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Australian Copyright Law Thumbs Nose at U.S. Trade Commitments

· July 6, 2018

Australia just expanded its copyright safe harbors to provide certain legal protections for educational, cultural, and disabilities organizations. Unfortunately, the revision withholds these protections from most Internet companies, in violation of the Australia-U.S. Free Trade Agreement (“AUSFTA”). Even more unfortunately, the U.S. Trade Representative appears to have acquiesced to Australia’s continuing non-compliance with its commitment to provide such protections in the 2004 agreement.

Article 17.11.29 of AUSFTA requires the parties to introduce limitations on the liability of providers of Internet services for copyright infringement with respect to four basic Internet functions: 1) transmission, routing, or providing connections (“mere conduit”); 2) automatic caching; 3) storage (“hosting”); and 4) referring or linking to an online location. These safe harbors mirror the safe harbors contained in the section 512 of the Digital Millennium Copyright Act (“DMCA”).

AUSFTA requires that these four safe harbors extend to “service providers.” Consistent with section 512(k)(1) of the DMCA, AUSFTA Article 17.11.29(b)(xii) provides two different meanings for two different types of “service provider.” For the mere conduit functions, “service provider” means “a provider of transmission, routing, or connections for digital online communications without modification of their content between or among points specified by the user of the material of the user’s choosing.” For the functions of caching, storage, and referring or linking users to an online location, “service provider” more generally means “a provider or operator of facilities for online services or network access.”

However, the Australian implementation of this safe harbor obligation, codified at sections 116AA et seq. of the Copyright Act 1968, is far narrower than required under AUSFTA. It applies only to “carriage service providers” rather than “service providers.” Five leading Australian law professors explained in 2014 that “carriage service provider” is an “extremely complex term, interpretation of which takes us on a merry chase through the provisions of the Telecommunications Act of 1997(Cth), in essence limits the safe harbours to phone companies.” The law professors observed that “this gives rise to a ridiculous situation where actual search engines, and actual web hosts, cannot take advantage of safe harbours designed and intended to protect them from liability.”

The Australian government also interprets “carriage service provider” in this narrow manner. In 2014, the Australian government issued a discussion draft concerning possible amendments to the Copyright Act. The discussion draft stated that adopting the definition of carriage service provider from the Telecommunications Act resulted in entities providing services that fall within the safe harbors’ four categories of activity being unable to take advantage of the safe harbor scheme unless they provided network access to the public. Thus, “the definition excludes a university as it provides internet access to students but not to ‘the public,’ and an online search engine, as it is not a ‘provider of network access.’” The government proposed extending application of the safe harbor scheme by removing reference to carriage service provider and replacing it with a broad definition of service provider: any person engaged in mere conduit, caching, storing, or linking services. This proposal was not adopted.

In 2017 the Australian government again recognized the narrowness of the term “carriage service provider.” The Australian Minister for Communications stated that “the safe harbour scheme only extends to a ‘carriage service provider,’ as defined in the Telecommunications Act 1997 as a person who uses a network unit to supply carriage services to the public. This includes telecommunications companies such as Telstra, Optus and TPG.”

There is longstanding international legal consensus that the carriage service provider limitation throws Australia’s safe harbor scheme out of compliance with the requirements of AUSFTA. As early as 2008, prominent U.S. and Australian copyright law professors Jane Ginsburg and Sam Ricketson observed that AUSFTA required Australia to apply its safe harbors to all online service providers. However, they noted that the Australian implementation was not only narrower than its DMCA counterpart, it was also “narrower that the obligations in the AUSFTA.” Similarly, in 2014, a group of leading Australian law professors wrote that extending safe harbors to all service providers “will finally bring Australian law into compliance with its obligations under art. 17.11.29 of AUSFTA.”

Indeed, in 2016, the Productivity Commission, the Australian government’s independent research and advisory body, explicitly recognized that AUSFTA “envisioned” the safe harbor regime applying to all service providers. The Commission believed that expanding the safe harbors is “consistent with Australia’s international obligations and is an important balance to the expanded protections for rights holders Australia has accepted as part of its international agreements.”

While businesses that export to Australia repeatedly asked the U.S. Trade Representative to insist that Australia live up to its AUSFTA safe harbor obligations during the Obama Administration, no action was taken. USTR appears to be following the same course under the current Administration.

The most recent changes provided a particularly appropriate occasion to insist on Australia finally coming into compliance with its long-standing obligation. Over the past two years, Australia has been considering amendments to its safe harbor provisions in response to complaints from nonprofit educational and cultural institutions as well as Australian Internet companies that were not the large telecommunications companies included within the scope of the carriage service provider definition. This provided USTR with the perfect opportunity to demand that Australia amend its copyright law to comply with AUSFTA, but USTR failed to act.

While extending the safe harbor to nonprofit institutions is commendable, the proposed amendment does not address the concerns of commercial Internet firms. At the same time, Australia’s decision to extend safe harbors to new constituencies while refusing to address a decade of acknowledged non-compliance with existing commitments could be considered an affront that may embolden other trading partners to similarly shirk FTA obligations.

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.