Chapter 2

Key Issues

Views on the bill

2.1        A number of submitters—particularly those representing the interests of copyright holders—expressed support for the bill. Music Rights Australia (MRA), for example, stated that the bill:

...is the product of deliberate and considered consultation and reflects a balanced approach to improving operation of section 115A while still maintaining the Parliament's intention to enact a prescriptive section to ensure the no-fault remedy is only used to target the worst of the illegal offshore sites.[1]

2.2        MRA's submission states that the bill introduces welcome amendments which will ensure that section 115A is able to address the serious damage which illegal offshore sites inflict on the local music industry, while maintaining appropriate evidentiary burdens for copyright holders.[2] A number of other submissions expressly endorsed MRA's views, and urged the Senate to pass the bill without amendment.[3]

2.3        Other submissions in support of the bill stated that while section 115A is operating effectively, there are nevertheless potential gaps and areas in which that section could be strengthened. These submitters welcomed the amendments in the bill as targeted and proportionate changes to the injunctive regime which would enhance its operation and effectiveness.[4] A number of submissions also emphasised that the bill reflects the outcome of an extensive consultation and review process.[5]

2.4        Submitters opposing the bill argued that section 115A as currently drafted is operating efficiently and effectively, and consequently there is no need for further amendment. These submissions also contended that the measures proposed by the bill are unnecessarily broad, and may give rise to adverse unintended consequences.[6]

2.5        Submitters opposing the bill also raised concerns that the introduction of the bill was 'rushed forward' without a thorough review of the extent of any problems with the current injunctive regime. These submissions argued that the timeframe for the introduction of the bill was problematic given the substantial changes proposed, and asserted that the proposed changes prioritise the interests of copyright owners rather than reflecting the interests of all stakeholders.[7] For example, the Communications Alliance (CA) submitted that:

The proposed changes appear to reflect only matters raised by Rights Holders, and do not appear to take into account matters raised by CSP...Prior to their introduction in the Draft Exposure Bill, CSPs and other service providers were never provided with a formal opportunity to consider or respond to the amendments proposed in the Bill.

It also appears that key stakeholders (including the Law Council of Australia, copyright users and online locations) have not been consulted. The rushed approach to the consultation on the Exposure Draft of the Bill was particularly concerning, given the impact of the proposed changes and in particular, a widening of the threshold test and substantive changes to the way extended blocking orders can be made.[8]

Issues raised

2.6        A number of submissions also provided commentary on specific elements of the bill, in particular the proposals to:

2.7        Stakeholder views on these matters are considered in further detail below.

Introduction of a 'primary effect' test

2.8        Proposed section 115A(1) would permit a copyright owner to apply to the Federal Court for the grant of an injunction in respect of an online location that infringes, or facilitates the infringement, of copyright, and has the primary purpose or the primary effect of infringing or facilitating an infringement of copyright.

2.9        Australian Film and TV Bodies and Foxtel argued that the existing test in section 115A (that is, the 'primary purpose' test) may hinder or prevent the achievement of the objectives of the injunctive regime, as the test is often difficult to meet.[9] Foxtel, for example, stated that:

It can be difficult in some circumstances to establish that some online locations have the 'primary purpose' of infringing copyright (the current threshold), even though that is the practical effect of the locations. This is relevant to online file-hosting services, such as cyberlockers, which are widely used to facilitate the unauthorised sharing of copyright material.[10]

2.10      Submissions supporting the introduction of a 'primary effect' test also argued that this test would assist the injunctive regime in section 115A of the Copyright Act achieve its intended purpose. This is because it would ensure that the scheme is able to capture online locations—in particular 'cyberlockers'—which may not have the primary purpose of infringing copyright, but which are nevertheless making infringing content available to Australian users.[11] In this regard, the Australian Copyright Council (ACC) stated that the introduction of the 'primary effect' test would:

...recognise the adaptive and evolving nature of technology and is therefore consistent with the current Copyright Modernisation Review and other previous reviews which seek copyright reform that acknowledges a need for flexibility and technology neutral language.[12]

2.11      Submitters supporting the introduction of a 'primary effect' test also acknowledged concerns that the test could capture legitimate services. However, the submitters argued that these concerns were misplaced, noting in particular the variety of factors that the Federal Court would be required to consider before granting an injunction, and the fact that the burden of establishing that an online location meets the 'primary effect' test continues to fall on the copyright owner.[13]

2.12      The majority of submissions opposing the introduction of a 'primary effect' test raised concerns as to its breadth, emphasising that the current 'primary purpose' test sets an intentionally high threshold for copyright owners seeking injunctive relief. The Australian Digital Alliance (ADA), Communications Alliance and the Pirate Party Australia argued that lowering this threshold could result in the site blocking scheme in section 115A being applied to online locations operated for legitimate purposes.[14] The ADA and the Communications Alliance further argued that this could create difficulties for smaller businesses that lack the resources to invest in sophisticated copyright removal technology.[15] The ADA stated that the introduction of a 'primary effect' test:

...ignores the reality that, due to the lack of general exemptions in our [Copyright] Act, a large number of innocent and everyday activities currently infringe copyright in Australia, including generating memes, auto-translation, cloud storage, caching and indexing, and sharing screenshots of websites...This means that sites which are perfectly legal in other jurisdictions with more internet-appropriate copyright laws, such as the United States, infringe copyright in Australia.[16]

2.13      The Pirate Party Australia also argued that the breadth of the proposed 'primary effect' test could place undue burden on the operators of online locations, stating that the test 'requires all online locations to monitor and restrict their user-generated content to avoid risking violation'.[17]

2.14      Finally, opponents of a 'primary effect' test argued that such a test is unnecessary. In this respect, the submitters argued that section 115A as currently drafted is operating effectively, and that the current 'primary purpose' test has not presented a barrier to copyright owners seeking injunctive relief.[18] For example, Google LLC (Google) stated that it is 'not aware of any cases where an applicant has failed to have a site blocked because of the current formulation of the test' in section 115A. Google added that:

Not a single hypothetical example of such a site has been put forward by those seeking the amendments. This can only be explained by the fact that no such examples exist, or that such examples do exist, but those seeking the amendments are concerned that the Australian public would oppose the amendments if those sites were revealed.[19]

Government position

2.15      The Department of Communications and the Arts' submission acknowledged the concerns relating to the inclusion of a 'primary effect' test in section 115A—particularly the concerns that the breadth of the proposed test would result in the capture of legitimate online locations.[20]

2.16      However, the department argued it is 'highly unlikely' that legitimate online locations would be captured by the injunctive regime, stating that:

Legitimate online locations that may have some infringing activity will not have the 'primary purpose or primary effect' of infringing copyright, or facilitating the infringement of copyright. While they may have some effect in terms of infringing material, this will generally not be the intended primary purpose of the location, nor its primary effect. Rather, the injunction provisions will only capture locations that meet this threshold, such as 'cyberlockers' that, in some instances, predominantly contain infringing copies of online material.[21]

2.17      The department emphasised that subsection 115A(5) sets out checks and balances on the exercise of the Federal Court's power to grant an injunction. The department concluded that it is difficult to envisage the circumstances in which the Court would grant an injunction against a legitimate online location (such as Pinterest or Dropbox) unless that location were to alter its services so as to have the primary purpose or primary effect of infringing or facilitating the infringement of copyright.[22]

Extension of injunctions to online search engine providers

2.18      The bill seeks to extend the injunctive regime in section 115A of the Copyright Act to online search engine providers. In this respect, proposed subsection 115A(2) provides that an applicant may request that an injunction require an online search engine provider to take such steps as the Court considers necessary so as not to provide a search result that refers to the online location. Proposed subsection 115A(2B) further seeks to permit an injunction to require online search engine providers not to provide search results that include certain domain names, URLs and IP addresses.

2.19      A number of submissions in support of these measures noted that the proposal to extend to the injunctive regime to online search engine providers is a narrow and proportionate measure which responds to concerns identified during the departmental review of section 115A, and which will have a meaningful impact on the volume of traffic to pirate sites.[23]

2.20      Submissions in support of extending the application of section 115A to online search engine providers also emphasised the key role that search engine providers can play in facilitating the infringement of copyright, noting that the current injunctive regime does not currently extend to these entities.[24]Australian Film and TV Bodies provided detailed commentary on the role that online search engines have in the infringement of copyright, stating that:

The dominant role played by search engines in facilitating the ongoing access by internet users to these infringing locations is reflected in consumer research conducted by Screen Audience Research International in its 'Role of Search in Piracy' Report. This report found that:

  1. 70% of first-time consumers of illegitimate content online use search engines when discovering a source of illegal content. Of these consumers, 44% state that they were not actively looking for infringing technology – they are directed to it by the operation of the search technology;
  2. The most common search terms leading consumers to pirate sites are generic and do not demonstrate any clear intent to seek infringing content or knowledge of its location; and
  3. 47% of online consumers trying to access a blocked infringing site use search engines to find an alternative site.[25]

2.21      Australian Film and TV Bodies further noted that:

'the actual webpage traffic data shows that search engines are responsible for an extraordinary 98% of all referrals by intermediaries to blocked sites. This data clearly demonstrates that search engines are a conduit to online pirate content and uniquely placed to meaningfully impact access to pirate websites, through compliance with site blocking orders'.[26]

2.22      Screen Producers Australia and Foxtel argued that the extension of the injunctive regime to search engine providers would not result in undue burdens for search engine providers, noting that providers already modify available search results to comply with Australian law.[27] In this respect, Foxtel stated that:

...search engines currently de-index URLs for purposes including national security, violation of defamation and privacy and security laws, and can remove that content at the request of government and in some cases individuals. We note that where search engines remove content in line with their product community standards this is done on a voluntary basis, rather than being compelled to do so by law, adding further weight to the argument that removal of content by search engines is relatively easy.[28]

2.23      The Australian Copyright Council and Australian Film and TV Bodies noted that the extension of the injunctive regime to search engine providers is broadly consistent with international best practice—in particular with recent developments in the European Union.[29]

2.24      The ADA, Communications Alliance and Google opposed the extension of the injunctive regime to online search engines. These submitters argued that it may increase the costs of the injunctive regime and increase regulatory burden, without delivering additional benefits to rights holders.[30] In this regard, the ADA argued that the existing site blocking regime already ensures Australian users are unable to access infringing material, stating that:

...it is unclear how adding search engines to the list of service providers covered by the website blocking scheme would change access to the sites in Australia when they are already blocked at the ISP level. Material on these sites will already be unavailable to users searching from Australia. As such, this proposed extension has no clear purpose or effect.[31]

2.25      Submissions opposing this measure also noted that no countries that have implemented site blocking legislation have extended the operation of that legislation to online search engine providers. Further, in countries with site blocking legislation, search engine providers willingly and regularly cooperate with rights holders to remove infringing material—without the need for special legislative measures.[32] In this regard, Google stated that:

According to the Motion Picture Association of Canada, there are now at least 42 countries that have either adopted, implemented or are legally obliged to adopt and implement, measures to ensure ISPs take steps to disable access to copyright infringing websites. However, not one of these countries has thought it necessary or desirable to extend ISP site blocking to other online service providers such as search engines.[33]

Government position

2.26      The department's submission observed that major online search engine providers have acknowledged that they have an important role in copyright enforcement, and that these providers are often active in disrupting infringement.[34] Further, copyright infringement involving online search engine providers is not unique to Australia, and foreign jurisdictions have taken steps to address this issue. In this regard, the submission noted that:

...the UK has brokered a code of practice, under which search engine providers have agreed to undertake copyright enforcement efforts that extend beyond what is contemplated in this Bill. The Department understands from overseas counterparts that these copyright enforcement mechanisms have been effective.[35]

2.27      The department further stated that the website blocking arrangements under section 115A do not preclude or prevent voluntary measures to prevent copyright infringement being entered into by relevant parties. The department argued that, to the extent that voluntary measures are effective, it is unlikely that a copyright owner would seek an injunction, particularly given the potential delays and costs associated with doing so. The department emphasised that section 115A provides an appropriate legislative 'backstop' should voluntary arrangements prove ineffective.[36]

'Adaptive' injunctions

2.28      Proposed subsection 115A(2B) seeks to allow the Federal Court to grant injunctions in terms that would allow copyright holders, carriage service providers and online search engine providers, by agreement, to extend an injunction to domain names, URLs and IP addresses that start to provide access to the infringing online location captured by the original injunction after that injunction is made.

2.29      The bill's explanatory memorandum stated that these measures are intended to respond to circumstances in which an online location seeks to avoid an injunction under current section 115A by using another domain name, URL or IP address which refers users to the same infringing content.[37]

2.30      Submissions in support of the measures argued that they would be a reasonable addition to the injunctive regime, and would likely provide the flexibility necessary to ensure online locations are not able to circumvent blocking orders merely by establishing new domain names, IP addresses and URLs.[38] In this regard, the ACC asserted that the measures are desirable, on the basis that they will:

2.31      Music Rights Australia and Australian Film and TV Bodies argued that the measures are appropriately circumscribed, noting that the copyright holder would bear the burden of establishing a nexus between any online location added to an injunction by agreement and the location subject to the original order.[40] The submitters also emphasised that the Federal Court would retain supervisory oversight over all site blocking orders, ensuring that online locations would not be blocked without appropriate judicial scrutiny.[41]

2.32      The joint submission by Australian Film and TV Bodies drew attention to practices in comparable international jurisdictions, noting that:

The UK Intellectual Property Office is considering introducing an administrative site blocking regime and other countries in the European Union and in the Asia-Pacific region have already done so (e.g. Indonesia, Korea, Portugal, Malaysia, and Thailand).[42]

2.33      The ADA, Communications Alliance and Pirate Party of Australia opposed the introduction of 'adaptive' injunctions. These submitters focussed on the lack of judicial oversight, contending that the injunctions would require copyright holders, carriage service providers and online search engine providers to negotiate and determine matters that can, and should, only be determined by a Court.[43] In this regard, the ADA argued that:

Due to the serious and extreme nature of the potential impact of the scheme, it is essential that close judicial oversight be maintained to ensure that websites are not erroneously blocked or blocked without clear evidence of malicious infringement. Any amendments which imply that rights holders will be given much greater latitude in determining which websites to block, or that ISPs may be required to monitor the communications of their clients for copyright purposes, should be avoided, to ensure the integrity not just of the scheme but of the Australian legal system itself.[44]

2.34      The ADA, Communications Alliance and Google argued that there is little, if any, evidence to suggest that orders extending the application of an injunction are slow or expensive to obtain.[45] In this respect, Google noted that the Federal Court in Foxtel Management Pty Ltd v TPG Internet Pty Ltd & Ors stated that the Court may be willing to act on very little in the way of additional evidence in the case of a variation to injunction,[46] adding that in Roadshow Films Pty Ltd v Telstra Corporation Limited, the Court made an order that:

....specifically addressed the issue that the...Bill is said to address. Namely, the order provides a very simple and effective method for the applicants to get site blocking orders in respect of websites that begin to operate from a different Domain Name, IP Address or URL after the date of the initial order. It is hard to conceive of a simpler process that maintained proper oversight than the one formulated by his Honour Justice Nicholas.[47]

2.35      The submitters also contended that the proposed 'adaptive' injunctions could in fact place additional burden on rights holders, carriage service providers and online service providers. In this respect, the ADA noted that:

Based on past experiences of negotiations between rights holders and CSPs, it is likely that the...process would be costly, lengthy and problematic, and arguably would be less efficient than a Court order, particularly considering the established abridged process for expanding blocks.[48]

Government position

2.36      The department's submission acknowledged concerns raised by stakeholders that proposed subsection 115A(2B) would allow copyright owners to dictate steps to carriage service providers and online search engine providers.[49] However, the department argued that this is not the case, stating that:

If the CSP or online search engine provider were not to agree with the copyright holder about new domain names, URLs and IP addresses that emerge after the injunction is made, the copyright holder would need to return to the Court to seek an extended order. The new provisions intend to make clear that the Federal Court may grant more responsive injunctions and reduce the potential need for parties to return to the Court as new pathways to blocked sites emerge.[50]

Ministerial power to exclude online search engine providers

2.37      Proposed subsection 115A(8B) seeks to enable the minister, by legislative instrument, to declare that online search engine providers, or classes of such providers, be exempt from the injunctive scheme in section 115A.

2.38      A number of submissions raised concerns about the inclusion of this power, noting that it provides an avenue for the amendments proposed by the bill to be undermined. These submissions largely argued that the power was not required, but may be acceptable if used only in the most extreme circumstances and following extensive public consultation.[51] For example, Phonographic Performance Company of Australia stated that:

...the checks and balances within section 115A make such declarations unnecessary, as the high evidentiary burden which Applicants carry to satisfy the primary purpose or effect tests and the other factors which the Court may consider before orders are made would prevent unintended consequences in the application of section 115A to online search engine providers.[52]

2.39      As outlined earlier, the Scrutiny of Bills Committee also raised concerns regarding the breadth of the proposed power, and queried the minister with respect to its necessity.[53]

Committee view

2.40      The committee is of the view that the amendments proposed by the bill are likely to improve the operation of the injunctive scheme in section 115A of the Copyright Act, and represent a measured and proportionate response to concerns identified by stakeholders in relation to the operation of that scheme. In this respect, the committee also notes that the majority of submissions received by the committee supported the bill and recommended that it be passed unamended.

2.41      The committee appreciates the concerns raised with respect to the scope of the amendments, particularly those regarding the proposals to introduce a 'primary effect' test, extend the operation of the injunctive regime to search engines, and allow the Federal Court to issue 'adaptive' injunctions. However, the committee is of the view that there appear to be adequate safeguards in the bill to ensure that the measures would not result in unintended and adverse consequences.

2.42      With respect to the proposed 'primary effect' test, the committee acknowledges the concerns that the test may capture online locations operated for legitimate purposes. However, the committee considers that there are adequate safeguards in section 115A (including as amended) to ensure that this would not occur in practice. In this regard, the committee also notes the department's evidence regarding the anticipated operation of the 'primary effect' test and applicable safeguards, as well as the assertion that the test would be 'highly unlikely' to capture legitimate online locations.

2.43      The committee further notes that, as outlined above, a number of submitters asserted that it is unnecessary to extend the injunctive regime to online search engine providers. However, in light of the significant role that these providers may play in both the infringement and enforcement of copyright, the committee is of the view that the measure is appropriate. In this regard, the committee notes the department's submission that while copyright holders may seek to restrict access to infringing content by agreement with search engine providers, the measures in the bill provide an important 'backstop' in the event that voluntary arrangements are ineffective.

2.44      With respect to the proposal to permit 'adaptive' injunctions, the committee acknowledges the concerns that the measure would require copyright holders and service providers to determine matters that should be left to the Court, as well as the concerns that these orders may be open to abuse. However, the committee is of the view that the measures are appropriately circumscribed. In particular, the committee notes the evidence that the Court would maintain ultimate oversight over these injunctions, as well as the evidence that there must a sufficient nexus between the online location covered by the original injunction and the location to which the order is expanded.

2.45      The committee considers that, on balance, the benefits of the bill outweigh any potential negative impacts that could arise from the proposed amendments. The committee therefore recommends that the bill should be passed.

Review

2.46      In light of the concerns raised in submissions, the committee considers that there may be merit in conducting a review of the operation of the bill two years after its enactment. The committee considers that this should provide sufficient time to assess whether the concerns raised in submissions are borne out in practice, and to identify any areas where the operation of the injunctive regime in section 115A could be clarified, rationalised or improved.

Ministerial power to exclude online search engine providers

2.47      As outlined above, a number of submissions raised concerns about the proposal to allow the minister, by legislative instrument, to exempt online search engine providers from the operation of the injunctive scheme in section 115A. The Scrutiny of Bills Committee was also concerned about the breadth of the power and has sought a response from the minister about this matter. The committee notes that senators will have an opportunity to consider the minister's response once it is provided to the Scrutiny of Bills Committee.

Recommendation 1

2.48      The committee recommends that the government review the effectiveness of the measures contained in the bill two years after its enactment.

Recommendation 2

2.49      The committee recommends that the Senate pass the bill.

Senator Jonathon Duniam
Chair

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