Thoughts on Online Copyright Infringement Discussion Paper

AGs is seeking public submissions on Online Copyright Infringement.

Some thoughts are:

The cover letter to the inquiry cites a PWC report prepared for the Australian Copyright Council.  The letter fails to note that gains are offset by the role of intellectual property in transfer pricing by multinationals.  There is strong evidence to suggest that intellectual property regimes have the effect of substantially reducing Australian taxation revenue through the use of transfer pricing mechanisms.

Page 3 of the discussion paper states that  the High Court in Roadshow said “that there were no reasonable steps that could have been taken by iiNet to reduce its subscribers’ infringements.”  The discussion paper goes on to enquire about what reasonable steps a network operator could take to reduce subscribers’ infringements. The whole of the debate about copyright infringement on the internet is infected by this sort of double speak.

The discussion paper does not specifically ask about a three strikes regime.  However, it invites discussion of a three strikes regime by raising it in the cover matter then inviting proposals as to what might be a “reasonable step.  Where noted my responses on a particular question relate to a three strikes regime.

Question 1:

Compelling an innocent person to assist a third party is to deprive that person of their liberty.  The only reasonable steps that come to mind are for network operators to respond to subpoenas validly issued to them – at least that is determined on a case by case basis under the supervision of a court.

Question 2:

Innocent third parties should not be required to assist in the enforcement of someone else’s rights. Any assistance that an innocent third party is required to give should be at the rights holder’s cost.  To do otherwise is to effectively require (in the case of a network) all customers to subsidise the private rights of the “rights’ holders'” enforcement. This is an inefficient an inequitable equivalent to a taxation scheme for public services.  The Government may as well compulsorily acquire the rights in question and equitably spread the cost through a levy.

Question 3:

No.  The existing section 36/101 was specifically inserted to provide exactly the clarity proposed here.  Rights holders were satisfied at the time.

Question 4:

Presumably reasonable is an objective test.

Question 5:

This response assumes the proposed implementation of a “three strikes” regime.

There is a Federal Magistrates court which is able to hear copyright infringement cases.  Defendants should have the right to have the case against them heard in a judicial forum. Under a three strikes regime an individual is required to justify their actions based on an accusation of infringement.  In the absence of a justification they suffer a sanction.  Our legal system should not be driven by mere accusations.  Defendants also have the right to know that the case against them is particular to them and not a cookie cutter accusation.

Question 6:

The court should have regard to what aims a block is intended to achieve, whether a block will be effective in achieving those aims and what impact a block will have on innocent third parties which may be affected by it.  For example, when Megaupload was taken down many innocent people lost their data with no warning.  This is more likely to be the case in the future as computing resources are increasingly shared in load balanced cloud storage implementations. These third parties are not represented in court and have no opportunity to put their case before a block is implemented.

A practice should be established whereby the court requires an undertaking from any person seeking a block to indemnify any innocent third party affected by the block against any damage suffered by them.  Alternatively, the Government could establish a victims compensation scheme that can run alongside such a block.  These third parties will be collateral damage from such a scheme.  Indeed, if the test for a site is only a “dominant purpose” test then collateral damage necessarily a consequence of the block.   An indemnity will serve the purpose of guiding incentives to reduce damage to innocent third parties.

Question 7

If the Government implements proposals which extend the applicability of auhtorisation infringements to smaller and smaller entities (eg a cafe providing wifi) then the safe harbour provisions need to be sufficiently simple and certain as to allow those entities to rely on them. At the moment they are compex and convoluted. If a cafe is forced to pay hundreds or thousands of dollars for legal advice about their wifi service, they will simply not provide it.

Question 8

Before the impact of measures can be measured [sic] a baseline first needs to be established for the purpose the Copyright Act is intended to serve.   In particular, the purpose of the Copyright Act is not to reduce infringement.  Rather, its titular purpose is to promote the creation of works and other subject matter.  This receives no mention in the discussion paper.  Historically, the Copyright Act has been promoted as necessary to maintain distribution networks (pre 1980s), as a means of providing creators with an income (last 2 centuries, but repeatedly contradicted empirically – most recently in the Don’t Give Up Your Day Job report),  as a natural right of authors (00s – contrary to judicial pronouncements on the issue) and now, apparently, as a means of stimulating the economy.  An Act which has so mutable a purpose ought to be considered with a jaundiced eye.

The reference to the PWC document suggests that the Hargreaves report would be a good starting point for further policy making.

Question 9

The retail price of downloadable copies of copyright works in Australia (exclusive of GST) should not exceed the price in their country of origin by more than 5% when sold directly.  The 5% figure is intended to allow for some additional costs of selling into Australia.

Implement the Productivity Commission’s recommendations on parallel importation.

Question 10, 11

The next two paragraphs of the response to this question deals primarily with a possible three strikes regime although the final observations are of a general character.

“Three strikes” regulation will effectively shift the burden of enforcement further away from rights holders to people who are the least equipped to implement it.  What will parents who receive warning letters do?  Will they implement a sophisticated filtering system on their home router?  Will they send their children off to a reeducation camp run by the rights’ holders? More likely they will blanket ban the internet access.  How will cafes manage their risk? More likely they will not provide wifi access.  This has already been the death knell of community wifi networks in the US.  The collateral damage from these proposals is difficult to quantify but there is every reason to believe it will be widespread.  This damage is routinely ignored in policy making.

Will rights’ holders use such a system against everyone? That is unlikely.  Rather, it will be used against some individuals unlucky enough to be first on the list. Those individuals will be used as examples for others.  This will be a law which will be enforced in an arbitrary and discriminatory fashion.  As such it will undermine respect for the law more generally.

The comments on the proposals above assume that they are acted on bona fide.  Once network operators are conditioned to a Pavlovian response to requests the system will be abused – the Get Up! organisation already believes it has been the subject of misuse: https://www.getup.org.au/campaigns/great-barrier-reef–3/adani-video/someone-wants-to-silence-us-dont-let-them

Evasion technologies have previously been a niche interest.  The size of the market limited their growth.  These provisions will sheet home to all citizens the need to implement evasion technologies, thereby greatly increasing the market and therefore the economic incentive for their evolution.  The long run effect of implementing proposals which effect this form of general surveillance of the population is to weaken national security.

By insulating rights holders from the costs of enforcement the proposals disconnect rights holders from the very externalities that enforcement creates.  If there were ever a recipe for poor policy, such a disconnection would be a key element of it.