Responses to an Australian government proposal for fighting online copyright infringement show a wide gap between rights holders and internet companies on liability and website blocking, reports IP Watch.

Read also a précis of the responses of consumers and legal profession in Herbert Smith Freehill’s report.

ISPs are concerned about the breadth of the Australian government’s proposals for extending liability for online copyright infringement.

According to the Communications Alliance, the proposals have ”the potential to capture many other entities, including schools, universities, libraries and cloud-based services in ways that may hamper their legitimate activities and disadvantage consumers”.

The Pirate Party claims the proposals turn ISPs into “Internet police”, IP Watch reports.

The Australian government has proposed a number of options for expanding the liability of ISPs for the online copyright infringements of their customers.

In a Discussion Paper released on 30 July 2014, the government identifies various options for reducing online copyright infringement – the following two of which impact negatively on ISPs:

• amending the provisions on authorisation infringement, to require consideration of the extent to which the ISP is complying with an industry scheme or a prescribed measure; and
• enabling copyright holders to seek an injunction requiring an ISP to block access to an overseas site, where the dominant purpose of the site is to infringe copyright.

The first of these proposals is consistent with the government’s previously-expressed preference for stakeholders to reach agreement on how to apportion responsibility for minimising online infringement.  By including “a prescribed measure” as one of the factors to be considered in determining authorisation liability, the government is holding out the threat of imposing its own version of a “three-strikes” system if ISPs can’t agree with rights holders on an industry scheme.

The second of these proposals mirrors the approach adopted in the UK and other European countries, pursuant to art. 8(3) of the EU Copyright Harmonisation Directive.

Also included in the Options Paper is a long-standing earlier proposal to extend the “safe harbour” provisions to a wider range of Internet service providers – in particular, to entities that provide access other than to the public, such as universities.

Canada will have a “notice and notice” regime for online copyright infringement from January 2015.

The government announcement calls the regime a “made-in-Canada solution”. It formalises a voluntary system that some copyright owners and Internet service providers (ISPs) have already adopted.

Smart and Biggar report that when an ISP or host receives proper notice of copyright infringement from a copyright owner, it must forward the notice as soon as feasible to the customers associated with the content – hence the description of a “notice and notice” regime. The ISP or host must inform the copyright owner once the notice has been forwarded and retain a record of the notice for six months, or one year if the copyright owner commences a court proceeding.

ISPs or hosts that fail to comply are subject to statutory damages of at least C$5,000, but no more than C$10,000.

The Court of Justice of the European Union (CJEU) has found that browsing material online is exempted from copyright infringement by the EU Copyright Directive.

Art. 5(1) of the EU Copyright Directive exempts temporary acts of reproduction which are transient or incidental and an integral and essential part of a technological process of transmission or lawful use. Art. 5(5) adds the ‘three-step test’ requirement that the reproduction must be a certain special case which does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the right holder.

In PRCA v NLA, the CJEU ruled that both on-screen and cached copies created during viewing material online are: “temporary”, because the on-screen copies are deleted once the user moves to another page and the cached copies are normally replaced by other content over time; and “integral and essential”, because they are made entirely in the context of the process of browsing. The court also ruled that: on-screen copies are “transient”, because their duration is limited to what is necessary for browsing; and cached copies are “incidental”, because they neither exist independently nor have a purpose independent of the technological process for browsing.

The Court further found that on-screen and cached copies satisfy the three-step test. They are special cases, because they are created only for the purpose of viewing material online; they do not unreasonably prejudice the legitimate interests of rights holders, so long as the material has been put online with the authorisation of the copyright owner; and they do not conflict with a normal exploitation of copyright, because viewing material is within a normal exploitation of material that has been put online with authorisation.

1.3 million online copyright infringement ‘alerts’ were sent to ISPs’ customers by the body which runs the US ’3-strikes’ system in its first 10 months’ operation.

According to a report by the Center for Copyright Information (CCI), most of the alerts were in the initial ‘educational’ phase. Only 265 challenges were filed, with no findings of ‘alse positives.

The CCI expects the number of alerts sent in the coming year to double those in the first year.

The Court of Justice of the European Union (CJEU) has determined that a private copying exemption in national law can apply only to a copy derived from a lawful source.

Article 5(2)b of the EU Copyright Directive entitles members states to provide an exemption from infringement for private copying, but only so long as the copyright owner receives fair compensation. Typically, fair compensation for private copying is provided through a levy on copying media, devices and/or services.

On a referral from the Netherlands Supreme Court, the CJEU ruled that the Copyright Directive precludes national legislation “which does not distinguish the situation in which the source from which a reproduction for private use is made is lawful from that in which that source is unlawful”.

It follows that, when determining the amount of the private copying levy payable, only copying from lawful sources can be taken into account.

Two separate lawsuits filed this month in the U.S. accuse Megaupload of paying users to upload popular entertainment content onto Megaupload’s servers, reports Finnegan.

The Federal Court of Canada has ordered an internet service provider (ISP) to release the names and addresses of 2,000 subscribers alleged to have illegally downloaded a copyrighted movie using peer-to-peer networks and the BitTorrent protocol.

Smart & Biggar reports that the decision represents a victory for rights holders seeking to address the large-scale downloading of copyrighted material from the Internet.

The decision is also balanced, in that it encourages the court to impose strict safeguards to prevent the coercive settlement tactics that have sometimes followed such orders in jurisdictions outside of Canada.