The growth in user-generated content (‘UGC’) that ushered in Web 2.0 challenged legislators to strike a workable balance between the interests of copyright holders and promoting the development of the digital economy. With services increasingly hosting and publishing content uploaded by uses, it became apparent that safe harbours were needed to shield Internet service providers from liability in the event that uploaded material infringes copyright.1
However, service providers clearly could not be permitted to host and publish infringing content with impunity, so these safe harbours came at a cost. For service providers to enjoy protection from liability, many jurisdictions imposed an obligation on service providers to respond efficiently and effectively to claims of copyright infringement by disabling access to the allegedly infringing content.2 Consequently, takedown notice regimes were born as a way for copyright owners to notify service providers of suspected copyright infringement.
Excluding users from the dialogue
Conversations over safe harbours and takedown notices have largely been between copyright owners and service providers. Because copyright owners and service providers have been the main participants in the dialogue, the rights and interests of users of copyright material have not featured prominently in the design or operation of takedown notice regimes. For example, Joseph M Miller notes that ‘absent from [safe harbour] negotiations were the Internet users, resulting in a compromise that provides a quick and effective solution for [Internet service providers] and copyright holders, and a heavy burden on Internet users’.3 Although Miller was writing in an American context, Australia’s safe harbours were introduced by the US Free Trade Agreement Implementation Act 2004 (Cth) to provide comparable limitations on remedies to those in the United States.4
Abuse of takedown notices
Specific concerns have been raised that takedown notices are susceptible to abuse by copyright owners, including by being issued in circumstances where the allegedly infringing use was permitted by a free use exception.5 Free use exceptions permit the legal use of copyright material without needing to seek authorisation from or give payment to the copyright owner, and include provisions such as fair dealing in Australia6 and fair use in the United States,7 among others. The essential difference between fair dealing and fair use is that fair dealing applies to specific types of uses (such as parody or critique), while fair use is an open-ended exception. Free use exceptions remain an important and relevant part of copyright law worldwide.
Through comparison with the United States, this essay examines whether Australia’s takedown notice regime requires copyright owners to give meaningful consideration to free use exceptions when issuing a takedown notice, and whether the law is satisfactory in this regard.
Global takedown notice regimes
Australia’s takedown notice regime has not been used to anywhere near the same extent as its counterparts in the United States8 or the European Union,9 most likely due to the limited number of UGC-oriented websites based in Australia. The most well-known of takedown notice regimes was established in the United States under the 1998 Digital Millenium Copyright Act (‘DMCA’).10 Global familiarity with the DMCA is a consequence of leading multilingual UGC-oriented websites such as YouTube and Facebook being headquartered in the United States.
This difference in familiarity is demonstrated in the development of related jurisprudence: although Australia’s takedown notice regime does not appear to have received any significant judicial attention, the American regime has been the subject of substantial litigation.11 However, as will be seen, there are substantial similarities between the two countries’ regimes, due primarily to the implementation of Australia’s free trade agreement with the United States.12 As a result, the experience in the United States contains some important lessons for Australia.
Australia’s takedown notice regime
Australia’s takedown notice regime consists of Division 2AA of the Copyright Act 1968 (Cth) (‘the Copyright Act’) and Part 6 of the Copyright Regulations 2017 (Cth) (‘the Copyright Regulations’).
Under the Copyright Act, a service provider that hosts content uploaded by users must promptly act to remove or disable access to infringing or likely infringing material once the service provider becomes aware that it hosts such content.13 The Copyright Regulations prescribe the process of bringing alleged infringement to a service provider’s attention — that is, the takedown notice procedure.14
A copyright owner (used here and elsewhere to include anyone authorised to act on behalf of a copyright owner in these matters15) ‘who reasonably believes’ hosted material is infringing may submit a notice to the service provider in the form prescribed by the Copyright Regulations requesting that the service provide remove or disable access to the material.16 The prescribed form requires copyright owners to declare:
I am the owner … of the copyright in the following copyright material residing on your system or network, and I believe, in good faith, that the storage of the material on your system or network is not authorised by the owner or any exclusive licensee of the copyright in that material, or by the Copyright Act 1968, and is therefore an infringement of the copyright in the material …17
Copyright owners must therefore give at least some consideration to whether the use of the content is actually infringing (that is, not authorised by them or the Copyright Act) before issuing a takedown notice.
Whether a use of copyright material in accordance with a free use exception qualifies as ‘authorised’ by the Copyright Act is not made explicit, and the explanatory statement to the Regulations is not particularly enlightening. Free use exceptions in the Copyright Act are typically phrased to the effect that the use to which the exception applies ‘does not constitute an infringement of the copyright’ in the subject matter.18 Therefore, whether the copyright owners are required to consider free use exceptions is ultimately a question of whether ‘permitted’ is synonymous with ‘authorised’ in this context.
Insights from the United States
Although Australian courts have so far not been called upon to decide this issue, courts in the United States have made it clear that copyright owners must consider fair use.
Under the DMCA, a takedown notice must include:
A statement that the complaining party has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law.19
This is substantially the same as the requirement under the Australian Copyright Regulations quoted above.
In Lenz v Universal Music Corp (‘Lenz’), the United States Court of Appeals for the Ninth Circuit said:
We conclude that because [section] 107 [of Title 17 of the United States Code] created a type of non-infringing use, fair use is ‘authorized by the law’ and a copyright holder must consider the existence of fair use before sending a takedown notification … 20
Due to the similarities between the requirements in Australia and the United States, it is likely that Australian courts would accept Lenz as persuasive precedent and similarly conclude that a use covered by a free use exception is authorised by the Copyright Act. Thus, it seems safe to assume that if an Australian free use exception applies to a use of copyright material, that use is authorised by the Copyright Act and copyright owners are therefore required to form a belief, in good faith, that a free use exception does not apply before they issue a takedown notice.
Good faith is not enough
It is one thing that copyright owners are required to take into account free use exceptions when issuing takedown notices, and quite another for that to produce satisfactory results.
Firstly, it may be optimistic to expect copyright owners to give objective consideration to free use exceptions. In other words, ‘good faith’ might not be enough to overcome any pre-existing bias against free use exceptions. Secondly, the takedown notice regime may fail to provide effective disincentives against issuing spurious takedown notices. In some cases, the potential benefits of issuing a dubious takedown notice might outweigh the risk of being penalised. Again, these are matters where American jurisprudence far exceeds that of Australia.
In Lenz, the Ninth Circuit said:
We hold that the statute requires copyright holders to consider fair use before sending a takedown notification, and that in this case, there is a triable issue as to whether the copyright holder formed a subjective good faith belief that the use was not authorized by law.21
Elaborating on this notion of subjectivity, their Honours said: ‘we are in no position to dispute the copyright holder’s [good faith] belief even if we would have reached the opposite conclusion.’22 Consequently, copyright owners are not required to put themselves in the position of a court when issuing a DMCA takedown notice, and a mistaken belief that fair use does not apply will satisfy a copyright owner’s obligation.
Amanda Reid observes:
The cynical view anticipates copyright holders will give a narrow interpretation to fair use. Subjectively, copyright holders can, in good faith, hold objectively unreasonable views about fair use.23
Thus, even a copyright owner acting in good faith may somewhat legitimately fail to make a sufficiently objective or unbiased assessment of whether a free use exception applies. The American experience therefore indicates that even where a copyright owner follows the letter of the law, the good faith obligation may still lead to unsatisfactory results viz the consideration of free use exceptions under the Australian takedown notice regime.
Incentives to act in bad faith
While good faith is clearly a poor bastion for free use exceptions, Australia’s takedown notice regime is also flawed because it contains incentives for copyright owners to act in bad faith and issue spurious takedown notices. As will be seen, the legislative framework clearly operates presumptively in favour of the copyright owner, and a copyright owner who picks their targets with a degree of care may succeed in having access to content disabled in circumstances where a free use exception would apply.
A takedown notice can be characterised as a type of automatic extra-judicial injunctive relief — it has immediate effect, mandates a specific response, and is not a court order.24 Service providers must act expeditiously to remove or disable access to content after receiving a takedown notice,25 without assessing the legitimacy of the notice. This creates an initial presumption in favour of the copyright owner.
A service provider may only restore access to the content if (1) the uploader issues a counter-notice within three months of receiving the original notice; and (2) the copyright owner fails to notify the service provider within 10 business days of receiving the counter-notice that they intend to seek a court-ordered injunction.26 Therefore, in effect, a takedown notice is a form of injunctive relief that can only be lifted if the uploader resists the notice within the time allowed and the copyright owner subsequently abandons the claim.
If an uploader does not resist a takedown notice, access to the content will be permanently disabled, an outcome favourable for the copyright owner. Uploaders may be discouraged from resisting because the prescribed form of the counter-notice requires them to declare that they ‘will accept service of process in any action for infringement’27 — the threat of legal consequences alone may act as a significant deterrent.
However, if an uploader does issue a counter-notice, and the copyright owner concedes that a free use exception applies, the copyright owner can simply choose not to pursue the matter. Remedies are available to persons who suffer ‘loss or damage because of a material misrepresentation made knowingly in a [takedown] notice’,28 but this is likely to be of limited help to uploaders. The evidentiary burden is on the uploader to demonstrate that the copyright owner knowingly (or, alternatively, negligently29) made an inaccurate statement, and the injury suffered will in many cases be minimal or non-existent, especially where the use was of a non-commercial nature.30
As a result, by issuing takedown notices to uploaders perceived as being unable to fight back, copyright owners can potentially exploit this power imbalance because the negative repercussions for acting in bad faith are likely minimal.
Reid has proposed the introduction of three requirements to the American regime to address these problems: (1) that allegations of infringement be made under penalty of perjury; (2) that express considerations of fair use be made in takedown notices; and (3) that the subjective good faith belief standard be replaced with an objective good faith belief standard.31 Each of these would also significantly improve the quality of takedown notices in Australia in terms of requiring greater and more sincere consideration of free use exceptions.
However, due to the plethora of free use exceptions in Australia compared to the single fair use exception in the United States, express consideration of individual free use exceptions may be excessively burdensome for copyright owners.32 On the other hand, if changes are made in the United States, legislative reform might also follow in Australia.
It is clear that in implementing its free trade agreement with the United States, Australia imported many of the problems associated with the American takedown notice regime. Arguably, it is also clear that many of these problems remain in a practical sense on the opposite side of the Pacific; Australia’s domestic takedown regime is underused as a consequence of its limited coverage of the global digital economy. Nevertheless, bad law is bad law, and it is evident that Australia’s takedown regime is in as dire need of reform as America’s.
Jack Lerner, ‘Secondary Copyright Infringement Liability and User-Generate Content in the United States’ in Giancarlo Frosio (ed), Oxford Handbook of Online Intermediary Liability (Oxford University Press, 2018) 353. See also Miquel Peguera, ‘Secondary Liability for Copyright Infringement in the Web 2.0 Environment: Some Reflections on Viacom v Youtube’ (2011) 6(1) Journal of International Commercial Law and Technology 18, 18–20. ↩
See, eg, Copyright Act 1968 (Cth) s 116AH(1) item 4; Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on Certain Legal Aspects of Information Society Services, in Particular Electronic Commerce, in the Internal Market (Directive on Electronic Commerce)  OJ L 178/1, art 14; 17 USC § 512(c)(1). ↩
See Joseph M Miller, ‘Fair Use through the Lenz of Section 512(c) of the DMCA: A Preemptive Defense to a Premature Remedy’ (2010) 95(5) Iowa Law Review 1697, 1702. ↩
Brian Fitzgerald et al, Internet and E-Commerce Law, Business and Policy (Thomson Reuters Lawbook Co, 2011) 1039. The provisions were introduced specifically by Part 11 of Schedule 2 of the Act. ↩
In an American study of a representative sample of more than 108 million takedown notices over a six-month period, it was found that 28.4% were questionable, including 6.6% where the fair use defence may have been invoked. A second study of Google Image Search takedown notices found that 36.3% were questionable, including 11.5% where fair use defences may have been invoked. Both studies were published in Jennifer M Urban, Joe Karaganis and Brianna L Schofield, ‘Notice and Takedown in Everyday Practice’ (University of California & Columbia University, March 2017) 11–12. See also Sharon Bar-Ziv and Niva Elkin-Koren, ‘Behind the Scenes of Online Copyright Enforcement: Empirical Evidence on Notice & Takedown’ (2018) 50(2) Connecticut Law Review 339. ↩
See Copyright Act 1968 (Cth) ss 40, 41, 41A, 42, 103A, 103AA, 103B, 103C for fair dealing exceptions. Fair dealing is common is Commonwealth countries: see, eg, Copyright, Designs and Patents Act 1988 (UK) ch III; Copyright Act 1994 (NZ) pt 3. Other free use exceptions in Australia are too numerous to list comprehensively, but see Parts III (Divisions 3, 4, 4A, 4B and 7), IV (Division 6) and IVA of the Copyright Act 1968 (Cth) for additional free use exceptions. ↩
17 USC § 107. ↩
17 USC § 512. ↩
The European Union does not (yet) have a unified takedown notice regime. The safe harbour provisions in the 2000 Directive on E-Commerce require service providers to remove content (see n 2), leading many member states to implement national takedown notice regimes. ↩
Digital Millennium Copyright Act of 1998, Pub L No 105-304, 112 Stat 2860, § 202. ↩
Compare the distinctly case-light analysis of the Australian provisions in Fitzgerald et al (n 3) at 1049–52 to Miller’s analysis of the good faith requirement (discussed further below) that cites no fewer than four significant decisions: Miller (n 3) 1706–7. ↩
See n 4 and accompany text. ↩
Copyright Act 1968 (Cth) s 116AH(1) item 4 condition 2A. This must be read in conjunction with sections 116AE and 116AG(4). ↩
Copyright Act 1968 (Cth) pt 6 div 4. ↩
Both Australia and the United States permit persons such as authorised agents and exclusive licensees to issue takedown notices on behalf of a copyright owner: Copyright Regulations 2017 (Cth) s 24(1); 17 USC § 512(c)(3). ↩
Copyright Regulations 2017 (Cth) ss 23–24. ↩
Ibid sch 2 pt 3. ↩
The phrase ‘does not constitute an infringement of the copyright’ is used in Copyright Act 1968 (Cth) ss 40, 41, 42, 43, 44A, 45, 46, 59, 103A, 103AA, 103B, 103C, 106, 112A, 200. ↩
17 USC § 512(c)(3)(A)(v). ↩
Lenz v Universal Music Corp, 572 F Supp 2d 1150 (ND Cal, 2008) 1153. ↩
Ibid 1148–9. ↩
Ibid 1154. ↩
Amanda Reid, ‘Considering Fair Use: DMCA’s Take Down & Repeat Infringers Policies’ (2019) 24(1) Communication Law and Policy 101, 105. ↩
Indeed, Reid describes the American takedown notice regime as ‘an expedited, extra-judicial process for removing infringing content’: ibid 102. ↩
Copyright Regulations 2017 (Cth) reg 25(1). ↩
Ibid regs 26, 28. ↩
Ibid sch 2 pt 6. ↩
Ibid reg 39. ↩
Ibid reg 39(1) provides: ‘a person knowingly makes a material representation in a notification, notice or counter-notice if the person does not take reasonable steps to ensure the accuracy of the information and statements include in the notification, notice or counter-notice’ (emphasis added). ↩
Rebecca Tushnet, ‘Fair Use’s Unfinished Business’ (2016) 15(2) Chicago-Kent Journal of Intellectual Property 399, 403–4. ↩
Reid (n 23) 129–36. ↩
In 2016 the Productivity Commission made the latest of a number of recommendations to replace the multiple fair dealing exceptions with a fair use exception in Australia, but there has been no progress on the matter: Productivity Commission, ‘Intellectual Property Arrangements’ (Report No 78, 23 September 2016) ch 6. The Australian Law Reform Commission made a similar recommendation in 2013: Australian Law Reform Commission, ‘Copyright and the Digital Economy’ (Report No 122, November 2013) ch 4. ↩