Second reading: Copyright Amendment (Online Infringement) Bill 2015

March 27, 2015

MALCOLM TURNBULL (Wentworth—Minister for Communications) (11:46): I move:

That this bill be now read a second time.

The Copyright Amendment (Online Infringement) Bill 2015 amends the Copyright Act 1968 to provide an effective new tool that rights holders use can then use to respond to commercial scale widespread copyright infringement on websites operated outside Australia.

Significance of the creative industries and copyright challenges

Copyright protection provides an essential mechanism for ensuring the viability and success of creative industries by providing an incentive for and a reward to creators. A part of copyright law is to strike the right balance between, on the one hand, creators and owners of copyrighted works and, on the other hand, users and disseminators of copyrighted works. However, this is never simple. Creators themselves have an interest in both protecting their rights as well as access and dissemination of content.

Australia possesses a proud and valuable creative sector. Our creative industries make a significant contribution to our national economy. According to a 2012 report, Australia's creative industries employ 900,000 people and generate economic value of more than $90 billion, including $7 billion in exports.

The internet has created new opportunities for creating, innovating, accessing and distributing intellectual property. The internet has also created major challenges for copyright protection. Material can be accessed, copied and shared with ease. In many instances this is a very good thing and has helped promote education and freedom of speech.

On any view, in net terms the internet has been the most wonderful beneficial invention of infrastructure of mankind. But a collateral effect of technological changes of this kind has been to exacerbate an indifference to the rights of copyright owners among some internet users an expectation amongst some that content should in every respect be free. In many cases, free access to content is lawful and proper, and, as such, is provided for expressly under exceptions to infringement in the Copyright Act.

The challenge though is to strike the right balance. In that regard, it has become apparent that there is a gap in Australia's legislative framework in so far as existing copyright law is not adequate to deter a specific type of infringing activity, which is the facilitation of the online infringement of copyright owners' content, largely of audio-visual material, by online apparatus. Hence parliament recognises that a remedy is required.

There are a number of foreign based online locations that disseminate large amounts of infringing content to Australian internet users. These online locations are currently able to operate without disruption, and profit to a large extent from facilitating the streaming and downloading by end users of infringing copies of audio-visual material. What they do, in unlawfully accessing and then profiting from the intellectual and artistic endeavours of others, is a form of theft.

Rights holders face a number of practical barriers in enforcing their rights against these operators and the most but practical barrier of all, of course, is that the website or the online site that is facilitating this type of infringement, engaging in this form of intellectual property theft is located in a jurisdiction where it is not practical to take legal proceedings. Hence the need to deal with this particular problem. It is a specific problem.

It is very hard to take enforcement action against entities operating outside Australia. In practical terms, it is very difficult. An injunction can only be awarded by a court after lengthy and costly civil proceedings. The widespread scale of infringement means that it is often not viable for rights holders to enforce their rights against individual users.

New injunctions power

This bill will provide a powerful new mechanism to protect the legitimate interests of rights-holders by enabling infringing material to be blocked by a carriage service provider without the need to establish fault on the part of that provider—the carriage service provider being the internet service provider. Specifically, the bill will introduce a new provision that allows rights holders to apply to the Federal Court for an order directing a carriage service provider to disable access to infringing online locations located outside Australia.

This type of provision is working well in other parts of the world such as the United Kingdom, Ireland and Singapore. An injunction is often ordered in those jurisdictions without any opposition from the internet service provider concerned.

Critically, the provisions in this bill have been carefully drafted to ensure that the new injunction power will not affect the legitimate websites and services that legally provide access to copyright material. Importantly, the provision will apply on a no-fault basis against the carriage service provider. This recognises that, while carriage service providers are not necessarily responsible for infringing online locations, they are best placed to prevent Australian internet users from accessing them. The provision does not apply to online locations in Australia, since rights holders can take direct action against those online locations through existing remedies in the Copyright Act.

The bill recognises that there is a need to balance the important goal of protecting our creative industries against other vital public and private interests. The bill, therefore, contains a number of safeguards to ensure that the power is not used to curb those competing interests. First, the power is only as broad as it needs to be to achieve its objectives. The provision will only capture online locations where it can be established that the primary purpose of the location is to infringe or facilitate the infringement of copyright. That is a significant threshold test which will ensure that the provision cannot be used to target online locations that are mainly devoted to a legitimate purpose. As an example of this, let us say that we have a legitimate streaming service located in the United States that is streaming content in respect of which it has all of the copyright authority to stream to customers in the United States. Let us assume that an Australian was to use a VPN, a virtual private network, to create the impression that they were actually located in the United States so that when the American site saw the IP address they would see a US IP address. This Australian could then—and this is widely done—purchase the content in the normal way, with a credit card. The owner of the Australian rights to the content may very well be quite unhappy about that, but they can take a remedy against the American site. This provision does not apply to a site like this. 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 because you could not say that Netflix in the United States has, as its primary purpose, the infringement or facilitation of the infringement of copyright. This is a very important point to make. There are other remedies available to Australian rights holders in respect of those conventional sites—if I can describe them that way.

Second, the court must consider a broad range of factors that reflect competing public and private interests. The court must consider the flagrancy of the infringement. This provision particularly contemplates online locations that deliberately and conspicuously flout copyright laws. The court must also consider whether blocking access to the online location is a proportionate response in the circumstances. For example, the court may consider the percentage of infringing content on the online location compared to the legitimate content or the frequency with which the infringing material is accessed by subscribers in Australia. Another consideration for the court is the overall public interest. The internet has revolutionised our ability to disseminate information and knowledge. The court must weigh the public interest in access to information against the public interest in protecting our creative industries. These competing public interests must themselves be considered in the wider context of the private interest which it is the principal purpose of the bill to protect—that is, the right of content creators to the protection of their intellectual property.

Another important factor is the impact of the application for an injunction on any person affected. That includes, in particular, the carriage service provider, the ISP. The court will need to consider whether there are procedural safeguards to ensure that affected operators of online locations will have an avenue to make their case. The bill requires the copyright owner to notify the carriage service provider and the operator of an application as soon as practical. The operator may then seek to be joined as a party to the proceedings.

Extensive consultation has been conducted on this measure. On 30 July last year the Attorney-General and I jointly released the Online Copyright Infringement discussion paper for public consultation. A number of submissions directly addressed this proposal. As a result of this consultation the measure was modified to give more flexibility to courts in determining whether to order an injunction to capture future infringing technologies and to provide more safeguards for carriage service providers, operators, online locations and internet users.

The new injunction power is one measure that the government is introducing to address online copyright infringement. International experience shows that a range of measures are needed to properly tackle the problem. The new injunction power will complement the industry code that is being developed between the internet service providers and copyright holders. When finalised, the code will create an education notice scheme that will warn alleged infringers and give them information about legitimate alternatives. An injunction provision will be even more effective if users are properly educated and warned about online copyright infringement.

In conclusion, in combating online copyright infringement the most powerful weapon that rights holders have is to provide access to their content in a timely and affordable way. The government accepts that this is an important element in any package of measures to address online copyright infringement. The government also welcomes recent action by rights holders and expects industry to continue to respond to this demand from consumers in the digital market. The bill complements these objectives by ensuring there is fair protection of the rights of content creators while balancing other competing interests in the online environment. This will be achieved by ensuring copyright holders have access to an effective remedy without unduly burdening carriage service providers or unnecessarily regulating the behaviour of consumers. I move that this bill be now read a second time, and I commend it to the House.

Debate adjourned.

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