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cyberlaw:intermediaries_copyright [2019/01/23 13:33]
witta
cyberlaw:intermediaries_copyright [2019/09/25 17:22] (current)
nic
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 # Intermediary Liability for Copyright # Intermediary Liability for Copyright
  
-**Chapter Overview** +##Chapter Overview
  
-In this Chapter, we will focus on the liability of online intermediaries for the infringing acts of their users, principally intermediaries who provide software or services that facilitate copyright infringement. We will generally assume that there has been primary infringement by the users. You are not expected to know the general principles of copyright in detail, and you do not need to know the rules for establishing primary infringement. ​+In this Chapter, we will focus on the liability of online intermediaries for the infringing acts of their users, principally intermediaries who provide software or services that facilitate copyright infringement. It explains the Australian position on copyright authorisation followed by the United States (US) position on intermediary liability. We will generally assume that there has been primary infringement by the users. You are not expected to know the general principles of copyright in detail, and you do not need to know the rules for establishing primary ​infringement. The Chapter also outlines intermediary liability for direct ​infringement. ​
  
 ## Copyright Authorisation (the Australian Position) ## Copyright Authorisation (the Australian Position)
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 ### Cooper v Universal Music Australia Pty Ltd (2006) 237 ALR 714 (“Cooper”) ### Cooper v Universal Music Australia Pty Ltd (2006) 237 ALR 714 (“Cooper”)
  
-**Video Overview of Cooper v Universal by [Ross Snell](https://​www.youtube.com/​watch?​v=y_pLPmnrmf4)**+**Video Overview of Cooper v Universal by [Ed Green](https://​www.youtube.com/​watch?​v=6VDB6P3GedA)**
  
-The defendant ran a website, ‘MP3s4FREE’,​ which contained a list of hyperlinks that directed users to other websites where they could download infringing music files. Visitors would submit links to music files through an automated form and Cooper exercised no editorial control over the links. In this case, the court was influenced by evidence that the defendant deliberately designed his website to facilitate the infringing downloading of sound recordings. The court held that Cooper had the power to prevent infringement by exercising supervision or control – editorial responsibility. Their Honours considered the defendant’s financial benefit derived from the website to be relevant to the second statutory factor – the nature of the relationship between the alleged authoriser and the primary infringer – because it made the relationship into a commercial one. They also held that the defendant had not taken any reasonable steps to prevent or avoid the infringements occurring as a result of his website. They accordingly found Cooper liable for authorisation.+The defendant ran a website, ‘MP3s4FREE’,​ which contained a list of hyperlinks that directed users to other websites where they could download infringing music files. Visitors would submit links to music files through an automated form and Cooper exercised no editorial control over the links. In this case, the court was influenced by evidence that the defendant deliberately designed his website to facilitate the infringing downloading of sound recordings. ​ 
 + 
 +The court held that Cooper had the power to prevent infringement by exercising supervision or control – editorial responsibility. Their Honours considered the defendant’s financial benefit derived from the website to be relevant to the second statutory factor – the nature of the relationship between the alleged authoriser and the primary infringer – because it made the relationship into a commercial one. They also held that the defendant had not taken any reasonable steps to prevent or avoid the infringements occurring as a result of his website. They accordingly found Cooper liable for authorisation.
  
 The court also found Cooper'​s ISP liable for authorisation. The ISP had provided free hosting in exchange for advertising on the high traffic site. The ISP and its directors had knowledge, derived a direct financial benefit, had the power to take the site down, and took no reasonable steps to prevent infringement. The court also found Cooper'​s ISP liable for authorisation. The ISP had provided free hosting in exchange for advertising on the high traffic site. The ISP and its directors had knowledge, derived a direct financial benefit, had the power to take the site down, and took no reasonable steps to prevent infringement.
 +
 +The appellants attempted to rely on the s 112E exception to the s 101(1). However, the Court concluded that both parties had done more than merely facilitate the infringements by others, and therefore, the exception could not apply to the appellants. As the exception did not apply, the Court concluded that the primary judge was correct as Cooper and E-Talk had authorised the copying and communication of copyright sound recordings. The Court dismissed the appeals. ​
  
 ## The Intervening Years: BitTorrent ## The Intervening Years: BitTorrent
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 ### Dallas Buyers Club v iiNet ### Dallas Buyers Club v iiNet
  
-**_Dallas Buyers Club v iiNet_** [[2015] FCA 317](http://​www.austlii.edu.au/​cgi-bin/​sinodisp/​au/​cases/​cth/​FCA/​2015/​317.html?​stem=0&​synonyms=0&​query=dallas%20buyers%20club&​nocontext=1) +**Video Overviews of Dallas ​Buyers Club v iiNet by [Kylie Pappalardo](https://​www.youtube.com/​watch?​v=BbGBSrbd1AY)** and **[Lachlan McCormick](https://​www.youtube.com/​watch?​v=FrCJRnxiPHw)**
- +
-**Video Overviews of Dalls Buyers Club v iiNet by [Kylie Pappalardo](https://​www.youtube.com/​watch?​v=BbGBSrbd1AY))** and **[Lachlan McCormick](https://​www.youtube.com/​watch?​v=FrCJRnxiPHw))**+
  
 The Dallas Buyers Club series of cases in 2015 concerned an application for a preliminary discovery order by Dallas Buyers Club LLC and its parent company, Voltage Pictures LLC,  under the Federal Court Rules 2011 (Cth) r 7.22. The Dallas Buyers Club series of cases in 2015 concerned an application for a preliminary discovery order by Dallas Buyers Club LLC and its parent company, Voltage Pictures LLC,  under the Federal Court Rules 2011 (Cth) r 7.22.
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 In the Dallas Buyers Club judgment, Justice Perram followed the approach taken by the English High Court of Justice in //Golden Eye (International) Ltd v Telefonica UK Ltd// [2012] EWHC 723 (Ch) and the Federal Court of Canada in //Voltage Pictures LLC v John Doe// [2014] FC 161. This approach was to impose conditions on the applicants to prevent speculative invoicing. Before preliminary disclosure would be allowed, the applicants were required to submit to the Court a draft of the proposed correspondence to be sent to the account holders once identified. In the Dallas Buyers Club judgment, Justice Perram followed the approach taken by the English High Court of Justice in //Golden Eye (International) Ltd v Telefonica UK Ltd// [2012] EWHC 723 (Ch) and the Federal Court of Canada in //Voltage Pictures LLC v John Doe// [2014] FC 161. This approach was to impose conditions on the applicants to prevent speculative invoicing. Before preliminary disclosure would be allowed, the applicants were required to submit to the Court a draft of the proposed correspondence to be sent to the account holders once identified.
  
-Later in the series of Dallas Buyers Club decisions,​((Dallas Buyers Club v iiNet (No 4)_** [[2015] FCA 838](http://​www.austlii.edu.au/​cgi-bin/​sinodisp/​au/​cases/​cth/​FCA/​2015/​838.html?​stem=0&​synonyms=0&​query=dallas%20buyers%20club&​nocontext=1)) Dallas Buyers Club LLC submitted to the court a number of draft correspondence to be sent to relevant account holders.+Later in the series of Dallas Buyers Club decisions,​((Dallas Buyers Club v iiNet (No 4) [2015] FCA 838 http://​www.austlii.edu.au/​cgi-bin/​sinodisp/​au/​cases/​cth/​FCA/​2015/​838.html?​stem=0&​synonyms=0&​query=dallas%20buyers%20club&​nocontext=1)) Dallas Buyers Club LLC submitted to the court a number of draft correspondence to be sent to relevant account holders.
  
-Justice Perram identified some differences in the legal context of the English and Canadian decisions he had referred to earlier in proceedings. (footnote). He pointed out that Australian law obliged him to try to accommodate the competing rights of account holders to privacy and the copyright owners right to sue for infringement to the best of his ability, rather than to apply a proportionality approach taken in the overseas jurisdictions. To do this, it was necessary to consider whether the proposed use of the information accords with the purpose of FCR r 7.22. Of particular focus was subrule (1)(a), which is the requirement that the prospective applicant has a right to obtain relief against a prospective respondent. To determine whether this right existed, an inquiry into whether the monetary demands contained in DBC’s proposed correspondence could plausibly be sued for was undertaken by the Court.+Justice Perram identified some differences in the legal context of the English and Canadian decisions he had referred to earlier in proceedings. He pointed out that Australian law obliged him to try to accommodate the competing rights of account holders to privacy and the copyright owners right to sue for infringement to the best of his ability, rather than to apply a proportionality approach taken in the overseas jurisdictions. To do this, it was necessary to consider whether the proposed use of the information accords with the purpose of FCR r 7.22. Of particular focus was subrule (1)(a), which is the requirement that the prospective applicant has a right to obtain relief against a prospective respondent. To determine whether this right existed, an inquiry into whether the monetary demands contained in DBC’s proposed correspondence could plausibly be sued for was undertaken by the Court.
  
 The monetary demands in DBC’s proposed correspondence fell into four heads (at [15]): (1) the purchase price of a single legitimate copy of the film; (b) a fee for sharing the film to other BitTorrent users (an amount which was mentioned to be an undisclosed,​ albeit substantial,​ sum); (c) an amount of additional (punitive) damages sought under s 115(4) of the Copyright Act 1968 (Cth) which would depend on the users’ downloading activities for other, unrelated content where the user had infringed copyright; and (d) a claim for costs related to the process of identifying account holders and BitTorrent users who had infringed copyright. The monetary demands in DBC’s proposed correspondence fell into four heads (at [15]): (1) the purchase price of a single legitimate copy of the film; (b) a fee for sharing the film to other BitTorrent users (an amount which was mentioned to be an undisclosed,​ albeit substantial,​ sum); (c) an amount of additional (punitive) damages sought under s 115(4) of the Copyright Act 1968 (Cth) which would depend on the users’ downloading activities for other, unrelated content where the user had infringed copyright; and (d) a claim for costs related to the process of identifying account holders and BitTorrent users who had infringed copyright.
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 A new head of liability, called **inducement**,​ was developed in the Grokster case, though it is unclear whether this is separate to or part of contributory infringement. In that case, the court held that those who actively induce others to commit infringing acts will be liable. This head of liability incorporates the notion of intent. A new head of liability, called **inducement**,​ was developed in the Grokster case, though it is unclear whether this is separate to or part of contributory infringement. In that case, the court held that those who actively induce others to commit infringing acts will be liable. This head of liability incorporates the notion of intent.
  
-###Sony Corp. of America v. Universal City Studios, Inc. 464 U.S. 417 (1984)+#### Sony Corp. of America v. Universal City Studios, Inc. 464 U.S. 417 (1984) 
 + 
 +**[Video explaining the 'Sony rule'​](https://​www.youtube.com/​watch?​v=8M04ISrQZq8) by by Tamara Moretto**
  
 In 1984, the United States Supreme Court decided the landmark case of Sony Corp. of America v. Universal City Studios, Inc. (Sony). Sony manufactured the Betamax VCR, which some consumers used to record television programs broadcast over the public television airwaves. Respondents,​ who owned copyright in some of these programs, argued that Sony was indirectly liable for the copyright infringement of these consumers because Sony marketed and sold the means of infringement – the Betamax – to them.  ​ In 1984, the United States Supreme Court decided the landmark case of Sony Corp. of America v. Universal City Studios, Inc. (Sony). Sony manufactured the Betamax VCR, which some consumers used to record television programs broadcast over the public television airwaves. Respondents,​ who owned copyright in some of these programs, argued that Sony was indirectly liable for the copyright infringement of these consumers because Sony marketed and sold the means of infringement – the Betamax – to them.  ​
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 > [T]he sale of copyright equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses.  ​ > [T]he sale of copyright equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses.  ​
  
-The court determined that the Betamax VTR was capable of substantial noninfringing uses because the practice of taping programs off the air for the purpose of watching them at a more convenient time (“time-shifting”) was a legitimate use, either because the use may be authorized by other copyright holders or because the use was covered by the doctrine of fair use in the Copyright Act. +The court determined that the Betamax VTR was capable of substantial noninfringing uses because the practice of taping programs off the air for the purpose of watching them at a more convenient time (“time-shifting”) was a legitimate use, either because the use may be authorized by other copyright holders or because the use was covered by the doctrine of fair use in the Copyright Act. It was also relevant that Sony had no right or ability to control how people used the technology.
  
 The Sony rule, as it came to be known, has emerged as a crucial doctrine in the secondary liability landscape. It ensures that producers who design or distribute a product capable of substantial noninfringing uses will not be held liable for enabling copyright infringement even if they know that some infringement will occur by use of their product. The Sony rule, as it came to be known, has emerged as a crucial doctrine in the secondary liability landscape. It ensures that producers who design or distribute a product capable of substantial noninfringing uses will not be held liable for enabling copyright infringement even if they know that some infringement will occur by use of their product.
  
-It was also relevant that Sony had no right or ability ​to control how people used the technology.+Online intermediaries can continue ​to benefit from the Sony rule if:
  
-### A & M Records, Inc. v. Napster, Inc. 239 F. 3d 1004 (9th Cir. 2001) ("​Napster"​)+*  Their product has a substantial non-infringing use; 
 + 
 +*  They do not have actual or constructive knowledge of copyright infringement by its users; and  
 + 
 +*  They are not liable under another form of intermediary liability (i.e. inducement or vicarious liability) 
 + 
 + 
 +#### A & M Records, Inc. v. Napster, Inc. 239 F. 3d 1004 (9th Cir. 2001) ("​Napster"​)
  
 **Video Overview of the Naspter Decision by [Evan Price](https://​www.youtube.com/​watch?​v=S2kLe-sqKj4)** **Video Overview of the Naspter Decision by [Evan Price](https://​www.youtube.com/​watch?​v=S2kLe-sqKj4)**
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 The court acknowledged the importance of the Sony rule, stating, “Absent specific information which identifies infringing activity, a computer system operator cannot be liable for contributory infringement merely because the structure of the system allows for the exchange of copyrighted material” (at 1021). The court found, however, that Napster did have specific knowledge of the infringing files as well as an ability to remove these files from its system, and on these grounds the court distinguished Napster from Sony and found Napster to be liable for contributory infringement. The court also found Napster to be vicariously liable because it received a direct financial benefit from advertising sales and had both the right and ability to control the infringement by filtering or blocking the exchange of the infringing files or blocking infringing users from its service. The court acknowledged the importance of the Sony rule, stating, “Absent specific information which identifies infringing activity, a computer system operator cannot be liable for contributory infringement merely because the structure of the system allows for the exchange of copyrighted material” (at 1021). The court found, however, that Napster did have specific knowledge of the infringing files as well as an ability to remove these files from its system, and on these grounds the court distinguished Napster from Sony and found Napster to be liable for contributory infringement. The court also found Napster to be vicariously liable because it received a direct financial benefit from advertising sales and had both the right and ability to control the infringement by filtering or blocking the exchange of the infringing files or blocking infringing users from its service.
  
-### The Next Generation: Aimster, Grokster, StreamCast, Kazaa+## The Next Generation: Aimster, Grokster, StreamCast, Kazaa
  
 Since Napster was liable because it had knowledge of the files shared on the network (contributory liability) and a centralised point of control (vicarious liability), the next generation of filesharing software was developed to have no central servers. Since Napster was liable because it had knowledge of the files shared on the network (contributory liability) and a centralised point of control (vicarious liability), the next generation of filesharing software was developed to have no central servers.
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   * The networks were designed to operate autonomously,​ with no central control. The central agent provided the software, but after the software was connected to the network, the network would pass on search requests, and transfer files without any intervention from a central server.   * The networks were designed to operate autonomously,​ with no central control. The central agent provided the software, but after the software was connected to the network, the network would pass on search requests, and transfer files without any intervention from a central server.
  
-### MGM Studios Inc., v. Grokster Ltd. 545 U.S. 913 (2005)+#### MGM Studios Inc., v. Grokster Ltd. 545 U.S. 913 (2005) 
 + 
 +**[Overview of the Grokster Case](https://​www.youtube.com/​watch?​v=TZVFGDJEhZ4) by Joe Sherman**
  
 The Sony rule was narrowed somewhat in the 2005 decision, Metro-Goldwyn-Mayer Studios Inc., v. Grokster Ltd. (Grokster), another p2p file-sharing case.  ​ The Sony rule was narrowed somewhat in the 2005 decision, Metro-Goldwyn-Mayer Studios Inc., v. Grokster Ltd. (Grokster), another p2p file-sharing case.  ​
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 > The fair dealing exception, like other exceptions in the Copyright Act, is a user’s right. ​ In order to maintain the proper balance between the rights of a copyright owner and users’ interests, it must not be interpreted restrictively… The fair dealing exception under s.29 is open to those who can show that their dealings with a copyrighted work were for the purpose of research or private study. ​ “Research” must be given a large and liberal interpretation in order to ensure that users’ rights are not unduly constrained. ​ I agree with the Court of Appeal that research is not limited to non-commercial or private contexts… Although the retrieval and photocopying of legal works are not research in and of themselves, they are necessary conditions of research and thus part of the research process. ​ > The fair dealing exception, like other exceptions in the Copyright Act, is a user’s right. ​ In order to maintain the proper balance between the rights of a copyright owner and users’ interests, it must not be interpreted restrictively… The fair dealing exception under s.29 is open to those who can show that their dealings with a copyrighted work were for the purpose of research or private study. ​ “Research” must be given a large and liberal interpretation in order to ensure that users’ rights are not unduly constrained. ​ I agree with the Court of Appeal that research is not limited to non-commercial or private contexts… Although the retrieval and photocopying of legal works are not research in and of themselves, they are necessary conditions of research and thus part of the research process. ​
- 
  
 Relevant to the court’s finding was that the library had an access policy which stated that only single copies of materials would be provided for the purposes of research, review, private study and criticism as well as use in legal proceedings,​ and that any requests for copies in excess of 5% of the volume would be referred to the Reference Librarian and might be refused. ​ Additionally,​ the service was provided on a not for profit basis. ​ Also relevant was that there were no apparent alternatives to the custom photocopy service – the court considered it unreasonable to expect that patrons would always conduct their research onsite, particularly as 20% of the library’s patrons lived outside the Toronto area.  The court held that the availability of a licence is not relevant to deciding whether a dealing has been fair and that it was not incumbent upon the Law Society to adduce evidence that every patron uses the material provided in a fair dealing manner – reliance on a general practice would suffice. Relevant to the court’s finding was that the library had an access policy which stated that only single copies of materials would be provided for the purposes of research, review, private study and criticism as well as use in legal proceedings,​ and that any requests for copies in excess of 5% of the volume would be referred to the Reference Librarian and might be refused. ​ Additionally,​ the service was provided on a not for profit basis. ​ Also relevant was that there were no apparent alternatives to the custom photocopy service – the court considered it unreasonable to expect that patrons would always conduct their research onsite, particularly as 20% of the library’s patrons lived outside the Toronto area.  The court held that the availability of a licence is not relevant to deciding whether a dealing has been fair and that it was not incumbent upon the Law Society to adduce evidence that every patron uses the material provided in a fair dealing manner – reliance on a general practice would suffice.
 +
 +## Recent developments
 +
 +### European Copyright Directive: the 'link tax' (Article 15)
 +
 +**Video overview by Katherine Karan on the ['Link Tax'​](https://​www.youtube.com/​watch?​v=6xpSsvpuQKU)**
 +
 +Article 15 (previously known as draft Article 11) provides a new copyright rules to allow news websites to be remunerated for their work when displayed or promoted on large commercial platforms, such as Facebook or Google. This does not affect private or non-commercial users. It is designed to increase compensation to the publishers of news articles. ​
 +
 +Because the link tax is yet to implemented by countries of the EU, it remains to be seen how states will deal with the ambiguities and potential adverse effects of Article 15. For instance, each platform will only be permitted to present a very short extract of the news article without breaching copyright, however it is at the country’s discretion to determine what constitutes a “very short extract”. This link tax will also have a major potential impact on small news websites that may see less traffic as a result. Exceptions do exist to this link tax, such as individual words, copyright expiry dates and hyperlinks. ​
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