Google Books = fair use in USA

Just in time for the 2015 Copyright Symposium, the Second Circuit Court of Appeals has ruled that the Google Books Project is “fair use” of copyright and so not infringing.

Judgment here (pdf). Opinion authored by Circuit Judge Leval.

Eleanora of the IPkats first look here; Rebecca Tushnet focuses on the fourth factor discussion here. The “four factors” from §107 are:

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

Before responsibility for copyright was transferred to the Department of Communications and the Arts, the Commonwealth Attorney-General had commissioned a study of the economic effects of the ALRC’s recommendation to introduce “fair use” into Australian copyright law.

The Authors Guild v Google Inc. (CA2 Oct 16. 2015 13-4829-cv)

Productivity Commission reviews IP

The Productivity Commission has released an issues paper for its inquiry into Intellectual Property Arrangements.

What it was asked to do

In his reference the then Treasurer directed the Productivity Commission to investigate:

The Australian Government wishes to ensure that the intellectual property system provides appropriate incentives for innovation, investment and the production of creative works while ensuring it does not unreasonably impede further innovation, competition, investment and access to goods and services. In undertaking the inquiry the Commission should:
1. examine the effect of the scope and duration of protection afforded by Australia’s intellectual property system on:
(a) research and innovation, including freedom to build on existing innovation;
(b) access to and cost of goods and services; and
(c) competition, trade and investment.
2. recommend changes to the current system that would improve the overall wellbeing of Australian society, which take account of Australia’s international trade obligations, including changes that would:
(a) encourage creativity, investment and new innovation by individuals, businesses and through collaboration while not unduly restricting access to technologies and creative works;
(b) allow access to an increased range of quality and value goods and services;
(c) provide greater certainty to individuals and businesses as to whether they are likely to infringe the intellectual property rights of others; and
(d) reduce the compliance and administrative costs associated with intellectual property rules.

Big job!

As a consequence, there are a “gazillion” questions set out in the Issues Paper. Here’s just a few:

Do IP rights encourage genuinely innovative and creative output that would not have otherwise occurred? If not, how could they be designed to do so? Do IP rights avoid rewarding innovation that would have occurred anyway? What evidence and criteria should be used to determine this? Are IP arrangements in other jurisdictions more effective in generating additional creative output?

To what extent does the IP system actively disseminate innovation and creative output? Does it do so sufficiently and what evidence is there of this? How could the diffusion ofknowledge-based assets be improved, without adversely impacting the incentive to create?

What, if any, evidence is there that parties are acting strategically to limit dissemination?

Do IP rights provide rewards that are proportional to the effort to generate IP? What evidence is there to show this? How should effort be measured? Is proportionality a desirable feature of an IP system? Are there particular elements of the current IP system that give rise to any disproportionality?

What are the relative costs and return to society for public, private and not-for-profit creators of IP? Does the public provision of IP act as a complement or substitute to other IP being generated? Are there any government programs or policies that prevent, raise or lower the costs of generating IP?

What are the merits and drawbacks of using other methods to secure a return on innovation (such as trade secrets/confidentiality agreements) relative to government afforded IP rights? What considerations do businesses/creators of IP make in order to select between options? How does Australia’s use of methods besides IP rights to protect IP compare to other jurisdictions? Why might such differences arise?

The Commission seeks submissions about how the parameters of the IP system came to be set, and on the basis of what evidence and analysis.

How were decisions to extend IP rights in the past (e.g. copyright) assessed? Is an evidence-based approach systematically used to assess changes to the IP system? How transparent have decisions to change the IP system been, including when it comes to legislation and international agreements? Is a stronger evidence base and greater transparency in the public interest, and if so, how should this be accomplished?

Don’t worry. Things get more specific from here. Some of the questions about patents will give you the flavour:

What evidence is there that patents have facilitated innovations that would not have otherwise occurred, or have imposed costs on the community, including by impeding follow-on innovation?

Are there aspects of Australia’s patent system that act as a barrier to innovation and growth? If so, how could these barriers be addressed?

Do patents provide rewards that are proportional to the effort to generate IP? What evidence is there to show this? How should effort be measured? How does the balance of costs and benefits from patent protection compare across sectors and innovations?

What scope is there to better leverage the economic benefits of patents, by taking steps to improve the diffusion of patent information?

Is the patent system sufficiently flexible to accommodate changes in technology and business practices?

Do the criteria for patentability in the Patents Act 1990 (Cwlth) help the patent system to meet its objectives? Would introducing economic criteria for patentability and/or gradually reducing the duration of patent protection substantially improve the efficiency and effectiveness of the patent system?
….

There are numerouse questions in similar vein for the other IP rights and “data”.

Don’t get me wrong. These are all facinating questions. You, or professors and teams of doctoral candidates, could spend lifetimes trying to answer them.[1]

But here’s a thing. Are we really going to withdraw from the World Trade Organisation (with its obligations under the TRIPS Agreement)? Are we really going to pull out of the Australia – USA Free Trade Agreement? Or, given what the Prime Minister is reported to have said, does anyone seriously think we are not going to implement the TPP?

Hmmm. Maybe, at least as far as patents go, we could tell them that [28] of the majority’s ruling in Myriad has solved all the problems.[2] On the other hand, may be you are thinking this might be a good place to try and “fix” Myriad. In that case, you might like to read “Box 3 Beyond the theory” right up the front of the Issues Paper:

While discussions about IP rights are often theoretical, policy decisions about the balance between creators and consumers matter in real ways. Striking the wrong balance can impact the price and availability of books, music, cars, phones or even clothes.

The balance is particularly contentious in pharmaceuticals. Cases exist where patents have allowed pharmaceutical companies to charge what some consider to be unconscionably high prices for life-saving medicines. New compounds and biologic drugs, and their safety and efficacy, are no doubt expensive to develop and test and consumers are often willing to pay almost anything to access them (or the community as a whole through pharmaceutical subsidy schemes). Practices such as patent ‘evergreening’, seeking extended test data exclusivity for biologics, or paying competing firms not to produce generic medicines makes the balance of IP rights all the more contentious. (my emphasis)

Yes, once it has been “discovered”, the price of a new drug or treatment will be higher than if there was no patent. That is the point of the patent (or any other IP right): to allow the holder the opportunity to charge higher than marginal cost. How do you work out whether the price for that expensive drug is “unconscionably high”?


  1. As it happens, you have until 30 November 2015 to get your thoughts in.  ?
  2. Apart of course from those “innovation” patents.  ?

Productivity Commission to review all IP laws

The Harper Review[1] recommended that the Government should direct the Productivity Commission to undertake an overarching review Australia’s IP laws.

The Treasurer and the Minister for Small Business have now announced that review.

According to the Harper Review:

an appropriate balance must be struck between encouraging widespread adoption of new productivity-enhancing techniques, processes and systems on the one hand, and fostering ideas and innovation on the other. Excessive IP protection can not only discourage adoption of new technologies but also stifle innovation.

Given the influence of Australia’s IP rights on facilitating (or inhibiting) innovation, competition and trade, the Panel believes the IP system should be designed to operate in the best interests of Australians.

The Panel therefore considers that Australia’s IP rights regime is a priority area for review. (emphasis supplied)

In reaching that view, the Harper Review flagged concern about entering into new treaties with extended IP protections.

The terms of reference state:

In undertaking the inquiry the Commission should:

  1. examine the effect of the scope and duration of protection afforded by Australia’s intellectual property system on:

    a. research and innovation, including freedom to build on existing innovation;

    b. access to and cost of goods and services; and competition, trade and investment.

  2. recommend changes to the current system that would improve the overall wellbeing of Australian society, which take account of Australia’s international trade obligations, including changes that would:

    a. encourage creativity, investment and new innovation by individuals, businesses and through collaboration while not unduly restricting access to technologies and creative works;

    b. allow access to an increased range of quality and value goods and services;

    c. provide greater certainty to individuals and businesses as to whether they are likely to infringe the intellectual property rights of others; and

    d. reduce the compliance and administrative costs associated with intellectual property rules.

Then follows a catalogue of 9 matters for the Commission to have regard to. These include the Government’s desire to retain appropriate incentives for innovation, the economy-wide and distributional consequences of recommendation and the Harper Review’s recommendations in relation to parallel imports.[2]

The Commission must report within 12 months.


  1. The Competition Policy Review, recommendation 6.  ?
  2. Rec. 13 and section 10.6 of the Competition Policy Review: i.e., repeal any remaining restrictions unless the benefits outweigh the costs and the objectives of the restrictions can only be achieved by restricting competition. Cue diatribe about “restricting competition” especially given the oft mouthed formula that IP rights rarely (if ever) restrict competition.  ?

Dallas Buyers’ Club: no sale (yet)

Perram J has refused to allow Dallas Buyers Club LLC to send out its proposed letters of demand to the account holders identified through its preliminary discovery application.

Under pressure from the judge, Dallas Buyers Club LLC was forced to disclose that it would be seeking to claim compensation under 4 heads:

  1. the lost licence fee on the copy downloaded by the (alleged) infringer;
  2. a licence fee for each copy shared (uploaded) by the (alleged) infringer;
  3. an amount for additional damages;
  4. compensation for the costs incurred in detecting the (alleged) infringer’s involvement and the preliminary discovery application.

Perram J considered that (1) and, perhaps more surprisingly, (4) were legitimate. (2) and (3), however, were not.

Perram J also indicated his Honour would be prepared to lift the stay on sending the letters out if limited to (1) and (2). Bearing in mind that Dallas Buyers Club LLC is not in the jurisdiction, however, his Honour would require Dallas Buyers Club LLC to post a bond of $600,000 as surety for its compliance with his Honour’s orders about the use of the information.

His Honour did get informed what sum Dallas Buyers Club LLC actually had in mind demanding if some (alleged) infringer did contact it in response to the proposed letter. Other than disclosing that it was “substantial”, his Honour did not spill those beans to the public.

At [7] and [8], his Honour further indicated the Court’s considerable unwillingness to embark on the type of supervisory role over the use of the discovered information that the English and Canadian courts have been willing to undertake. Perram J thought those courts might be more willing to engage in such supervision as a result of the human rights protections for privacy in those jurisdictions. Perram J accepted that the discretionary nature of the preliminary discovery remedy permitted privacy issues to be taken into account. Rather than embark in close, ongoing supervision, however, it would appear that an Australian court will not afford the rights holder too many chances to satisfy the Court that it would use the discovered information appropriately

Dallas Buyers Club LLC v iiNet Limited (No 4) [2015] FCA 838

lid dip @mslods

Program formats and copyright

Channel 7 has lost its bid to get an interlocutory injunction against Channel 9’s show Hotplate.

Channel 7 claimed Hotplate infringes Channel 7’s copyright in the dramatic works consisting of the combination and series of incidents, plot, images and sounds that make up My Kitchen Rules:

  1. MKR Series 1, Episode 1;
  2.  the whole of MKR Series 1;
  3.  the whole of MKR Series 5; and
  4.  the whole of MKR Series 6.

Nicholas J found that Channel 7 had a reasonably arguable case, but did not agree with Channel 7 that it was a strong prima facie case. Then, his Honour considered the balance of convenience weighed in Channel 9’s favour.

Prima facie case

Nicholas J thought this might well cause Channel 7 some difficulties. At [15] his Honour said:

There may be a difficulty in framing the case in this way.  My understanding of Seven’s case is that it claims copyright in the dramatic work that constitutes the format for the MKR television program which was first reduced to material form in Series 1, Episode 1 (see Seven’s outline of submissions para 11). If that is correct, then one would expect subsequent episodes of MKR merely to reproduce the dramatic work (ie. the format) first seen in Series 1, Episode 1.  The alternative approach involves treating every subsequent episode of MKR as an original dramatic work that has its own original format.  This seems inconsistent with the way in which Seven has argued its case.  In any event, it is not necessary to explore this issue in any detail for present purposes.  In due course Seven will need to explain precisely how it puts its case.

Channel 9 contended that many of the key elements of MyKitchen Rules were common place and unoriginal. The makers of Hotplate, Endemol, also pointed to a catalogue of what it said were very substantial differences between the 2 shows:

(a) The Hotplate is based on professional restaurateurs, and established restaurant businesses, whereas MKR involves amateur cooks in their kitchens.

(b) The restaurants and contestants for The Hotplate were selected because they were varied examples of different restaurant styles and the best characters, not because they are from a particular State (as is the case for MKR) – as a result, two restaurants are in Sydney, one is in Brisbane, one is in Perth, one is in Mandurah (in Western Australia) and one is in regional Victoria.

(c) The restaurant businesses featured in The Hotplate focus on different cuisines in order to show different cooking styles, including Italian, Japanese, French, seafood, modern Australian and Asian fusion.

(d) In Round 1 of The Hotplate, the contestants are required to cook meals from their existing menu, and must be prepared to cook anything on the menu since they are not given advance notice of which two entrees, two mains and two desserts will be ordered by the judges, whereas in MKR the contestants select their own menu of one entree, one main and one dessert. The Hotplate shows the contestants preparing meals, but does not show them shopping for ingredients as for MKR.

(e) When their restaurant is featured, the contestants in The Hotplate wear what they generally wear in their day-to-day business – they are not provided with a branded apron as they are for MKR or for Masterchef (another well-known cooking program).

(f) In Round 1 of The Hotplate, the other restauranteur contestants provide their scores to the judges in a bill folder, but in Round 2 (after the restaurant makeovers), the other contestants must deliver their scores directly to the contestants whose restaurant is being featured on the night.

(g) The judges in The Hotplate give feedback to the contestants about everything from the ambiance and decor of the restaurant to the service to the overall menu to the specific dishes they serve – this is aimed at assisting the restaurateurs with how they can improve their businesses as a whole, not just the cooking. This is not an element of MKR since the program does not involve actual restaurant businesses.

(h) In Round 2 of The Hotplate, the contestants are given an amount of money to undertake renovations and makeovers of their restaurant’s furniture, colour scheme and decor in addition to updating of the restaurant’s menu. Again, this is not an element of MKR since the program does not involve the renovation or makeover of restaurant businesses. This information may be confidential to Nine. I have not had time to check while preparing this affidavit.

(i) In Round 3 of The Hotplate, the contestants cook meals from their newly renovated restaurants for diners. This is not an element of the MKR program since it does not involve restaurants or their diners.

Balance of convenience

Nicholas J accepted that Channel 7’s losses would be difficult to quantify. His Honour considered, however, that Channel 9’s losses would also be particularly difficult to quantify. The factor which appears to have tipped the balance, bearing in mind the problematic strength of Channel 7’s claim that its rights were infringed, was the disruption to Channel 9’s broadcasting schedule. 3 episodes of Hotplate had already broadcast and it was unrealistic to expect Channel 9 could simply resume where it left off, or start over again, if it successfully defended the infringement claim. At [41] and [42], his Honour said:

During the course of argument it was suggested by Senior Counsel for Seven that if Nine was restrained from broadcasting further episodes of Hotplate, it would be able to resume broadcasting them at a later date on the assumption that no permanent injunction was granted. I doubt that this would be as simple as the submission seemed to suggest. Presumably it would be necessary for Nine to re-broadcast the first three or more episodes. I think it would be difficult for Nine to re-establish the program’s momentum after it was abruptly halted by injunction and then “shelved” for however many months it takes to determine the proceeding and any subsequent appeal.

There is evidence from Ms Officer to show that Nine considers Hotplate to be a key piece of its programming that Nine has decided to broadcast in prime-time slots not only with a view to achieving high ratings for Hotplate itself, but also with a view to boosting the ratings of some of Nine’s other programs.

Seven Network (Operations) Limited v Endemol Australia Pty Limited [2015] FCA 800

Project home appeals

The Full Court has partially allowed Tamawood’s appeal, and denied Habitare’s appeal from Collier J’s findings about copyright infringement.

Tamawood designs and builds homes; Habitare is (or was) a developer. Habitare arranged for Tamawood to design some houses for a development it was working on. The plans were submitted to the local authority for, and received, planning approval. Tamawood and Habitare were unable to agree the basis on which they would go forward. Habitare decided to get Mondo Architects to draw up the building plans to carry the project forward and used Bloomer to build the houses. At first instance, Collier J found some of Mondo’s plans infringed, but others did not.

On appeal, the Full Court upheld Collier J’s ruling that Habitare’s licence to use the plans with planning approval terminated when Habitare decided not to proceed with Tamawood. This was because the basis of the licence was that Tamawood would not charge for preparing the drawings on the understanding it would build the houses. Use (ie., reproduction) of the plans outside those terms was unlicensed.

On appeal, Tamawood also successfully challenged Collier J’s conclusion that its copyright in “Stad 939 Conondale/Dunkeld”:

Stad 939 Conondale/Dunkeld
Stad 939 Conondale/Dunkeld

was not infringed by Mondo Duplex 1:

Mondo 1 Duplex with patio
Mondo 1 Duplex with patio

Two points of interest here. First, the Full Court was unanimous in holding that Collier J had erred by ascertaining whether Mondo Duplex 1 sufficiently resembled Stad 939 Conondale/Dunkeld and then considering whether or not there had been copying. The question of copying needs to be resolved first although, in doing so, the degree of resemblance may lead to an inference of copying.

Secondly, for Jagot and Murphy JJ, the degree of resemblance, Mondo’s access to Tamawood’s plans and the significant difference between Mondo’s plans before that access and after all contributed to a conclusion of copying. Their Honour’s then applied Eagle Homes v Austec to find reproduction of a substantial part on the basis that the copyright work could still be seen in the accused plans. For Jagot and Murphy J the changes in the floor plan were minor. At [168]:

The footprints of the duplexes are identical but for the addition of the patio at the rear of the Mondo Duplex 1 plans. The internal and other external differences all result from two changes – swapping the position of bedroom 1 with bedroom 2 and swapping the position of bedroom 3 with the living/entry space. All changes appear consequential on these two basic changes in location. The changes, however, are minor, in the sense that the overall relationship between the internal spaces and the exterior remain the same. ….

Greenwood J dissented on this point at [89] – [90], considering that the layout and traffic flows, shapes and proportions and relationships of the rooms and other spaces were sufficiently different. His Honour considered that the common placement of Beds 1 and 2 and associated wet areas along the external walls of the duplex rather than the party wall was rational and for obvious reason.

Otherwise, the Full Court affirmed her Honour’s ruling at first instance.

Tamawood Limited v Habitare Developments Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2015] FCAFC 65

 

How much is that copyright in the power generation system

The Full Federal Court has allowed the Commissioner of Taxation’s appeal from Pagone J’s ruling allowing SPI Powernet a deduction for the value of its copyright in the plans, drawings and manuals for its electricity power generation network.[1]

SPI Powernet bought the assets of the Victorian electricity power generation and transmission line system when the Kennett government privatised the State Electricity Commission in 1997. It paid $2.5 billion. The assets included the intellectual property rights which included the copyright in some 100,000 drawings and plans which were critical to the operation and maintenance of the business and various manuals and software.

The purchase price was not apportioned amongst the various assets. Indeed the sale agreement specified that the purchase price was fixed notwithstanding that the components might be shown “collectively to have a different value.”

SPI Powernet sought to apportion the purchase price among the various asset classes and, in the case of the copyright, claimed depreciation in respect of a “unit of industrial property”. The Commissioner assessed the value of the copyright at “nil”. Pagone J allowed SPI Powernet’s appeal, finding that the value of the copyright was in the order of $171 million using the replacement cost methodology.[2]

The Full Court’s decision involves a number of procedural issues as well as substantive questions including the extent to which the Commissioner’s methodology could be challenged and his Honour’s exclusion of the expert’s written reports at first instance.[3]

The Full Court were agreed that the valuation exercise undertaken by the experts was misdirected. The question was what part of the purchase price should be attributed to the copyright, not what was the market value of the copyright. That caused two problems for the SPI Powernet parties.

One problem was the form of the purchase price: by specifying that it was a fixed price regardless of the value of the component assets, it meant that no cost could be attributed to a particular component. If you are drafting a sale agreement and including intellectual property rights in the assets and not apportioning the purchase price, be careful.

The second problem was that SPI Powernet, as the purchaser of all the assets to run a power generation business, would have a licence implied by necessity to use and reproduce the copyright in conjunction with the business. So, Greenwood J said at [185] and [186]:

…. Let it be assumed that SPI PowerNet had not acquired the copyright subsisting in the 105,410 documents. Could it be reasonably inferred in such a case, having regard to the terms of the Agreement under which SPI PowerNet acquired all of the relevant assets necessary to conduct the electricity transmission undertaking, that Power Net Victoria (the Victorian government owned corporation which formerly owned the copyright in the documents), would have been the source of an implied licence in favour of SPI PowerNet to use all of the documents in connection with that undertaking in a way which included exercising any and all rights falling within the rights comprised in the copyright? The answer to that question seems plainly enough yes, in which event any exercise of any of the rights subsisting in the copyright would have occurred with the licence of the owner of the copyright.

Fourth, in those circumstances, it is not necessary to undertake a timebased analysis of the value of work which would have been necessary to recreate the 105,410 documents in a way which could have expressed the information contained in those documents in a noninfringing form. Such a valuation exercise does not aid or inform the statutory task under s 124R(5). I respectfully disagree with the finding of the primary judge at [33] that had the copyright not been acquired, SPI PowerNet would have had to create the field of documents in which copyright subsisted in a way which conveyed the same information but in a noninfringing way to enable the business to function.

and Edmonds J said at [102]:

If an actual acquisition by SPANT of all of SPI PowerNet’s assets as at 19 October 2005 had not included the copyright, there can be no doubt that by reason of the notion of “necessity”, as explained by McHugh and Gummow JJ in [Byrne v Australian Airlines Limited][byrne] (1995) 185 CLR 410 at 450, SPANT would have enjoyed an implied licence to copy and modify the drawings and documents in any event: see Copyright Agency Limited v State of New South Wales [2008] HCA 35; (2008) 233 CLR 279 at 305–306 [92] per Gleeson CJ, Gummow, Heydon, Crennan and Kiefel JJ, and the other cases there cited (also [81], [82] and the cases cited); see too Acohs Pty Ltd v Ucorp Pty Ltd and Anor [2012] FCAFC 16; (2012) 201 FCR 173 at [145].

Commissioner of Taxation v AusNet Transmission Group Pty Ltd [2015] FCAFC 60 (Kenny, Edmonds and Greenwood JJ)


  1. The case before the courts was actually 2 cases: 1 concerning SPI Powernet’s claim for the depreciation; the second by its parent when the parent adopted consolidated group accounts including SPI Powernet.  ?
  2. The valuation experts agreed there were three accepted methods to value the copyright: an income approach, a market value approach and a cost approach. Because there was nothing income generated from exploiting the copyright nor a market for the copyright, SPI Powernet’s experts applied the “replacement cost” method – what it would cost in time and effort to recreate the drawings etc. from scratch. See e.g. Pagone J at [24].  ?
  3. The latter of which led to the Full Court quashing his Honour’s decision on that part of the case and remitting it for reconsideration by Pagone J on the basis at [85] and [101] that the exclusion of the written reports meant it was impossible for the Full Court to evaluate his Honour’s reasons for accepting the views of SPI Powernet’s experts over the Commssioner’s expert on what all parties considered the fundamental issuel  ?

Blocking injunctions – the Bill

The Commonwealth Government has introduced into Parliament the Copyright Amendment (Online Infringement) Bill 2015. This bill will implement the second (or third) of the Government’s online infringement proposals.

The Bill would insert a new s 115A into the Act. Under s 115A, a copyright owner would have a right to apply to the Federal Court for an injunction against a carriage service provider[1] requiring the carriage service provider to take reasonable steps to block access to on online location outside Australia the primary purpose of which is to infringe copyright (whether in Australia or not).

The EM is at pains to stress that the website must be outside Australia – otherwise the copyright owner could sue directly – and its primary purpose must be copyright infringement. Thus, the EM says services like Youtube, iTunes and so on would not be exposed to the risk of injunction.

The bill does not prescribe what steps would be reasonable (to attempt) to block access, but presumably guidance may be sought from English decisions on this issue.

In deciding whether or not to grant the injunction, the Court will be directed to take into account a range of factors including, in particular, the flagrancy of the infringement and the proportionality of blocking access to the extent of the infringement.

Provision is also made for the person operating the website to be, or become, a party to the proceeding and to apply after an injunction has been granted for it to be rescinded or varied.

The carriage service provider will be liable for costs only if it enters an appearance and takes part in the proceedings. The bill does not make provision for whom should bear the costs of implementing and maintaining the injunction.

The injunctions provided by the English courts include a mechanism for copyright holders to “update” the webiste addresses so that, if the website operator changes the URL, it is an administrative exercise to notify the ISP. The Bill does not appear specifically to contemplate this, and it is unclear whether the Federal Court would, or should, adopt such a mechanism.

In addition to discussion of blocking methods, the Cartier[2] ruling in England includes an interesting discussion of the costs of such applications and also the costs incurred by the ISPs in implementing the injunctions. Apparently, after the initial cases, such an application typically cost the copyright owners around £14,000 with a further fee of around £3,600 per year per website for monitoring. The costs to ISPs reported by the judge ranged from a “low four figure sum per month” to a “low six figure sum a year”.

The Cartier case concerned websites infringing trade marks, not copyright. One might wonder whether the Australian law should also extend to trade marks?

The Senate has referred the Bill to its Legal and Constitutional Affairs committee for review. There is plainly not much to discuss about the bill, as the committee is due to report back by 13 May 2015 and you must make your submissions, if any, by 16 April 2015.

Copyright Amendment (Online Infringement) Bill 2015 (pdf)
Explanatory Memorandum (pdf)


  1. For you and me, that’s Telstra, Optus, iiNet/TPG, Foxtel etc., but real lawyers should go via s10 to here (take a tent and all necessary provisions and we’ll see you in several years).  ?
  2. Also known as Richemont after the third claimant.  ?

Three strikes in Australia

The Communications Alliance has published a draft Code for a copyright notice scheme in Australia.

The draft Code will apply to residential, fixed line accounts only. It appears to be intended to apply to all ISPs of (an as yet to be determined) minimum size. The scheme does not involve ISPs terminating, suspending or throttling accounts, but leads up to the rights holders potentially making applications for preliminary discovery to identify egregious account holders. Participation in the scheme, however, does not preclude a rights holder from taking infringement proceedings at any stage.

The draft Code envisages 3 stages of notice:

  1. an Education Notice;
  2. a Warning Notice; and
  3. a Final Notice.

A rights holder who alleges an infringement would send a notice in the agreed form to the relevant ISP which would then issue a notice at the appropriate level to the account holder. The ISP must not at any stage disclose any personal information “including the identity or any contact details of an Account Holder at any stage of the copyright notice scheme, unless there is a court order or written permission from the Account Holder”.

Each type of notice will include, amongst other things, details about the alleged infringement and information where legitimate content can be obtained.

A Final Notice would be issued only within the 12 months from issue of the most recent Education Notice. If more than 12 months has passed, the process resets to the Education Notice.

If a Final Notice is sent, it will include a warning that the Account Holder may be subject to court proceedings including an application for preliminary discovery. An Account Holder who receives a Final Notice may challenge it before an Adjudication Panel on payment of a $25 fee. Until the challenge is resolved, the Account Holder must not be included in “the Final Notice List”. The costs of the Adjudication Panel are otherwise to be borne by the rights holders.

Rights holders can seek access to each ISP’s Final Notice List – which must be provided in a way that does not include any personal identification material and, having received it, the rights holder may apply to “a federal court or tribunal” for preliminary discovery and the ISP must abide by the outcome.

It is envisaged that the Code will operate for 18 months and then be subject to an evaluation.

The draft has been prepared through consultations involving:

  • on the ISPs side: Telstra, Optus, iiNet, IP Star, M2, Verizon and Vodafone Hutchison; and
  • on the rights holders side: APRA AMCOS, ARIA, Australia Screen Association, Copyright Agency, Foxtel, Free TV Australia, Music Rights Australia, News Corporation Australia, Village Roadshow Limited and World Media.

The implementation of the scheme will be overseen by a Copyright Information Panel, consisting of representatives of the ISPs, rights holders and “the Consumer Organisation”. The Copyright Information Panel will also be responsible for appointing the Adjudication Panel.

In addition to the size of ISPs who must participate, the press release notes that the parties are still to agree on the funding arrangements – i.e., who will bear the costs of the notices and administration – and how many notices an ISP may have to handle in any given month.

The publication of the draft reflects the ultimatum from the Attorney-General back in December.

The draft is now open for public comment until 23 March 2015. The intention is that, once finalised, the draft will be submitted to the Australian Communications and Media Authority for registration as an Industry Code under s 112 of the Telecommunications Act 1997.

Draft Code here (pdf).

Press release here.

Online copyright infringement reforms announced

The Attorney-General and the Minister for Communications have issued a joint media release announcing the Government’s response to July’s Issues Paper:

  1. First step: they have written to “industry leaders” and told them to come up with an agreed industry code for a “graduated response” regime[1] to be registered with the Australian Communications and Media Authority (ACMA) under Part 6 of the Telecommunications Act 1997;
  2. Second step: if the “industry leaders” cannot come up with an agreement within 120 days [2]:

    the Government will impose binding arrangements either by an industry code prescribed by the Attorney-General under the Copyright Act 1968 or an industry standard prescribed by the ACMA, at the direction of the Minister for Communications under the Telecommunications Act.

  3. Third step: the Government will also amend the Copyright Act to enable rights holders to get injunctions ordering ISPs to block access to websites outside Australia that provide access to infringing content.

Well, at least, Option 1 in the Issues Paper seems to have died a deserved death.[3] The media release does not mention, however, whether or not the Government will extend the “safe harbour” provisions to “service providers” and not just “carriage service providers”.

The letter the Government sent to “industry leaders” did provide some general direction about the contents of the anticipated industry code:

  • that ISPs take reasonable steps (including the development of an education and warning notice scheme) to deter online copyright infringement on their network, when they are made aware of infringing subscribers, in a manner that is proportionate to the infringement
  • informing consumers of the implications of copyright infringement and legitimate alternatives that provide affordable and timely content
  • providing appropriate safeguards for consumers
  • fairly apportioning costs as between ISPs and rights holders
  • ensuring smaller ISPs are not unfairly or disproportionately affected, and
  • include a process for facilitated discovery to assist rights holders in taking direct copyright infringement action against a subscriber after an agreed number of notices

and included the exhortation:

Any code must be sustainable and technology neutral. It should be educative and attempt to address the reasons that people are accessing unauthorised content. Consumer interests must be given genuine consideration in your negotiations.

There is no more detail on what sanctions, if any, would apply.[4]

The media release also includes a warning, of sorts, to the right holders:

The issue of affordability and accessibility of legitimate content is a key factor in reducing online copyright infringement. The Government welcomes recent action by content owners and expects industry to continue to respond to this demand from consumers in the digital market.

It will be interesting to see if the “industry leaders” can come up with an agreed code, given they have failed to reach agreement for over a decade now. Even if the Government is forced to impose a code, it may also be interesting see which ISPs join in the scheme. If there is an industry code and significant ISPs join in, would that be a basis for reconsidering the High Court’s ruling of non-authorisation in the iiNet case which was predicated, at least in part, on the ability of subscribers to jump ship from iiNet to another ISP if sanctions were imposed.

Lid dip: David Andrews.


  1. That is a system whereby subscribers get some number of notices that their account is (allegedly) being used to infringe copyright and warning them to stop or …. All the media release says at this stage:  ?

    The code will include a process to notify consumers when a copyright breach has occurred and provide information on how they can gain access to legitimate content.

  2. According to the letter the Government sent to “industry leaders”, the industry code must be agreed by 8 April 2015. (Update: you can now read the letter via this link (scroll down).At the moment, I don’t seem to be able to find a copy of the letter, which was attached to the media release, online.)  ?
  3. The media release says that the effectiveness of these measures will be reviewed in 18 months as in “a world of rapid changes in technology and human behaviour, there is no single measure that can eliminate online copyright infringement.”.  ?
  4. Yesterday’s press reports suggested that “harsh measures” like internet throttling would not be available.  ?