Should the legislation provide further guidance on what would constitute ‘reasonable steps’?
News Corp Australia recommends that any guidance in relation to what would constitute ‘reasonable steps’
should be set out in regulations that support the legislative provisions. Those regulations could include
guidance as to the elements that industry schemes and/or commercial arrangements should encompass.
94
http://www.copyrightinformation.org/the-copyright-alert-system/
56
Such an approach would allow sufficient flexibility to enable amendments to accommodate current and
future evolutions – some of which are unknown to us now.
Question 4: Should different ISPs be able to adopt different ‘reasonable steps’ and, if so, what would be
required within a legislative framework to accommodate this?
News Corp Australia stresses here that it is important that the legislative framework fulfils the goal of
ensuring an effective legal framework and legal incentives via explicit legal liability, for service providers and
rights holders to work together – and ensure that the authorisation liability provisions of the Act operate as
originally intended.
In fulfilling this, it is important to restate the importance of competitive neutrality. Regarding the preferred
industry scheme for ISPs, it should apply to all ISPs. While the regulations should be clear about the
elements of a scheme, it may be that the scheme itself – developed by the applicable parties – will
incorporate some flexibility into ‘how’ the legislative and regulatory requirement is to be met in agreement
with the parties.
Question 5: What rights should consumers have in response to any scheme or ‘reasonable steps’ taken
buy ISPs or rights holders? Does the legislative framework need to provide for these rights?
News Corp Australia suggests that the preferred model of an industry scheme, the US CAS, incorporates a
consumer appeal process, enabling customers to appeal notices when in the mitigation stage. It is envisaged
that under Amended Proposal 1 that there be a consumer appeals process available.
QUESTIONS REGARDING EXTENDED INJUNCTIVE RELIEF
Question 6: What mattes should the Court consider when determining whether to grant an injunction to
block access to a particular website?
As outlined above, in granting the court the power to consider applications for the equitable remedy of
injunctive relief of this kind, we do not support a list of determinative factors – whether that list is
exhaustive or non-exhaustive – being included in the legislation. We believe that such matters should not be
threshold issues, rather be left to the discretion of the court.
Threshold issues would be open to gaming
If matters such as, but not limited to, commercial scale/dominant purpose/primary purpose, freedom of
expression, cost/reasonable costs and indemnification were included in the legislative provisions, it is likely
to undermine the intent of the Proposal because parties to the matter – be they service providers or
websites – may well game the approach and subvert the intent of the Proposal.
Threshold issues would fetter the power of the court
Additionally, the inclusion matters in such a threshold manner such would fetter the power of the court,
which is best placed to weigh up all of the factors brought before it in an application for an order of this kind.
57
Inconsistent with international legislative provisions
Also, as expressed above, directing the court as to the matters that the Court should consider when
determining whether to grant an injunction to block access to a particular website would be consistent with
international jurisdictions, such as the United Kingdom and Ireland.
We refer again to the legislative provisions in those particular jurisdictions that give the court the power to
issue similar orders, contained in the Copyright, Designs and Patents Act 1988 (UK) and the Copyright and
Related Rights Act 2000 (IE) respectively; consist of open language against which the court determines key
factors in cases.
International jurisprudence is evidence of courts taking a range of matters into consideration
Also as outlined above, the jurisprudence established by the UK cases, particularly 20C Fox v BT 20C Foxis
instructive as to the discretionary factors taken into consideration by the court based on the evidence put
before it. We shall not repeat those here as they are addressed above in our detailed analysis. As
referenced previously, an overview of the jurisprudence resulting from early UK cases is at Appendix F of
this submission.
Also, as outlined previously in this submission, the European Court of Justice in the kino.com case confirmed
that:




ISPs are intermediaries – and held that this finding is not undermined by a lack of a contractual
relationship between the infringer (website) and the intermediary;
Site blocking injunctions do not infringe the freedom of business right as there is an obligation to
implement proportionate measures;
Site blocking injunctions do not infringe the freedom of information as; and
Site blocking measures do not need to be a ‘perfect fix,’ rather it should seriously discourage users
from accessing the site while not impacting the ability to access to legal services.
QUESTIONS REGARDING EXTENDED SAFE HARBOUR SCHEME
Question 7: Would the proposed definition adequately and appropriately expand the safe harbour
scheme?
We note that it appears to be somewhat premature to respond this question regarding the specifics of
Proposal 3 due to the interconnected nature of these provisions with Proposal 1, and therefore in advance
of legislation being implemented. However, we offer the following comments.
As stated previously in this submission, News Corp Australia notes that the case for extending the safe
harbour provisions has not been made.
Again, as above, we support an extension to the safe harbour scheme to include service providers, only if the
approach we outline at Proposal 1 is implemented.
Should the amendments as recommended regarding Proposal 1 not be implemented, we cannot
countenance expansion of the safe harbour scheme to service providers. This is because the safe harbour
scheme is contingent on functioning authorisation liability provisions – which is currently not the case; and
58
the balanced jurisdictions – such that those parties to whom authorisation liability applies can have an
opportunity to claim the safe harbour if the requirements of the authorisation liability provisions are met.
We suggest that the Act will require a definition of ‘service provider’ that is sufficiently broad to encompass
a range of entities. However, we foresee that it is important that such a definition would apply to the
entities in their capacity as service providers. This is an appropriate mechanism to minimise any concerns
regarding unintended consequences and so-called ‘chilling effects.’
Question 8: How can the impact of any measures to address online copyright infringement best be
measured?
Again, we note that it appears somewhat premature to respond to this question as it is unclear as to the
details of the legislative framework, industry schemes, and the goals of each of the programs and/or
measures put in place. However, we offer the following comments.
It is useful to look to international examples to point to the following:



Consumer awareness of programs (such as the graduated response) and licensed services
Consumer attitudes
Use of unlicensed services
We emphasise that it will be important that the methods of measuring impact of the measures put in place
to address online copyright infringement be fit for purpose.
Question 9: Are the alternative measures to reduce online copyright infringement that may be more
effective?
As outlined at Section 4, there is no silver bullet to ‘solve’ online copyright infringement. It requires a
multifaceted approach – a toolkit – that includes legitimate products and services, consumer awareness and
education, and legislative measures that assist in addressing the availability, or supply, of unlawful content,
and also legal measures that incentivise parties to work together to deter consumer demand for such
content.
Section 4 includes a snapshot of legitimate and innovative products and services, and consumer awareness
and education measures developed by the market. This is not a static situation, and the market responses
continue to develop and evolve.
There are no ‘alternatives’ to a well-functioning legal framework
We stress however, that these market-based initiatives are not alternatives to the requirement for the
amendments required to deliver the Government goal:
‘to provide a legal framework within which rights holders, ISPs and consumer representatives can
develop flexible, fair and workable approaches to reducing online copyright infringement’95
to:
‘provide certainty as to legal liability, streamline the process by which rights holders can seek relief
from the courts to block access to websites providing infringing material, and provide an incentive for
market participants to work together to address online copyright infringement.’96
95
96
The Paper, p1
The Paper, p1
59
News Corp Australia therefore urges the Government to adopt Amended Proposals 1, 2 and 3 to deliver on
this goal and the aim of the framework.
Work in progress
Work in progress includes an initiative being led by Music Rights Australia, with the Audited Media
Association of Australia, to develop industry guidelines in the form of an industry code to ensure that each
section of the online advertising value chain has in place practical processes and guidelines to reduce the
instances of brands placing their advertising on illegal streaming and downloading sites.
As we know from international reports such as Good Money Gone Bad – digital thieves and the hijacking of
the online ad business,97a report on the profitability of ad-supported content theft for the Digital Citizens
Alliance, thee content theft websites researched make about US$227 million in ad revenue annually.
According to the report, the 30 largest content theft sites that are supported exclusively by ads make on
average US$4.4 million annually, and the largest BitTorrent portal sites top US$6 million – by relying on the
works of others.
The development of such an industry code in Australia would complement similar international initiatives.
More details about these local and international initiatives are included in the Music Rights Australia
submission to the Paper.
As outlined in this submission and supported with detailed analysis, in concert with these market responses
across products and services and awareness and education Australia requires a legal framework that
supports and respects the decisions of creators and rights holders.
QUESTIONS REGARDING REGULATION IMPACT STATEMENT
As we have prefaced previously in the submission, it appears to be somewhat premature to respond to
questions regarding the specifics of the Proposals in advance of them being finalised. However, we offer the
following comments.
These comments are predicated on the recommendations in this submission being adopted (referred to as
Amended Proposal 1, Amended Proposal 2 and Amended Proposal 3).
In the case of amended Proposal 1 it is also predicated on the preferred model for a graduated response
industry scheme, akin to the US CAS model, being developed.
Question 10: What regulatory impacts will the proposals have on you and your organisation?
Proposal 1
The implementation of Amended Proposal 1 would require rights holders to make a significant investment to
ensure that the evidentiary burden for the issuing of notices regarding alleged copyright infringement is met.
February 2014, Good Money Gone Bad – digital thieves and the hijacking of the online ad business, Research
conducted by MediaLink for the Digital Citizens Alliance,
http://www.digitalcitizensalliance.org/cac/alliance/content.aspx?page=FollowTheProfit
97
60
As stated above, we believe that it is appropriate that each party bears its own cost in meeting the legislative
requirements.
Proposal 2
The implementation of Amended Proposal 2 would require rights holders to make a significant investment to
ensure that the case for applying for the court order is sound, and to meet the evidential hurdles of the
court in considering the matter and issuing the order. As stated above, we believe that it is appropriate that
each party bears its own cost in meeting the legislative requirements.
Proposal 3
The implementation of Amended Proposal 3 may impose additional business costs to rights holders. As
stated previously in the submission we believe that it is appropriate that each party bears its own cost in
meeting legislative requirements.
Some may say Proposals 1, 2 and 3 apply new regulatory burdens and compliance costs

Proposal 1
Some may say that there are new ‘regulatory imposts’ and ‘compliance costs’ associated with
Amended Proposal 1.
As we have explained previously in the submission, Amended Proposal 1 merely rectifies the
deficiencies in the Act, and is therefore not a new requirement; rather it makes the existing
requirement function as it should. It is also the case that, as the Paper states, Australia has existing
international obligations to provide protections for copyright material. Therefore we do not agree
with the proposition that some may put regarding this Proposal.

Proposal 2
Some may say that the cost of website blocking, being the legal process and/or complying with the
court order, applies new ‘regulatory imposts’ and ‘compliance costs.’
Again, as the Paper states, Australia has existing international obligations to provide protections for
copyright material, and in this context, it is an additional, but necessary amendment to assist in
fulfilling those obligations.
To the extent that the proposition put by some may have traction – which we do not agree with, but
for the purposes deal with here – we point to international jurisprudence, particularly in the UK. As
cited previously in this submission, in the 20C Fox v BT Approved Second Judgement, Justice Arnold
said:
‘Each side contends that the other should pay the costs of implementing the order. In my
judgment the costs of implementing the order should be borne by BT…The cost of
implementing the order is a factor that can be taken into account when assessing the
proportionality of the injunction, and in the present case I have done so: see the main
judgment at [200]. Indeed, my conclusion there that the cost to BT “would be modest and
proportionate” is supported by the evidence subsequently filed by BT, which estimates the
initial cost of implementation at about £5,000 and £100 for each subsequent notification.’98
98
20C Fox v BT, Second Judgement, at [32]
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
Proposal 3
Some may say that Amended Proposal 3 applies new ‘regulatory imposts’ and ‘compliance costs’ on
the parties to whom the extension applies given the link with Amended Proposal 1.
However, as stated above, the requirement to have a safe harbour scheme that is balanced by the
obligations under the authorisation provisions Act is an existing requirement. Under the Amended
Proposal 3, the extension of the safe harbour scheme to service providers also must extend the
obligations of authorisation provisions to service providers to maintain the balance.
To the extent that the proposition put by some may have traction – which we do not agree with, but
for the purposes deal with here – we say that these obligations are required under existing
international obligations, and may already be employed through existing business processes, for
example, the measures some service providers and intermediaries already undertake regarding
managing online piracy.99
Notwithstanding this, as the Paper states, Australia has existing international obligations to provide
protections for copyright material which, with the safe harbour provisions being interdependent
with Amended Proposal 1, come into play.
Question 11: Do the proposals have unintended implications, or create additional burdens for entities
other than rights holders and ISPs?
As outlined in our Amended Proposals 1, 2 and 3, it is important to ensure:
 A technology neutral approach to the market participants to whom the Proposals apply; and
 That should safe harbour be extended to service providers that the corresponding obligations also
extend to service providers to ‘balance’ the scheme.
To the extent that the Amended Proposals apply to service providers, the obligations should only apply to
entities in their capacity as service providers – hence the importance of the definition of service provider.
As outlined in response to Question 10 above, based on existing international obligations and international
jurisprudence, and coupled with the ability to fulfil Proposal 1 via industry schemes and commercial
arrangements, we do not foresee Amended Proposals 1, 2 and 3 being burdensome to the parties to whom
they will apply in their capacity as service providers.
99
Examples include How Google Fights Piracy, http://googlepublicpolicy.blogspot.com.au/2013/09/report-how-googlefights-piracy.html and https://docs.google.com/a/google.com/file/d/0BwxyRPFduTN2dVFqYml5UENUeUE/edit; and
How eBay Protects Intellectual Property (VeRO), http://pages.ebay.com.au/help/tp/programs-vero-ov.html
62
APPENDIX A – DIGITAL CONTENT GUIDE PRESS RELEASE
Media Release: Tuesday, August 5, 2014
Digital Content Guide launches today
Australia’s first guide to digital entertainment and services is open for business
The Digital Content Guide, commissioned by an assembly of Australia’s creative content
associations, creators and distributors, launched today in an effort to provide a quick and easy way
for Australians to find and enjoy access to licensed online entertainment services including TV
shows, movies, music, eBooks, video games and sport.
There has been an explosion in legitimate ways to get access to content online. However,
sometimes it can be hard to find that content or to distinguish between sites that offer legal access
and those that illegally monetise the hard work of all who contribute to the creative industry. The
Digital Content Guide simplifies the search and helps people find the games, shows, movies, music
and books they love.
The site directs visitors to information about different services, which can be clicked to directly to
explore and enjoy. Australians will see a wide choice of licensed digital services for a variety of
content across different devices and platforms. As the breadth of options continues to grow, the site
will keep pace in order to help Australians find the content they want from a licensed service.
Simon Burke, Actors’ Equity President said, “People are passionate about entertainment and we are
passionate about creating it. Therefore, it’s critical to ensure that the creative industries receive the
support they need, through legitimate use, so that the 900,000* Australians they employ can
continue to make them thrive.”
The Digital Content Guide is a joint effort by APRA AMCOS, The Australian Recording Industry
Association (ARIA), The Australian Screen Association (ASA), Copyright Agency Ltd, News Corp
Limited, Foxtel and Village Roadshow Limited.
For more information, visit The Digital Content Guide at: www.digitalcontentguide.com.au.
*Source: PWC: The Economic Contribution of Australia’s Copyright Industries report
For more information:
[email protected]
(02) 9813 7577/ 0409 928 209
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APPENDIX B – THANK YOU CAMPAIGN PRESS RELEASE
MEDIA RELEASE
20 AUGUST 2012
IPAF LAUNCHES ‘THANK YOU’ CAMPAIGN AT MOVIE CONVENTION
NEW AD SAYS ‘PAYING FOR FILMS & TV WORKS FOR EVERYONE, THANK YOU’
SYDNEY: The film and television industry in Australia launched a new campaign today to say thank
you to consumers for choosing to view or access film and television in the way it was intended to be
seen – in the cinema, on television, on Blu-ray or DVD or via legitimate online channels.
The campaign was launched at the opening of the Australian International Movie Convention (AIMC)
on Queensland’s Gold Coast., where over 1,000 film distributors and cinema operators converge to
preview the upcoming year of movie releases and discuss the business of cinema.
The Intellectual Property Awareness Foundation (IPAF), a broad membership of film and television
organisations in Australia, produced and distributed the consumer awareness message with the
support of actors, production crew, distributors, exhibitors and a wide range of local industry
businesses, both large and small.
Actor Susie Porter, who features in the new campaign, said: “I chose to personally become involved in
this campaign because our industry relies on the good will of our audience for any show to be a
success. It’s important to once in a while say ‘thank you’ to Australians who chose to support our work
by going to the cinema, buying or renting DVDs, watching TV or viewing our shows on a genuine
online website, because without them we wouldn’t be able to invest in the production of all of our
great shows. Good on you for watching!”
IPAF Executive Director, Lori Flekser, said: “Our new campaign is informed by research released by
Sycamore and Newspoll in June this year that found that nearly two thirds of Australians do not access
unauthorized films and television shows online, while another 10% have stopped doing so in the last
12 months. The survey also found that over three quarters of Australians are more aware of the
growth of online legal alternatives.
“As a film and TV community, we want to say ‘thank you’ to the many Australians who choose to
patronize the cinema, watch TV, rent or buy DVDs and Blu-rays, or access their online content via
genuine websites. By doing so, people are not only supporting jobs and businesses in the creative
community, they are also contributing to further investment in new films and television shows. Doing
the right thing ultimately benefits everyone.”
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Nic Holland, director of the ‘Thank You’ commercial, said: “Like all productions, creating this
consumer message was a labour of love. It takes an army of talented individuals, each with their own
special skill, to come together as a team and create quality screen content, and the production of this
‘Thank You’ video was no different. However, the common motivation for everyone’s involvement was
a commitment to thank Australians for watching our shows the way we intended them to be viewed.
While we are blessed to be working in a field we love, it has its fair share of challenges, particularly,
and we can only continue to make quality films and TV shows with the support of the paying public.”
Quickflix Founder and Executive Chairman, Stephen Langsford said: “We want people to enjoy film and
television when they want it and on the platform of their choice. We’re here to deliver an enjoyable
legal
alternative,
whether
that
be
online or delivered to your door, at a competitive price. We’re proud to be a part of saying ‘Thank You’
to all Australian film and TV lovers."
The campaign can be seen in cinemas nationally, on Foxtel, on select new release DVDs, on Quickflix
home delivery DVD envelopes, and via a wide range of film and television industry websites.
To view the ‘Thank You’ consumer campaign, hear from the people behind the scenes, and learn more
about the work of the Intellectual Property Awareness Foundation, please go to:
www.ipawareness.com.au.
ABOUT THE INTELLECTUAL PROPERTY AWARENESS FOUNDATION (IPAF)
IPAF promotes screen copyright by conducting research, creating consumer awareness campaigns
and producing educational programs and resources for Australian secondary schools. 50,000
Australians depend on the film and TV industry for their livelihoods, including those in
production, distribution, exhibition, DVD rental & retail, marketing, operations, office trades and
a multitude of service providers and suppliers.
www.ipawareness.com.au
@IPAF
CONTACTS:
Stephen Jenner, Communications Director, IPAF
0409 776196
[email protected]
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APPENDIX C – MUSIC MATTERS PRESS RELEASE
MUSIC MATTERS
LAUNCHES IN AUSTRALIA AND NEW ZEALAND
MEDIA RELEASE
STRICTLY EMBARGOED UNTIL 10 AUGUST 2011
Today MUSIC MATTERS launches across Australia and New Zealand! Aimed to remind music fans of the value and
significance of music, this exciting international campaign is supported by a collective of people across the Australian
and New Zealand music community, including artists, songwriters, managers, labels, publishers, online music providers
and record stores.
As a 23 year old writing my third album doing the only thing I’ve ever wanted to do, every other part of my life
exists in the giant and encompassing shadow that my passion for music has cast….
Alexander Gow, singer + songwriter, Oh Mercy
Allowing the music to speak for itself, the educational campaign brings together a growing collection of short animated
films about inspirational Australian and New Zealand artists including Eskimo Joe, Nick Cave, Oh Mercy, Graeme
Connors and Dave Dobbyn. These artists have dedicated their lives to music and have helped shape our cultural
landscape.
Many of the short animated MUSIC MATTERS films have been created through a unique collaboration between the
Australian music community and talented final year animators at the University of Technology, Sydney. More will be
launched over the coming months, culminating in an official launch on the opening night of the UTS: Sydney
International Animation Festival on Friday, 23 September which will unveil The Go Betweens animated film.
The MUSIC MATTERS animated films are complemented by a series of rotating “blogs” from people across the music
community on why MUSIC MATTERS to them. Blog contributors include Alex Dyson (presenter on Triple J), John
Watson (manager of Cold Chisel, Birds of Tokyo, Silverchair, Missy Higgins, Gotye) and many others.
The campaign also incorporates a MUSIC MATTERS “trust mark” which is displayed by supporting music stores and acts
as such a guide for music fans to determine whether the record store or music site that they are using is supporting the
artists, musicians, songwriters and everyone involved in creating the music. With more than 14 million tracks available
through 400+ legitimate online music stores worldwide, music fans have more ways than ever to access music
legitimately.
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The MUSIC MATTERS campaign can be seen at www.whymusicmatters.org. You can also follow us at: Facebook:
www.facebook.com/whymusicmattersANZ
and
Twitter:
www.twitter.com/musicmattersANZ.
MUSIC MATTERS reflections
Music Matters is a great campaign, as it focuses on the value of music. They're saying, "These artists have put their
whole lives into their music, so do them a favour. Support their music, so they can keep creating it." Stu Macleod, Eskimo Joe
Music matters appealed to me because it humanised the creative process. Young people in this day have been raised in
an environment where music is so easily accessed that it by-passes any thought and acknowledgment of the source of
the entertainment. Music matters is educating young people on the worth and value of music. - Alexander Gow, Oh
Mercy
Music is the corner stone of our cultural lives and makes a mark on the kind of society we are or want to be. Music
breaks down cultural, political and social barriers....makes us "feel" in a world that can sometimes make it hard.
Celebrating music and the music makers is what Music Matters is all about, and how music has changed our lives for the
better. Where would we be without it? - Cath Haridy, Manager of Eskimo Joe and Chairperson of the Australian Music
Managers (AMM)
Music is such an important part of Australia's social and cultural fabric, it reflects the times we live in and the things we
aspire to be. It's an incredible emotional outlet for audiences and creators alike. We love MUSIC MATTERS because it is
an acknowledgement by the 'music industry' that what we do is nothing without the music itself. When all is said and
done, the most important thing we need to do is protect and encourage is the creation of music. - Nick O'Byrne, General
Manager, Australian Independent Record Labels Association
It's such a pleasure to see Music Matters roll out in Australia after being part of the UK launch. The creativity and stories
in these lovely clips bring such strong emotions and pride about being part of the music industry and the impact music
has on us all as individuals and passion it creates. Music Matters is all about fans and I hope the word spreads fast! Beth Appleton, Director of Marketing at Warner Music
There’s no doubt that here in the early years of the 21 st century the love of music continues to obsess us the way it
always has and to my mind Music Matters is a magnificent way to recognise that, showcasing the passion, commitment
and creative vision of the artists, whilst also respecting all the hard work that goes into bringing that first spark of an
idea in a songwriter’s mind right through to a polished and finished tune in the hands (and ears, and mind) of a
fan. AMRA is privileged to be involved. - Gavin Ward, Chairman, Australian Music Retailers Association
Music matters because it has the power to completely change people's emotions and moods. Music can make you
laugh, cry and all emotions in between. - Kenneth Macrohon, Design student at UTS, Animator for MUSIC MATTERS
The MUSIC MATTERS project was particularly inspirational for me as I myself am an aspiring musician. To be able
combine the craft of design and music is a wonderful thing and was a pleasure be a part of. - Salvatore Scopelliti,
Design student at UTS, Animator for MUSIC MATTERS
The Music Matters campaign is a great idea and brilliantly executed. We have been supporting and promoting the
Australian music industry in Asia for many years and look forward to supporting this initiative.Jasper Donat, President, Music Matters Asia Pacific Music Forum
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Background to MUSIC MATTERS
The MUSIC MATTERS campaign was an initiative that began in March 2010 in the United Kingdom which included
animated films about Nick Cave, Kate Bush, Sigur Ros, Iron Maiden, Louis Armstrong and many others, each focusing
on the reason why MUSIC MATTERS to them or their fans. The films are emotional, thought provoking and as a whole
express the passion, blood, sweat and tears that goes into making music.
The MUSIC MATTERS campaign in Australia and New Zealand is proudly supported by:
 Artists involved in the MUSIC MATTERS animations
 Artists and managers including through the AAM (Australian Music Managers)
 Songwriters through APRA | AMCOS
 Australian independent record labels through AIR (Australian Independent Record Labels Association)
 Over 125 Australian record labels through ARIA (The Australian Recording Industry Association)
 NZ record labels through RIANZ (NZ Recording Industry Association)
 Music publishers through AMPAL (Australian Music Publishers Association)
 Many Australian music retailers both online and bricks & mortar including through AMRA (Australian Music
Retailers) that display the MUSIC MATTERS trust mark
 Community broadcasters through AMRAP (The Australian Music Radio Airplay Project)


The University of Technology Sydney – whose talented final year students are involved in the creation of the
MUSIC MATTERS animations
Range of talented grass-roots animators that are involved in the creation of animations for the MUSIC
MATTERS ANZ campaign
The Australian and New Zealand MUSIC MATTERS animations have been created by the following talented animators:
 Darcy Prendergast (Eskimo Joe)
 Sarah Cox and Emma Lazenby (Nick Cave)
 Sam Scopelliti (student at University of Technology, Sydney) (Oh Mercy)
 Sarah Eddows (Graeme Connors)
 Leanne Choi (Dave Dobbyn)
More MUSIC MATTERS animations coming soon!
Media contact
Luke Woods, ARIA Communications Manager
(02) 8569 1151 or 0402 684 803
[email protected]
-ENDS –
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APPENDIX D – HADOPI, DANAHER ET AL STUDY100
Further to the data included in the submission sourced from the the Danaher et al research of the French
Hadopi scheme, The Effect of Graduated Response Anti-Piracy Laws on Music Sales: Evidence from an Event
Study in France, we offer the following:
Elements of the study
The study obtained a panel of iTunes sales data from the four major music labels (Universal Music, Warner
Music, EMI and Sony Music – representing about 70% of music industry sales) across a broad set of
countries. A difference-in-difference approach was applied, using sales trends in a control group of
European countries (UK, Italy, Spain, Germany and Belgium) to simulate the counterfactual of what music
sales in France would have been if Hadopi had not been passed.
Using Google Trends data on Google searches, the study found that:
Public awareness of Hadopi became widespread in Spring 2009, and our difference-in-difference
model suggests that Hadopi awareness caused a 22.5% increase in iTunes song unit sales in France
(over any change in the control group), as well as a 25% increase in iTunes album unit sales (over and
above the change in the control group).101
The study goes on the say:
Closer examination reveals similar trends separately for each of the four major music labels,
suggesting that our industry-wide results are not driven by one label’s advertising campaign or
marketing activity.102
And;
To test the validity of our results, we add another level of difference to the model. Previous research
and new survey data reveal that music genres differ in their tendency to be pirated. Once would
expect that if the observed relative increase in French sales is caused by Hadopi, that high-piracy
genres would experience a larger increase in sales than low-piracy genres do. Our results are
consistent with this hypothesis: low piracy genres experienced only a 7% difference-in-difference
sales increase in France after Hadopi, which high piracy genres experienced a 30% difference-indifference increase in sales, a result that is consistent with the hypothesis that the observed
increased in French sales after Hadopi is due to a reduction in internet piracy.103
Regarding the limitations of the study
A limitation of our study is that we only observe data for one industry (music), in one channel (iTunes). Thus
the conclusions should be generalised with caution. However, this also means that our study likely
understates the true sales impact of HADOPI. 104
100
Danaher, Smith, Telang and Chen, The Effect of Graduated Response Anti-Piracy Laws on Music Sales: Evidence
from an Event Study in France, 2012 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1989240
101
Ibid, p2
102
Ibid, p2-3
103
Ibid, p3
104
Ibid, p20
69
The study states:
It is possible that HADOPI could affect physical sales [eg CDs] in addition to digital sales (physical
retail sales data was not available at the time of the study); 105
And;
[The data] also does not reflect revenues from newer legal music streaming platforms [eg Spotify,
Deezer, MusicMe or You Tube]; 106
And concludes;
In short, while we suspect that revenues from these or other similar music services may have
benefitted from HADOPI, we are unable to evaluate this claim with the same rigor or precision that
we could with iTunes sales. As such, we believe that the €13.8 (US18.6) million per year increase in
French iTunes revenues suggested in our results should be taken as a lower bound of the total effect
that HADOPI has had on music industry revenues.107
105
Ibid, p7
Ibid, p7
107
Ibid, p21
106
70
APPENDIX E – OVERVIEW OF EUROPEAN COURT OF JUSTICE RULING, KINO.COM CASE
The European Court of Justice (CJEU) issued its decision on copyright site blocking injunctions in UPC
Telekabel v Constantin Film (kino.com case) (Case C-314/12)108 on 27 March 2014.
THE CJEU JUDGEMENT

Confirmed that kino.to (website) directly infringed copyright

Confirmed that ISPs are intermediaries – and held that this finding is not undermined by a lack of a
contractual relationship between the infringer (website) and the intermediary

Site blocking injunctions do not infringe the freedom of business right as there is an obligation to
implement proportionate measures:
o
o
o
The ISP can determine the specific measures to be taken to achieve the result sought; and
The ISP avoids financial liability by taking reasonable measures, and is not required to make
unbearable sacrifices – there is an obligation to implement proportionate measures only
However must do what is reasonable to effect the block within its capacity

Site blocking injunctions do not infringe the freedom of information as:
o The ISP’s manner of meeting the requirement of the injunction must not affect lawful access
to information

Site blocking measures do not need to be a ‘perfect fix,’ rather it should seriously discourage users
from accessing the site while not impacting the ability to access to legal services

Costs – the question was reverted to the relevant EU country’s court to determine
The verdict is final and binding on the courts of all 28 EU Member States.
Other national appeals
The CJEU ruling is final and binding on the courts of all 28 EU Member States.
108
Article 8(3) of Directive 2001/29/EC108 is known as the Copyright Directive. This allows nations to implement laws
to allow third party injunctions to ISP stop customer access to sites that illegal offer content for download and streaming
71
THE RULING IN DETAIL
Infringement by kino.to
The Court confirms that kino.to directly infringed copyright.
It made the claimants’ works available via link, and that linking to copyright protected content – without the
consent of the rights holder – constitutes an infringement109.
UPC (the ISP) is an intermediary
The Court confirms that UPC is an intermediary for the purpose of the Copyright Directive.
It confirms the ISP is an ‘inevitable actor in any transmission of an infringement over the internet’110 and that
its services are therefore used to infringe copyright.
The Court then holds that this is not undermined by the lack of a contractual relationship between the
infringer and the intermediary.
The Court also found that rights holders do not need file evidence of consumers actually accessing the illegal
content111 – evidence of the availability of the content is sufficient112.
Fundamental rights
The CJEU addresses the issue of fundamental rights113 by weighing blocking injunctions and the protection of
the IP against the freedom to do business right and the freedom of information right.

Freedom of business right
The Court states that site blocking injunctions do not infringe the freedom of business right114
because:
o
the ISP can determine the specific measures to be taken to achieve the result sought,
specifically:
‘with the result that he [the ISP] can choose to put in place measures which are best
adapted to the resources and abilities available to him and which are compatible
with the other obligations and challenges which he will encounter in the exercise of
his activity;’115and
o

the ISP avoids financial liability by taking reasonable measures and ‘not be required to
make unbearable sacrifices’116.
Freedom of information
109
At [31] of judgement
At [32] of judgement
111
At [36] of judgement
112
This allows rights holders to minimise end-user/privacy related issues when filing blocking applications
113
At [47] of judgement
114
At [49 to 54] of judgement
115
At [52] of judgement
116
At [51] of judgement
110
72
The Court states that site blocking injunctions do not infringe the freedom of information117
because the ISP’s manner of meeting the requirement of the injunction must ‘serve to bring
an end to a third party’s infringement of copyright’118 without affecting lawful access to
information.
Effectiveness
The Court acknowledges that the blocking order does not need to lead to a complete cessation of the
infringement; and the effect of the blocking order is capable of being circumvented.
Therefore the Court holds that an injunction does not need to be a ‘perfect fix,’ rather it should discourage
users from accessing the site.
Specifically the CJEU states:
‘…sufficiently effective to ensure genuine protection of the fundamental right at issue, that is to say that
they must have the effect of preventing unauthorised access to the protected subject-matter or, at least,
of making it difficult to achieve and of seriously discouraging internet users who are using the services of
the addressee of that injunction from accessing the subject-matter made available to them in breach of
that fundamental right.’119
Combination of fundamental rights and effectiveness
In summary, blocking measures must seriously discourage internet users from access illegal services whilst
not impacting the ability to access to legal services (for example Youtube, Facebook, etc)
The Court states:
‘Even though the measures taken when implementing an injunction such as that at issue in the main
proceedings are not capable of leading, in some circumstances, to a complete cessation of the
infringements of the intellectual property right, they cannot however be considered to be
incompatible with the requirement that a fair balance be found, in accordance with Article 52(1), in
fine, of the Charter, between all applicable fundamental rights, provided that (i) they do not
unnecessarily deprive internet users of the possibility of lawfully accessing the information available
and (ii) that they have the effect of preventing unauthorised access to protected subject-matter or, at
least, of making it difficult to achieve and of seriously discouraging internet users who are using the
services of the addressee of that injunction from accessing the subject-matter that has been made
available to them in breach of the intellectual property right.’120
117
At [55-56] of judgement
At [56] of judgement
119
At [62] of judgement
120
At [63] of judgement
118
73
BACKGROUND
Rights holders Constantin Film and Wega Film Production sought a court injunction whereby UPC Telekabel
(the ISP) would prohibit its customer’s access to the site kino.to – an illegal streaming site.

13 May 2011 – The Commercial Court, Vienna (Austria) ordered that UPC prohibit providing its
customers with access to the website at issue

27 October 2011 – The High Regional Court, Vienna (Austria), as an appeal court, partially reversed
the order of the Commercial Court
UPC appealed to the Supreme Court (Austria) on a point of law. UPC submitted that its services
could not be considered to be sued to infringe copyright because it did not have any business
relationship with the operators of the website at issue, and it was not established that its own
customers acted unlawfully. UPC claims, that in any event:
o
o

The various blocking measures which may be introduced can all be technically circumvented;
and
That some of them are excessively costly
May/June 2012 – The Supreme Court decided to stay the proceedings and referred the following
questions to the European Court of Justice (CJEU) for a ruling:
a) Is Article 8(3) of Directive 2001/29 … to be interpreted as meaning that a person who makes
protected subject-matter available on the internet without the rightholder’s consent [for the
purpose of Article 3(2) of Directive 2001/29] is using the services of the [internet] access
providers of persons seeking access to that protected subject-matter?
The court addressed these as outlined at (i) and (ii) above
If the answer to the first question is in the negative:
b) Are reproduction for private use [within the meaning of Article 5(2)(b) of Directive 2001/29]
and transient and incidental reproduction [within the meaning of Article 5(1) of Directive
2001/29] permissible only if the original of the reproduction was lawfully reproduced,
distributed or made available to the public?
The Court held that it did not need to respond to Qn 2 due to its finding in Qn 1.
If the answer to the first question or the second question is in the affirmative and an
injunction is therefore to be issued against the user’s [internet] access provider in
accordance with Article 8(3) of [Directive 2001/29]:
c) Is it compatible with Union law, in particular with the necessary balance between the
parties’ fundamental rights, to prohibit in general terms an [internet] access provider from
allowing its customers access to a certain website (thus without ordering specific measures)
as long as the material available on that website is provided exclusively or predominantly
without the rightholder’s consent, if the access provider can avoid incurring coercive
penalties for breach of the prohibition by showing that it had nevertheless taken all
reasonable measures?
74
The court addressed these as outlined at (iii) to (v) above
If the answer to the third question is in the negative:
d) Is it compatible with Union law, in particular with the necessary balance between the
parties’ fundamental rights, to require an [internet] access provider to take specific
measures to make it more difficult for its customers to access a website containing material
that is made available unlawfully if those measures require not inconsiderable costs and can
easily be circumvented without any special technical knowledge?’
The Court held that it did not need to respond to Qn 4 due to its finding in Qn 3.
75
APPENDIX F – OVERVIEW OF CASES AND JURISPRUDENCE OF EARLY UK SITE BLOCKING CASES
20CF v Newzbin [2010] EWHC 608 (Ch)121
(Newzbin 1 site)




The Hon Mr Justice Kitchen Kitchin found that Newzbin Ltd infringed the copyright of the claimants'
on a large scale;122
He granted an injunction against Newzbin Ltd to restrain further infringements of the claimants'
copyright;
Subsequently the Newzbin 1 site ceased operation; and
Shortly afterwards, the Newzbin 2 site began operation at the same location, but hosted overseas.
REMEDIES FOR ONLINE COPYRIGHT INFRINGEMENT: STRIKING THE BALANCE: A PRESENTATION
BY THE HON MR JUSTICE ARNOLD
Justice Arnold discussed his rulings in a presentation titled Remedies for Online Copyright Infringement:
Striking the Balance at the UK Intellectual Property Office (the IPO Seminar) held a seminar in July 2012.123
20C Fox v BT (No 1) [2011] EWHC 1981 (Ch)124
(Newzbin 2 site)
This application was a sequel to a successful claim of copyright infringement brought by the claimants
against Newzbin Ltd, which had operated an almost identical site to Newzbin 2 (Newzbin 1) at the same
location, but hosted overseas.
Justice Arnold held that the Court had jurisdiction, and it was appropriate to exercise his discretion, to make
a blocking order against the 2nd defendant (BT) with respect to the site Newzbin 2. His presentation at the
IPO seminar included the following questions and answers:

20C Fox v BT (No 1): Discretion to make a website blocking order
Q: Did it matter that the Studios were not interested in the whole of Newzbin2?
o The Studios were the biggest single group of rights holders affected and their rights were
being infringed on a massive scale so they had a sufficient interest to seek an order.
o It did not matter that other rights holders would benefit, particularly since other groups
supported the application.
Q: Did it matter that BT would be exposed to other claims?
o A flood of applications was unlikely
o The fact that further applications were likely was not a reason to refuse an order
Q: Did it matter that the order would not be wholly effective?
o An order would be justified even if it only prevented access to Newzbin 2 by a minority of
users
121
http://www.bailii.org/ew/cases/EWHC/Ch/2010/608.html
20CF v Newzbin, at [101]
123
http://www.ipo.gov.uk/ipenforce-onlinedisputes.pdf
124
http://www.bailii.org/ew/cases/EWHC/Ch/2011/1981.html
122
76
Q: Was the order proportionate?
o The order was proportionate since it was necessary to protect the Studios’ rights which
outweighed the infringers’ rights and since it was narrow, targeted, contained safeguards
and would not be costly to implement
20C Fox v BT (No 2) [2011] EWHC 2714 (Ch)125
(Newzbin 2 site)
Justice Arnold determined the terms of the order in 20C Fox v BT. His presentation at the IPO seminar
included the following:

20C Fox v BT (No 2): Approved Second Judgement (terms of the order )
The costs of implementing the order should be borne by BT given that they were modest.

The order would not include any cross-undertaking or indemnity in favour of BT in respect of losses
caused by the order and in particular claims by third parties: a cross-undertaking was inappropriate
in a final order and an indemnity was not required since BT would have an absolute defence to third
party claims.
The Studios should bear the initial costs of the application, BT should pay the costs occasioned by
BT’s resistance to it and each side should pay their own costs of the argument over the terms of the
order.
Dramatico v Sky (No 1) [2012] EWHC 268 (Ch) 126
Justice Arnold held that both users and operators of The Pirate Bay infringed the copyrights of claimants and
those they represented.
Following that judgement, five of the Defendants indicated to the claimants that they did not oppose the
making of orders under s97A of the Copyright, Designs and Patents Act 1988 (UK). His presentation at the
IPO seminar included the following:

Dramatico v Sky (No 1): Infringement by operators and users of the Pirate Bay
The British Recorded Music Association (BPI) applied for a website blocking order with respect to the
Pirate Bay against all six major ISPs
Since there has been no prior infringement case, an order was made for the trial of preliminary
issues as to whether (i) the operators and (ii) the suers of the Pirate Bay were infringing the BPI
members’ copyright.
The ISPs were not represented.
It was not necessary to join or server the operators of any users of the Pirate Bay.
The users infringed copyright.
125
126
http://www.bailii.org/ew/cases/EWHC/Ch/2011/2714.html
http://www.bailii.org/ew/cases/EWHC/Ch/2012/268.html
77
The operators infringed copyright:
o By authorising the users: 20C Fox v Newzbin
o The operators were jointly liable for the users’ infringements: 20c Fox v Newzbin.
Dramatico v Sky (No 2) [2012] EWHC 1152 (Ch)
127
Justice Arnold acceded to the claimants' application that he should make orders for the reasons given in this
judgement.
His presentation at the IPO seminar included the following:

Dramatico v Sky (No 2): Whether to make an order
In the light of the ruling in Dramatico v Sky (No 1) and agreement over the terms of the order, four
ISPs did not resist an order and one agreed to an order.
The court had jurisdiction to make the orders and it was appropriate to do so for similar reasons as
in 20C Fox v BT.
The fact that the ISPs did not object implied that the orders were proportionate as between the BPI
and the ISPs, but it did not necessarily follow that they were proportionate as between the BPI and
to the subscribers.
Nevertheless the court was satisfied that the orders were proportionate.
127
http://www.bailii.org/ew/cases/EWHC/Ch/2012/1152.html
78

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