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Israel Copyright Amendments Authorize Blocking Orders

· January 17, 2019

DisCo is taking part in Copyright Week, a series of actions and discussions supporting key principles that should guide copyright policy. Every day this week, various groups are taking on different elements of the law, and addressing what’s at stake, and what needs to be done to make sure that copyright promotes creativity and innovation.

The Israeli Knesset just adopted a provision authorizing courts to order Internet access providers to block access to websites hosting infringing material. Although the effectiveness of blocking orders is debatable, the provision reflects a sense of proportionality and balance missing from Article 13 of the proposed EU Digital Single Market Directive and the notorious Stop Online Piracy Act (“SOPA”) rejected by the U.S. Congress in 2012. The Knesset also adopted other important amendments to the Israeli Copyright Act, including provisions relating to indirect liability, disclosure of the identity of alleged infringers, statutory damages, and orphan works.

Blocking

The new section 53A of the Israeli Copyright Act authorizes a court, at the request of a copyright owner, to issue an order directing an access provider to restrict access, in whole or in part, to a “Source of Content” if the court is persuaded that “the principal content of such Source of Content” is infringing material. A Source of Content is defined to include an Internet website hosted on a server either inside or outside of Israel.

In an order restricting access, the court must instruct the access provider “to employ reasonable measures to restrict access to the Source of Content…subject to conditions and in proportionate manner as the court may order….” In granting and setting the conditions of an order restricting access, the court must take into account:

(1) The impact on the public as a result of the restriction of access under the order, or of the Court’s decision not to grant the order;

(2) The severity of the alleged infringement;

(3) The necessity of the order for the prevention, as much as possible, or an infringement of copyright;

(4) The efficacy of other remedies available to the copyright holder….

(5) The extent of the expected harm to access to other Sources of Content;

(6) The extent of the expected harm to the privacy of users.

The copyright owner must join the owner of the Source of Content, the operator of the Source of Content, and the alleged infringer to the proceedings for the motion for the Order Restricting Access. Additionally, if the server on which the Source of Content is stored is located in Israel, the hosting service provider must be joined to the proceedings. After a motion for an order has been submitted, the access provider must provide notice of the proceedings on its website so that other interested parties have the opportunity to join the proceedings. Furthermore, after an access provider restricts access to a Source of Content pursuant to an order, the access provider must notify any person trying to access the Source that access has been blocked. Any person may request the court to revoke the order or amend its conditions.

If the server on which the Source of Content is hosted is located in Israel, the court may not order the restriction of access. Instead, the court must order removal of the content or the Source of Content from the server, unless such removal is not possible.

Section 53A contains important limitations.

  • It can be applied only against a Source of Content whose “principal material” is infringing. Thus, a legitimate Internet platform on which some users post infringing material cannot be subject to an Order Restricting Access.   
  • It can be applied only against a Source of Content hosted outside of Israel. If the Source is hosted inside Israel, the appropriate remedy is removal of the content from the server hosting the material.
  • There are numerous procedural safeguards, such as joinder of the owner and operator of the source of Content, and the alleged infringer. Interested parties, such as members of the public who wish to access the Source of Content, have the opportunity to participate in the proceedings for the motion for an Order Restricting Access, and to request that the order be revoked or amended.
  • There are significant substantive safeguards in the form of the factors the court must consider in issuing an Order, including the impact on the public, the severity of the infringement, the necessity of a blocking order, and the availability of other remedies.
  • The court can require the access provider only to employ “reasonable measures” to restrict access in a “proportionate manner.”

For several years, Israeli courts have issued blocking orders against websites hosting infringing content. However, according to a summary prepared by the Israeli law firm S. Horowitz & Co., some Israeli “courts have been reluctant to issue such orders, since they are essentially directed against third parties (the ISPs), which are not directly involved in the infringing activities.” Section 53A establishes clear standards and procedures for the issuance of such orders. It is unclear whether blocking orders are effective because the blocks can easily be circumvented. Also, the blocks may cause unintended damage to the domain name system. Nonetheless, if there are going to be blocking orders, Section 53A provides a good framework for issuing them. It reflects an understanding of the competing interests and equities at play, and contains essential guardrails.

Indirect Infringement

As in many countries, secondary copyright liability in Israel focuses on whether a person has authorized another person to engage in an infringing act. New Section 48A clarifies the scope of secondary liability in the Internet context. It provides that a person infringes copyright if he: (1) takes an action that facilitates public access to a work that has been made available via infringement; (2) with the aim of deriving a profit from providing such access; (3) when he knew or ought to have known that the work had been available via infringement. The section adds that “a person which operates technological measures for the detection and prevention of infringement shall not be presumed, because of that only, as a person which ought to have known that the work was made available via infringement.” The provision thus avoids discouraging service provides from taking proactive measures to prevent infringement.

A summary of the provision prepared by the Israeli law firm Herzog Fox Neeman explains that “according to the explanatory notes to the Amendment bill and to discussions held in the Knesset, this section does not impose liability on site owners, forum managers or other intermediary entities (“Intermediaries“) for the actions of their users, but is rather intended to fight piracy websites that provide links to infringing content.” However, the summary notes the wording of this section was “subject to severe criticism from Intermediaries, human-rights organizations, and internet users, who argued that it constitutes censorship of the internet and that it may ultimately apply to Intermediaries, even if that was not its intent.”

The impact of this provision will turn on how broadly courts interpret it—in particular, how the courts apply the “ought to have known” standard. If courts apply it to legitimate intermediaries, the Knesset may be compelled to amend this provision or adopt safe harbors for intermediaries.

Disclosure of Identifies of Alleged Infringers

New Chapter H1 creates a procedure for disclosure of the identity of a person who allegedly infringed copyright via an electronic communications network. The copyright owner may request a court to order a service provider to disclose the identity of the alleged infringer. If the court determines that the request is not vexatious or quarrelsome, it can order the service provider to disclose the identity of the alleged infringer to the court. The court then may notify the alleged infringer of the motion for disclosure of his identity, and provide him with an opportunity to oppose disclosure based on the harm it may cause him. If the court determines that the information provided by the service provider is insufficient to determine the identity of the alleged infringer, the court may appoint an expert to assist in the identification of the alleged infringer. If the court allows disclosure of the alleged infringer’s identity, that information can be used only for purposes of bringing an infringement action him, and no other purpose.

According to S. Horowitz & Co., the Israeli Supreme Court “in the past ruled that the law does not provide any mechanism for obtaining an order demanding that the identity of an alleged infringer be disclosed, and suggested that the legislature take a stand in this matter.” That is precisely what the Knesset did in the new Chapter H1.

Statutory Damages

In 2007, Israel amended its Copyright Act to allow the award of statutory damages. This prompted aggressive infringement actions by copyright trolls. In response, the Knesset adopted new section 56A, which exempts from statutory damages government bodies, educational institutions, libraries, archives, and certain other noncommercial actors.

Orphan Works

Finally, the Knesset adopted new section 27A, which under certain circumstances permits the use of orphan works—works whose copyright owners cannot be identified or located. If a noncommercial user has acted with reasonable diligence to identify or locate the copyright owner of the work, the user is not liable for a royalty when the copyright owner reemerges, provided that the user terminates the use. If the user wishes to continue the use, he must pay a royalty. Section 27A also applies to commercial users of orphan works who acted the reasonable diligence to identify or locate the copyright. However, the commercial user must pay the reemerging owner a reasonable royalty from the date the use began.

Section 27A is based on the Shawn Bentley Orphan Works Act, which passed the U.S. Senate in 2008, but failed in the House of Representatives. Section 27A, however, avoids much of the definitional complexity of the U.S. provision. Section 27A is broader than the EU Orphan Works Directive, which applies only to noncommercial cultural heritage institutions. It appears that Israel may have the world’s most effective orphan works provision. See here for a comparison of the U.S. and EU approaches to orphan works.

Intellectual Property

The Internet enables the free exchange of ideas and content that, in turn, promote creativity, commerce, and innovation. However, a balanced approach to copyright, trademarks, and patents is critical to this creative and entrepreneurial spirit the Internet has fostered. Consequently, it is our belief that the intellectual property system should encourage innovation, while not impeding new business models and open-source developments.