85 Submission News Corporation Updating Australia's Copyright Laws

1. SUBMISSION TO DEPARTMENT OF COMMUNICATIONS REGARDING THE EXPOSURE DRAFT OF THE COPYRIGHT AMENDMENT (DISABILITY AND OTHER MEASURES) BILL 2016

17 FEBRUARY 2016

2. INTRODUCTION

News Corp Australia welcomes the opportunity to make a submission regarding the Exposure Draft of the Copyright Amendment (Disability and Other Measures) Bill 2016 (the Bill)1.

This submission focuses solely on Schedule 2 of the Bill, a proposed amendment to the Copyright Act 1968 (the Act) that would extend safe harbour to service providers.

We have the following significant process concerns regarding Schedule 2 of the Bill. We are of the view that the Bill suffers significantly due to these critical shortcomings:  The Government has not articulated the reasons for the inclusion of Schedule 2 of the Bill – the evidence of the problem and/or the policy rationale; and  The Government has not engaged in stakeholder consultation regarding the inclusion and details of Schedule 2 of the Bill.

As a result, the Bill includes – and/or is deficient by the absence of – the following:  The definition of ‘service provider’ is overly broad and overreaches the intended parameters to whom safe harbour schemes apply globally. The definitions are so loose that safe harbour would be granted to piracy websites;  The sections of the Act that Schedule 2 proposes to amend are not stand-alone provisions in the Act, they are interrelated with other sections and parts of the Act that comprise the safe harbour scheme, the online intermediary liability provisions and subordinate legislation such as Regulations under the Act. These associated provisions are essential to making the safe harbour scheme and online intermediary liability elements of the Act function properly and as intended;  Such an inconsistent approach substantially increases the complexity and inconsistency of the application of provisions of the Act; and  Further to the point above, whatever the Government’s rationale for proposed Schedule 2 and extending safe harbour from carriage service provider (CSP) to service provider, we note other provisions in the Act that apply to CSPs and are not proposed to extend to service providers – for example the June 2015 inclusion of section 115A – injunctions against carriage service providers providing access to online locations outside Australia. We question why it is not proposed, that these too – and particularly section 115A – be extended to service providers.

Lastly, we also note that the US Copyright Office is currently reviewing the US safe harbour scheme and the European Commission is considering issues of intermediary liability in light of new technologies, the digital economy, and the market effects of such. It would seem prudent to understand and learn from the issues raised in those international jurisdictions to help to inform Australian domestic policy.

1 https://www.communications.gov.au/have-your-say/updating-australias-copyright-laws

1 RECOMMENDATION

If the Government intends to proceed to introduce the Bill into Parliament2 we recommend that Schedule 2 be removed from the Bill and not be introduced to Parliament at this stage.

Rather, the Government should undertake a meaningful consultation regarding the issue, including distributing a discussion paper containing reasons for the amendment, and inviting comments from interested stakeholders. Such an approach would also give the Government the opportunity to include the complementary and interrelated elements of the safe harbour eco-system for consultation; and ensuring sound public policy outcomes and the avoidance of unintended consequences.

That way, the issue of Schedule 2 can be explored fully, while allowing all other provisions of the Bill – which News Corp Australia understands have been the subject of appropriate and adequate stakeholder consultation – to proceed to be introduced to Parliament in the Government’s intended timeframe.

3. THE ISSUES: SIGNIFICANT PROCESS CONCERNS

4. The Government has not articulated the reasons for the inclusion of Schedule 2 of the Bill

Due to the lack of explanation in the Bill and associated documentation, it is not at all transparent what the problem is that the Government ascertains that Schedule 2 it attempting to solve, nor can an assessment be made that if the problem is known, that the response – including the definition of service provider in this case – is proportionate to the problem and an appropriate response.

We are of the view that the lack of explanation and articulation the evidence of the problem and/or the policy rationale does not fit with sound policy-making practices, and can lead to unintended consequences – including increasing the risk to creativity generated by those that rely on property rights. Again, however, it is unclear if such has been considered, or not, as there is no rationale provided as to why Schedule 5 has been included in the Bill.

The most recent inclusion of safe harbour as an issue for exploration was in the Attorney-General’s Department’s Online Copyright Infringement Discussion Paper of mid-2014. The context in which the concept of an extension to safe harbour was raised in that paper was as one of three proposals, including injunctive relief and authorisation liability.

The Government pursued a legislative amendment to a well-understood, evidenced and articulated problem – for injunctive relief (now section115A of the Act). However, the highly contentious issues of extension of safe harbour and authorisation liability remain as they were at the close of submissions to that Discussion Paper – without a Government response – in spite of Schedule 2 being included in the Bill.

It is also of significant concern that while the Bill is being circulated for comment, it is also listed to be introduced in the Autumn sittings of Parliament – indicating that it is the intention of the Government to press ahead on the Bill, including Schedule 2, without the Government articulating why it is doing so.

We recommend that to overcome this issue, and to ensure any amendments are given due consideration, that Schedule 2 of the Bill be removed and not be introduced to Parliament at this stage.

2 29 January 2016, Legislation proposed for introduction in the 2016 Autumn Sittings 2016, Department of Prime Minister and Cabinet, https://www.dpmc.gov.au/sites/default/files/files/2016_autumn_public_list-Introduction.pdf

2 Rather there should be an appropriate consultation to ensure sound public policy outcomes and the avoidance of unintended consequences.

5. Lack of stakeholder consultation regarding Schedule 2 of the Bill

Exacerbating the lack of transparency about reasons for the hurried, and lack of articulation for the inclusion of Schedule 2, is that lack of consultation, including the lack of any questions regarding Schedule 2 in the Guiding Questions3 companion document to the Bill, which purports to provide ‘background and context about the proposed amendments’.

It could be the case that a lack of stated reasons for Schedule 2 might give rise to the issue of a lack of stakeholder consultation. However, two wrongs do not make a right. Regardless, we find this lack of consultation curious, particularly as it is acknowledged that what Schedule 2 is intending to do is highly contentious amongst stakeholders. In contrast we note the various consultations that continue to occur regarding other contentious issues the Government is considering, including but not limited to media policy reform.

While we make no comment on the provisions in the Bill other than Schedule 2, we are aware that there has been a level of stakeholder consultation regarding the other provisions, but none regarding Schedule 2.

We recommend that to overcome these issues, and to ensure any amendments are given due consideration, that Schedule 2 of the Bill be removed and not be introduced to Parliament at this stage.

Rather there should be an appropriate consultation to ensure sound public policy outcomes and the avoidance of unintended consequences.

6. THE ISSUES: THE BILL INCLUDES – AND/OR IS DEFICIENT BY THE ABSENCE OF:

7. The definition of ‘service provider’ is overly broad and overreaches the intended parameters to whom safe harbour schemes apply globally

The definition of ‘service provider’ as currently drafted is overly broad and overreaches the intended parameters of safe harbour schemes globally – being the provision of limited liability for passive services, not all services, and particularly not for commercial services that can then exploit the safe harbour to nurture and build commercial services at the expense of content creators.

This is an important element of safe harbour schemes, that it apply on a limited basis to passive service providers – those that only innocently and not-for-profit facilitate the communication of content.

Arguably all website operators are service providers including the operators of copyright piracy and torrent websites. AS such the amendments could make copyright piracy lawful in Australia.

It would seem that the definition would be helped by an explanation of the ‘problem’ that Schedule 2 was seeking to ‘fix’.

Notwithstanding the lack of transparency of the problem, we understand that the Music Rights Australia submission includes proposed drafting of the definition to ensure that it reflects the underlying policy of safe harbour. We urge the Government to consider this within a separate consultation process for Schedule 2 as recommended previously in this submission.

3 https://www.communications.gov.au/have-your-say/updating-australias-copyright-laws

3 8. The sections of the Act that Schedule 2 proposes to amend are not stand-alone provisions in the Act

As we detailed in our submission to the AGD Online Copyright Infringement Discussion Paper, the safe harbour and online intermediary liability are inextricably linked, and also work in concert with subordinate legislation such as Regulation 20B of the Act.

These associated provisions are essential to making the safe harbour scheme and online intermediary liability elements of the Act function properly and as intended – it is an eco-system.

To labour the point, the safe harbour scheme provides an incentive for limiting liability for carriage service providers (in the form of limiting the remedies available against carriage service providers) if they are found liable under the authorisation provisions of the Act.

As described in the AGD Safe Harbour Consultation Paper4:

In 2006, the Copyright Act 1968 was amended to provide a scheme offering legal incentives for Carriage Service Providers (CSPs) to cooperate with copyright owners in deterring copyright infringement on their networks. The scheme is commonly referred to as the ‘safe harbour scheme’ and limits the remedies available against CSPs for copyright infringements that take place through their systems and networks that they do not control, initiate or direct.5

It is therefore the case that the safe harbour scheme is inextricably linked to the authorisation provisions of the Act, and therefore Schedule 2 is ill conceived and will have significant unintended consequences.

Illustrating this with the common image of a set of scales – on one side of the scales would be the benefit (or incentive), and on the other side of the scales would be the obligation. The Act intends for the sides of the scales to be balanced. Schedule 2 does not achieve this balancing act outcome as intended.

Therefore, Schedule 2 merely gifts the safe harbour to an unwarranted and overly-expanded set of parties (as per the definition of service provider in the Bill) without requiring the countervailing obligation of taking reasonable steps to actually claim the safe harbour.

We note that the October 2011 Safe Harbour Consultation Paper stated:

The expanding scope of the safe harbour scheme is not intended to alter the existing balance of the scheme.6

9. Such an inconsistent approach substantially increases the complexity and inconsistency of the application of provisions of the Act

Furthermore, there provisions other than those included in Schedule 2 of the Bill that apply to carriage service providers – that without understanding the reasoning of Schedule 2 could and perhaps should also extend service providers.

As outlined above, there are a number of provisions that are instrumental for the intended functioning of the safe harbour scheme that must also be amended to extend to service providers, such as sections 101 and 36.

4 https://www.ag.gov.au/Consultations/Documents/Revising+the+Scope+of+the+Copyright+Safe+Harbour+Scheme.pdf 5 Ibid, p3 6 Ibid, p5

4 What this is illustrating moreover is that the cherry-picking approach taken by the Government to change the application of a provision – particularly without explaining why it should be so – from one set of entities to another, leads inconsistency and complexity in the Act.

We also note that some of the proponents for the extension of safe harbour are vocal in claiming that the Act is complex and inconsistent, and needs a good rewrite – including a broad safe harbour provision. However, it is interesting that those same entities are also vocal that authorisation provisions should not be extended to service providers, while safe harbour provisions are – thereby promoting greater inconsistency within the Act – for which they want fair use to ‘fix’.

10. Additional provisions should be reviewed to extend to service provider

Further to the point above, whatever the Government’s rationale for proposed Schedule 2 and extending safe harbour from carriage service provider to service provider, we note other provisions in the Act that apply to CSPs and are not proposed to extend to service providers.

We draw particular attention to section 115A that was passed by the Parliament in 2015, providing for no fault injunctions against carriage service providers providing access to online locations outside Australia. We question why it is not proposed, that these too – and particularly section 115A – be extended to service providers.

We recommend that section 115A be extended to service providers.

11. NEWS CORP AUSTRALIA’S POSITION REGARDING EXTENDING SAFE HARBOUR TO SERVICE PROVIDERS

Our principled position on such a proposition as Schedule 2, extending safe harbour to service providers, remains unchanged since our submission to the Attorney-General’s Department’s Online Copyright Infringement Discussion Paper of 2014.

For convenience the News Corp Australia submission to that Discussion Paper is attached at Appendix A to this submission.

To restate that position, safe harbour can be extended to service providers – only if there is also an obligation for service providers to act reasonably to deter copyright infringement on a service provider’s network, and an explicit liability if this is not met. Only then will the ‘balance’ between authorisation liability (the legal obligation or risk) and safe harbour (the benefit of taking reasonable steps) be struck.

This requires amendments to the Act in addition to those currently drafted in the Bill. Specifically, amendment to sections 101 and 36 regarding authorisation – to ensure they apply to service providers. There is also an issue which arises regarding ‘how’ the entity claiming safe harbour would meet the requirement, and these are contained in, and would require amendments to, Regulation 20B of the Act.

This will also enable the Government to meet its only stated intention of the amendment, being to provide safe harbour to service providers ‘if they comply with conditions designed to reduce online copyright infringement’7.

7 15 January 2016, Have your say on copyright amendments, Media Release from the Minister for Communications, Senator the Hon Mitch Fifield, http://www.minister.communications.gov.au/mitch_fifield/news/have_your_say_on_copyright_amendments#.VsPD_kv6 BZg

5 Also, if the Government is to meet the stated goals of the Bill – that the ‘draft amendments are designed to modernise and streamline the Copyright Act 1968’8 and to ‘update and improve the operations of existing legislation’9 – it must take time to review Division 2AA of Part V of the Act and subordinate legislation such as Regulation 20B. Additionally, the Government must also consult and review other interdependent elements of the safe harbour scheme within the Act, including authorisation provisions at sections 101 and 36 of the Act, and other provisions such as section 115A that is currently limited in application to carriage service providers.

Only if full and adequate consultation occurs and required amendments made – including amendment to the definition of service provider, and to ensure the scheme functions as intended, do we support the safe harbour scheme being expanded to service providers.

8 Ibid. 9 Op. cit.

6 12. APPENDIX A:

SUBMISSION TO ATTORNEY-GENERAL’S DEPARTMENT, ONLINE COPYRIGHT INFRINGEMENT DISCUSSION PAPER

5 SEPTEMBER 2014

13. INTRODUCTION

News Corp Australia welcomes the opportunity to make a submission to the Attorney General’s Department Online Copyright Infringement Discussion Paper (the Paper)10.

We support the general thrust of the Government’s approach to legislative amendment to help address online copyright infringement in Australia, to rectify the deficiencies in the Copyright Act 1968 (the Act) and provide rights holders with the ability to efficiently and effectively take steps to protect their copyright.

However, we do recommend changes to the proposals to ensure that the Government’s goal of a legal framework – that provides certainty regarding legal liability; a streamlined process for rights holders to seek a court order to block access to websites providing infringing material; and incentives for the parties to work together to address online copyright infringement – will be fulfilled.

Reform of this area of the copyright regime is long overdue. Failure to address this pressing issue will put at risk the significant contribution that copyright industries make to Australia‘s cultural and economic landscape. As the Paper records, these are the jobs of over 900,000 people and an economic value of more than $90 billion, including $7 billion in exports.11

As we have said previously, there is no silver bullet to online copyright infringement. However it is important that the three elements of legitimate/licensed products and services, consumer awareness and education, and a well-functioning legal framework work in concert to support the copyright associated industries’ ongoing contribution to Australia’s economy and culture.

10 July 2014, Australian Government Online Copyright Infringement Discussion Paper (The Paper), http://www.ag.gov.au/Consultations/Documents/OnlineCopyrightInfringement/FINAL%20-%20Online%20copyright %20infringement%20discussion%20paper%20-%20PDF.PDF 11 PwC (2012), The Economic Contribution of Australia’s Copyright Industries 1996-97 to 2010-11, Prepared for the Copyright Council, http://www.copyright.org.au/pdf/PwC-Report-2012.pdf

7 14. STRUCTURE OF THE SUBMISSION

Section 1 – Recommendations

Section 2 – Overview of the issue

Section 3 – The goal and how it will be achieved

Section 4 – The toolkit required to address online copyright infringement o Legitimate/licensed products and services o Availability of unlawful content o Consumer awareness and education

Section 5 – Analysis of Proposals contained in the Paper o Including recommendations; and o Responses to corresponding questions posed in the Paper

Section 6 – Responses to questions posed in the Paper

Appendices A. Digital Content Guide press release B. Thank You campaign press release C. Music Matters press release D. Hadopi – Danaher et al study E. Overview of European Court of Justice ruling, kino.com case F. Overview of cases and jurisprudence of early UK site blocking cases

8 15. RECOMMENDATIONS

News Corp Australia supports the general thrust of the Government’s approach to legislative amendment to help address online copyright infringement in Australia.

We make the following specific recommendations regarding the Proposals in the Paper.

PROPOSAL 1 – RECOMMENDATION

While we support the overarching intent of Proposal 1, we recommend that Proposal 1 does not proceed in its current form.

Rather, Proposal 1 must deliver a legislative amendment that ensures an effective legal framework and legal incentives for service providers and rights holders to work together, and ensure the Act works as originally intended.

This will require amendment to the authorisation provisions of the Act such that:

1. It is explicit that a service provider that fails to take reasonable steps, when placed on notice of infringing behaviour on its network, is liable under the authorisation provisions of the Act; and 2. Expand the authorisation liability provisions to service providers and intermediaries.

This will also require a definition of ‘service provider’ in the Act. This definition should be appropriate to capture entities acting in their capacity to function as a service provider.

This definition should be appropriate to capture entities such as universities, schools and libraries, only if they are acting as a service provider.

This will meet the goals of the Government, assist in meeting Australia’s international trade obligations, ensure the Act works as intended including rectifying the unintended deficiencies as identified in the iiNet case, and align Australia with international jurisdictions.

The expansion to incorporate service providers and intermediaries is essential if the safe harbour provisions (at Proposal 3) are to be expanded.

Rather, Proposal 2 must deliver a legislative amendment that ensures a streamlined process that allows the court to determine an order for injunction. Expanding injunctive relief will enable rights holder/s to apply to the court to have service provider/s block access to websites operated outside Australia that provide access to material that infringes copyright.

9 It is unnecessary, and very likely counterproductive and undermining, to stipulate the matters for the court to take account of in determining the order. Rather, it is appropriate that the matters outlined in Proposal 2 are determined by the court in considering the evidence of the case before it.

This will require amendment to the Act such that:

 The court is granted the power to determine such a request for injunction;  The matters referred to in Proposal 2 not be included in the legislation – these are more appropriately determined by the court in considering the evidence brought before it; and  Extend injunctive relief to service providers and intermediaries.

This will also require a definition of ‘service provider’ in the Act.

This will meet the goals of the Government, assist in meeting Australia’s international trade obligations, ensure the Act works as intended, and align Australia with international jurisdictions.

Giving the court the power to determine a request for equitable relief of this kind, without directing the court to take into account specific matters, is consistent with powers already invested in the court.

We recommend that Proposal 3 does not proceed in its current form, particularly in light of Proposal 1 (as per the paper) not being extended to include service providers.

Rather, Proposal 3 may proceed – in that safe harbour can be extended to service providers – only if the approach outlined at Proposal 1 is implemented. That is, that there is an obligation to act reasonably to deter copyright infringement on a service provider’s network, and explicit liability if this is not met. Only then will the ‘balance’ between authorisation liability and safe harbour by struck.

Only if the above occurs can the safe harbour scheme be expanded to service providers.

Only then will the Proposal 3 meet the goals of the Government, assist in meeting Australia’s international trade obligations, ensure the Act works as intended, and align Australia with international jurisdictions.

10 16. 1. OVERVIEW OF ONLINE COPYRIGHT INFRINGEMENT

17. THE ISSUE

As is well understood, the Act does not currently provide rights holders with the ability to easily take steps to protect their copyright against current and evolving forms of digital copyright infringement.

This manifests in increased business investment risk, which detrimentally impacts investment in new and innovative services, and therefore reduces benefits to consumers. It also undermines revenue streams to Australian artists. Reform of this area of the copyright regime is long overdue.

Failure to address this pressing issue will put at risk the significant contribution that copyright industries make to Australia‘s cultural and economic landscape. As the Paper records, these are the jobs of over 900,000 people and an economic value of more than $90 billion, including $7 billion in exports.12

18. CURRENT SITUATION IN AUSTRALIA

There are currently two major types of online copyright infringement:

 Peer-to-peer (P2P) – the Act is unable to deal with the problems of P2P online infringement as it presents today. This was acknowledged by the High Court in the iiNet case.13

Rectifying the current deficiencies in the Act, via the authorisation provisions, and ensuing industry schemes or commercial agreements and appropriate regulatory measures would be an appropriate approach.

 Websites that illegally make available content by streaming or download – there is currently no mechanism for rights holders to apply for a court order for carriage service providers (CSPs), including internet service providers (ISPs), to limit consumer access to overseas sites that make available material that infringes copyright. Therefore rights holders are not able to protect their rights, or take steps to protect consumers, from these sites.

Amending the Act to give the power for the court to hear an application from rights holder/s for an order for service providers, including ISPS, to block access to such websites in overseas jurisdictions, would also be an appropriate approach.

19. LEGISLATIVE AMENDMENT IS REQUIRED IN AUSTRALIA

We are clear that legislative amendments are required as the Act currently does not provide rights holders with the ability to efficiently and effectively take steps to protect their copyright against these types of infringements, including in these ways.

Similar measures have been implemented in international jurisdictions including the United Kingdom, Europe and the United States.

12 PwC, The Economic Contribution of Austrlaia’s Copyright Industries 1996-97 to 2010-11; Prepared for the Copyright Council (2012), http://www.copyright.org.au/pdf/PwC-Report-2012.pdf 13 Roadshow Films Pty Ltd v iiNet Ltd [2012] HCA 16, http://www.austlii.edu.au/au/cases/cth/HCA/2012/16.html, at [79]

11 20. 3. THE GOAL AND HOW IT WILL BE ACHIEVED

Before undertaking detailed analysis and assessment of the proposals included in the Paper, it is useful to review the Government’s goal as stated in the Paper, which the proposals must serve. That goal is:

‘to provide a legal framework within which rights holders, ISPs and consumer representatives can develop flexible, fair and workable approaches to reducing online copyright infringement.’14

News Corp Australia supports the goal outlined by the Government.

The Paper also acknowledges that Australia has a range of international obligations to provide protections for copyrighted material, including bilateral trade agreements, for example with the United States, and also multilateral treaties made under the World Intellectual Property Organisation and the World Trade Organisation.15

The Paper goes on to state that the framework aims to:

‘provide certainty as to legal liability, streamline the process by which rights holders can seek relief from the courts to block access to websites providing infringing material, and provide an incentive for market participants to work together to address online copyright infringement.’16

The Paper proposes three elements to achieve the goal, those being:

 Proposal 1: extended authorisation liability;  Proposal 2: extended injunctive relief; and  Proposal 3: extended safe harbour scheme.

News Corp Australia supports – and stresses – that the only way in which to achieve the goal and the aims of the framework is by amending the Copyright Act 1968 (the Act).

Detailed analysis of each Proposal is at Section 5 of this submission.

14 The Paper, p1 15 Ibid, p1 16 Ibid, p1

12 21. 4. THE TOOLKIT REQUIRED TO ADDRESS ONLINE COPYRIGHT INFRINGEMENT

The Introduction to the Paper17 also outlines three factors that contribute to online copyright infringement in Australia, including the availability and affordability of lawful content, the ease with which consumers can access unlawful material, and consumer awareness of legitimate services.

The Paper is accurate in outlining that any response to online copyright infringement cannot just come from Government. Therefore, we provide the following information regarding:

 Legitimate/licensed products and services;  Availability of unlawful content; and  Consumer awareness and education.

As we have said previously, there is no silver bullet to online copyright infringement. However it is important that the three elements of legitimate/licensed products and services, consumer awareness and education, and a well-functioning legal framework work in concert to support the copyright associated industries’ ongoing contribution to Australia’s economy and culture.

22. LEGITIMATE/LICENSED PRODUCTS AND SERVICES

There is an ever expanding and wide array of authorised channels and delivery platforms available for Australians to enjoy content, including movies, TV, books and music. The recently launched Digital Content Guide is a useful tool to provide information regarding the depth and breadth of legitimate content and services.

Notwithstanding the range of services available, we offer the following examples, both of which utilise digital delivery mechanisms to continue to innovate and deliver the entertainment that people want, where and when they want it.

 Movies and television – Foxtel

Foxtel offers a range of innovative products and services that deliver entertainment to consumers, across various devices and at a range of price points, including:

o Foxtel Play18

Foxtel Play enables consumers to choose where and when you want to be entertained. It streams over the internet and offers a range of live TV, catch-up TV and movies, and TV and movies on demand.

It is available on a range of different devices including Sony PlayStation, Xbox 360, PCs and Macs, Smart TVs and Blu-Ray players.

Foxtel Play subscribers also receive access to the Foxtel Go app that allows access on smart phones and tablets.

17 Ibid, p1 18 http://www.foxtel.com.au/foxtelplay/howitworks/default.htm

13 o Foxtel Go19

If a consumer has a Foxtel residential account or a Foxtel Play Account, they also have access to Foxtel Go. Up to three devices can be registered on the account, and customers can have two devices running Foxtel Go simultaneously. There is also the flexibility to change device choices once a month.

Foxtel Go is available on a range of devices including Apple and Samsung portable devices, PCs and Macs, and Android.

o Foxtel Express from the US20

Express from the US offers the most popular US dramas from major producers, including HBO, to customers within hours of their broadcast in the US. Express from the US entertainment available for September 2014 includes the final seasons of Boardwalk Empire and Sons of Anarchy.

o Presto21

Presto is a stand-alone movie service offered over the internet that offers Foxtel movie channels and access to a library of movies available on-demand. Foxtel recently announced a new 'all-you-can-eat' flat rate movie subscription price of $9.99 per month on a no lock-in contract.22 It is available on televisions via Chromecast, tablets, and PCs and Macs. The Presto app is available on the Apple and Samsung app stores and on Google Play.

Foxtel recently announced that more than 20 percent of Presto views have been via Chromecast since Presto’s arrival on the device in July this year. 23

 Music

There are more than 30 licensed online music services in Australia. These offer a vast range of music, accessible via licensed download and subscription services, ubiquitously across a range of devices at a range of price points including $0.

In February 2014 the Australian Recording Industry Association (ARIA) released its annual wholesale figures for the local recorded music industry, showing the rapid growth and development of digital music services in 2013, with digital music product overtaking physical music product for the first time.24

ARIA Chairman Denis Handlin AM, said:

‘As our industry continues to embrace the digital landscape, it is increasingly important that we have the business and rights protection environment in place to support our local artists

19 https://www.foxtel.com.au/discover/foxtelgo/default.htm 20 http://www.foxtel.com.au/whats-on/foxtel-insider/express-from-the-us-september-2014-236090.htm 21 https://www.presto.com.au 22 http://www.foxtel.com.au/about-foxtel/communications/hey-presto-for-9-99-per-month-218129.htm 23http://www.foxtel.com.au/cms/groups/webcontent/@fox/@corporate/@dotcom/documents/webcontent/pr_chromecast -presto_140821.pdf 24 28 February 2014, ARIA Wholesale Figures 2013, http://www.aria.com.au/pages/documents/MediaRelease- 2013ARIAWholesaleFigures.pdf

14 and record labels, which make such a valuable contribution to our country’s cultural identity and creative economy.’25

23. AVAILABILITY OF UNLAWFUL CONTENT

Notwithstanding the plethora of legitimate licensed services available across all entertainment genres, unlawful content remains abundantly available.

This is best illustrated by the music industry. As outlined above, the music industry offers a range of products and services, with music available at the same time around the world, on a range of devices and across a range of price points – including $0 – yet still there is a significant issue with unlawful music availability and ensuing online copyright infringement of music globally.

In fact, the IFPI Digital Music Report 201426 reports that 26 percent of internet users worldwide regularly access unlicensed services. This figure applies on to desktop-based services and does not include smartphone and tablet-based music infringement.

The music industry experience annihilates what some may claim, that if only the content was ‘available and affordable,’ or ‘available at a comparable price,’ or ‘available at the same time as overseas’, or some other combination of ‘availability and price’ then people would not infringe copyright. Price and availability are important tools, but these alone cannot address the issue.

As outlined in the Introduction to this submission, there are currently two main sources of infringing content, that being via P2P network, and also websites that make available content for streaming and/or download that infringes copyright.

Regarding the latter category, many of these sites are funded by advertising revenue, with the content element of the site merely the material that operators use to draw people to the website, and in turn serve advertising. Again product responses, including price and availability, cannot alone address the supply of unlawful content. Additional legislative measures are required to assist in dealing with the issue of the supply, or availability, of unlawful content.

In Good Money Gone Bad – digital thieves and the hijacking of the online ad business,27 a report into the profitability of ad-supported content infringement, it is reported that the websites researched make about US$227 million in ad revenue annually; and the 30 largest sites researched that are supported exclusively by ads average US$4.4 million each annually – with the largest BitTorrent portal sites making over US$6 million.

This data illustrates the quantum of the issue of the monetary lure of the supply of unlawful content, and that even when licensed content is available for $0, it remains the case that the availability of unlawful content remains and users access that unlicensed content. This illustrates the need to complement legitimate content initiatives in the marketplace, and consumer awareness and education with legislative amendment to address the supply of unlawful content via site blocking orders determined by the court.

25 Ibid 26 March 2014, http://www.ifpi.org/downloads/Digital-Music-Report-2014.pdf, p40 27 February 2014, research conducted by MediaLink for the Digital Citizens Alliance http://www.digitalcitizensalliance.org/cac/alliance/content.aspx?page=FollowTheProfit

15 24. CONSUMER AWARENESS AND EDUCATION

For some years rights holders and their representative groups have undertaken programs and research to raise awareness of the importance and value of content. Some of these initiatives are outlined below.

25. Digital Content Guide

Recently a group of rights holders and their associations worked together to develop and launch the Digital Content Guide at www.digitalcontentguide.com.au. It is a free service designed to help consumers find legitimate sources on content. It can also be used as a tool for cross-referencing and checking that digital content sources, for example responses to online searches, are legitimate/licensed and not infringing. This will help consumers to increase their awareness and understanding of the range of legitimate digital content services, and also more confidently ascertain the bona fides of a website or source before accessing the content.

The press release associated with the launch of the Digital Content Guide is attached at Appendix A.

26. Thank You

In August 2012 the Australian screen community launched a campaign to say thank you to consumers for choosing to watch film and television via legitimate channels. Produced and distributed by the IP Awareness Foundation (IPAF)28, the campaign was supported by actors, production crew, distributors, exhibitors and a wide range of local businesses.

Australian actor, Susie Porter, who featured in the campaign, said:

‘I chose to personally become involved in this campaign because our industry relies on the good will of our audience for any show to be a success. It’s important to once in a while say ‘thank you’ to Australians who chose to support our work by going to the cinema, buying or renting DVDs, watching TV or viewing our shows on a genuine online website, because without them we wouldn’t be able to invest in the production of all of our great shows. Good on you for watching!’29

Nic Holland, director of the Thank You commercial, said:

‘Like all productions, creating this consumer message was a labour of love. It takes an army of talented individuals, each with their own special skill, to come together as a team and create quality screen content, and the production of this ‘Thank You’ video was no different. However, the common motivation for everyone’s involvement was a commitment to thank Australians for watching our shows the way we intended them to be viewed. While we are blessed to be working in a field we love, it has its fair share of challenges, and we can only continue to make quality films and TV shows with the support of the paying public.’30

When launched, Thank You ran in cinemas nationally, on Foxtel, on select new release DVDs, on Quickflix home delivery DVD envelopes, and via a wide range of film and television industry websites. It is currently running in cinemas, on Foxtel and selected channels including Sky News, and on free-to-air television networks.

28 http://www.ipawareness.com.au/ 29 20 August 2012, Thank You campaign press release, http://www.ipawareness.com.au/media-release/screen- community-launches-thank-you-campaign-at-movie-convention 30 Ibid

16 The press release associated with the launch of the Thank You campaign is attached at Appendix B.

 Music Matters

The Music Matters campaign originated in the UK in 2010, and launched in Australia and New Zealand in 2011. The site is at http://anz.whymusicmatters.org and is also on YouTube, Facebook and Twitter.

Music Matters is a collective of people across the music community, including artists, songwriters, labels, managers, publishers and music stores, formed to remind listeners of the value and significance of music. One of the central tenants of the ongoing campaign is described as:

‘We all know that music is important. But with music more available than ever before, it’s worth reminding ourselves of that fact. It’s easy to forget about the extraordinary lengths that performers, songwriters and musicians can go to create music and the powerful effect that music has on each and every one of us.

We believe it is important to support the musicians and all those involved in making incredible music, and that is why we’ve set up the Music Matters campaign in Australia and New Zealand.’31

There is also a Music Matters trust mark that acts as a guide to identifying legitimate sites in Australia, New Zealand and other territories worldwide. The trust mark is an important element of Music Matters, because:

‘In an evolving digital landscape we think that music fans like to know that the site they are using is legitimate, supporting the artists, musicians, songwriters and everyone involved in creating the music.’32

The press release associated with the launch of Music Matters in Australia and New Zealand is attached at Appendix C.

27. IP Awareness Foundation

The IP Awareness Foundation33 is an initiative of the Australian film and television community aimed at promoting the benefits of screen copyright and the legal accessing of film and television content.

The IP Awareness Foundation's core activities include:

o Education – producing and delivering educational programs and resources for Australian secondary schools and facilitating classroom discussions around the issues of creativity and copyright – which has been occurring since 2007;

o Research – conducting annual national research regarding the attitudes and behaviours of Australians in relation to accessing digital content. The research is conducted by independent market research organisation Sycamore Research & Marketing, in conjunction with Newspoll; and

31 http://anz.whymusicmatters.org/why-music-matters 32 Ibid 33 http://www.ipawareness.com.au/

17 o Consumer awareness and campaigns – creating consumer awareness campaigns to inform Australians about the impact of copyright infringement and establish the connection between online behavior and the effect on the local film and TV industry – such as the Thank You campaign outlined above.

The information above is only a snapshot of some of the legitimate products and services, and consumer awareness and campaigns undertaken including market and publicity. However it is evident that rights holders and their representative groups continue to invest in their evolving services as they strive to meet the needs of consumers in the digital era, and in turn continue to innovate and create even more content for consumers.

However, it is also evident in this Section that while rights holders continue to produce innovative content and evolve the ways in which this is delivered, and educate people about the importance of sourcing that content from legitimate sources, there are some that exploit the hard work and investment of others for their own gain – and do not return a cent to the creators, be they big or small. Continuing to supply legitimate content and undertaking consumer awareness is not deterring the operators of the websites overviewed on this Section from supplying content that infringes copyright. Pointing to price and availability of legitimate and licensed content and services, as some tend to do, does not impact the operators of such sites. The experience of the music industry story tells us so – again, price and availability are moot points, and still 26 percent of internet users worldwide regularly access unlicensed services.

Therefore it is with much resolve that we support the goal of the Government, to provide a legal framework and legal incentives for market participants to cooperate to deter online copyright infringement. The Government’s goal and framework are focused correctly on dealing with both the supply of unauthorised content – extending injunctive relief; and the demand for unauthorised content – extending authorisation liability.

In the proceeding Section we analyse the details of each of the Proposals contained in the Paper.

18 28. 5. ANALYSIS OF PROPOSALS CONTAINED IN THE PAPER

PROPOSAL 1 – EXTENDED AUTHORISATION LIABILITY

29. THE PROPOSAL

Proposal 1 entails amending the Copyright Act 1968 to ‘clarify the authorisation liability under sections 36 and 101 to ISPs.’34 The Proposal suggests that this would be achieved by the following legislative amendments to those respective sections:

Section 36 – Infringement by doing acts comprised in the copyright (1) Subject to this Act, the copyright in a literary, dramatic, musical or artistic work is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorises the doing in Australia of, any act comprised in the copyright. (1A) In determining, for the purposes of subsection (1), whether or not a person has authorised the doing in Australia of any act comprised in the copyright in a work, without the licence of the owner of the copyright, the matters that must be taken into account include the following: (a) the extent (if any) of the person's power to prevent the doing of the act concerned; (a) the nature of any relationship existing between the person and the person who did the act concerned; (b) whether the person took any reasonable steps to prevent or avoid the doing of the act, including; whether the person complied with any relevant industry codes practice. (i) the extent (if any) of the person’s power to prevent the doing of the act concerned; (ii) whether the person or entity was complying with any relevant industry schemes or commercial arrangements entered into by relevant parties; (iii) whether the person or entity complied with any prescribed measures in the Copyright Act Regulations 1969; and (iv) any other relevant factors. (2) The next three succeeding sections do not affect the generality of this section. And section 101 – Infringement by doing acts comprised in copyright (1) Subject to this Act, a copyright subsisting by virtue of this Part is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorises the doing in Australia of, any act comprised in the copyright. (1A) In determining, for the purposes of subsection (1), whether or not a person has authorised the doing in Australia of any act comprised in a copyright subsisting by virtue of this Part without the licence of the owner of the copyright, the matters that must be taken into account include the following: (a) the extent (if any) of the person's power to prevent the doing of the act concerned; (a) the nature of any relationship existing between the person and the person who did the act concerned; (b) whether the person took any other reasonable steps to prevent or avoid the doing of the act, including; whether the person complied with any relevant industry codes of practice. (i) the extent (if any) of the person’s power to prevent the doing of the act concerned; (ii) whether the person or entity was complying with any relevant industry schemes or commercial arrangements entered into by relevant parties;

34 The Paper, p4

19 (iii) whether the person or entity complied with any prescribed measures in the Copyright Act Regulations 1969; and (iv) any other relevant factors. (2) The next two succeeding sections do not affect the generality of the last preceding subsection. (3) Subsection (1) applies in relation to an act done in relation to a sound recording whether the act is done by directly or indirectly making use of a record embodying the recording. (4) Subsection (1) applies in relation to an act done in relation to a television broadcast or a sound broadcast whether the act is done by the reception of the broadcast or by making use of any article or thing in which the visual images and sounds comprised in the broadcast have been embodied.

While News Corp Australia supports an amendment to the authorisation liability provisions of the Act to enable the Act to operate as it was intended, and to enable industry schemes and commercial arrangements to satisfy the ‘reasonable steps’ requirement, we do not support the approach outlined in Proposal 1 for the following reasons.

Proposal 1 does not meet the goal

It is important to link this back to the Government’s stated goal of providing a legal framework to reduce online copyright infringement – by ‘providing certainty as to legal liability’ and ‘provide an incentive for market participants to work together to address online copyright infringement.’

Unfortunately the proposed amendments contained in Proposal 1 do not meet the Government’s goal. Nor do they overcome address the issues raised by the High Court in Roadshow Films Pty Ltd v iiNet Limited, particularly:

‘This final conclusion shows that the concept and the principles of the statutory tort of authorisation of copyright infringement are not readily suited to enforcing the rights of copyright owners in respect of widespread infringements occasioned by peer-to-peer file sharing, as occurs with the BitTorrent system. The difficulties of enforcement which such infringements pose for copyright owners have been addressed elsewhere, in constitutional settings different from our own, by specially targeted legislative schemes, some of which incorporate co-operative industry protocols, some of which require judicial involvement in the termination of internet accounts, and some of which provide for the sharing of enforcement costs between ISPs and copyright owners.’35

Nor do the proposed amendments overcome:

‘The history of the Act since 1968 shows that the Parliament is more responsive to pressures for change to accommodate new circumstances than in the past. Those pressures are best resolved by legislative processes rather than by extreme exercise in statutory interpretation by judicial decisions.’36

It could be said that what the Proposal actually does is reshuffle the deck chairs that are the factors of consideration for establishing authorisation liability. It remains the case however that the Proposal does nothing to address the deficiencies of the Act in this area and meet the goal.

News Corp Australia therefore does not support the proposal in the current form.

Proposal 1 risks undermining the established factors of authorisation and increased litigation

35 [2012] HCA 16 at [79] 36 [2012] HCA 16 at [120]

20  Risk of undermining established factors of authorisation

Proposal 1 appears to risk undermining the inclusive, but not exclusive, list of factors at sections 36(1A) and 101(1A) that must be taken into consideration in determining if a person has authorised the doing of an act comprised in copyrights.

These factors were established by the Copyright Amendment (Digital Agenda) Act 2000, which, as outlined in the Explanatory Memorandum to that Act:

‘The inclusion of these factors in the Act essentially codifies the principles in relation to authorisation that currently exist at common law (see in particular University of New South Wales v Moorhouse (1975) 133 CLR 1). They are intended to provide a degree of legislative certainty about liability for authorising infringements.’37

 Risk of increased litigation

It therefore follows that undermining the established factors of authorisation risks the re-litigation of cases previously decided where those cases include consideration of authorisation liability.

It is also the case that ISPs and rights holders – if they were so minded – would have no avenue other than considering further rounds of protracted and expensive litigation. While we do not believe that such outcomes are the intention of the Government, it is the case that if Proposal 1 was to proceed, then these outcomes would be likely.

 Risk of undermining legitimate businesses

It also flows that a range of businesses and business models have been established and are predicated on the basis of the outcomes of the various cases and case law regarding these provisions. Increased risk and uncertainty associated with the legal under-pinning of those, including as a result of potential re-litigation posed by Proposal 1, flows through into risk for those legitimate businesses.

Deficiency of authorisation liability provisions makes safe harbour scheme redundant

The flaws in the current provisions, and also Proposal 1, do nothing to re-balance the current operation of the safe harbour scheme.

The safe harbour scheme, at Part V Division 2AA of the Act, was enacted in 2006 following the finalisation of the Australia United States Free Trade Agreement (AUSFTA). It provides incentives for CSPs, in the form of limited liability for authorisation, for cooperating with rights holders in deterring copyright infringement on their networks.38

37 Revised Explanatory Memorandum, Copyright Amendment (Digital Agenda) Act 2000, http://parlinfo.aph.gov.au/parlInfo/download/legislation/ems/r910_ems_426f8e74-8b69-432b-8ebe- 87e490e88bb6/upload_pdf/33832rem.pdf;fileType=application%2Fpdf, at [57] 38 October 2011, AGD Revising the Scope of the Copyright ‘Safe harbour Scheme’ Consultation Paper, (The Safe Harbour Consultation Paper) http://www.ag.gov.au/Consultations/Documents/Revising+the+Scope+of+the+Copyright+Safe+Harbour+Scheme.pdf, p3

21 Illustrating this with the common image of a set of scales – on one side of the scales would be the benefit (or incentive), and on the other side of the scales would be the obligation. The Act intends for the sides of the scales to be balanced.

If the Act was properly functioning, the benefit to CSPs – limited liability (under the safe harbour provisions); would be balanced by CSPs meeting the obligation – cooperating with rights holders to deter copyright infringement (under the authorisation provisions). Thus the safe harbour provisions of the Act are inextricably linked with the authorisation provisions of the Act.

However, as CSPs have not cooperated with rights holders to deter copyright infringement on their networks by taking reasonable steps – due largely to their being no incentive to do so, and a therefore a lack consequence of not doing so under the authorisation liability provisions themselves – the safe harbour provisions are not actually activated, used or relied upon.

The issue of safe harbour is investigated further in this submission.

The amendment is not technology neutral

Proposal 1 specifies that the Act would be amended to ‘clarify the application of authorisation liability under sections 36 and 101 to ISPs.’39

Such an amendment is constrained because it specifies ISPs only, rather than allowing for the broad range of parties, be they intermediaries or service providers or others, whose services may be used by third parties to infringe copyright.

This issue is intensified in combination with Proposal 3 – the extension to safe harbour – whereby it is proposed that the same broad range of parties as described in the preceding paragraph, would be awarded ‘safe harbour’ without being obliged by the law to have to do anything, such as taking ‘reasonable steps,’ to be able to obtain a limited liability from authorisation liability. It is absurd that parties would be given ‘safe harbour’ and an ability to limit liability arising from authorisation, without having an obligation under the authorisation provisions to do something to offset claims for authorisation.

Constraining the application of Proposal 1 to ISPs also undermines a technology neutral approach in enabling this important amendment to meet the goal in a streamlined manner, and therefore would fail to amend the issue that is raised in the iiNet judgement as referenced previously in this submission.

We therefore do not support the extension of authorisation liability to ISPs only.

News Corp Australia supports legislative amendment that would fulfil the goal of ensuring an effective legal framework and legal incentives for service providers and rights holders to work together – and ensure that the authorisation liability provisions of the Act operate as originally intended.

Proposal 1 does not rectify – and could likely exacerbate – the imbalance between the authorisation liability provisions and the safe harbour provisions of the Act. This was not the manner in which these provisions were designed to operate, and it should not continue to be so.

For the reasons outlined above, individually and in aggregate, News Corp Australia does not support the detail of Proposal 1.

39 The Paper, p4

22 PROPOSAL 1 – RECOMMENDATION

Rather, Proposal 1 must deliver a legislative amendment that ensures an effective legal framework and legal incentives for service providers and rights holders to work together, and ensure the Act works as intended.

 It is explicit that a service provider that fails to take reasonable steps, when placed on notice of infringing behaviour on its network, is liable under the authorisation provisions of the Act; and  Expand the authorisation liability provisions to service providers and intermediaries.

This definition should be appropriate to capture entities such as universities, schools and libraries, only if they are acting as a service provider.

This will meet the goals of the Government, assist in meeting Australia’s international trade obligations, ensure the Act works as intended including rectifying the unintended deficiencies as identified in the iiNet case, and align Australia with international jurisdictions.

The expansion to incorporate service providers, and entities acting in their capacity as a service provider, is essential if the safe harbour provisions (at Proposal 3) are to be expanded.

30. NEWS CORP AUSTRALIA RECOMMENDATION – AMEND THE AUTHORISATION LIABILITY PROVISIONS TO ENSURE THEY OPERATE AS INTENDED

News Corp Australia supports legislative amendment that would fulfil the goal of ensuring an effective legal framework and legal incentives for service providers and rights holders to work together – and ensure that the authorisation liability provisions of the Act operate as intended.

This also includes the interaction of authorisation liability and the safe harbour scheme, which is investigated further in this submission.

Legislative amendment must rectify lack of incentives

 Explicit liability required

We believe that what is lacking under the current authorisation liability provisions is the certainty of legal liability and the incentive for service providers, including ISPs, to work with rights holders – that being explicit liability for failure to take reasonable steps when placed on notice of infringing behaviour on its network. This also remains the case under Proposal 1.

23 In short, under the existing provisions and also Proposal 1, there is a lack of incentive for ISPs to take reasonable steps to prevent infringing behaviour on their networks, and a lack of incentive for ISPs to cooperate with rights holders – because there is no explicit liability for not doing so.

Until this is rectified there remains no incentive to compel ISPs to work with rights holders to agree how these issues will be addressed. This was evidenced most recently through the protracted ‘round table’ meetings facilitated by the Attorney-General’s Department which did not achieve an outcome. We cannot countenance more of the same.

The most efficient manner of rectifying this situation is for there to be an obligation for service providers, including ISPs, to act when placed on notice; and failure to act in such circumstances will subject the service provider/s to claims for authorisation. Only then will there be an effective legal framework, and incentives for ISPs and rights holders to come together to decide what would constitute ‘reasonable steps.’

 Only then will the environment be conducive to the parties reaching agreement on appropriate industry schemes or commercial arrangements

As we have said for some time, it will only be once legislative amendment is achieved, delivering an effective legal framework and incentives for the parties to work together, that the environment will be conducive for the parties to – for the first time – engage in meaningful and constructive negotiations to develop the ‘reasonable steps’ required to meet the legislative requirements. This will be because there will be explicit liability for service providers, including ISPs, who fail to take reasonable steps, including wilful inactivity, to prevent infringing behaviour on their networks when placed on notice of the infringing behaviour – that they will be subject to claims for authorisation.

Rectifying incentives to cooperate will assist the safe harbour scheme to operate as intended

As outlined previously in this submission, due to the deficiencies in the authorisation liability provisions of the Act, the safe harbour scheme does not operate as it was designed to do – that being ‘offering legal incentives for Carriage Service Providers to cooperate with copyright owners in deterring copyright infringement on their networks.’40

Therefore, rectifying the incentives for service providers, including ISPs, to cooperate with rights holders under the authorisation provisions of the Act will also assist the safe harbour scheme to operate as it was intended.

It is vital that an appropriate amendment to authorisation liability is made to ensure that both the authorisation liability provisions and the safe harbour provisions of the Act interact and operate as originally intended. This is exceptionally important in light of the Government’s Proposal 3, to extend the safe harbour scheme to service providers.

A definition of service provider that encompasses all entities and avoids unintended consequences

We suggest that the Act will require a definition of ‘service provider’ that is sufficiently broad to encompass a range of entities. However, we foresee that it is important that such a definition would apply to the entities in their capacity as service providers. This is an appropriate mechanism to minimise any concerns regarding unintended consequences and so-called ‘chilling effects.’

40 The Safe Harbour Consultation Paper, p3

24 International experience

In jurisdictions around the globe market participants and government are undertaking actions to address the supply and demand side of consumers access unauthorised copyright material. The underpinning legislative and regulatory environments, and therefore the approaches, do vary.

These international experiences offer a very useful learning environment to inform the Australian context and the Government’s approach to legislative amendments and the outcomes being sought. To that end we also provide an overview of some international experiences further in this section of the submission.

The legislative approach to achieving this outcome

While we do not prescribe in this submission how this may be achieved, we understand that some rights holders, such as Music Rights Australia and the Australian Screen Association, may put forward more detailed proposals and approaches regarding legislative amendments.

While these more detailed proposals for legislative amendment from other rights holders may take differing approaches, they achieve the same goal – that is to ensure an effective legal framework and legal incentives for service providers and rights holders to work together, and ensure the Act works as originally intended.

25 31. RESPONSE TO PROPOSAL 1 QUESTIONS

These comments are predicated on the recommendations in this submission being adopted, in this case being referred to as Amended Proposal 1.

We note that it appears to be somewhat premature to respond to questions regarding the specifics of the industry schemes and/or commercial models that would meet the legislative and/or regulatory requirements of Amended Proposal 1 in advance the legislation being implemented. However, we offer the following comments.

Question 1: What could constitute ‘reasonable steps’ for ISPs to prevent or avoid copyright infringement?

Regarding what would constitute ‘reasonable steps’ for ISPs to prevent or avoid copyright infringement, we recommend an industry scheme that comprises a graduated response approach to notifying ISP customers when their accounts have been used to infringe copyright online. Our preferred model for such an industry scheme is the US Copyright Alert System (CAS)41.

Such an industry scheme would be competitively neutral, and include:

 Identification of alleged copyright infringement (IP addresses only);  Rights holders investing in systems to identify and verify potentially infringing material on P2P networks;  A series of notices which ISPs send to their customers;  Appropriate mitigation measures designed to deter ongoing infringing behaviour;  Each party should bear their own costs – therefore ensuring each party has an incentive to introduce as efficient a system as possible (see response to Question 2 below); and  A right of review for customers who believe that notification of alleged infringement has been mistakenly sent.

Overview of the Copyright Alert System

The CAS is a collaboration between rights holders – Motion Picture Association of America and its members (Walt Disney Studios, Paramount Pictures, Sony Pictures, Twentieth Century Fox, Universal Studios and Warner Bros) and the Recording Industry Association of America and its members (UMG Recordings, Warner Music, Sony Music and EMI Music); and ISPs (AT&T, Verizon, Comcast, CSC and Time Warner) to reduce digital copyright infringement through a progressive series of six graduated notifications. The system aims to educate consumers when unlawful activity appears to be occurring on their internet accounts and provide them information to avoid such infringement.

The CAS is administered by the US Center for Copyright Information (CCI).42 The CAS began operating in March 2013, under the auspices of an MOU signed by all parties, which also states that each party to the CAS bears its own costs.

 The launch of the CAS

In February 2013, the CCI and CAS members provided the Congressional Internet Caucus Advisory Committee with an overview of the CAS. Speakers included CCI Executive Director, Jill Lesser and

41 http://www.copyrightinformation.org/the-copyright-alert-system/ 42 http://www.copyrightinformation.org

26 members of the CCI Advisory Board; Verizon’s Vice President & Deputy General Counsel, Global Strategy and Head of International Public Policy, Tom Dailey; and representatives of the Recording Industry association of America and the Motion Picture Association of America. That overview, a video of which is available at http://www.c-span.org/video/?311398-1/online-piracy provides much information about the cooperative way that the CAS operates.

 How CAS operates

The process takes the following course:

o Content owners use software to locate copies of copyright infringing content (efor example movies, TV shows, music) on P2P networks – identifying IP addresses only; o Copyright owners then send notification of alleged copyright infringement to ISPs; o ISPs match the IP address with customer details and send ‘Copyright Alerts’ to their subscriber under their own brand; o The Alert includes date, time, time zone and title of the copyrighted content that is alleged to have been unlawfully distributed via P2P on the subscriber’s account; o An ISP subscriber will be sent a maximum of six (6) alerts with an increasing degree of seriousness; and o An appeals process for customers who believe that notification of alleged infringement has been mistakenly sent.

In general, the tiers of the six (6) Copyright Alerts are:

o Alert 1 and 2: educational alerts which make account holders aware that unlawful content sharing may have happened using their internet account; o Alert 3 and 4: acknowledgement alerts where the account holders are required to acknowledge the Alerts; and o Alert 5 and 6: mitigation alerts which notify the subscriber that a mitigation measure will be implemented after 14 calendar days – these impose minor consequences to emphasise the seriousness of the problem. o This framework of Alerts offers a suite of measures that can be selected from, and it is up to each ISP to implement to suit their individual operations. For example, Verizon implemented the following approach:

o Education: Alert 1 and 2 are sent to subscribers email, and are spaced by 1 week (if Alert 2 is triggered); o Acknowledgement: Alert 3 and 4 consist of an online pop-up which requires the subscriber to watch a short video regarding the seriousness of online copyright infringement, and acknowledge the alert (not liability); and o Mitigation: Alert 5 notifies that the subscriber’s internet account will be slowed to 256kbps for two (2) allocated days; and Alert 6 notifies that the subscriber’s internet account will be slower to 256kbps for three (3) allocated days.

There is a useful FAQ section at http://www.copyrightinformation.org/resources-faq/copyright- alert-system-faqs/.

We stress that the legislative amendments at Amended Proposal 1 are essential to achieving such a scheme, as Amended Proposal 1 is key to delivering the legal framework and legal incentives to bring the parties

27 together to establish such an industry scheme. We have outlined the reasons for this above and will not reiterate here.

Efficacy of the CAS

On 28 May 2014 the CCI released the first report regarding the US Copyright Alert System, The Copyright Alert System: Phase One and Beyond,43 about the first 10 months of the CAS operation.

The CCI acknowledges that the data it has on the success of the CAS is limited by the short time the program has been running. However, CCI believes that the results are encouraging and 'support the view that an educational program like the CAS can make a material difference in influencing the behaviour of digital content consumers once the possibility of copyright infringement on their account is bought to their attention.’44

 Key data from the report

o More than 2 million notices of alleged infringement were sent to ISPs and more than 1.3 million alerts were sent to 722,820 customer accounts; o The majority of alerts, 72 percent, were educational alerts (Alerts 1 and 2); 17 percent of alerts were acknowledgment alerts (Alerts 3 and 4); and 11 percent were mitigation alerts (Alerts 5 and 6); and o There were only 265 appeals, of which only 47 were successful – and the vast majority of which were based on an unauthorised use of an account.

 Consumer research

The CCI also engaged in qualitative and quantitative customer research into consumer awareness in relation to online piracy and found the following:

o 79 percent of respondents who use P2P software said that knowing someone who got into trouble for copyright infringement would be ‘somewhat to very’ influential on their own behaviours; o Consumers would like more guidance about how to engage online legally; and o 57 percent of users surveyed by CCI would stop engaging in copyright infringement immediately upon receiving an alert.

In a panel overview, similar to that undertaken on the cusp of the operation of the CAS, the CCI and CAS members provided the Information Technology and Innovation Foundation with an overview of the CAS after the first year of operation. Speakers again included CCI Executive Director, Jill Lesser and members of the CCI Advisory Board; and Verizon’s Vice President & Deputy General Counsel, Global Strategy and Head of International Public Policy, Tom Dailey. A video of this overview is available at http://www.itif.org/media/copyright-alert-system-year-one-review#video.

43 http://www.copyrightinformation.org/wp-content/uploads/2014/05/Phase-One-And_Beyond.pdf 44 Ibid, p10

28 32. REPONSES TO ADDITIONAL PROPOSITIONS

Some may say…

 Graduated response schemes ‘don’t work’

News Corp Australia does not agree with this statement. We offer the following data available from international scemes.

o US – Copyright Alert System

On 28 May 2014 the Centre for Copyright Information (CCI) released the first report regarding the US Copyright Alert System, The Copyright Alert System: Phase One and Beyond45, about the first 10 months of the CAS operation.

The CCI acknowledges that the data it has on the success of the CAS is limited by the short time the program has been running. However, CCI believes that the results are encouraging and 'support the view that an educational program like the CAS can make a material difference in influencing the behaviour of digital content consumers once the possibility of copyright infringement on their account is bought to their attention.’46

Key data from the report and also the results of consumer research are outlined above.

o France – Hadopi

In 2009 France introduced the Hadopi (or Creation and Internet) Law to promote the distribution and protection of creative works on the internet – specifically regarding the impact of illegally downloading via P2P networks.

The law and supporting regulations provide a graduated response notice system to educate consumers, and therefore encourage compliance with copyright laws. It involves content providers, ISPs and the authority, Hadopi, working in concert.

. The Effect of Graduated response Anti-Piracy Laws on Music Sales: Evidence from an Event Study in France47 – An independent study by Danaher et al, 2012

This independent study analysed the impact of the Hadopi law and its impact on consumer behaviour since April 2009.

The study found that the combination of increased awareness of the law, the illegality of piracy, and the potential penalties were important elements in changing consumer behaviour – and reinstating the legitimate protections that copyright provides to content creation and distribution. Specifically, the study found that public awareness of HADOPI law caused:

 iTunes song sales in France to increase by 22.5% above the sales increase of a control group of five European countries;

45 http://www.copyrightinformation.org/wp-content/uploads/2014/05/Phase-One-And_Beyond.pdf 46 Ibid, p10 47 2012, Danaher, Smith, Telang and Chen, The Effect of Graduated Response Anti-Piracy Laws on Music Sales: Evidence from an Event Study in France, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1989240

29  A 25% increase in iTunes album unit sales above the change in the control group; and  Sales increases (30%) were much higher in genres that, prior to HADOPI, experienced high piracy levels, for example Rap and Hip Hop; than sales increases (7%) for less pirated genres, for example Christian, Classical, and Jazz.

Further data and findings from the Danaher study are at Appendix D.

. HADOPI, 1 ½ year after the launch48

A report from the French Government, undertaken 18 months after the launch of the Hadopi scheme states:

‘Benchmarking studies covering all of the sources available shows a clear downward trend in illegal P2P downloads;’ and ‘at the same time, the wide range of legal content offers are gaining visibility and some offers have posted excellent progress.’49

The study also found that over a wide range of metrics:

 17 to 29% decrease in audiences of websites offering links to peer-to-peer files and applications; and  43 to 66% decrease in illegal data sharing.50

We note that there exists a paper that concludes that graduated response is a flawed process that cannot work. It appears that this paper applies a threshold of perfect outcome or 100% effectiveness. If the schemes cannot reach this threshold, then they are classified as ineffective and failing. Such an approach applies a theoretical and therefore unrealistic hurdle, over which it unlikely any scheme or approach will pass.

Some may also say…

i. Proposal 1 changes decades of Australian case law and understanding of authorisation liability, and in turn increases legal uncertainty and risk

News Corp Australia concurs that this is a risk posed by Proposal 1, which in addition does not fulfil the goal of providing certainty of legal liability. Therefore, as set out in more detail above, we do not support the detail of Proposal 1. However this is where a common view ends.

We hold that the current deficiencies of the authorisation provisions of the Act must be rectified – and therein provide a legal framework and legal incentives to bring the parties together, which requires amendment to authorisation liability provisions to be explicit about liability.

48 March 2012, HADOPI, 1 ½ year after the launch, A report by the French Government, http://www.hadopi.fr/sites/default/files/page/pdf/note17_en.pdf 49 Ibid, p1 50 Ibid, p3

30 As we have also detailed above, due to the interrelation of the authorisation liability provisions and the safe harbour provisions, there is a requirement to re-balance safe harbour. Therefore Amended Proposal 1 provides a better outcome as it meets the goal of providing certainty of legal liability, and does not pose the risks of Proposal 1.

While we say that the authorisation liability provisions should be fixed so that they operate as originally intended, others may say that it would be better to leave the authorisation liability provisions alone, and allow the parties to come together of their own volition. We disagree with this approach and address this at the next point.

As we have also detailed above, due to the interrelation of the authorisation liability provisions and the safe harbour provisions, there is a requirement to re-balance safe harbour therefore Amended Proposal 1 better outcome – meets the goal and does not pose the risks of Proposal 1

ii. Following from the point above, some may say that ‘stand-alone arrangements would be better’

These parties would say that no changes to the current authorisation liability provisions are necessary. News Corp Australia does not agree for a number of reasons, including those outlined in detail previously. We recap some of those points below.

It is well known to the parties involved that the previous ‘round-table’ discussions did not result in cooperative measures to deter ISP customers from online copyright infringement, particularly via P2P networks. This has particularly been the case since the High Court decision in the iiNet case.

As we have expressed above, until there is a legal framework and legal incentives for the parties to cooperate. Again, in our view the most efficient manner of rectifying this situation is for there to be explicit liability for service providers, including ISPs, who fail to take reasonable steps, including via wilful inactivity, to prevent infringing behaviour on their networks when placed on notice of the infringing behaviour – that they be liable for authorisation. Only then will there be an effective legal framework, and legal incentives, for ISPs and rights holders to come together to decide what would constitute ‘reasonable steps.’

Regardless of this, some may claim that Australia has a history of self-regulation and co- regulation. We are not disputing that there are a range of regulatory tools at the Government’s disposal. However, what we do dispute is that the environment is conducive to self-regulatory outcomes in absence of a functioning legal framework and legal incentives. Hence Amended Proposal 1 is required.

While there are ‘stand-alone’ schemes in place in other jurisdictions, one does need to look at the context. It is impossible to consider the Australian context without taking account of the decision in the iiNet case.

Lastly, we note that if safe harbour is extended – and we stress that this should only be the case if Amended Proposal 1 is adopted – then those service providers will have the benefit of the safe harbour, and therefore should also be required to meet the obligations of well- functioning authorisation liability provisions. We note that many parties that advocate for an extended safe harbour scheme oppose, or are at least silent, the corresponding extension of authorisation liability.

31 iii. Following on from this, some may point to the New Zealand model, suggesting it is a good model because it is ‘stand-alone’; others may say it is a good model because it is a notice scheme that is paid for by rights holders; and others say it is a good model because it can end up with individual consumers being sued

News Corp Australia notes the elements of the New Zealand model, however, for a range of reasons we and other rights holders do not believe it is an appropriate model for efficiently and effectively addressing rampant online copyright infringement.

We understand that some rights holder representative groups have first-hand data about the New Zealand model that is being incorporated into their respective submissions. We refer to those submissions regarding the issues of concern with the New Zealand model.

What we do note, however, is that taking individuals to court and suing them is not an efficient or effective deterrent to online copyright infringement, nor does it address the deficiencies of the current authorisation provisions as identified in the iiNet case, and therefore does not meet the goal including clarity regarding legal liability.

iv. Some may say that a range of businesses and institutions will be concerned if authorisation liability is amended as per Amended Proposal 1

a. News Corp Australia reiterates that the provisions would only apply to an entity in its capacity as a service provider, and hence the importance of the definition regarding this.

As we understand it, a number of the entities that may be ‘concerned’ and/or oppose the terms of Amended Proposal 1 –in that they do not want to be captured by an extension to service providers; support an extension of the safe harbour scheme to include service providers.

Because of the interaction between authorisation liability and safe harbour, and the detailed analysis supporting Amended Proposals 1 and 3 – including their interaction – we hold that it is a fair and equitable outcome for service providers who receive a benefit to also be required to meet an obligation.

Also, given the technological specificity highlighted by the iiNet case, it is appropriate for authorisation liability to apply to service providers to foster technological neutrality.

v. Some may say that service providers don’t have a contractual relationship with users and therefore ‘reasonable steps’ as outlined for ISPs won’t work

a. News Corp Australia acknowledges that a range of commercial models exist in the marketplace. b. Notwithstanding this, we advocate for a short, but reasonable timeframe – say three (3) months – between legislative amendments receiving Royal Assent and the law commencing, thereby providing time for industry schemes and/or commercial arrangements to develop.

We note that some service providers have already developed, and make known, measures to deter online copyright infringement on their networks.51 These may also include terms of

51 Examples include How Google Fights Piracy, http://googlepublicpolicy.blogspot.com.au/2013/09/report-how-google- fights-piracy.html, https://docs.google.com/a/google.com/file/d/0BwxyRPFduTN2dVFqYml5UENUeUE/edit; and How

32 use of services, including where the relationship between the service and the user is not a contractual one.

Question 2: How should the costs of any ‘reasonable steps’ be shared between industry participants?

News Corp Australia recommends that the most efficient manner for costs to be allocated are with each party bearing its own costs. This is the approach taken in the US CAS model.

Question 3: Should the legislation provide further guidance on what would constitute ‘reasonable steps’?

News Corp Australia recommends that any guidance in relation to what would constitute ‘reasonable steps’ should be set out in regulations that support the legislative provisions. Those regulations could include guidance as to the elements that industry schemes and/or commercial arrangements should encompass.

Such an approach would allow sufficient flexibility to enable amendments to accommodate current and future evolutions – some of which are unknown to us now.

Question 4: Should different ISPs be able to adopt different ‘reasonable steps’ and, if so, what would be required within a legislative framework to accommodate this?

News Corp Australia stresses here that it is important that the legislative framework fulfils the goal of ensuring an effective legal framework and legal incentives via explicit legal liability, for service providers and rights holders to work together – and ensure that the authorisation liability provisions of the Act operate as originally intended.

In fulfilling this, it is critical to restate the importance of competitive neutrality. Regarding the preferred industry scheme for ISPs, it should apply to all ISPs. While the regulations should be clear about the elements of a scheme, it may be that the scheme itself – developed by the applicable parties – will incorporate some flexibility into ‘how’ the legislative and regulatory requirement is to be met in agreement with the parties.

Question 5: What rights should consumers have in response to any scheme or ‘reasonable steps’ taken buy ISPs or rights holders? Does the legislative framework need to provide for these rights?

News Corp Australia suggests that the preferred model of an industry scheme, the US CAS, incorporates a consumer appeal process, enabling customers to appeal notices when in the mitigation stage. It is envisaged that under Amended Proposal 1 that there be a consumer appeals process available.

eBay Protects Intellectual Property (VeRO), http://pages.ebay.com.au/help/tp/programs-vero-ov.html

33 PROPOSAL 2 – EXTENDED INJUNCTIVE RELIEF

News Corp Australia supports an amendment to the Act to enable rights holders to apply for a court order to block access to internet sites operated extra-territorially that make available content for streaming and/or download that infringes copyright.

Again, we believe that it is important to link this back to the Government’s stated goal of providing a legal framework to reduce online copyright infringement – by ‘streamlining the process by which rights holders can seek relief from the courts to block access to websites providing infringing material.’

We are therefore concerned that:

 Some matters expressed in Proposal 2 do not support ‘streamlining the process’ to seek relief from the courts. We believe that such matters, outlined below, are more appropriately determined by the court rather than being included in legislative provisions – as the court is already well placed to do in considering evidence brought before it. This is how such provisions and courts operate in jurisdictions where streamlined processes are in place and operating effectively and efficiently, such as in the United Kingdom and Ireland; and

 The approach outlined is technology specific and references only ISPs rather than taking a more technology neutral approach, as is the case in international jurisdictions, which acknowledge ‘intermediaries.’

Matters appropriately determined by the courts in deciding an application for court order

The following specific matters are raised within the overview of Proposal 2 and/or contained in Proposal 2. Based on the usual processes of the court, and also international experience and jurisprudence, we recommend that the court before which the application for injunction is made, based on the evidence presented, most appropriately determines these matters.

 Freedom of expression

The overview to Proposal 2 contemplates the court would be required to consider factors such as ‘the importance of freedom of expression.’52

This should not be a threshold question and it should not be included in the legislation. Rather, it is an issue appropriate for a court to determine in considering the evidence of the case before it. This particularly the case when the objective is to deliver a streamlined process.

o International experience

This issue is not a threshold question, and therefore not included in the legislation of European nations, such as the UK and Ireland, that enables rights holders to apply for a court order in similar circumstances.

. European Court of Justice

52 The Paper, p6

34 Of particular interest is the judgement of the European Court of Justice (CJEU) in its March 2014 decision on copyright site blocking injunctions in UPC Telekabel v Constantin Film (the kino.com case) (Case C-314/12).

The Court stated:

‘Even though the measures taken when implementing an injunction such as that at issue in the main proceedings are not capable of leading, in some circumstances, to a complete cessation of the infringements of the intellectual property right, they cannot however be considered to be incompatible with the requirement that a fair balance be found, in accordance with Article 52(1), in fine, of the Charter, between all applicable fundamental rights, provided that (i) they do not unnecessarily deprive internet users of the possibility of lawfully accessing the information available and (ii) that they have the effect of preventing unauthorised access to protected subject-matter or, at least, of making it difficult to achieve and of seriously discouraging internet users who are using the services of the addressee of that injunction from accessing the subject-matter that has been made available to them in breach of the intellectual property right.’53

In summary, the CJEU said that site blocking injunctions do not infringe the freedom of information as the ISP’s manner of meeting the requirement of the injunction must not affect lawful access to information.

An overview of the kino.com case is at Appendix E of this submission.

. UK copyright law expert and law firm Partner, Andrew Forbes, recently wrote about the matter and noted that with 41 websites blocked under court orders in the UK, the internet continues to operate. He wrote:

‘The music industry, together with other creative industries, have been granted court orders requiring UK internet providers to block 41 illegal websites. Has the internet been broken by this activity? Far from it.’54

 Commercial scale

The overview to Proposal 2 contemplates that a law is required to provide rights holders with an efficient mechanism to disrupt sites operated outside of Australia where ‘online copyright infringement is occurring on a commercial scale.’55

This should not be a threshold question and it should not be included in the legislation. Rather, it is an issue appropriate for a court to determine in considering the evidence of the case before it. This is particularly the case when the objective is to deliver a streamlined process.

Separately, we note that the Act makes reference to ‘commercial scale.’ However this arises in relation to criminal liability and increased financial sanctions, of which neither is an appropriate link for the context of Proposal 2.

53 at [63] of judgement 54 30 July 2014, Andrew Forbes, Will blocking illegal music download sites ruin the internet? http://themusic.com.au/opinion/music/2014/07/30/does-blocking-illegal-websites-break-the-internet/ 55 The Paper, p5

35  Dominant purpose

Proposal 2 proposes limiting sites to be blocked to those which have a ‘dominant purpose56’ to infringe copyright.

This term, if prescribed and included as a bright line parameter, would likely frustrate legitimate cases brought by rights holders as it is open to gaming by parties to avoid being subjected to the law.

It is also important to note here that such a limitation has been problematic in cases brought previously in Australia, for example, Stevens v Sony57. In that case, the High Court said:

‘In the selection of a sole or dominant "purpose," there is a risk of unintended consequences, particularly where, as here, the substratum of the legislation is constantly changing technologies.’58

Some legitimate businesses may say that legislative provisions to enable court orders would need to be as narrow and targeted as possible, for example, a website should ‘have primary purpose’ to infringe copyright; or it should apply to websites that ‘get their main revenue source from infringing content;’ or similar. We do not support such an approach for the reasons outlined above.

o International practice

We refer to the legislative provisions in the United Kingdom and Ireland that give the court the power to issue similar orders. These provisions, at section 97A of the Copyright, Designs and Patents Act 1988 (IE)59 and sections 40 and 205 of the Copyright and related Rights Act 2000 (IE)60 respectively, consist of open language against which the court determines key factors in cases.

The jurisprudence established by the UK cases, particularly Twentieth Century Fox Film Corporation & Ors v British Telecommunications PLC (20C Fox v BT)61, is instructive as to the discretionary factors taken into consideration by the court based on the evidence put before it. This includes the claim made by BT that the studios were not interested in the whole of the Newzbin2 website, as movies and television did not comprise all of the material on the Newzbin2 website.62

Justice Arnold, Judge of the High Court, said in his judgement:

It can be seen from the figures quoted in paragraph 53 above that films and television programmes comprise about 70% of the material accessible via Newzbin2, while about 30% of that material consists of other types of content. Furthermore, while the Studios own or control the copyrights in a large proportion of the films and television programmes indexed by Newzbin2, it is clear that other rightholders are also substantially affected by it. Counsel for BT submitted that in these

56 The Paper, p5 57 [2005] HCA 58, http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/HCA/2005/58.html 58 Ibid at [34] 59 http://www.legislation.gov.uk/ukpga/1988/48/section/97A 60 http://www.irishstatutebook.ie/2000/en/act/pub/0028/ 61 20C Fox v BT [2011] EWHC 1981 (Ch) http://www.bailii.org/ew/cases/EWHC/Ch/2011/1981.html 62 20C Fox v BT at [53]

36 circumstances it would be wrong in principle to grant an injunction which extended beyond the films and television programmes in which the Studios have rights, and to require BT to prevent its subscribers visiting any part of the Newzbin2 website for any purpose.

In my judgment, subject to the points that remain to be considered, the Studios have established their entitlement to an injunction under section 97A. It appears from the evidence that the Studios form the biggest single group of rightholders interested in obtaining such relief. In any event, it is clear that the Studios' rights are being infringed on a massive scale. In those circumstances, I consider that they have a sufficient interest to justify the making of the order sought. It is true that the order sought will also benefit other rightholders, but I do not regard this as a reason for refusing the order. On the contrary, I consider that it supports the making of the order. So far as the groups of rightholders referred to in paragraph 4 above are concerned, they all support the application. It is immaterial that they have not formally joined in the application. So far as other rightholders are concerned, their rights under Article 1 of the First Protocol are also engaged and there is no reason to believe that they would not be equally supportive of the application.

Finally, I recognise that the order would potentially prevent BT subscribers from making use of Newzbin2 for non-infringing uses. On the evidence, however, the incidence of such uses is de minimis.’63

‘In general, I am satisfied that the order sought by the Studios is a proportionate one. It is necessary and appropriate to protect the Article 1 First Protocol rights of the Studios and other copyright owners. Those interests clearly outweigh the Article 10 rights of the users of Newzbin2, and even more clearly outweigh the Article 10 rights of the operators of Newzbin2. They also outweigh BT's own Article 10 rights to the extent that they are engaged. The order is a narrow and targeted one, and it contains safeguards in the event of any change of circumstances.’64

The case which preceded this, Twentieth Century Fox Film Corporation v Newzbin Ltd65 (known as Newzbin1) established that the Newzbin website infringed the Studios’ copyright on a large scale. Justice Kitchen said in his judgement:

‘I also consider it significant that a very large proportion of the content of the Movies category is commercial and so very likely to be protected by copyright.’66

An overview of the jurisprudence resulting from some of the early UK site blocking cases, including relating to the discretion of the court in 20C Fox v BT as presented by Justice Arnold at a UK Intellectual Property Office seminar, is at Appendix F of this submission.

This case law demonstrates that courts in jurisdictions comparable to Australia are quite capable of ruling on questions of proportionality without the need for this matter to be enshrined in law. There

63 20C Fox v BT at [185-186] 64 20C Fox v BT at [200] 65 20C Fox v Newzbin [2010] EWHC 608 (Ch), http://www.bailii.org/ew/cases/EWHC/Ch/2010/608.html 66 20C Fox v Newzbin at [101]

37 is a very serious risk that if such a concept is enshrined in law it will be gamed by ISPs, and quite possibly websites, and the effectiveness of the law neutered.

 Reasonable costs

Proposal 2 states that rights holders ‘would be required to meet any reasonable costs associated with an ISP giving effect to an order.’67

Again, this should not be a threshold question or a direction to the court, and therefore it should not be included in the legislation. Rather, it is an issue appropriate for a court to determine in considering the evidence of the case before it. This is particularly the case when the objective is to deliver a streamlined process.

Further to the matter of undermining the delivery of a streamlined process, if the matter of reasonable costs was stipulated in the legislation, it could be envisaged that ascertaining what would be the ‘reasonable costs’ of all ISPs listed as respondents could be a cumbersome process and could be open to gaming and delay tactics.

We refer again to the legislative provisions in the United Kingdom and Ireland that give the court the power to issue similar orders, as cited above, that consist of open language against which the court determines key factors in cases, including costs.

Further, the jurisprudence established by the UK cases, particularly 20C Fox v BT, is instructive as to the discretionary factors taken into consideration by the court based on the evidence put before it, including proportionality (as referenced above) and the costs of implementing the order. Specifically, Justice Arnold stated:

‘The cost of implementation to BT would be modest and proportionate.’68

In the second judgement69, Justice Arnold explicitly dealt with the claims before the court regarding costs of the case, including costs of implementing the order. He said:

‘Each side contends that the other should pay the costs of implementing the order. In my judgment the costs of implementing the order should be borne by BT. The Studios are enforcing their legal and proprietary rights as copyright owners and exclusive licensees, and more specifically their right to relief under Article 8(3). BT is a commercial enterprise which makes a profit from the provision of the services which the operators and users of Newzbin2 use to infringe the Studios’ copyright. As such, the costs of implementing the order can be regarded as a cost of carrying on that business. It seems to me to be implicit in recital (59) of the Information Society Directive that the European legislature has chosen to impose that cost on the intermediary. Furthermore, that interpretation appears to be supported by the Court of Justice’s statement in L’Oréal v eBay at [139] that such measures “must not be excessively costly”. The cost of implementing the order is a factor that can be taken into account when assessing the proportionality of the injunction, and in the present

67 The Paper, p6 68 20C Fox v BT at [200] 69 20C Fox v BT [2011] EWHC 2714 (Ch), Second Judgement http://www.bailii.org/ew/cases/EWHC/Ch/2011/2714.html

38 case I have done so: see the main judgment70 at [200]. Indeed, my conclusion there that the cost to BT “would be modest and proportionate” is supported by the evidence subsequently filed by BT, which estimates the initial cost of implementation at about £5,000 and £100 for each subsequent notification.’71

For these reasons ‘reasonable costs’ – or indeed cost/s more generally – should not be a threshold question and should not be included in the legislation. Rather, it is an issue appropriate for a court to determine in considering the evidence of the case before it. This particularly the case when the objective is to deliver a streamlined process.

In summary, News Corp Australia opposes the matters outlined above being included in the legislation. We recommend that matters such as these are most appropriately determined by the courts in the course of deciding an application for injunction. Such an approach would be consistent with international jurisdictions such as the United Kingdom and Ireland.

 Lack of requirement for indemnification

Proposal 2 specifies that the Act would be amended to ‘indemnify the ISP against any damages claimed by a third party.’72

Again, this should not be a threshold question or a direction to the court, and therefore it should not be included in the legislation.

In extending injunctive relief to this context, by its nature, it precludes claims by third parties against ISPs that implement the orders of the court. In short, in blocking a site the ISP is actioning a court order. To not do so would be in contempt. It is the case that it is not required to consider the matter of indemnification further.

To the extent that parties believe the matter of indemnification requires addressing, it would be most appropriately determined by the court in the course of assessing the evidence before it.

It may be useful to reflect on international experience in this regard. The matter of indemnification was raised in 20C Fox v BT. In that case BT requested the inclusion of cross- undertaking in damages, requiring the Studios to undertake to comply with any order the court may make if the court was to find, at a later stage, that the order caused a loss to BT, and the Studios should compensate BT for that loss. Alternatively, BT sought an indemnity against losses caused by the order, particularly against third party claims.73

Justice Arnold considers these claims in detail74, including regarding the request for cross- undertaking of damages:

‘In my view there is no reason to require the Studios to give a cross-undertaking in damages. There is no analogy between an order under Article 8(3) and an interim injunction. An interim injunction is granted before the parties’ legal rights and

70 20C Fox v BT http://www.bailii.org/ew/cases/EWHC/Ch/2011/1981.html 71 20C Fox v BT, Second Judgement, at [32] 72 The Paper, p6 73 20C Fox v BT, Second Judgement, at [34] 74 20C Fox v BT, Second Judgement, at [34 to 52]

39 liabilities have been ascertained. The original and main purpose of the cross undertaking in damages was and remains to attempt to protect the party enjoined if it subsequently transpires that no injunction should have been granted because the party applying for the injunction did not have the rights claimed or they were not infringed or for some other reason… An order under Article 8(3) is a final injunction, and accordingly there is no warrant for a cross-undertaking.’75

Justice Arnold also considered in detail the matter of the request for indemnity against damages claimed by third parties at [42 to 52]. Justice Arnold concluded:

‘I do not consider that a BT subscriber could bring a claim against BT for breach of contract as a result of BT’s compliance with the order. It appears unlikely that any subscriber would have a claim against BT for breach of contract anyway, for two reasons. First, BT’s broadband service terms incorporate its Acceptable Use Policy. This states that “You must not infringe the rights of others, including ... copyright”. Thus a subscriber could not claim against BT for being prevented from accessing Newzbin2 for the purpose of obtaining infringing content. Secondly, BT’s terms contain a series of limitations and exclusions…

As for third parties who are not subscribers, my conclusion is the same. In any event, I find it very difficult to see the basis on which such a third party could have a claim in tort against BT. Counsel for BT suggested that a third party might have a claim for interference with contractual relations, but he did not explain how an order against BT could result in BT interfering with the contractual relations of a third party with a fourth party.’76

The amendment is not technology neutral

Proposal 2 specifies that the Act would be amended to ‘enable rights holders to apply for a court order against ISPs to block access…’77

Such an extension to injunctive relief is constrained because it specifies ISPs only, rather than a broad description of the category (of which ISPs may be but one) with the ability to block access to third parties that infringe copyright.

The approach taken in Proposal 2 therefore undermines a technology neutral approach in enabling this important amendment to meet the goal effectively and efficiently.

We note that the Paper acknowledges that the EU Directive applies to intermediaries – ‘ensure that rights holders are in a position to apply for an injunction against intermediaries whose services are used by a third- party to infringe a copyright or related right.’78 We support a similar and consistent approach being implemented in Australia.

Given the sound reasons outlined above, individually and in aggregate, News Corp Australia does not support a number of the detailed elements of Proposal 2.

75 20C Fox v BT, Second Judgement, at [35] 76 20C Fox v BT, Second Judgement, at [51 to 52] 77 The Paper, p6 78 The Paper, p5, citing EU Directive No. 2001/29/EC of the European Parliament, http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:167:0010:0019:EN:PDF

40 41 PROPOSAL 2 – RECOMMENDATION

Rather, Proposal 2 must deliver a legislative amendment that ensures a streamlined process that allows the court to determine an order for injunction. Expanding injunctive relief will enable rights holder/s to apply to the court to have service provider/s block access to websites operated outside Australia that provide access to material that infringes copyright.

It is unnecessary, and very likely counterproductive and undermining, to stipulate the matters for the court to take account of in determining the order. Rather, it is appropriate that the matters outlined in Proposal 2 are determined by the court in considering the evidence of the case before it.

This will require amendment to the Act such that:

 The court is granted the power to determine such a request for injunction;  The matters referred to in Proposal 2 not be included in the legislation – these are more appropriately determined by the court in considering the evidence brought before it; and  Expand the extension of injunctive relief to providers and intermediaries.

This will also require a definition of ‘service provider’ in the Act.

This will meet the goals of the Government, assist in meeting Australia’s international trade obligations, ensure the Act works as intended, and align Australia with international jurisdictions.

Granting the court the power to determine a request for equitable relief of this kind, without directing the court to take into account specific matters, is consistent with powers already invested in the court.

33. NEWS CORP AUSTRALIA RECOMMENDATION – AMEND THE ACT TO ENABLE RIGHTS HOLDERS TO APPLY TO A COURT FOR AN ORDER AGAINST SERVICE PROVIDERS TO BLOCK ACCESS TO WEBSITE/S OPERATED OUTSIDE AUSTRALIA THAT PROVIDE ACCESS TO MATERIAL THE INFRINGES COPYRIGHT

We suggest that the Act will require a definition of ‘service provider’ that is sufficiently broad to encompass a range of entities. However, we foresee that it is important that such a definition would cover this broad range of entities in their capacity as service providers. This is an appropriate mechanism to minimise any concerns regarding unintended consequences and so-called ‘chilling effects.’

International experience

In jurisdictions around the globe market participants and government are undertaking actions to address the supply and demand side of consumers accessing unauthorised copyright material. The underpinning legislative and regulatory environments, and therefore the approaches, do vary.

42 These international experiences offer a very useful learning environment to inform the Australian context and the Government’s approach to legislative amendments and the outcomes being sought.

It is with these learnings in mind that we prefer the legislative approach taken in Ireland, whereby the service provider does not have to have actual knowledge of the infringement before the application for the court order is made. The UK experience, particularly the jurisprudence, is very instructive for a range of matters referenced above and below in this section. We also look to the European Court of Justice and the decision in the kino.com case for guidance on critical elements of these cases that is now applied across the European Union.

Efficacy of site blocking

We offer the following data points associated with court orders to block access to sites:

 Impact of Third Party Orders on Traffic to Infringing Sites

The Motion Picture Association (MPA) has undertaken analysis of the impact of third party orders of traffic to infringing sites in Impact of Third Party Orders on Traffic to Infringing Sites using Alexa and comScore data. That analysis, and methodology, is contained in the Annexure to the submission made by the Australian Film/TV Bodies. Rather than reproducing that analysis here, we refer to the Annexure of that submission.

However we include here the following graphs which illustrate the effectiveness of blocking orders in the Newzbin 2 case (Graph 1) and also 20C Fox v BT (Graph 2).

BT was ordered to block access to the Newzbin2 website in July 11. Similar orders were subsequently made against other ISPs. As illustrated in Graph 1, Newzbin2 lost two-thirds of its visitors within 12 months of the blocking orders being put into effect, despite changes in IP address and domain name.

Graph 1: Effect of site blocking on UK visitors to Newzbin

Source: NetNames

43 Major ISPs were ordered to block The Pirate Bay website in April 2012. Graph 2 below illustrates the impact of the court ordered blocking in the significant reduction in UK visitors to The Pirate Bay website.

Graph 2: Effect of site blocking on UK visitors to ThePirateBay

Source: NetNames

 IFPI Digital Music Report

The IFPI Digital Music Report79 states that website blocking orders implemented by ISPs have been effective. Supporting data states that BitTorrent use declined by 11 percent between January 2012 and July 2013 in European countries where site blocking orders are in place, while an BitTorrent use in countries without site blocking orders increased 15 percent.80

The report also says that effect was especially pronounced in UK and Italy – where the highest number of illegal services have been blocked o UK – BitTorrent traffic declined 20 percent; and o Italy – BitTorrent traffic declined 13 percent.81

79 IFPI Digital Music Report, p42 80 Based on comScore / Nielsen data 81 IFPI Digital Music Report, p42

Question 6: What mattes should the Court consider when determining whether to grant an injunction to block access to a particular website?

As outlined above, in granting the court the power to consider applications for the equitable remedy of injunctive relief of this kind, we do not support a list of determinative factors – whether that list is exhaustive or non-exhaustive – being included in the legislation. We believe that such matters should not be threshold issues, rather be left to the discretion of the court.

Threshold issues would be open to gaming

If matters such as, but not limited to, commercial scale/dominant purpose/primary purpose, freedom of expression, cost/reasonable costs and indemnification were included in the legislative provisions, it is likely to undermine the intent of the Proposal because parties to the matter – be they service providers or websites – may well game the approach and subvert the intent of the Proposal.

Threshold issues would fetter the power of the court

Additionally, the inclusion matters in such a threshold manner such would fetter the power of the court, which is best placed to weigh up all of the factors brought before it in an application for an order of this kind.

Inconsistent with international legislative provisions

Also, as expressed above, directing the court as to the matters that the Court should consider when determining whether to grant an injunction to block access to a particular website would be consistent with international jurisdictions, such as the United Kingdom and Ireland.

We refer again to the legislative provisions in those particular jurisdictions that give the court the power to issue similar orders, contained in the Copyright, Designs and Patents Act 1988 (UK) and the Copyright and Related Rights Act 2000 (IE). These consist of open language against which the court determines key factors in cases.

International jurisprudence is evidence of courts taking a range of matters into consideration

Also as outlined above, the jurisprudence established by the UK cases, particularly 20C Fox v BT is instructive as to the discretionary factors taken into consideration by the court based on the evidence put before it. We shall not repeat those here as they are addressed above in our detailed analysis. As referenced previously, an overview of the jurisprudence resulting from early UK cases is at Appendix F of this submission.

Additionally, the European Court of Justice in the kino.com case confirmed that:

 ISPs are intermediaries – and held that this finding is not undermined by a lack of a contractual relationship between the infringer (website) and the intermediary;  Site blocking injunctions do not infringe the freedom of business right as there is an obligation to implement proportionate measures;  Site blocking injunctions do not infringe the freedom of information as; and  Site blocking measures do not need to be a ‘perfect fix,’ rather it should seriously discourage users from accessing the site while not impacting the ability to access to legal services.

As referenced previously, an overview of the kino.com case is at Appendix E of this submission.

45 35. REPONSES TO OTHER PROPOSITIONS

Some may say…

Lastly, some may say that Proposal 2 must be narrow and targeted, and a range of matters including but not limited to those addressed above – for example, commercial scale/dominant purpose/primary purpose, freedom of expression, cost/reasonable costs, indemnification – should be specified in the legislative provision. We believe that we have discharged these matters in the detailed evidence above.

Therefore, as stated previously in our analysis of Proposal 2, we recommend that matters such as these are most appropriately determined by the courts in the course of deciding an application for injunction – without being specifically included in the legislation.

46 PROPOSAL 3 – EXTENDED SAFE HARBOUR SCHEME

As overviewed previously in this submission (at Proposal 1) the safe harbour scheme, at Part V Division 2AA of the Act, was enacted in 2006 following the finalisation of the Australia United States Free Trade Agreement (AUSFTA).

Proposal 3 would amend the Act to extend the application of the safe harbour scheme from CSPs to service providers for the four categories of relevant activity as set out in sections 116AC, 116AD, 116AE and 116AF.

We note that this issue was the subject of previous consultation, most recently being the Attorney-General’s Department October 2011 Consultation Paper, Revising the scope of the Copyright ‘Safe harbour Scheme’ (the Safe Harbour Consultation Paper)82. It proposed extending the application of the safe harbour scheme to include entities providing network access and online services.

The safe harbour scheme is inextricably linked to the authorisation provisions of the Act

Before commenting on Proposal 3, it is important to note that the safe harbour scheme provides an incentive for limiting liability for CSPs (in the form of limiting the remedies available against CSPs) if they are found liable under the authorisation provisions of the Act.

As described in the Safe Harbour Consultation Paper:

In 2006, the Copyright Act 1968 was amended to provide a scheme offering legal incentives for Carriage Service Providers (CSPs) to cooperate with copyright owners in deterring copyright infringement on their networks. The scheme is commonly referred to as the ‘safe harbour scheme’ and limits the remedies available against CSPs for copyright infringements that take place through their systems and networks that they do not control, initiate or direct.83

It is therefore the case that the safe harbour scheme is inextricably linked to the authorisation provisions of the Act, and therefore linked to Proposal 1 of the Paper.

Safe harbour scheme does not function as intended

It is supposed to be that the ‘safe harbour’ is only required if the CSP is found liable under the authorisation provisions. As above, the safe harbour scheme provides incentives for CSPs, in the form of limited liability for authorisation, for cooperating with rights holders in deterring copyright infringement on their networks.84

Illustrating this with the common image of a set of scales – on one side of the scales would be the benefit (or incentive), and on the other side of the scales would be the obligation. The Act intends for the sides of the scales to be balanced.

If the Act was properly functioning, the benefit to CSPs – limited liability (under the safe harbour provisions); would be balanced by CSPs meeting the obligation – cooperating with rights holders to deter copyright

82 The Safe Harbour Paper, http://www.ag.gov.au/Consultations/Documents/Revising+the+Scope+of+the+Copyright+Safe+Harbour+Scheme.pdf, p3 83 Ibid, p3 84 Ibid, p3

47 infringement (under the authorisation provisions). Thus the safe harbour provisions of the Act are inextricably linked with the authorisation provisions of the Act.

However, as CSPs have not cooperated with rights holders to deter copyright infringement on their networks by taking reasonable steps – due largely to their being no incentive to do so, particularly following the iiNet case, and a lack of consequence for not doing so under the authorisation liability provisions themselves – the safe harbour provisions are not actually activated, used or relied upon.

The combined realities of a flawed safe harbour scheme and the unintended deficiencies of the authorisation provisions of the Act are untenable independently and collectively.

News Corp Australia therefore does not support the extension of the safe harbour scheme on the basis that the current safe harbour scheme does not operate as intended – the scales are not balanced and therefore the scheme does not work as a whole.

In fact, Proposal 3 could likely exacerbate the imbalance between the authorisation liability provisions and the safe harbour provisions of the Act – giving safe harbour benefits to a broader range of parties while not obliging them to do anything to claim the safe harbour. The matter that the safe harbour scheme does not function – in that the safe harbour provisions are not actually activated, used or relied upon – is not a reason to wave through the extension in Proposal 3. Rather, it is a sound policy reason as to why not.

No case has been made as to why the safe harbour provisions require ‘extending’

Notwithstanding the above, it remains the case that the case for extending the safe harbour provisions has not been made.

36. COMBINATION OF PROPOSALS 1 AND 3

Extending the application of the safe harbour scheme does not fix authorisation liability – rather it worsens the imbalance, and highlights and aggravates the deficiencies

Proposals 1 and 3 in combination do not rectify – rather highlight and aggravate – the deficiencies of the authorisation liability provisions of the Act, and worsens the ensuing imbalance between the authorisation liability and the safe harbour provisions of the Act. This was not the manner in which these provisions were designed to operate, and it should not continue to be so.

To step through this, if Proposals 1 and 3 were implemented:  the safe harbour scheme would extend to service providers; and  the authorisation provisions would not be amended to rectify the current issues; and  the authorisation provisions would not be extended to service providers.

Therefore, the outcome merely ‘gifts’ the ‘safe harbour’ to an expanded set of parties such as internet intermediaries, universities, schools and libraries, without requiring the countervailing obligation of taking reasonable steps to actually claim the safe harbour.

We note that the October 2011 Safe Harbour Consultation Paper stated:

48 The expanding scope of the safe harbour scheme is not intended to alter the existing balance of the scheme.85

However, as we have explained, the so-called balance between authorisation liability and safe harbour is theoretical at best as outlined previously in this submission. Therefore the impact of Proposals 1 and 3 in aggregate – which was also proposed in the Safe Harbour Consultation Paper, in that it proposed expanding safe harbour but did not contemplate expanding the countervailing authorisation liability provisions to service providers – does alter the ‘balance’ of the scheme, even in a theoretical sense.

It would be a suboptimal policy approach if the safe harbour scheme was expanded under Proposal 3 on the basis that as the ‘balance’ is theoretical – that it is unlikely that authorisation liability would be established and therefore the safe harbour provisions would not need to be met; therefore expanding the safe harbour would make little, if any, material difference. This would, of course, beg the question, that if the safe harbour was theoretical, why is it needed at all?

Given the sound reasons outlined above, News Corp Australia does not support the extension of the safe harbour scheme.

We recommend that Proposal 3 does not proceed in its current form, particularly in light of Proposal 1 (as per the paper) not being extended to include service providers.

Rather, Proposal 3 may proceed – in that safe harbour can be extended to service providers – only if the recommendations outlined regarding Proposal 1 are implemented. That is, that there is an obligation to act reasonably to deter copyright infringement on a service provider’s network, and explicit liability if this is not met. Only then will the ‘balance’ between authorisation liability and safe harbour by struck.

To recap:

Proposal 1 must deliver a legislative amendment that ensures an effective legal framework and legal incentives for service providers and rights holders to work together, and ensure the Act works as originally intended.

 It is explicit that a service provider that fails to take reasonable steps, when placed on notice of the infringing behaviour, is liable under the authorisation provisions of the Act; and  Expand the authorisation liability provisions to service providers and intermediaries.

The expansion to incorporate service providers and intermediaries is essential if the safe harbour provisions (at Proposal 3) are to be expanded.

Only if the above occurs should the safe harbour scheme be expanded to service providers.

85 Ibid, p5

49 Only then will the Proposal 3 meet the goals of the Government, assist in meeting Australia’s international trade obligations, ensure the Act works as intended, and align Australia with international jurisdictions.

37. NEWS CORP AUSTRALIA RECOMMENDATION – THE SAFE HARBOUR SCHEME CAN BE EXTENDED TO SERVICE PROVIDERS ONLY IF THE RECOMMENDATIONS OUTLINED REGARDING PROPOSAL 1 ARE IMPLEMENTED

News Corp Australia notes that the case for extending the safe harbour provisions has not been made.

Notwithstanding the above, we support an extension to the safe harbour scheme to include service providers, only if the approach we outline at Proposal 1 is implemented.

Should the amendments as recommended regarding Proposal 1 not be implemented, we cannot countenance expansion of the safe harbour scheme to service providers. This is because the safe harbour scheme is contingent on functioning authorisation liability provisions – which is currently not the case; and the balanced jurisdictions – such that those parties to whom authorisation liability applies can have an opportunity to claim the safe harbour if the requirements of the authorisation liability provisions are met.

Therefore, we restate here the elements of the News Corp Australia recommendation regarding Proposal 1 in full.

Legislative amendment must rectify lack of incentives

 Explicit liability required

We believe that what is lacking under the current authorisation liability provisions is the certainty of legal liability and the incentive for service providers, including ISPs, to work with rights holders – that being explicit liability for failure to take reasonable steps when placed on notice of the infringing behaviour. This also remains the case under Proposal 1.

In short, under the existing provisions and also Proposal 1, there is a lack of incentive for ISPs to take reasonable steps to prevent infringing behaviour on ISP networks, and a lack of incentive for ISPs to cooperate with rights holders – because there is no explicit liability for not doing so.

Until this is rectified there remains no incentive to compel ISPs to work with rights holders to agree how these issues will be addressed. This was evidenced most recently through the protracted ‘round table’ meetings facilitated by the Attorney-General’s Department which did not achieve an outcome. We cannot countenance more of the same.

The most efficient manner of rectifying this situation is for there to be explicit liability for service providers, including ISPs, who fail to take reasonable steps, including wilful inactivity, to prevent infringing behaviour on their networks when placed on notice of the infringing behaviour – that they be liable for authorisation. Only then will there be an effective legal framework, and incentives, for service providers and rights holders to come together to decide what would constitute ‘reasonable steps.’

 Only then will the environment be conducive to the parties reaching agreement on appropriate industry schemes or commercial arrangements

50 As we have said for some time, it will only be once legislative amendment is achieved, delivering an effective legal framework and incentives for the parties to work together, that the environment will be conducive for the parties to – for the first time – engage in meaningful and constructive negotiations to develop the ‘reasonable steps’ required to meet the legislative requirements. This will be because there will be explicit liability for service providers, including ISPs, who fail to take reasonable steps, including wilful inactivity, to prevent infringing behaviour on their networks when placed on notice of the infringing behaviour – that they be liable for authorisation.

Rectifying incentives to cooperate will assist the safe harbour scheme to operate as intended

As outlined previously in this submission, due to the deficiencies in the authorisation liability provisions of the Act, the safe harbour scheme does not operate as it was designed to do – that being ‘offering legal incentives for Carriage Service Providers to cooperate with copyright owners in deterring copyright infringement on their networks.’86

Therefore, rectifying the incentives for service providers, including ISPs, to cooperate with rights holders under the authorisation provisions of the Act will also assist the safe harbour scheme to operate as it was originally intended.

It is vital that an appropriate amendment to authorisation liability is made to ensure that both the authorisation liability provisions and the safe harbour provisions of the Act interact and operate as intended. This is exceptionally important in light of the Government’s Proposal 3, to extend the safe harbour scheme to service providers.

86 Ibid, p3

Question 7: Would the proposed definition adequately and appropriately expand the safe harbour scheme?

We note that it appears to be somewhat premature to respond to this question regarding the specifics of Proposal 3 due to the interconnected nature of these provisions with Proposal 1, and therefore in advance of legislation being implemented. However, we offer the following comments.

As stated previously in this submission, News Corp Australia notes that the case for extending the safe harbour provisions has not been made.

Again, as above, we support an extension to the safe harbour scheme to include service providers, only if the approach we outline at Proposal 1 is implemented.

Should the amendments as recommended regarding Proposal 1 not be implemented, we cannot countenance expansion of the safe harbour scheme to service providers. This is because the safe harbour scheme is contingent on functioning authorisation liability provisions – which is currently not the case; and the balanced jurisdictions – such that those parties to whom authorisation liability applies can have an opportunity to claim the safe harbour if the requirements of the authorisation liability provisions are met.

Question 8: How can the impact of any measures to address online copyright infringement best be measured?

Again, we note that it appears somewhat premature to respond to this question as it is unclear as to the details of the legislative framework, industry schemes, and the goals of each of the programs and/or measures put in place. However, we offer the following comments.

It is useful to look to international examples that point to the following:

 Consumer awareness of programs (such as the graduated response) and licensed services  Consumer attitudes  Use of unlicensed services

We emphasise that it will be important that the methods of measuring impact of the initiatives put in place to address online copyright infringement be fit for purpose.

Question 9: Are the alternative measures to reduce online copyright infringement that may be more effective?

As outlined at Section 4, there is no silver bullet to ‘solve’ online copyright infringement. It requires a multifaceted approach – a toolkit – that includes legitimate products and services, consumer awareness and education, and legislative measures that assist in addressing the availability, or supply, of unlawful content, and also legal measures that incentivise parties to work together to deter consumer demand for such content.

52 Section 4 includes a snapshot of legitimate and innovative products and services, and consumer awareness and education measures developed by the market. This is not a static situation, and the market responses continue to develop and evolve.

There are no ‘alternatives’ to a well-functioning legal framework

We stress however, that these market-based initiatives are not alternatives to the requirement for the amendments required to deliver the Government goal:

‘to provide a legal framework within which rights holders, ISPs and consumer representatives can develop flexible, fair and workable approaches to reducing online copyright infringement’87 to: ‘provide certainty as to legal liability, streamline the process by which rights holders can seek relief from the courts to block access to websites providing infringing material, and provide an incentive for market participants to work together to address online copyright infringement.’88

News Corp Australia therefore urges the Government to adopt Amended Proposals 1, 2 and 3 to deliver on this goal and the aim of the framework.

Work in progress

Work in progress includes an initiative being led by Music Rights Australia, with the Audited Media Association of Australia, to develop industry guidelines in the form of an industry code to ensure that each section of the online advertising value chain has in place practical processes and guidelines to reduce the instances of brands placing their advertising on illegal streaming and downloading sites.

According to international report Good Money Gone Bad – digital thieves and the hijacking of the online ad business,89a report on the profitability of ad-supported content theft for the Digital Citizens Alliance, the content theft websites researched make about US$227 million in ad revenue annually. According to the report, the 30 largest content theft sites that are supported exclusively by ads make on average US$4.4 million annually, and the largest BitTorrent portal sites top US$6 million – by relying on the works of others.

The development of an industry code in Australia would complement similar international initiatives. More details about these local and international initiatives are included in the Music Rights Australia submission to the Paper.

As outlined in this submission and supported with detailed analysis, in concert with these market responses across products and services and awareness and education Australia requires a legal framework that supports and respects the decisions of creators and rights holders. REPONSES TO OTHER PROPOSITIONS

Some may say…

 There are more sustainable approaches than legislation

87 The Paper, p1 88 Ibid, p1 89 February 2014, Good Money Gone Bad – digital thieves and the hijacking of the online ad business, Research conducted by MediaLink for the Digital Citizens Alliance http://www.digitalcitizensalliance.org/cac/alliance/content.aspx?page=FollowTheProfit

53 As we have detailed, non-exhaustively, in Section 4, rights holders and content creators have – and continue to – innovate and deliver products and services to meet consumer demand.

As outlined in this submission and supported with detailed analysis, in concert with these market responses across products and services and awareness and education – which continue to evolve – Australia requires a legal framework that supports and respects the decisions of creators and rights holders.

 Follow the money is the best approach

As above, some work in this area is being undertaken. That work could only benefit from the involvement of the parties advocating, and with international experience, in these initiatives.

Like other initiatives however, it must be acknowledged that this is not a silver bullet and not an alternative. It is however a complement, and another tool in the toolkit of deterring online copyright infringement through disrupting the business models of the beneficiaries of this activity.

 Some may say that the problem of infringement would be solved/fixed with ‘better’ availability and pricing

As outlined in Section 4, pricing and availability are elements of the product response being continually evolved and delivered by the market.

Some that advocate for ‘pricing and availability’ say that people wouldn’t pirate content if these were ‘fixed’ or even that online piracy is primarily an availability and pricing problem.90 As evidenced previously, and restate here, the experience of the music industry – with ubiquitous access including at price points of $0 – is that still 26% of internet users worldwide regularly access unlicensed services.91

We acknowledge that price and availability are important tools, but these alone cannot address the issue. However, as above and akin to other market-based initiatives, it must be acknowledged that ‘pricing and availability’ is not a silver bullet, and is certainly not an alternative to what the Paper is seeking, that being legislative amendment and a well-functioning legal framework to support other measures to address online copyright infringement.

We note here that Telstra CEO, David Thodey, in responding to a question posed at a media briefing following Telstra’s FY14 results, said:

‘Piracy of content is theft…I hold a very strong view on that. You can’t justify it because of the price of content.’92

Also, Minister Turnbull, in blog post regarding online copyright infringement said:

‘A part of the solution is making content available in Australia at the same time, or very shortly after, it is released overseas and at a comparable price…Now let me make this clear.

90 17 December 2013, Google correspondence to Minister for Communications, http://www.communications.gov.au/__data/assets/pdf_file/0009/214983/Google.pdf 91 March 2014, http://www.ifpi.org/downloads/Digital-Music-Report-2014.pdf, p40, Note – this figure applies on to desktop-based services and does not include smartphone and tablet-based music infringement. 92 14 August 2014, http://www.businessinsider.com.au/david-thodey-telstra-has-a-role-to-play-in-stopping-content- piracy-2014-8

54 The owners of copyright material, music, movies or whatever, are able to determine the price at which they sell it and when they sell it. That’s their call.’93

93 http://www.malcolmturnbull.com.au/media/copyright-the-internet-and-piracy

55 39. 6. RESPONSE TO QUESTIONS POSED IN THE PAPER

Section 5 of this submission includes responses to questions posed for Proposals 1, 2 and 3. However, for reference, those responses are repeated below, in addition to questions posed regarding the Regulation Impact Statement.

QUESTIONS REGARDING EXTENDED AUTHORISATION LIABILITY

These comments are predicated on the recommendations in this submission being adopted, in this case being referred to as Amended Proposal 1.

We note that it appears to be somewhat premature to respond to questions regarding the specifics of the industry schemes and/or commercial models that would meet the legislative and/or regulatory requirements of Amended Proposal 1 in advance the legislation being implemented. However, we offer the following comments.

Question 1: What could constitute ‘reasonable steps’ for ISPs to prevent or avoid copyright infringement?

Regarding what would constitute ‘reasonable steps’ for ISPs to prevent or avoid copyright infringement, we recommend an industry scheme that comprises a graduated response approach to notifying ISP customers when their accounts have been used to infringe copyright online. Our preferred model for such an industry scheme is the US Copyright Alert System (CAS)94.

At Section 5 above we outline that such an industry scheme would be competitively neutral, and the elements that should be included. We also provide at Section 5:

 Overview of the CAS o The launch o How it operates o Overview of the Alerts  Efficacy of the CAS o Key data o Consumer research

Question 2: How should the costs of any ‘reasonable steps’ be shared between industry participants?

News Corp Australia recommends that the most efficient manner for costs to be allocated are with each party bearing its own costs. This is the approach taken in the US CAS model.

Question 3: Should the legislation provide further guidance on what would constitute ‘reasonable steps’?

News Corp Australia recommends that any guidance in relation to what would constitute ‘reasonable steps’ should be set out in regulations that support the legislative provisions. Those regulations could include guidance as to the elements that industry schemes and/or commercial arrangements should encompass.

94 http://www.copyrightinformation.org/the-copyright-alert-system/

56 Such an approach would allow sufficient flexibility to enable amendments to accommodate current and future evolutions – some of which are unknown to us now.

Question 4: Should different ISPs be able to adopt different ‘reasonable steps’ and, if so, what would be required within a legislative framework to accommodate this?

News Corp Australia stresses here that it is important that the legislative framework fulfils the goal of ensuring an effective legal framework and legal incentives via explicit legal liability, for service providers and rights holders to work together – and ensure that the authorisation liability provisions of the Act operate as originally intended.

In fulfilling this, it is important to restate the importance of competitive neutrality. Regarding the preferred industry scheme for ISPs, it should apply to all ISPs. While the regulations should be clear about the elements of a scheme, it may be that the scheme itself – developed by the applicable parties – will incorporate some flexibility into ‘how’ the legislative and regulatory requirement is to be met in agreement with the parties.

Question 5: What rights should consumers have in response to any scheme or ‘reasonable steps’ taken buy ISPs or rights holders? Does the legislative framework need to provide for these rights?

News Corp Australia suggests that the preferred model of an industry scheme, the US CAS, incorporates a consumer appeal process, enabling customers to appeal notices when in the mitigation stage. It is envisaged that under Amended Proposal 1 that there be a consumer appeals process available.

QUESTIONS REGARDING EXTENDED INJUNCTIVE RELIEF

Question 6: What mattes should the Court consider when determining whether to grant an injunction to block access to a particular website?

As outlined above, in granting the court the power to consider applications for the equitable remedy of injunctive relief of this kind, we do not support a list of determinative factors – whether that list is exhaustive or non-exhaustive – being included in the legislation. We believe that such matters should not be threshold issues, rather be left to the discretion of the court.

Threshold issues would be open to gaming

If matters such as, but not limited to, commercial scale/dominant purpose/primary purpose, freedom of expression, cost/reasonable costs and indemnification were included in the legislative provisions, it is likely to undermine the intent of the Proposal because parties to the matter – be they service providers or websites – may well game the approach and subvert the intent of the Proposal.

Threshold issues would fetter the power of the court

Additionally, the inclusion matters in such a threshold manner such would fetter the power of the court, which is best placed to weigh up all of the factors brought before it in an application for an order of this kind.

57 Inconsistent with international legislative provisions

Also, as expressed above, directing the court as to the matters that the Court should consider when determining whether to grant an injunction to block access to a particular website would be consistent with international jurisdictions, such as the United Kingdom and Ireland.

We refer again to the legislative provisions in those particular jurisdictions that give the court the power to issue similar orders, contained in the Copyright, Designs and Patents Act 1988 (UK) and the Copyright and Related Rights Act 2000 (IE) respectively; consist of open language against which the court determines key factors in cases.

International jurisprudence is evidence of courts taking a range of matters into consideration

Also as outlined above, the jurisprudence established by the UK cases, particularly 20C Fox v BT 20C Foxis instructive as to the discretionary factors taken into consideration by the court based on the evidence put before it. We shall not repeat those here as they are addressed above in our detailed analysis. As referenced previously, an overview of the jurisprudence resulting from early UK cases is at Appendix F of this submission.

Also, as outlined previously in this submission, the European Court of Justice in the kino.com case confirmed that:

 ISPs are intermediaries – and held that this finding is not undermined by a lack of a contractual relationship between the infringer (website) and the intermediary;  Site blocking injunctions do not infringe the freedom of business right as there is an obligation to implement proportionate measures;  Site blocking injunctions do not infringe the freedom of information as; and  Site blocking measures do not need to be a ‘perfect fix,’ rather it should seriously discourage users from accessing the site while not impacting the ability to access to legal services.

QUESTIONS REGARDING EXTENDED SAFE HARBOUR SCHEME

Question 7: Would the proposed definition adequately and appropriately expand the safe harbour scheme?

We note that it appears to be somewhat premature to respond this question regarding the specifics of Proposal 3 due to the interconnected nature of these provisions with Proposal 1, and therefore in advance of legislation being implemented. However, we offer the following comments.

As stated previously in this submission, News Corp Australia notes that the case for extending the safe harbour provisions has not been made.

Again, as above, we support an extension to the safe harbour scheme to include service providers, only if the approach we outline at Proposal 1 is implemented.

Should the amendments as recommended regarding Proposal 1 not be implemented, we cannot countenance expansion of the safe harbour scheme to service providers. This is because the safe harbour scheme is contingent on functioning authorisation liability provisions – which is currently not the case; and

58 the balanced jurisdictions – such that those parties to whom authorisation liability applies can have an opportunity to claim the safe harbour if the requirements of the authorisation liability provisions are met.

Question 8: How can the impact of any measures to address online copyright infringement best be measured?

Again, we note that it appears somewhat premature to respond to this question as it is unclear as to the details of the legislative framework, industry schemes, and the goals of each of the programs and/or measures put in place. However, we offer the following comments.

It is useful to look to international examples to point to the following:

 Consumer awareness of programs (such as the graduated response) and licensed services  Consumer attitudes  Use of unlicensed services

We emphasise that it will be important that the methods of measuring impact of the measures put in place to address online copyright infringement be fit for purpose.

Question 9: Are the alternative measures to reduce online copyright infringement that may be more effective?

As outlined at Section 4, there is no silver bullet to ‘solve’ online copyright infringement. It requires a multifaceted approach – a toolkit – that includes legitimate products and services, consumer awareness and education, and legislative measures that assist in addressing the availability, or supply, of unlawful content, and also legal measures that incentivise parties to work together to deter consumer demand for such content.

Section 4 includes a snapshot of legitimate and innovative products and services, and consumer awareness and education measures developed by the market. This is not a static situation, and the market responses continue to develop and evolve.

There are no ‘alternatives’ to a well-functioning legal framework

We stress however, that these market-based initiatives are not alternatives to the requirement for the amendments required to deliver the Government goal:

‘to provide a legal framework within which rights holders, ISPs and consumer representatives can develop flexible, fair and workable approaches to reducing online copyright infringement’95 to: ‘provide certainty as to legal liability, streamline the process by which rights holders can seek relief from the courts to block access to websites providing infringing material, and provide an incentive for market participants to work together to address online copyright infringement.’96

95 The Paper, p1 96 The Paper, p1

59 News Corp Australia therefore urges the Government to adopt Amended Proposals 1, 2 and 3 to deliver on this goal and the aim of the framework.

Work in progress

Work in progress includes an initiative being led by Music Rights Australia, with the Audited Media Association of Australia, to develop industry guidelines in the form of an industry code to ensure that each section of the online advertising value chain has in place practical processes and guidelines to reduce the instances of brands placing their advertising on illegal streaming and downloading sites.

As we know from international reports such as Good Money Gone Bad – digital thieves and the hijacking of the online ad business,97a report on the profitability of ad-supported content theft for the Digital Citizens Alliance, thee content theft websites researched make about US$227 million in ad revenue annually. According to the report, the 30 largest content theft sites that are supported exclusively by ads make on average US$4.4 million annually, and the largest BitTorrent portal sites top US$6 million – by relying on the works of others.

The development of such an industry code in Australia would complement similar international initiatives. More details about these local and international initiatives are included in the Music Rights Australia submission to the Paper.

As outlined in this submission and supported with detailed analysis, in concert with these market responses across products and services and awareness and education Australia requires a legal framework that supports and respects the decisions of creators and rights holders.

QUESTIONS REGARDING REGULATION IMPACT STATEMENT

As we have prefaced previously in the submission, it appears to be somewhat premature to respond to questions regarding the specifics of the Proposals in advance of them being finalised. However, we offer the following comments.

These comments are predicated on the recommendations in this submission being adopted (referred to as Amended Proposal 1, Amended Proposal 2 and Amended Proposal 3).

In the case of amended Proposal 1 it is also predicated on the preferred model for a graduated response industry scheme, akin to the US CAS model, being developed.

Question 10: What regulatory impacts will the proposals have on you and your organisation?

Proposal 1

The implementation of Amended Proposal 1 would require rights holders to make a significant investment to ensure that the evidentiary burden for the issuing of notices regarding alleged copyright infringement is met. As stated above, we believe that it is appropriate that each party bears its own cost in meeting the legislative requirements. 97 February 2014, Good Money Gone Bad – digital thieves and the hijacking of the online ad business, Research conducted by MediaLink for the Digital Citizens Alliance, http://www.digitalcitizensalliance.org/cac/alliance/content.aspx?page=FollowTheProfit

60 Proposal 2

The implementation of Amended Proposal 2 would require rights holders to make a significant investment to ensure that the case for applying for the court order is sound, and to meet the evidential hurdles of the court in considering the matter and issuing the order. As stated above, we believe that it is appropriate that each party bears its own cost in meeting the legislative requirements.

Proposal 3

The implementation of Amended Proposal 3 may impose additional business costs to rights holders. As stated previously in the submission we believe that it is appropriate that each party bears its own cost in meeting legislative requirements.

Some may say Proposals 1, 2 and 3 apply new regulatory burdens and compliance costs

 Proposal 1

Some may say that there are new ‘regulatory imposts’ and ‘compliance costs’ associated with Amended Proposal 1.

As we have explained previously in the submission, Amended Proposal 1 merely rectifies the deficiencies in the Act, and is therefore not a new requirement; rather it makes the existing requirement function as it should. It is also the case that, as the Paper states, Australia has existing international obligations to provide protections for copyright material. Therefore we do not agree with the proposition that some may put regarding this Proposal.

 Proposal 2

Some may say that the cost of website blocking, being the legal process and/or complying with the court order, applies new ‘regulatory imposts’ and ‘compliance costs.’

Again, as the Paper states, Australia has existing international obligations to provide protections for copyright material, and in this context, it is an additional, but necessary amendment to assist in fulfilling those obligations.

To the extent that the proposition put by some may have traction – which we do not agree with, but for the purposes deal with here – we point to international jurisprudence, particularly in the UK. As cited previously in this submission, in the 20C Fox v BT Approved Second Judgement, Justice Arnold said:

‘Each side contends that the other should pay the costs of implementing the order. In my judgment the costs of implementing the order should be borne by BT…The cost of implementing the order is a factor that can be taken into account when assessing the proportionality of the injunction, and in the present case I have done so: see the main judgment at [200]. Indeed, my conclusion there that the cost to BT “would be modest and proportionate” is supported by the evidence subsequently filed by BT, which estimates the initial cost of implementation at about £5,000 and £100 for each subsequent notification.’98

98 20C Fox v BT, Second Judgement, at [32]

61  Proposal 3

Some may say that Amended Proposal 3 applies new ‘regulatory imposts’ and ‘compliance costs’ on the parties to whom the extension applies given the link with Amended Proposal 1.

However, as stated above, the requirement to have a safe harbour scheme that is balanced by the obligations under the authorisation provisions Act is an existing requirement. Under the Amended Proposal 3, the extension of the safe harbour scheme to service providers also must extend the obligations of authorisation provisions to service providers to maintain the balance.

To the extent that the proposition put by some may have traction – which we do not agree with, but for the purposes deal with here – we say that these obligations are required under existing international obligations, and may already be employed through existing business processes, for example, the measures some service providers and intermediaries already undertake regarding managing online piracy.99

Notwithstanding this, as the Paper states, Australia has existing international obligations to provide protections for copyright material which, with the safe harbour provisions being interdependent with Amended Proposal 1, come into play.

Question 11: Do the proposals have unintended implications, or create additional burdens for entities other than rights holders and ISPs?

As outlined in our Amended Proposals 1, 2 and 3, it is important to ensure:  A technology neutral approach to the market participants to whom the Proposals apply; and  That should safe harbour be extended to service providers that the corresponding obligations also extend to service providers to ‘balance’ the scheme.

To the extent that the Amended Proposals apply to service providers, the obligations should only apply to entities in their capacity as service providers – hence the importance of the definition of service provider.

As outlined in response to Question 10 above, based on existing international obligations and international jurisprudence, and coupled with the ability to fulfil Proposal 1 via industry schemes and commercial arrangements, we do not foresee Amended Proposals 1, 2 and 3 being burdensome to the parties to whom they will apply in their capacity as service providers.

99 Examples include How Google Fights Piracy, http://googlepublicpolicy.blogspot.com.au/2013/09/report-how-google- fights-piracy.html and https://docs.google.com/a/google.com/file/d/0BwxyRPFduTN2dVFqYml5UENUeUE/edit; and How eBay Protects Intellectual Property (VeRO), http://pages.ebay.com.au/help/tp/programs-vero-ov.html

62 40. APPENDIX A – DIGITAL CONTENT GUIDE PRESS RELEASE

Media Release: Tuesday, August 5, 2014

Digital Content Guide launches today

Australia’s first guide to digital entertainment and services is open for business

The Digital Content Guide, commissioned by an assembly of Australia’s creative content associations, creators and distributors, launched today in an effort to provide a quick and easy way for Australians to find and enjoy access to licensed online entertainment services including TV shows, movies, music, eBooks, video games and sport.

There has been an explosion in legitimate ways to get access to content online. However, sometimes it can be hard to find that content or to distinguish between sites that offer legal access and those that illegally monetise the hard work of all who contribute to the creative industry. The Digital Content Guide simplifies the search and helps people find the games, shows, movies, music and books they love.

The site directs visitors to information about different services, which can be clicked to directly to explore and enjoy. Australians will see a wide choice of licensed digital services for a variety of content across different devices and platforms. As the breadth of options continues to grow, the site will keep pace in order to help Australians find the content they want from a licensed service.

Simon Burke, Actors’ Equity President said, “People are passionate about entertainment and we are passionate about creating it. Therefore, it’s critical to ensure that the creative industries receive the support they need, through legitimate use, so that the 900,000* Australians they employ can continue to make them thrive.”

The Digital Content Guide is a joint effort by APRA AMCOS, The Australian Recording Industry Association (ARIA), The Australian Screen Association (ASA), Copyright Agency Ltd, News Corp Limited, Foxtel and Village Roadshow Limited.

For more information, visit The Digital Content Guide at: www.digitalcontentguide.com.au.

*Source: PWC: The Economic Contribution of Australia’s Copyright Industries report For more information: [email protected] (02) 9813 7577/ 0409 928 209

63 41. APPENDIX B – THANK YOU CAMPAIGN PRESS RELEASE

MEDIA RELEASE 20 AUGUST 2012 IPAF LAUNCHES ‘THANK YOU’ CAMPAIGN AT MOVIE CONVENTION NEW AD SAYS ‘PAYING FOR FILMS & TV WORKS FOR EVERYONE, THANK YOU’

SYDNEY: The film and television industry in Australia launched a new campaign today to say thank you to consumers for choosing to view or access film and television in the way it was intended to be seen – in the cinema, on television, on Blu-ray or DVD or via legitimate online channels.

The campaign was launched at the opening of the Australian International Movie Convention (AIMC) on Queensland’s Gold Coast., where over 1,000 film distributors and cinema operators converge to preview the upcoming year of movie releases and discuss the business of cinema.

The Intellectual Property Awareness Foundation (IPAF), a broad membership of film and television organisations in Australia, produced and distributed the consumer awareness message with the support of actors, production crew, distributors, exhibitors and a wide range of local industry businesses, both large and small.

Actor Susie Porter, who features in the new campaign, said: “I chose to personally become involved in this campaign because our industry relies on the good will of our audience for any show to be a success. It’s important to once in a while say ‘thank you’ to Australians who chose to support our work by going to the cinema, buying or renting DVDs, watching TV or viewing our shows on a genuine online website, because without them we wouldn’t be able to invest in the production of all of our great shows. Good on you for watching!”

IPAF Executive Director, Lori Flekser, said: “Our new campaign is informed by research released by Sycamore and Newspoll in June this year that found that nearly two thirds of Australians do not access unauthorized films and television shows online, while another 10% have stopped doing so in the last 12 months. The survey also found that over three quarters of Australians are more aware of the growth of online legal alternatives.

“ As a film and TV community, we want to say ‘thank you’ to the many Australians who choose to patronize the cinema, watch TV, rent or buy DVDs and Blu-rays, or access their online content via genuine websites. By doing so, people are not only supporting jobs and businesses in the creative community, they are also contributing to further investment in new films and television shows. Doing the right thing ultimately benefits everyone.”

Nic Holland, director of the ‘Thank You’ commercial, said: “Like all productions, creating this consumer message was a labour of love. It takes an army of talented individuals, each with their own

64 special skill, to come together as a team and create quality screen content, and the production of this ‘Thank You’ video was no different. However, the common motivation for everyone’s involvement was a commitment to thank Australians for watching our shows the way we intended them to be viewed. While we are blessed to be working in a field we love, it has its fair share of challenges, particularly, and we can only continue to make quality films and TV shows with the support of the paying public.”

Quickflix Founder and Executive Chairman, Stephen Langsford said: “We want people to enjoy film and television when they want it and on the platform of their choice. We’re here to deliver an enjoyable legal alternative, whether that be online or delivered to your door, at a competitive price. We’re proud to be a part of saying ‘Thank You’ to all Australian film and TV lovers."

The campaign can be seen in cinemas nationally, on Foxtel, on select new release DVDs, on Quickflix home delivery DVD envelopes, and via a wide range of film and television industry websites.

To view the ‘Thank You’ consumer campaign, hear from the people behind the scenes, and learn more about the work of the Intellectual Property Awareness Foundation, please go to: www.ipawareness.com.au.

ABOUT THE INTELLECTUAL PROPERTY AWARENESS FOUNDATION (IPAF)

IPAF promotes screen copyright by conducting research, creating consumer awareness campaigns and producing educational programs and resources for Australian secondary schools. 50,000 Australians depend on the film and TV industry for their livelihoods, including those in production, distribution, exhibition, DVD rental & retail, marketing, operations, office trades and a multitude of service providers and suppliers. www.ipawareness.com.au

CONTACTS: Stephen Jenner, Communications Director, IPAF 0409 776196 [email protected]

65 42. APPENDIX C – MUSIC MATTERS PRESS RELEASE

MUSIC MATTERS LAUNCHES IN AUSTRALIA AND NEW ZEALAND

MEDIA RELEASE STRICTLY EMBARGOED UNTIL 10 AUGUST 2011

Today MUSIC MATTERS launches across Australia and New Zealand! Aimed to remind music fans of the value and significance of music, this exciting international campaign is supported by a collective of people across the Australian and New Zealand music community, including artists, songwriters, managers, labels, publishers, online music providers and record stores.

As a 23 year old writing my third album doing the only thing I’ve ever wanted to do, every other part of my life exists in the giant and encompassing shadow that my passion for music has cast…. Alexander Gow, singer + songwriter, Oh Mercy

Allowing the music to speak for itself, the educational campaign brings together a growing collection of short animated films about inspirational Australian and New Zealand artists including Eskimo Joe, Nick Cave, Oh Mercy, Graeme Connors and Dave Dobbyn. These artists have dedicated their lives to music and have helped shape our cultural landscape.

Many of the short animated MUSIC MATTERS films have been created through a unique collaboration between the Australian music community and talented final year animators at the University of Technology, Sydney. More will be launched over the coming months, culminating in an official launch on the opening night of the UTS: Sydney International Animation Festival on Friday, 23 September which will unveil The Go Betweens animated film.

The MUSIC MATTERS animated films are complemented by a series of rotating “blogs” from people across the music community on why MUSIC MATTERS to them. Blog contributors include Alex Dyson (presenter on Triple J), John Watson (manager of Cold Chisel, Birds of Tokyo, Silverchair, Missy Higgins, Gotye) and many others.

The campaign also incorporates a MUSIC MATTERS “trust mark” which is displayed by supporting music stores and acts as such a guide for music fans to determine whether the record store or music site that they are using is supporting the artists, musicians, songwriters and everyone involved in creating the music. With more than 14 million tracks available through 400+ legitimate online music stores worldwide, music fans have more ways than ever to access music legitimately.

66 The MUSIC MATTERS campaign can be seen at www.whymusicmatters.org. You can also follow us at: Facebook: www.facebook.com/whymusicmattersANZ and Twitter: www.twitter.com/musicmattersANZ.

MUSIC MATTERS reflections Music Matters is a great campaign, as it focuses on the value of music. They're saying, "These artists have put their whole lives into their music, so do them a favour. Support their music, so they can keep creating it." - Stu Macleod, Eskimo Joe

Music matters appealed to me because it humanised the creative process. Young people in this day have been raised in an environment where music is so easily accessed that it by-passes any thought and acknowledgment of the source of the entertainment. Music matters is educating young people on the worth and value of music. - Alexander Gow, Oh Mercy

Music is the corner stone of our cultural lives and makes a mark on the kind of society we are or want to be. Music breaks down cultural, political and social barriers....makes us "feel" in a world that can sometimes make it hard. Celebrating music and the music makers is what Music Matters is all about, and how music has changed our lives for the better. Where would we be without it? - Cath Haridy, Manager of Eskimo Joe and Chairperson of the Australian Music Managers (AMM)

Music is such an important part of Australia's social and cultural fabric, it reflects the times we live in and the things we aspire to be. It's an incredible emotional outlet for audiences and creators alike. We love MUSIC MATTERS because it is an acknowledgement by the 'music industry' that what we do is nothing without the music itself. When all is said and done, the most important thing we need to do is protect and encourage is the creation of music. - Nick O'Byrne, General Manager, Australian Independent Record Labels Association

It's such a pleasure to see Music Matters roll out in Australia after being part of the UK launch. The creativity and stories in these lovely clips bring such strong emotions and pride about being part of the music industry and the impact music has on us all as individuals and passion it creates. Music Matters is all about fans and I hope the word spreads fast! - Beth Appleton, Director of Marketing at Warner Music

There’s no doubt that here in the early years of the 21st century the love of music continues to obsess us the way it always has and to my mind Music Matters is a magnificent way to recognise that, showcasing the passion, commitment and creative vision of the artists, whilst also respecting all the hard work that goes into bringing that first spark of an idea in a songwriter’s mind right through to a polished and finished tune in the hands (and ears, and mind) of a fan. AMRA is privileged to be involved. - Gavin Ward, Chairman, Australian Music Retailers Association

Music matters because it has the power to completely change people's emotions and moods. Music can make you laugh, cry and all emotions in between. - Kenneth Macrohon, Design student at UTS, Animator for MUSIC MATTERS

The MUSIC MATTERS project was particularly inspirational for me as I myself am an aspiring musician. To be able combine the craft of design and music is a wonderful thing and was a pleasure be a part of. - Salvatore Scopelliti, Design student at UTS, Animator for MUSIC MATTERS

The Music Matters campaign is a great idea and brilliantly executed. We have been supporting and promoting the Australian music industry in Asia for many years and look forward to supporting this initiative.- Jasper Donat, President, Music Matters Asia Pacific Music Forum

67 Background to MUSIC MATTERS

The MUSIC MATTERS campaign was an initiative that began in March 2010 in the United Kingdom which included animated films about Nick Cave, Kate Bush, Sigur Ros, Iron Maiden, Louis Armstrong and many others, each focusing on the reason why MUSIC MATTERS to them or their fans. The films are emotional, thought provoking and as a whole express the passion, blood, sweat and tears that goes into making music.

The MUSIC MATTERS campaign in Australia and New Zealand is proudly supported by:  Artists involved in the MUSIC MATTERS animations  Artists and managers including through the AAM (Australian Music Managers)  Songwriters through APRA | AMCOS  Australian independent record labels through AIR (Australian Independent Record Labels Association)  Over 125 Australian record labels through ARIA (The Australian Recording Industry Association)  NZ record labels through RIANZ (NZ Recording Industry Association)  Music publishers through AMPAL (Australian Music Publishers Association)  Many Australian music retailers both online and bricks & mortar including through AMRA (Australian Music Retailers) that display the MUSIC MATTERS trust mark  Community broadcasters through AMRAP (The Australian Music Radio Airplay Project)  The University of Technology Sydney – whose talented final year students are involved in the creation of the MUSIC MATTERS animations  Range of talented grass-roots animators that are involved in the creation of animations for the MUSIC MATTERS ANZ campaign

The Australian and New Zealand MUSIC MATTERS animations have been created by the following talented animators:  Darcy Prendergast (Eskimo Joe)  Sarah Cox and Emma Lazenby (Nick Cave)  Sam Scopelliti (student at University of Technology, Sydney) (Oh Mercy)  Sarah Eddows (Graeme Connors)  Leanne Choi (Dave Dobbyn)

More MUSIC MATTERS animations coming soon!

Media contact

Luke Woods, ARIA Communications Manager (02) 8569 1151 or 0402 684 803 [email protected]

-ENDS –

68 43. APPENDIX D – HADOPI, DANAHER ET AL STUDY100

Further to the data included in the submission sourced from the the Danaher et al research of the French Hadopi scheme, The Effect of Graduated Response Anti-Piracy Laws on Music Sales: Evidence from an Event Study in France, we offer the following:

Elements of the study

The study obtained a panel of iTunes sales data from the four major music labels (Universal Music, Warner Music, EMI and Sony Music – representing about 70% of music industry sales) across a broad set of countries. A difference-in-difference approach was applied, using sales trends in a control group of European countries (UK, Italy, Spain, Germany and Belgium) to simulate the counterfactual of what music sales in France would have been if Hadopi had not been passed.

Using Google Trends data on Google searches, the study found that:

Public awareness of Hadopi became widespread in Spring 2009, and our difference-in-difference model suggests that Hadopi awareness caused a 22.5% increase in iTunes song unit sales in France (over any change in the control group), as well as a 25% increase in iTunes album unit sales (over and above the change in the control group).101

The study goes on the say:

Closer examination reveals similar trends separately for each of the four major music labels, suggesting that our industry-wide results are not driven by one label’s advertising campaign or marketing activity.102

To test the validity of our results, we add another level of difference to the model. Previous research and new survey data reveal that music genres differ in their tendency to be pirated. Once would expect that if the observed relative increase in French sales is caused by Hadopi, that high-piracy genres would experience a larger increase in sales than low-piracy genres do. Our results are consistent with this hypothesis: low piracy genres experienced only a 7% difference-in-difference sales increase in France after Hadopi, which high piracy genres experienced a 30% difference-in- difference increase in sales, a result that is consistent with the hypothesis that the observed increased in French sales after Hadopi is due to a reduction in internet piracy.103

Regarding the limitations of the study

A limitation of our study is that we only observe data for one industry (music), in one channel (iTunes). Thus the conclusions should be generalised with caution. However, this also means that our study likely understates the true sales impact of HADOPI. 104

The study states: 100 Danaher, Smith, Telang and Chen, The Effect of Graduated Response Anti-Piracy Laws on Music Sales: Evidence from an Event Study in France, 2012 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1989240 101 Ibid, p2 102 Ibid, p2-3 103 Ibid, p3 104 Ibid, p20

69 It is possible that HADOPI could affect physical sales [eg CDs] in addition to digital sales (physical retail sales data was not available at the time of the study); 105

[The data] also does not reflect revenues from newer legal music streaming platforms [eg Spotify, Deezer, MusicMe or You Tube]; 106

And concludes;

In short, while we suspect that revenues from these or other similar music services may have benefitted from HADOPI, we are unable to evaluate this claim with the same rigor or precision that we could with iTunes sales. As such, we believe that the €13.8 (US18.6) million per year increase in French iTunes revenues suggested in our results should be taken as a lower bound of the total effect that HADOPI has had on music industry revenues.107

105 Ibid, p7 106Ibid, p7 107 Ibid, p21

70 44. APPENDIX E – OVERVIEW OF EUROPEAN COURT OF JUSTICE RULING, KINO.COM CASE

The European Court of Justice (CJEU) issued its decision on copyright site blocking injunctions in UPC Telekabel v Constantin Film (kino.com case) (Case C-314/12)108 on 27 March 2014.

THE CJEU JUDGEMENT

 Confirmed that kino.to (website) directly infringed copyright

 Confirmed that ISPs are intermediaries – and held that this finding is not undermined by a lack of a contractual relationship between the infringer (website) and the intermediary

 Site blocking injunctions do not infringe the freedom of business right as there is an obligation to implement proportionate measures:

o The ISP can determine the specific measures to be taken to achieve the result sought; and o The ISP avoids financial liability by taking reasonable measures, and is not required to make unbearable sacrifices – there is an obligation to implement proportionate measures only o However must do what is reasonable to effect the block within its capacity

 Site blocking injunctions do not infringe the freedom of information as: o The ISP’s manner of meeting the requirement of the injunction must not affect lawful access to information

 Site blocking measures do not need to be a ‘perfect fix,’ rather it should seriously discourage users from accessing the site while not impacting the ability to access to legal services

 Costs – the question was reverted to the relevant EU country’s court to determine

The verdict is final and binding on the courts of all 28 EU Member States.

Other national appeals

The CJEU ruling is final and binding on the courts of all 28 EU Member States.

108 Article 8(3) of Directive 2001/29/EC is known as the Copyright Directive. This allows nations to implement laws to allow third party injunctions to ISP stop customer access to sites that illegal offer content for download and streaming

71 THE RULING IN DETAIL

Infringement by kino.to

The Court confirms that kino.to directly infringed copyright.

It made the claimants’ works available via link, and that linking to copyright protected content – without the consent of the rights holder – constitutes an infringement109.

UPC (the ISP) is an intermediary

The Court confirms that UPC is an intermediary for the purpose of the Copyright Directive.

It confirms the ISP is an ‘inevitable actor in any transmission of an infringement over the internet’110 and that its services are therefore used to infringe copyright.

The Court then holds that this is not undermined by the lack of a contractual relationship between the infringer and the intermediary.

The Court also found that rights holders do not need file evidence of consumers actually accessing the illegal content111 – evidence of the availability of the content is sufficient112.

Fundamental rights

The CJEU addresses the issue of fundamental rights113 by weighing blocking injunctions and the protection of the IP against the freedom to do business right and the freedom of information right.

 Freedom of business right

The Court states that site blocking injunctions do not infringe the freedom of business right 114 because:

o the ISP can determine the specific measures to be taken to achieve the result sought, specifically:

‘with the result that he [the ISP] can choose to put in place measures which are best adapted to the resources and abilities available to him and which are compatible with the other obligations and challenges which he will encounter in the exercise of his activity;’115and

o the ISP avoids financial liability by taking reasonable measures and ‘not be required to make unbearable sacrifices’116.

109 At [31] of judgement 110 At [32] of judgement 111At [36] of judgement 112 This allows rights holders to minimise end-user/privacy related issues when filing blocking applications 113 At [47] of judgement 114 At [49 to 54] of judgement 115 At [52] of judgement 116 At [51] of judgement

72  Freedom of information

The Court states that site blocking injunctions do not infringe the freedom of information 117 because the ISP’s manner of meeting the requirement of the injunction must ‘serve to bring an end to a third party’s infringement of copyright’118 without affecting lawful access to information.

Effectiveness

The Court acknowledges that the blocking order does not need to lead to a complete cessation of the infringement; and the effect of the blocking order is capable of being circumvented.

Therefore the Court holds that an injunction does not need to be a ‘perfect fix,’ rather it should discourage users from accessing the site.

Specifically the CJEU states:

‘…sufficiently effective to ensure genuine protection of the fundamental right at issue, that is to say that they must have the effect of preventing unauthorised access to the protected subject-matter or, at least, of making it difficult to achieve and of seriously discouraging internet users who are using the services of the addressee of that injunction from accessing the subject-matter made available to them in breach of that fundamental right.’119

Combination of fundamental rights and effectiveness

In summary, blocking measures must seriously discourage internet users from access illegal services whilst not impacting the ability to access to legal services (for example Youtube, Facebook, etc)

The Court states:

‘Even though the measures taken when implementing an injunction such as that at issue in the main proceedings are not capable of leading, in some circumstances, to a complete cessation of the infringements of the intellectual property right, they cannot however be considered to be incompatible with the requirement that a fair balance be found, in accordance with Article 52(1), in fine, of the Charter, between all applicable fundamental rights, provided that (i) they do not unnecessarily deprive internet users of the possibility of lawfully accessing the information available and (ii) that they have the effect of preventing unauthorised access to protected subject-matter or, at least, of making it difficult to achieve and of seriously discouraging internet users who are using the services of the addressee of that injunction from accessing the subject-matter that has been made available to them in breach of the intellectual property right.’120

117 At [55-56] of judgement 118 At [56] of judgement 119 At [62] of judgement 120 At [63] of judgement

73 BACKGROUND

Rights holders Constantin Film and Wega Film Production sought a court injunction whereby UPC Telekabel (the ISP) would prohibit its customer’s access to the site kino.to – an illegal streaming site.

 13 May 2011 – The Commercial Court, Vienna (Austria) ordered that UPC prohibit providing its customers with access to the website at issue

 27 October 2011 – The High Regional Court, Vienna (Austria), as an appeal court, partially reversed the order of the Commercial Court

UPC appealed to the Supreme Court (Austria) on a point of law. UPC submitted that its services could not be considered to be sued to infringe copyright because it did not have any business relationship with the operators of the website at issue, and it was not established that its own customers acted unlawfully. UPC claims, that in any event:

o The various blocking measures which may be introduced can all be technically circumvented; and o That some of them are excessively costly

 May/June 2012 – The Supreme Court decided to stay the proceedings and referred the following questions to the European Court of Justice (CJEU) for a ruling:

a) Is Article 8(3) of Directive 2001/29 … to be interpreted as meaning that a person who makes protected subject-matter available on the internet without the rightholder’s consent [for the purpose of Article 3(2) of Directive 2001/29] is using the services of the [internet] access providers of persons seeking access to that protected subject-matter?

The court addressed these as outlined at (i) and (ii) above

If the answer to the first question is in the negative:

b) Are reproduction for private use [within the meaning of Article 5(2)(b) of Directive 2001/29] and transient and incidental reproduction [within the meaning of Article 5(1) of Directive 2001/29] permissible only if the original of the reproduction was lawfully reproduced, distributed or made available to the public?

The Court held that it did not need to respond to Qn 2 due to its finding in Qn 1.

If the answer to the first question or the second question is in the affirmative and an injunction is therefore to be issued against the user’s [internet] access provider in accordance with Article 8(3) of [Directive 2001/29]:

c) Is it compatible with Union law, in particular with the necessary balance between the parties’ fundamental rights, to prohibit in general terms an [internet] access provider from allowing its customers access to a certain website (thus without ordering specific measures) as long as the material available on that website is provided exclusively or predominantly without the rightholder’s consent, if the access provider can avoid incurring coercive penalties for breach of the prohibition by showing that it had nevertheless taken all reasonable measures?

74 The court addressed these as outlined at (iii) to (v) above

If the answer to the third question is in the negative:

d) Is it compatible with Union law, in particular with the necessary balance between the parties’ fundamental rights, to require an [internet] access provider to take specific measures to make it more difficult for its customers to access a website containing material that is made available unlawfully if those measures require not inconsiderable costs and can easily be circumvented without any special technical knowledge?’

The Court held that it did not need to respond to Qn 4 due to its finding in Qn 3.

75 45. APPENDIX F – OVERVIEW OF CASES AND JURISPRUDENCE OF EARLY UK SITE BLOCKING CASES

20CF v Newzbin [2010] EWHC 608 (Ch)121 (Newzbin 1 site)

 The Hon Mr Justice Kitchen Kitchin found that Newzbin Ltd infringed the copyright of the claimants' on a large scale;122  He granted an injunction against Newzbin Ltd to restrain further infringements of the claimants' copyright;  Subsequently the Newzbin 1 site ceased operation; and  Shortly afterwards, the Newzbin 2 site began operation at the same location, but hosted overseas.

REMEDIES FOR ONLINE COPYRIGHT INFRINGEMENT: STRIKING THE BALANCE: A PRESENTATION BY THE HON MR JUSTICE ARNOLD

Justice Arnold discussed his rulings in a presentation titled Remedies for Online Copyright Infringement: Striking the Balance at the UK Intellectual Property Office (the IPO Seminar) held a seminar in July 2012.123

20C Fox v BT (No 1) [2011] EWHC 1981 (Ch)124 (Newzbin 2 site)

This application was a sequel to a successful claim of copyright infringement brought by the claimants against Newzbin Ltd, which had operated an almost identical site to Newzbin 2 (Newzbin 1) at the same location, but hosted overseas.

Justice Arnold held that the Court had jurisdiction, and it was appropriate to exercise his discretion, to make a blocking order against the 2nd defendant (BT) with respect to the site Newzbin 2. His presentation at the IPO seminar included the following questions and answers:

 20C Fox v BT (No 1): Discretion to make a website blocking order

Q: Did it matter that the Studios were not interested in the whole of Newzbin2? o The Studios were the biggest single group of rights holders affected and their rights were being infringed on a massive scale so they had a sufficient interest to seek an order. o It did not matter that other rights holders would benefit, particularly since other groups supported the application.

Q: Did it matter that BT would be exposed to other claims? o A flood of applications was unlikely o The fact that further applications were likely was not a reason to refuse an order

Q: Did it matter that the order would not be wholly effective? o An order would be justified even if it only prevented access to Newzbin 2 by a minority of users

121 http://www.bailii.org/ew/cases/EWHC/Ch/2010/608.html 122 20CF v Newzbin, at [101] 123 http://www.ipo.gov.uk/ipenforce-onlinedisputes.pdf 124 http://www.bailii.org/ew/cases/EWHC/Ch/2011/1981.html

Q: Was the order proportionate? o The order was proportionate since it was necessary to protect the Studios’ rights which outweighed the infringers’ rights and since it was narrow, targeted, contained safeguards and would not be costly to implement

20C Fox v BT (No 2) [2011] EWHC 2714 (Ch)125 (Newzbin 2 site)

Justice Arnold determined the terms of the order in 20C Fox v BT. His presentation at the IPO seminar included the following:

 20C Fox v BT (No 2): Approved Second Judgement ( terms of the order )

The costs of implementing the order should be borne by BT given that they were modest.

The order would not include any cross-undertaking or indemnity in favour of BT in respect of losses caused by the order and in particular claims by third parties: a cross-undertaking was inappropriate in a final order and an indemnity was not required since BT would have an absolute defence to third party claims.

The Studios should bear the initial costs of the application, BT should pay the costs occasioned by BT’s resistance to it and each side should pay their own costs of the argument over the terms of the order.

Dramatico v Sky (No 1) [2012] EWHC 268 (Ch) 126

Justice Arnold held that both users and operators of The Pirate Bay infringed the copyrights of claimants and those they represented.

Following that judgement, five of the Defendants indicated to the claimants that they did not oppose the making of orders under s97A of the Copyright, Designs and Patents Act 1988 (UK). His presentation at the IPO seminar included the following:

 Dramatico v Sky (No 1) : Infringement by operators and users of the Pirate Bay

The British Recorded Music Association (BPI) applied for a website blocking order with respect to the Pirate Bay against all six major ISPs

Since there has been no prior infringement case, an order was made for the trial of preliminary issues as to whether (i) the operators and (ii) the suers of the Pirate Bay were infringing the BPI members’ copyright.

The ISPs were not represented.

It was not necessary to join or server the operators of any users of the Pirate Bay.

125 http://www.bailii.org/ew/cases/EWHC/Ch/2011/2714.html 126 http://www.bailii.org/ew/cases/EWHC/Ch/2012/268.html

77 The users infringed copyright.

The operators infringed copyright: o By authorising the users: 20C Fox v Newzbin o The operators were jointly liable for the users’ infringements: 20c Fox v Newzbin.

Dramatico v Sky (No 2) [2012] EWHC 1152 (Ch) 127

Justice Arnold acceded to the claimants' application that he should make orders for the reasons given in this judgement.

His presentation at the IPO seminar included the following:

 Dramatico v Sky (No 2): Whether to make an order

In the light of the ruling in Dramatico v Sky (No 1) and agreement over the terms of the order, four ISPs did not resist an order and one agreed to an order.

The court had jurisdiction to make the orders and it was appropriate to do so for similar reasons as in 20C Fox v BT.

The fact that the ISPs did not object implied that the orders were proportionate as between the BPI and the ISPs, but it did not necessarily follow that they were proportionate as between the BPI and to the subscribers.

Nevertheless the court was satisfied that the orders were proportionate.

127 http://www.bailii.org/ew/cases/EWHC/Ch/2012/1152.html