Copyright Update: Website blocking injunctions, Dallas Buyers Club and the law reform agenda

The past year has been a significant one for copyright law in Australia. In this update, we review the following recent developments in this area:

• the introduction of specific website blocking legislation;
• subsidiary proceedings to the landmark Dallas Buyers Club LLC v iiNet Ltd proceeding; and
• the Australian Law Reform Commission’s (ALRC’s) final report into Copyright and the Digital Economy.

Specific website blocking legislation becomes law

The Copyright Amendment (Online Infringement) Act 2015 (Cth) (Act) commenced as law on 27 June 2015 after being passed by Parliament with bipartisan support. The Act amends the Copyright Act 1968 (Cth) by empowering rights’ holders to seek injunctive relief to require a carriage service provider (CSP) to take reasonable steps to disable access to certain online locations.

The new section 115A applies where:

• the CSP provides access to an online location outside of Australia;
• the online location infringes or facilitates infringement of copyright; and
• the online location’s primary purpose is to infringe or facilitate infringement of copyright (whether or not in Australia).

To date, similar measures have been introduced in the United Kingdom, Ireland and Singapore.

Minister for Communications Malcolm Turnbull has described the measure as necessary to enforce copyright law against website operators who are based overseas, although also stated that ultimately the most effective means to reduce online copyright infringement is to provide content in a timely and affordable way.

Supporters of the amendments submitted that similar measures in the UK have drastically reduced traffic toward the blocked websites and disrupted their operators’ businesses.

However, concerns remain that website blocks are too easily circumvented by virtual private networks (VPNs) and proxy servers, or simply made redundant once the website is quickly re-established in another location, making the process a costly exercise that results in consumer detriment.

The measures are likely to provide additional and potentially powerful avenues to address online copyright infringement where the infringing content originates from overseas. However, there is the possibility that enforcement costs will be either too prohibitive to have any real impact, or will be passed onto consumers without having the desired effect on infringement rates. We will monitor the legislation’s practical outcomes with interest, including the legislated cost-benefit analysis to be completed in June 2017.

Dallas Buyers Club – Proceedings continue

The Federal Court’s decision in Dallas Buyers Club LLC v iiNet Ltd [2015] FCA 317 was a key moment in Australian copyright law, being the first decision in which rights’ holders successfully compelled ISPs to divulge information about potential infringing customers. Hall & Wilcox has previously summarised the case here.

Since the decision, Justice Perram has presided over supplementary proceedings regarding the circumstances in which ISPs will release information for preliminary discovery. These have led to the public release of the letter and telephone transcript proposed to be used to contact alleged infringers. The plaintiffs’ failure to specify a settlement amount to alleged infringers has raised concerns about the practice of speculative invoicing, which involves making unconscionable demands for large settlement sums that could not otherwise be recovered in a trial.

A final decision is expected in the coming months.

It is approaching 18 months since the Australian Law Reform Commission published its final report into Copyright and the Digital Economy.

Its recommendations included (among other things) that:

• a flexible ‘fair use’ exception be introduced, permitting non-infringing use of copyright material by reference to an inclusive list of factors, such as the purpose of the use and the material’s availability;
• narrower exceptions (such as time-shifting or incidental use) should be repealed in favour of the flexible fair use exception; and
• parties should be limited in their capacity to contract out of the Act’s exceptions.

At the time the report was released, Attorney-General and Minister for the Arts George Brandis promised that the government’s formal response would address the Act’s convoluted nature, provide a technology neutral framework, and have regard to Australia’s international legal and economic context. However, he reassured copyright holders that “the Government has no intention of lessening rights of content creators to protect and benefit from their intellectual property.”