Can ISP's weather the copyright infringement storm?

If an internet or carriage service provider has knowledge of its services being used in breach of the Copyright Act 1988 (Cth) (Copyright Act), why can’t it be prosecuted for that known breach?

The answer lies at first instance in the safe harbour provisions of the Copyright Act.  These provisions are found in division 2AA of the Copyright Act, and are regularly relied upon by carriage service providers to protect themselves against monetary penalties and claims resulting from consumers’ breaches of the Copyright Act.  In June 2010 the US decision of Viacom v Google considered the level of knowledge of infringements that a carriage service provider could possess before being cut loose from the US safe harbour provisions.

The Australian safe harbour provisions are moulded from similar provisions found in the US statutes.  Therefore, the Viacom decision provides a useful guide to the law in Australia.

Viacom alleged that Google had allowed the uploading of approximately 160,000 video clips onto which infringed Viacom’s copyright.  Google argued that YouTube was protected by the American safe harbour provisions dealing with ‘information residing on systems or networks at the directions of users’.  If the safe harbour provisions were found to apply, Google would be exempt from any claim seeking monetary relief.  Viacom were seeking damages in excess of $1billion.  Its claim was summarily dismissed.

The critical question was whether the statutory phrase requiring ‘actual knowledge’ of the infringement included a ‘general awareness’ of the infringement or ‘actual or constructive knowledge’ of the infringement.  The Australian provisions provide that carriage service providers must act expeditiously to remove or disable access to a reference residing on its system or network if the carriage service provider becomes aware of the underlying facts or circumstances that make it apparent that the copyright material to which it refers is likely to be infringing.  It is this last phrase of the Australian provisions referring to the level of required knowledge to which the import of the Google decision attaches. 

The United States District Court found that a specific and identifiable infringement of particular individual items is required before the carriage service provider can have ‘knowledge’ of the infringement.  In that sense, ‘mere knowledge of prevalence of such activity in general is not enough’.  In coming to that conclusion, the US District Court relied heavily on the second reading speeches.

The second reading speeches of the Copyright Act in Australia suggests a less stringent test is applied to determining the level of knowledge allowable for the carriage service provider.  Mr Philip Ruddock made the following remarks to the House of Representatives during the second reading speeches:

‘it is not the government’s intention that a carriage service provider wanting to take advantage of the safe harbour scheme will have to disable or remove material, or access to material merely because it becomes aware of an allegation or claim of copyright infringement.  Likewise, becoming aware of a court action where there is a claim of copyright infringement will not, in itself, require a carriage service provider seeking to use the safe harbour to take down the material.

The intention of the government is that a carriage service provider seeking the benefit of a safe harbour will only have to remove material when it is apparent, when faced with the facts and the circumstances known to the service provider, that material will probably, as opposed to possibly infringe Australia’s copyright law.  For example, a carriage service provider might become aware of a copy of the latest Harry Potter movie at a site on its network before it has been publicly released in the cinema.

As is currently the case, a carriage service provider will not be required to actively monitor their systems or networks for such material. Nor will they be required to make independent investigations once they become aware of potential copyright infringement.  The probable infringement has to be apparent’.

Whilst the second reading speech of Mr Ruddock MP makes it clear that the Government’s intent was not to place an onerous obligation for carriage service providers to monitor their network, it certainly, in our view, makes it apparent that once the carriage service provider becomes aware of an infringement it may not have the right to rely upon the safe harbour provisions.  The one saving grace for the carriage service provider is that knowledge of a potential infringement does not seem to be enough.  The second reading speeches contemplate that a proven infringement, presumably by way of judgment, will be required.

This poses some difficult questions for the owner of the copyright.  For example, would it be enough for the producer of the Harry Potter movies to establish a breach of copyright by one person through the use of peer to peer software in order to make the carriage service provider aware of the infringement and thus exempt from the safe harbour provisions?  If a carriage service provider was to remove the offending peer to peer stream, would it be enough that one offending stream of the Harry Potter movies would exempt the carriage service provider from all other peer to peer streams of Harry Potter movies?

These issues certainly put carriage service providers on notice that they must be aware of copyright infringement decisions in Australia and pose some interesting strategic questions as to how the owner of copyright may create a scenario whereby compensation may be sought from the carriage service providers.

Finally, similar issues were considered in Roadshow Films Pty Ltd v iiNet Ltd (No3) (2010) 263 ALR 215 in which the Federal Court of Australia found that because iiNet did not provide the ‘means’ by which its users infringed copyright material, it could not be said to ‘authorise’ its users’ acts. In so far as an act of authorisation touches upon a level of awareness, it may have important implications for the level of awareness required for safe harbour provisions. The iiNet case is on appeal and further clarity to these issues should come from the determination of that appeal.

For further information please contact Associate, Toby Bishop, on 08 9288 6882 /

Disclaimer – the information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.