On 11 June 2015, the Legal and Constitutional Affairs Legislation Committee released its report on the Copyright Amendment (Online Infringement) Bill 2015 (Bill).  The Committee (with the Greens dissenting) recommended that the Bill be passed, subject to the Committee's other recommendations. On Tuesday, the Bill was passed with an amendment in the House of Representatives.  A Supplementary Explanatory Memorandum (Supplementary EM) was also  released.  The Bill is now with the Senate and it is expected that it will be passed soon.

We now take a look at the Government's responses to the Committee's recommendations, as shown in the amendment to the Bill and the Supplementary EM.

Background

The Bill is part of the Government's three proposals to address online piracy, outlined in our previous post available here.  In summary, the Bill will enable copyright owners to apply to the Federal Court for an injunction requiring a carriage service provider (CSP) to take reasonable steps to disable access to an online location operated outside Australia, where the 'primary purpose' of the website is to infringe, or to facilitate the infringement of, copyright. 

Recommendations and the Government's responses

The Committee's recommendations, together with the Government's responses, are outlined below:

  1. Matters to be considered by the Federal Court

The Bill as considered by the Committee required the Federal Court to consider certain matters set out in section 115A(5) when determining whether to grant an injunction.  The Committee recommended that the Court be given a discretion as to which of these matters should be taken into account.

The Government has implemented this recommendation, amending section 115A(5) to state that the Federal Court 'may', rather than 'is to', take into account the matters listed in section 115A(5) when determining whether to grant an injunction.  The Supplementary EM notes that this amendment also 'removes the unnecessarily burdensome requirement for parties to tender evidence in relation to each of these factors …'.

  1. Landing page at blocked sites

As stated above, the injunction granted by the Federal Court will require a CSP to take 'reasonable steps' to block access to an infringing online location.

The Committee recommended that the Explanatory Memorandum (EM) be amended to specify that the 'reasonable steps' to be taken by a CSP may include a requirement to post a landing page at the blocked site, specifying that the site has been blocked by a court order and outlining the details of that order. 

The Government agreed, with the Supplementary EM stating that the landing page suggested by the Committee should be noted in the EM as an additional example of an appropriate order that the Federal Court could make.  The Government notes in the Supplementary EM that '[t]he purpose of a landing page would be to ensure that subscribers are informed of the reason that they are unable to access a disabled online location, avoiding the need to contact their CSP for information.'

  1. Review after two years

The Committee noted that a formal cost-benefit analysis of the Bill was not commissioned and, as such, the Committee received no information that provided a comparison between the expected benefits to rights holders and the potential costs to other parties.

The Committee recommended that the Government conduct a formal review of the effectiveness of the Bill after two years.  This recommendation has not been addressed in the revised Bill or the Supplementary EM.

  1. Costs of the CSP in complying with the blocking order

Section 115A(9) of the Bill provides that a CSP is not liable for any costs in relation to site-blocking proceedings, unless the CSP enters an appearance and takes part in the proceedings. 

The Committee noted concerns raised by both sides of the site-blocking debate that it is unclear whether CSPs or copyright owners will be liable for the costs of implementing a blocking order.  The Committee took the view that questions of costs should be a matter for the Federal Court to determine, on a case-by-case basis.  Nonetheless, the Committee recommended that the EM provide greater clarity and guidance on the issue of CSP costs subsequent to compliance with a site-blocking injunction.  In particular, the Committee was of the view that this clarity is required to reassure CSPs that the costs associated with site-blocking will primarily be borne by the copyright owner/s seeking the order.

The Government has left this issue to the Federal Court, the Supplementary EM providing that '[a]s to the costs of implementing the order, it would be open to a court to give appropriate directions on that issue.'  This leaves it open as to whether the costs will be borne by the copyright owner or the CSP.

  1. Liability of the CSP in complying with the blocking order

    The Committee noted the evidence regarding the need to indemnify a CSP for acts done in compliance with the Federal Court's order, for example where the owner of an online location sues the CSP for losses that result from the site-blocking, including where over-blocking occurs.  The Committee had regard to Justice Perram's reasoning in Dallas Buyers Club LLC v iiNet (No. 3) [2015] FCA 422 (Dallas Buyers Club) that since the ISPs subject to the Court's order in that case will be obeying a Federal Court order in providing the information required by the order, they will have no liability in misconceived claims brought against them as a result of compliance with the order.  However, the Committee recommended that the EM provide greater clarity and guidance on the issue of CSP liability subsequent to the CSP's compliance with a site-blocking injunction.

In response, the Government notes in the Supplementary EM that section 115A 'is not intended to expose CSPs to legal actions by subscribers as a result of acts done or omitted in compliance with an order' and that Justice Perram's reasoning in Dallas Buyers Club'indicates that service providers acting in compliance with a Federal Court order will not be liable to actions from subscribers for doing so.'

  1. The primary purpose test

The Committee was of the view that 'where the infringement of copyright is in fact the 'primary purpose' of an online location, this purpose will be unambiguously apparent regardless of whatever other activities or links (such as advertising) may be associated with the online location.'  However, in response to various submissions expressing concern at the interpretation of the primary purpose test, the Committee 'urged' (but did not expressly recommend) the Government to insert a legislative note into the Bill to clarify the operation of the test.

The Government did not go this far.  Instead, the Supplementary EM provides that an online location may have the primary purpose of infringing, or facilitating the infringement of, copyright, 'even if the operator of the location derives a commercial advantage or profit from the operation of the location.'  The effect of this amendment to the EM is most unclear and does not appear to reflect the intention of the Committee.

Other requests by the Committee

The Committee also 'urged' or 'encouraged,' or stated that it would be 'reassured' if, the Government clarified the following in the EM:

  1. the status of virtual private networks;
  2. the meaning of 'facilitate´ an infringement of copyright;
  3. the expectation that the practice of applications and orders for injunctive relief being sought and imposed across multiple CSPs continue;
  4. the ability of the Federal Court to access independent technical expertise by noting the Court's inherent right to appoint a court expert;
  5. that a copyright owner would be obliged to provide independent technical advice on the possible impacts of the site-blocking on third parties, such as over-blocking, and potential exposure of CSPs to liability for the same.

Given the apparent urgency the Government is applying to the passage of the Bill, it is not surprising that these requests are not addressed in the Supplementary EM.