1 Special Edition July 2015 Print Version For more information, please contact: Adrian Lawrence Partner +61 2 8922 5204 firstname.lastname@example.org Andrew Stewart Partner +61 2 8922 5117 email@example.com Site blocking commences in Australia As of 27 June 2015, the Copyright Amendment (Online Infringement) Act 2015 (Act) has passed both houses of the Australian Parliament and commenced. In March 2015, Communications Minister Malcolm Turnbull introduced the legislation with the aim of reducing the availability of infringing material online, such as through torrent tracking sites. The Act introduces a requirement for site blocking at an ISP level. Notably, the Explanatory Memorandum (EM) provides that the Act is "deliberately prescriptive" and "intended as a precise response to a specific concern raised by copyright owners." The Act amends the Copyright Act 1968 (Cth), to allow for a copyright owner or an exclusive licensee to apply to the Federal Court of Australia for an order requiring a carriage service provider, (i.e., an ISP), to take "reasonable steps" to disable access to an "online location". The Act does not prescribe what reasonable steps may be, nor does it define what constitutes an online location. Test for grant of injunction The Act provides that an injunction will only be granted if the Court is satisfied that the: ● carriage service provider provides access to an online location outside of Australia; ● the online location infringes, or facilitates an infringement of, the copyright; and ● the primary purpose of the online location is to infringe, or to facilitate the infringement of, copyright. The Act does not provide any explanation as to the circumstances in which an online location may "facilitate" infringement. The applicant must first notify both the ISP and the person operating the online location. However, the Court may dispense with the requirements to notify the person operating the online location if the Court is satisfied that the applicant is unable to determine the identity or address of the person, or to send notices 2 Ryan Grant Senior Associate +61 2 8922 5243 firstname.lastname@example.org to that person (despite reasonable efforts by the copyright owner). The Act does not provide any detail as to what "reasonable steps" to notify the online location will be required or the appropriate method(s) of notification (i.e., by email, physical address or telephone). Before granting an injunction, the Act states that the Court may take into account a number of factors, including: ● flagrancy of the infringement, or the flagrancy of the facilitation of such infringement; ● whether the online location makes available or contains directories, indexes or categories of the means to infringe, or to facilitate an infringement of, copyright; ● whether the owner or operator of the online location demonstrates a disregard for copyright generally; ● whether access to the online location has been disabled by orders from any court of another country or territory on the grounds of or related to copyright infringement; ● whether disabling access to the online location is a proportionate response in the circumstances; ● the impact on any person, or class of persons, likely to be affected by the grant of an injunction; ● whether it is in the public interest to disable access to the online location; and ● whether the owner has notified the carriage service provider and the person who operates the online location. In the version of the legislation that was referred to the Senate Legal and Constitutional Affairs Legislation Committee (Senate Committee), the Court was required to take into account each of the above factors. The Senate Committee recommended that the parliament amend the requirement for the Court to take all factors into account, such that the Court "may" take each factor into account. The Senate Committee took the view that the legislation was too prescriptive as to the matters the Court must take into account, leading to a situation where irrelevant matters would need to be dealt with in any injunction application so as to comply with the legislation. The Senate Committee stated that the Court "should be able to exercise discretion in identifying the salient features of each matter on a case-by-case basis". Costs In the lead-up to the introduction of the legislation, the costs of implementation featured significantly in the public discussion around the proposal. The Act provides that ISPs will not be liable for any costs in relation to the proceedings unless the ISP enters an appearance and takes part in the proceedings. However, the Act does not stipulate any requirement for the applicant to pay for the technical process of blocking the online location. The Communications Minister has estimated that it would cost the telecommunications industry approximately $130,825 a year to implement the Act. The Senate Committee recommended that that the EM provide greater clarity regarding the costs of compliance with the orders and the ISP's liability to third parties for complying with the order. 3 In response, the Supplementary EM indicates that: “It is intended to ensure that a party will not be penalised and required to bear unnecessary costs where it is fully cooperating, or not frustrating proceedings. As to the costs of implementing the order, it would be open to a court to give appropriate directions on that issue. “ This is a disappointing response as it appears as though the Parliament did not want to shoulder any criticism in making a decision one way or the other but simply preferred to not make a decision. It would have provided much greater certainty for both copyright owners and ISPs if the matter was decided in the legislation. Leaving the matter to the Court is more likely to lead to contested hearings, likely unnecessarily wasting legal costs. Technical questions A live question is the manner in which the ISP is to “disable access” to the “online location”. While not formal recommendations, the Senate Committee also suggested that a number of issues be covered in the EM, including 1. that the Court's ability to receive expert evidence on the effectiveness of its orders be clarified; and 2. that the EM expressly state that a rights holder would be obliged to include in its application: "independent technical advice that identifies possible impacts on third parties, such as the extent to which the blocking order could result in 'over-blocking' or accidental blocking of legitimate content and the potential exposure of CSPs to consequential liability" The last item was a concern to the Senate Committee after it heard submissions regarding a decision by ASIC to block 1,200 sites that were hosting investment scams.The ASIC action had the effect of not only blocking the infringing sites, but, because ASIC was not aware that a single IP address may host a large number of websites, also blocking access to 250,000 legitimate websites that were hosted on the same IP addresses. Despite the suggestions from the Senate Committee, the Supplementary EM was silent on these issues. There are two potential problems here, the first is the technical way in which the ISP is to disable access as there are a number of possibilities, the main ones being: 1. the blocking of an IP address; 2. a redirect on a DNS Lookup of a domain (also known as DNS poisoning); and 3. a blocking based upon a URL, which requires some form of deep packet inspection (DPI). IP address blocking is effective but can result in “over-blocking”, such as with the ASIC example above. A DNS redirect (or DNS poisoning) only works for sites with a 4 domain name and can very easily be thwarted by using a different DNS server (possibly not located in Australia) or by knowing the IP address of the relevant site. In addition, all sites on that domain will be blocked. The blocking of URLs is significantly more targeted as only the particular page or resource identified is blocked. However, URL blocking generally requires DPI, which requires software to inspect the particular packet to identify the actual item requested in a packet, rather than just the IP address or domain (which is all that is needed to route the packet). DPI can be expensive and may adversely affect user internet speeds (specifically latency). A further option is known as IP-address rerouting, where the ISP only reroutes requests for content on a particular IP (which includes the offending URL) for DPI and only blocks the offending URLs. Related to this issue is the independent technical evidence that the Senate recommended be required, so that orders are best crafted to avoid technical difficulties in implementation or overblocking. Unfortunately, no such recommendation made it into the legislation or Supplementary EM, leaving it up to the Court or defendants to request such information if not provided by the copyright owners. Likely next stages Given the passage of the legislation, it is likely that copyright owners will start discussions with ISPs regarding the injunctions. It seems likely that there will be some form of consultation between copyright owners and ISPs prior to proceedings being commenced, although it remains to be seen as to whether the two parties can find sufficient common ground so that blocking orders are made by consent. Further, we think that it is likely that the first cases will be more challenging as the Court and parties become accustomed to the new cause of action. In addition, we think that it is likely that copyright owners will first seek injunctions against a group of obvious infringers, such as the Pirate Bay, so that the injunctions against those major infringers have more likelihood of being granted in a timely fashion, bringing a more immediate benefit to the copyright owners. In the United Kingdom, copyright site blocking injunctions have existed for a number of years and there have been a number of cases, where it appears that the obviousness of infringement becomes gradually less as each injunction is brought. The United Kingdom cases have also provided some insight on some of the possible practical issues facing Australian copyright owners and ISPs: 1. the Court has indicated that IP blocking is generally only available as a remedy where the relevant IP address only hosts the infringing site and no others; 2. the blocking orders can be different for each ISP, given that the technical capability of each ISP may be different; 3. usually, multiple copyright owners and multiple ISPs are joined in the same action; 4. orders for the injunction have been crafted so that an ISP is 5 deemed to comply if it operates particular named software (such as Clear Feed - which employs IP Address rerouting) to block the relevant site; 5. in the latter cases, ISPs have generally consented to the orders but the Court still turns its mind to the relevant factors in relation to infringement; 6. the Court has granted injunctions against sites, and sites hosting software available for download, that simply offer software that allows users to search for torrent files (rather than hosting the torrents itself). It should be noted that the test in the UK for whether a site should be subject to a blocking order is quite different; and 7. some orders have provided for a means for the copyright owners to notify ISPs of additional IP addresses or URLs relating to the relevant blocked site, without again approaching the Court. This appears to be a means to prevent copyright infringing sites from simply moving the site to a new IP address or URL. The legislation will be reviewed in two years' time.  Dramatico Entertainment Limited v British Sky Broadcasting Ltd (No 2)  EWHC 1152 (Ch) at   Twentieth Century Fox v Sky UK Limited  EWHC 1082 (Ch).  Twentieth Century Fox v Sky UK Limited  EWHC 1082 (Ch); Twentieth Century Fox v British Telecom  EWHC 2714 (Ch) at   Dramatico Entertainment Limited v British Sky Broadcasting Ltd (No 2)  EWHC 1152 (Ch) at ; Paramount Home Entertainment International Ltd v British Sky Broadcasting Ltd  EWHC 937 (Ch) at   Home Entertainment International Ltd v British Sky Broadcasting Ltd  EWHC 937 (Ch) at ; Paramount Home Entertainment International Ltd v British Sky Broadcasting Ltd  EWHC 3479 (Ch).  Twentieth Century Fox v Sky UK Limited  EWHC 1082 (Ch) at .