Draft ISP Code on Copyright Infringement Warning Offenders

Draft ISP Code on Copyright Infringement Warning Offenders

On 20 February 2015 the Communications Alliance released a draft code of practice responding to concerns about online copyright infringement. In recent months we have voiced our opinion on the issue and will be filing our response to the Communications Alliance in the coming weeks. Below is a summary of the draft code: 

Background
In November 2014 the Attorney General and Minister for Communications laid down the following ultimatum to Australian copyright holders, ISPs and consumers: collaborate to develop an industry code which responds to concerns about online copyright infringement, while protecting the legitimate interests of rights holders, by April 2015; or we will impose measures for you.

It comes as no surprise that the Communications Alliance - which represents ISPs and rights holders from music, film, television and the performing arts – has released a draft code of practice in support of its fight against online copyright infringement.  The draft code was released for public comment on 20 February 2015 with a final proposal anticipated to be lodged with the ACMA by 8 April 2015.

Benchmarks
Among the main criteria outlined by the AG and Minister for Communications was a code which:

• 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
  
• Informs consumers of the implications of copyright infringement and legitimate alternatives that provide affordable and timely content providing appropriate safeguards for consumers
• Fairly apportions costs as between ISPs and rights holder ensures smaller ISPs are not unfairly or disproportionately affected, and includes a process for facilitated discovery to assist rights holders in taking direct copyright infringement action against a subscriber after an agreed number of notices. 
• 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

Proposed Changes
In response The Communications Alliance have proposed the creation of a Copyright Notice Scheme targeted at residential fixed internet users who are alleged to have infringed copyright online. Rights Holders may send infringement notices to ISPs covered by the scheme, alleging that copyright infringement of a particular work has been associated with a particular ISP address. The ISP must wait at least 14 days on issuing a notice before issuing a further notice.

An ISP participating in the scheme must investigate the complaint, but must not disclose the user’s identity at any time during the process. Users caught illegally downloading content will receive an escalating series of infringement notices designed to change their behaviour and steer them toward lawful sources of content. An account holder who receives three infringement notices in a 12 month period has the right to have the validity of the allegations independently reviewed by an adjudication panel.

The rights holder may request a Final Notice List from the ISP detailing the IP Addresses who have received Final Notices which have not been set aside by the Adjudication Panel.

In line with the AG’s recommendations the proposed scheme has a strong emphasis on public education and while it does not contain explicit sanctions against internet users, it does provide for a ‘facilitated preliminary discovery’ process through which ISPs can assist Rights Holders who may decide to take legal action against persistent infringers. Such discovery must be sought by way of application to the Federal Court, with ISPs, rights holders and users having to comply with any orders of Court.

Details on key issues such as how the Scheme is to be funded and the roles played by rights holders of content such as music and films and the ISPs are still under discussion.

Rights Holders involved in the code development include APRA AMCOS, ARIA, Australia Screen Association, Copyright Agency, Foxtel, Free TV Australia, Music Rights Australia, News Corporation Australia, Village Roadshow Limited and World Media.

Chris Woodforde, a representative on behalf of several Right’s Holders during the negotiations said “The creative industries believe that the implementation of an effective code is an important step in protecting creative content in the online environment. The release of the draft code for public comment is important in achieving that goal.  The creative industry representatives will continue to work with the Government, ISPs and other stakeholders to implement the code and address the serious issue of online copyright infringement.”

 Is the draft code well balanced in its response to the issues?For the most part the code has adopted a pragmatic approach to the issue and has largely struck a balance between the interests of the rights holder, ISP and consumers. While the Communications Alliance concedes that the code is currently in draft there are some notable points of concern.

One of the more obvious concerns is whether ISPs are adequately equipped to police and investigate such inquiries? If we are to recommend devolving the power to police copyright infringement to a commercial enterprise then more consideration must be given to ensure that this responsibility is not abused. In the current state of play ISPs remain under intense pressure from rights holders to disclose the identity of copyright infringers. While the draft code provides for a ‘3 strikes policy’ and scope for an independent adjudicator, uncertainty remains over the integrity of the ISP’s investigation.

Will the investigations take place in Australia or an offshore location? Do ISPs intend on establishing dedicated units within their organisation to conduct such investigations? Will the processes be uniform across all ISPs? While in theory the proposal makes sense and reads well, there is inevitably scope for abuse in practice. The biggest fear is that ISPs simply ‘go through the motions’ of issuing infringement notices without adequate investigation, unduly placing more pressure and costs on the consumer to defend the allegations. It also bears considering whether and how the costs of implementing and regulating such a scheme are passed onto the consumer from the ISPs.

In 2009 the ‘3 strikes policy’ was introduced in France and serves as a cautionary tale. Despite resulting in positive feedback the law was eventually repealed in 2013. The government cited a failure to benefit authorized services, punishing users more so than the illegal providers and the costs of implementing the regime as the main reasons for its failure. The French calculated the costs of sending out the 1 million required emails and 99,000 registered letters as 12 million Euros and requires the dedication of 60 civil servants. The French Culture Minister argued that the costs outweighed the low rate of cases actually proceeding to trial (some 134), many without conviction.