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Focus: Free Trade Agreement – December 2004

The new ISP 'safe harbour provisions' in the Copyright Act

In brief: Partner Michael Pattison (view CV)and Senior Associate Ken Shiu look at the changes to the Australian Copyright Act in relation to safe harbour provisions for Internet service providers.

The recent US Free Trade Agreement Implementation Act 2004 (Implementation Act) created a new Part V, Division 2AA within the Copyright Act 1968 (Cth) that will deal with safe harbour provisions and a take-down notice regime for Internet service providers (ISPs) in connection with copyright infringement claims. This was part of the Australian Government's Free Trade Agreement (FTA) commitment to align certain aspects of Australian copyright law with those of the US.

From 1 January 2005, Part V, Division 2AA of the Copyright Act will limit the remedies against a carriage service provider (including an ISP) who satisfies the conditions stated in the Act. In general, a service provider who satisfies those conditions will not be liable for damages, which could include an account of profits. Instead, the principal relief against them will be orders that prevent or deter a repetition of the infringing conduct. Those orders include an ISP being required to terminate a specific account and removing infringing material from its site.

In order to obtain protection in the safe harbour, the ISP must first satisfy two general conditions:

  • adopting and implementing a policy of terminating the accounts of users who are repeat infringers; and
  • accommodating and not interfering with any technical measures used to protect and identify copyright material.

If the threshold criteria are satisfied, certain additional conditions need to be satisfied depending on the services offered:

Services provided Conditions
Providing facilities or services for transmitting, routing or providing connections for copyright material or the intermediate transient storage of copyright material in the course of transmission, routing or provision of connections. (Category A).
  • The transmission of copyright material must not have been initiated by the ISP; eg must be user or another person.
  • The copyright material must have been transmitted without substantive modification.
Caching copyright material through an automatic process. (Category B).
  • If access to the original content site requires user access subject to conditions, the ISP must ensure that access to significant part of the cached material is permitted to users who have met those conditions.
  • The ISP must comply with any industry code relating to the update of cached copyright material and any industry code for the non-interference with technology used at the original content site to monitor use of or access to the copyright material.
  • ISP must expeditiously remove or disable access to cached copyright material after notification in the prescribed form that material has been removed or blocked at the original content site.
  • The cached copyright material must have been transmitted to users without substantive modification.
At the direction of a user, storing copyright material on a system or network controlled by or for the ISP. eg hosted web site. (Category C).
  • The ISP must not receive a financial benefit directly attributable to the infringing activity if it has the right and ability to control the activity.
  • The ISP must expeditiously remove or disable access to copyright material residing on its systems on receipt of a notice (in prescribed form) that material has been found by a court to be infringing.
  • The ISP must act expeditiously to remove or disable access to copyright material residing on its systems if the ISP becomes aware that material is infringing or becomes aware of facts or circumstances that make it apparent that the material is likely to be infringing.
  • The ISP must comply with the prescribed procedure for the removal or disabling access to copyright material on its systems. eg take-down notice or counter notice.
Referring users to an online location by using information location tools or technology, eg hyperlinks, pop-up windows, search engines and online directories. (Category D).
  • The ISP must not receive a financial benefit directly attributable to the infringing activity if it has the right and ability to control the activity.
  • The ISP must expeditiously remove or disable access to a reference residing on its systems on receipt of a notice (in prescribed form) that the material which the reference refers to has been found by a court to be infringing.
  • The ISP must act expeditiously to remove or disable access to a reference residing on its systems if the ISP becomes aware that the copyright material it refers to is infringing or becomes aware of facts or circumstances that make it apparent that the copyright material it refers to is likely to be infringing.
  • The ISP must comply with the prescribed procedure for the removal or disabling access to copyright material on its systems, eg take-down notice or counter notice.

The introduction of the new 'awareness' conditions (applicable to categories C and D) has created discomfort with the major local ISPs generated by concerns that the amendments will result in a repeat of the experience of US ISPs being bombarded with the legal and administrative task of responding to a deluge of automated email take-down notices. The Minister for Trade, Mark Vaille, has given assurances that the mechanics of the safe harbour provisions can be clarified by special regulation under the new section 116AJ of the Copyright Act.

Indeed the regulations will clearly need to provide much-needed guidance on issues that the new Part V, Division 2AA does not cover, including:

  • specifying the exact requirements for a valid take-down notice;
  • detailing the account suspension or termination procedures following a take-down notice;
  • provision for counter notices for mistaken identity or where material has been incorrectly identified;
  • the identification and application of any relevant technical industry codes; and
  • the evidentiary requirements to satisfy the presumption of compliance by an ISP under s116AI.

The test for authorisation of copyright infringement by an ISP under s36 and s101 of the Copyright Act remains unchanged. An ISP will still need to be found to have authorised infringement of copyright before it needs to rely on the safe harbour provisions. An ISP is not liable where they are 'merely' providing 'facilities' that a person uses to infringe copyright. In assessing authorisation liability by an ISP, courts will need to consider the various factors outlined in s36(1A) and s101(1A), which include whether any relevant industry code has been complied with. This further highlights the need for the ISP industry to develop a code of practice for ISPs regarding copyright protection. 

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