Options for Australian rights owners on tackling VPN use

Originally published by E-Commerce Law & Policy Journal

Cecile Park Publishing

Date of Publication: 01.4.2016

Content streaming provider Netflix, having launched internationally, has been cracking down on the use of virtual private networks (‘VPNs’) by users to access country-specific Netflix content libraries, such as those available to US-based users exclusively, as a result of Netflix’s licensing agreements. The crackdown has been reportedly widely felt in Australia. Moreover, the battle has drawn attention to the wider use of VPNs to circumvent geo-blocking by content providers. In this article, Antoine Pace and Geoff McGrath of Gadens in Australia discuss how, under the country’s law, content owners in Australia might discourage or prevent VPN usage to access their content.

In January 2016, a week after it extended access to its library of streaming television shows and movies to hundreds of countries around the world, Netflix foreshadowed that it would implement measures to crack down on the use of VPNs by its users1.

VPNs can be used for various purposes, including the protection of user identities or locations. Controversy has arisen, however, where VPNs are used to circumvent geographic restrictions that are used to effect licensing models where different providers (such as Netflix USA or Foxtel Australia) are licensed to display content in different countries2. Use of these restrictions is commonly known as geo-blocking. VPNs and similar services are used to route internet traffic through a server based in a different country, giving the impression that the user is arriving from that different country, so that the user can access a different, and often greater, selection of content.

Below we discuss two particular avenues that may be available to content owners to discourage or prevent VPN usage, outlining possible recourse to the newly introduced ‘blocking laws’ under the Copyright Act 1968 (Cth) (the ‘Copyright Act’) and the prohibitions against the use of technological protection measures (‘TPMs’) under that Act.

The ‘blocking laws’: section 115A Copyright Act 1968

New provisions of the Copyright Act, known as the ‘blocking laws,’ came into effect on 27 June 2015 pursuant to the Copyright Amendment (Online Infringement) Act 2015 (Cth) (the ‘Amendment Act’).

The blocking laws allow a content owner to seek an injunction against an internet service provider, requiring it to take reasonable steps to disable access to an ‘online location,’ provided that3:

  1. the online location is located outside of Australia;
  2. the online location infringes or facilitates the infringement of copyright; and
  3. the primary purpose of the online location is to infringe or facilitate the infringement of copyright.

The provisions also require the court to consider a broad range of matters, which cover the flagrancy of infringement, the means of infringement, whether other countries have blocked the location, as well as proportionality, public interest and other matters4.

The term ‘online location’ is not defined. The stated intention is to introduce a method for blocking locations that provide access to infringing content (such as BitTorrent search engines and indexes), however the technology-agnostic use of the term opens up the opportunity for it to apply to future technologies5.

Arguably, a content owner could bring an action to block the ‘online location’ leading to a VPN service under these provisions. However, there are potential impediments to such an action.

First, it appears that the Government’s intention is that this would not apply to geo-blocked content. Malcolm Turnbull, the then Communications Minister (and now Prime Minister), stated in the Bill’s second reading: “Where someone is using a VPN to access Netflix in the United States to get content in respect of which Netflix does not have an Australian licence, this bill would not deal with that […].”6 Secondly, the ‘primary purpose’ threshold is a high one. The explanatory memorandum states that this is intended as a safeguard against potential abuse7. Accordingly, some VPN providers may take advantage of this high threshold. A VPN provider may market its services for a separate use, such as privacy, and argue on that basis that the ‘primary’ purpose of its services is not related to copyright infringement8.

Finally, from a technical perspective, even where an injunction is successful and a VPN provider’s address is blocked, it would be a relatively simple matter for the provider to move its servers to a new address and continue operating.

While the blocking laws provide a potential avenue to block VPN services, the likelihood of a successful action remains uncertain. The relevant laws are new and have not yet attracted significant judicial attention9. It is likely that content owners will wait to test the application of the laws in a ‘conventional’ manner, against BitTorrent or direct download websites providing direct links to infringing content, before attempting to extend the limits of the blocking laws.

Technological protection measures: division 2A Copyright Act 1968

A second avenue is a claim that the use of a VPN is to circumvent a technological protection measure (‘TPM’). A TPM is a mechanism, including a computer program, for controlling access to a copyrighted work10. Providing a service for the circumvention of a TPM is an offence under section 116AP of the Copyright Act. A related offence exists for the act of circumvention.

It is not clear whether geo-blocking restrictions put in place by a content provider (such as Netflix) would fall within the definition of a TPM11. In a 2013 parliamentary enquiry, the Attorney General’s department took the view that the definition is unlikely to apply and the TPM provisions were described in the parliamentary report as “opaque” and “plagued by uncertainty.”12 Further, under section 116AP, the VPN provider must be providing a circumvention service, which must have a limited commercially significant purpose or use and must be primarily or solely designed or produced to enable or facilitate the circumvention of a TPM13. Given the various legitimate purposes of a VPN service, such as privacy and access to corporate networks, it may be difficult to establish that a VPN service is a circumvention service.

Ultimately, the outcome would depend on the technical measures used and the court’s interpretation of the provisions. However, in most cases a content owner would face substantial difficulties, and it is unlikely that the TPM provisions would apply to VPN services. Similarly, content owners would face difficulties in bringing an action against individuals utilising VPN services.

Where to next?

The approach taken by Netflix, disabling content and possibly suspending accounts in reliance on its terms of service with customers, may well be the most effective response. It is not a remedy offered under the current law, but a practical solution to the current state of events. However, as with other technologies, relying on a content provider to actively block VPN services could result in a technological ‘game of cat and mouse,’ with VPN providers constantly updating their methods and content providers constantly chasing one or two steps behind.

Content owners, then, are left in an uncertain position under Australian law. The blocking laws provide a possible avenue of remedy, however they are new and untested, and if they apply at all, will likely only apply to VPN services that flagrantly offer their services for the purposes of copyright infringement. The TPM laws also remain untested in this context, and there would be significant challenges involved with successfully bringing an action against VPN providers for supplying circumvention services for TPMs.

For years, Australian copyright laws have been playing catch-up, with changes in technology continually bringing new avenues to infringe copyright, and legislators being slow to react. It appears that the case with VPN services may be no different.