Intellectual Property & Technology

Cyberspace Piracy - A Compromise

First published in Inside Tourism, Issue 831, 5 May 2011

The Copyright (Infringing File Sharing) Amendment Bill was rushed through its final reading last month and is now law. Most of its provisions relating to internet copyright infringement come into force on 1 September. The Bill was introduced to replace a controversial scheme that could have resulted in many unwarranted disconnections from the internet. Now that it is law, it is timely to remind those of you who provide internet access to your customers and staff, of the possible consequences of doing so.

Three strikes ...

The amended Act sets out a three notice process which first seeks to educate the offender of illegal file sharing and, if that fails, to provide a system under which copyright owners can enforce their rights.

Under the new regime the copyright holder may require the internet service provider to give an alleged infringing account owner a notice to stop infringing. This first notice informs the account owner that an infringing activity has occurred and that it is illegal. A second and third notice may be sent if the account holder ignores these notices and continues infringing.

After issuing the third notice the copyright holder can seek damages of up to $15,000 from the Copyright Tribunal.

An important change to note is that although there is provision for copyright holders to take court action to have the ISP account holder disconnected for up to six months, this has been suspended for the moment.

Onus on account holders ...

Account holders will have the right to challenge any notice and to make submissions on whether they have infringed the copyright. However, it is worth noting that there is a presumption that the information given in the infringement notice is correct and that each incidence of file sharing identified in the notice is an infringement of the relevant work. It is only if the account holder can submit a credible explanation as to why this is not the case that the copyright holder will be required to prove the facts in the notice.

The Act includes a clear exclusion of all liability for the ISPs provided they follow the procedures required of them. However, the select committee has been careful to exclude providers of internet access to the public (such as libraries, accommodation providers and internet cafes for example) from the protections afforded to ISPs. The committee made it clear that it considered "the onus should be on all account holders to take measures to ensure that infringing file sharing does not occur on their accounts". Account holders risk liability for the infringement itself, together with possible disconnection in the future, should that provision come into force.

Be prepared ...

All businesses should review their employment policies to ensure that they are in a position to prevent any further infringement by an employee after the first notice. Businesses that provide internet access to their customers should also review their policies and processes with a view to reducing the chances of their customers indulging in illegal file sharing while using these services.

There is no doubt that the Act is intended to put in place a fair and balanced process to deal with online copyright infringement by unauthorised file sharing. This new regime is a compromise designed to reduce the need for drastic steps damaging business. A business operating policies and practices designed to reduce illegal file sharing to the absolute minimum will have a much better chance of avoiding being the subject of any complaint in the first place. In addition it would also have a chance of avoiding an order awarding damages, or ultimately disconnection, on the ground that the order would be manifestly unjust.

By John Ferner

Business, Property, Finance

The contents of this publication are general in nature and are not intended to serve as a substitute for legal advice on a specific matter. In the absence of such advice no responsibility is accepted by Brookfields for reliance on any of the information provided in this publication.


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