Update strengthens legal avenues for online copyright rights holders

By Andrew Wiseman
Intellectual Property Media, Advertising & Marketing Patents & Trade Marks Startups Technology Telecommunications

In brief

Telecommunications industry body the Communications Alliance has submitted an updated Copyright Notice Scheme to allow rights holders to better use existing legal avenues to defend their rights. The updated Notice Scheme resolves a number of issues that were left open when the first draft of the Notice Scheme was published in February. Partner Andrew Wiseman and Lawyer Ben Murphy report.

How does it affect you?

  • The Copyright Notice Scheme (Notice Scheme) available here, will come into force by 1 September 2015, subject to approval by the Australian Communications and Media Authority (ACMA).
  • The Notice Scheme will see Internet Service Providers (ISPs) co-operate with applications for preliminary discovery made by owners and exclusive licensees of copyright (rights holders), where an Australian account holder has received three notices alleging that they have breached a rights holder's copyright.
  • Since we last reported on the draft scheme, the Communications Alliance has clarified a number of outstanding issues regarding ISPs and rights holders, including to which ISPs the Notice Scheme applies. Changes to the process of challenging a notice have also been made that take into account feedback received during the consultation period.
  • We anticipate that once in place the Notice Scheme will be used by rights holders in preference to direct applications for preliminary discovery of the type seen in Dallas Buyers Club LLC v iiNet Limited.

What has changed?

The first draft of the Notice Scheme was prepared under significant time pressure, as the Communications Alliance sought to meet the deadline set by the Federal Attorney General and the Minister for Communications in their joint letter to industry leaders on 10 December 2014. As a result, the draft code left a number of issues open for further discussion and included a number of clauses that needed to be refined.

The updated Notice Scheme clarifies a number of outstanding issues, including that the Notice Scheme will:

  • only apply to ISPs who have 1000 account holders individually or as part of a corporate group; and
  • be funded by ISPs and rights holders to allow up to 200,000 notices to be processed and sent by all ISPS every 12 months.
A number of changes have also been made to take into account feedback received during the consultation period, including:
  • Removal of the $25 fee that was to be paid by account holders in order to challenge a notice. Challenges will now be free to accounts holders, unless the Copyright Infringement Panel (CIP) determines that a fee is necessary at a later date;
  • The addition of a second consumer representative to the CIP executive committee. This executive committee will now include two representatives of each of rights holders, ISPs and consumer organisations. The balance of power, however, remains with the ISPs and the rights holders, who will control the chair of the executive committee and also determine which consumer organisation will be entitled to appoint the second consumer representative;
  • Clarification of the function of the CIP's adjudication panel in considering challenges to notices made by account holders. The adjudication panel must now decide, on the balance of probabilities, whether the procedure required by the Notice Scheme has been followed in relation to each challenged notice and whether the act constituting the alleged infringement was permitted by the account holder;
  • The introduction of the concept of a 'Code Year', which is defined as 12 months from the date that an ISP sends an account holder a 'first education' notice. Account holders will only receive a final notice under the scheme if they receive three notices within a Code Year.

What's next?

The Communications Alliance finalised the Notice Scheme on 8 April 2015, the deadline set by the Attorney General and the Minister for Communications in December 2014.The draft has now been submitted to the ACMA for registration as an industry code under the Telecommunications Act 1997 (Cth).

The ACMA must register the Notice Scheme as an industry code if it is satisfied with the consultation undertaken in relation to the Notice Scheme and is satisfied that the Notice Scheme provides appropriate community safeguards. Once the Notice Scheme is registered as an industry code under the Telecommunications Act, the ACMA may direct ISPs to comply with it. Failure to comply with a direction from the ACMA to comply with the Notice Scheme will expose ISPs to civil penalties.

The Notice Scheme itself provides, however, that the scheme will not commence until 1 September 2015, unless the CIP determines that it can commence earlier, having regard to the preparatory steps required to be taken by ISPs, rights holders, and the CIP. Given the range of preparatory work that will need to be taken before the commencement of the Notice Scheme, 1 September 2015 appears to be the most likely start date.

What else?

The Notice Scheme represents only one of a number of important recent developments in the fight against online copyright infringement.

The Federal Court's decision to order preliminary discovery of account holder information in Dallas Buyers Club LLC v iiNet Limited1 has received significant publicity as representing an avenue for rights holders to access account holder information. We anticipate, however, that this decision will have limited impact, as rights holders will be more likely to use the Notice Scheme to access account holder details rather than making direct applications that may be opposed by ISPs, as was the case in the Dallas Buyers Club case. The Federal Court's decision does, however, provide an alternative avenue to rights holders if the Notice Scheme proves to be unwieldy or ineffective. You can read more about the decision in Dallas Buyers Club here.

The Federal Government has also followed through on the other decision flagged by the Attorney General and the Minister for Communications on 10 December 2014 by introducing legislation to allow rights holders to apply for an injunction requiring ISPs to take steps to block overseas piracy websites from their users. You can read more about the Copyright Amendment (Online Infringement) Bill 2015 (Cth) here.

Finally, and perhaps just as importantly as these legal developments, the Australian market has recently seen an influx of new online streaming services. Presto (a joint venture between Channel 7 and Foxtel), Stan (a joint venture between Nine Network and Fairfax), and Netflix all now provide Australian consumers with an alternative means of accessing television and movie length content. Together with other steps being taken by rights holders, ISPs and government, the Notice Scheme represents a positive step towards addressing online copyright infringement in Australia.