The Sydney Morning Herald is reporting the news that Music Industry Piracy Investigations (MIPI), the music industry’s copyright enforcement arm, is threatening that they may have to start suing individuals for copyright infringement, if ISPs don’t do what they wish, and ‘exert more control over their users’. but is this news? And is it likely? I don’t think so. But to explain why, we need some backstory.

[UPDATE]: Today’s AFR has more on MIPI’s proposals for ISP monitoring of copyright infringement: see page 40]

This new story about a threat to Australian consumers is traceable to the US case that is getting so much attention at the moment, in which a 30 year old American woman was fined US$220,000 dollars for sharing 24 songs online (although note, the Industry said she didn’t just share 24, but 1709 songs, and I think that’s probably right, since they wouldn’t have brought the action for 24). There’s been extensive coverage of the case; among other links, see:

But what of Australia? According to the SMH story, MIPI has ‘threatened to start suing individuals for illegal downloading if internet providers do not exert more control over their users’. MIPI, apparently, want the ISPs to do two things: send warning notices to users who are downloading, and disconnect the internet connections of users identified as illegal downloaders. This attempt to encourage the ISPs to get involved is supported by Australian Federation Against Copyright Theft (AFACT). It’s not clear whether AFACT are also threatening action against individual downloaders.

Could the Jammie Thomas case happen here? Well:

  1. Yes, she could be sued and held liable here in Australia. Making copyright works available online is clearly an infringement of copyright (it’s even clearer, under Australian law, than it is under US law).
  2. But no, you wouldn’t get a $220,000 jury award here. First, we don’t have juries. But more importantly, you couldn’t get a damages award of $220,000 for 24 songs here, because our system for calculating damages is different. Under US law, a copyright owner who sues for copyright infringement can claim either their actual damage (what it actually caused them in terms of loss) or a fixed (statutory) amount per infringement. The amounts, under US law, that you can claim per infringement are between US$750 and US$30,000 per infringement (see 17 USC 504). That’s what leads to enormous damages claims in the US. By contrast, here in Australia, if you wanted to sue an individual, you would have to seek your actual damage (for 24 songs, or even 1709 songs, a much smaller amount, I suspect, than $220,000). You no longer have to prove every infringement (s115(5) and (6)) but the damages award still has to be linked to actual loss. There is capacity for ‘punitive’ damages in Australia (s 115(4)), but I don’t think on any stretch of the imagination they would get to these heights, even if they were to be awarded (not guaranteed – would courts really want to punish individuals like that?).

Will it happen? Will we see lawsuits against individuals? It’s always dangerous to speculate of course. But let’s have a go.

I’ve said before that I didn’t think it likely that individuals would be targeted while the process of copyright law reform was going on. The American campaign of lawsuits against individuals, brought by the RIAA, started in late 2003, but here in Australia, since early 2004 we’ve been going through a process of copyright law reform. Copyright owners would have been certifiably insane had they started suing individuals while that process was ongoing: it would have been a surefire way to draw political heat and make it harder to get tougher copyright laws. In fact, had single mothers or 12 year olds been the subject of lawsuits in Australia, I suspect politicians would have been calling for softer copyright laws, not tougher laws. Those personal copying exceptions would have been even broader.

But that reform process ended in late 2006. What now? And what of this reported threat?

It’s possible, of course, that there is no new threat as such. It may be that someone from MIPI was asked to comment on the Thomas case, and they chose to keep their options open, and to refer back to their chief battle ground at present – convincing ISPs to police users more stringently. In other words, this may not be ‘news’, but rather, a simple opportunistic comment by an industry body seeking to capitalise on a news story to try to generate a bit of attention to their concerns, and to capitalise on any deterrence against downloading in Australia that the US jury judgment may have generated.

But let’s assume there is some threat, whether recent or not, to sue downloaders if the ISPs don’t come to the party. Idle threat or likely next step?

Logic would suggest that the threat is not entirely implausible, for two reasons. On the one hand, it is not likely that the ISPs will be coming to the proposed MIPI/AFACT party anytime soon. The Internet Industry Association, at least, has said so in a letter available here, and if you think about it, it just looks like all cost, no benefit from the perspective of an ISP:

  1. There are the costs involved in setting up the systems for monitoring and sending notices. Whichever way you look at it, that would involve spending money to set up the technology. And cost incurred purely for the benefit of someone else – ie copyright owners.
  2. Then there are the costs of incurring the ire of users wrongly accused by the automated system of copyright warnings. Some notices would inevitably be sent in error, generating complaint and potentially bad publicity. And some notices wouldn’t be sent in error, but would arise where the registered user wasn’t the person doing the download. in that case, you still are likely to have some ire from the wrongly named user;
  3. disconnecting users would have similar costs – but magnified.
  4. Give in on this one, and it becomes harder for ISPs to resist other demands for similar systems to avoid other kinds of legal breaches. What would be the basis for special treatment of copyright owners? what about trade mark or patent owners who can prove infringement (I know there are differences. but the point I think holds: give into one demand to monitor, warn and disconnect, and you are less able to argue it’s impracticable when the next demand comes along).

Assuming that ISPs don’t want to come to the party, the realistic choice has to be to sue some users for effect. As Lemley and Reese have pointed out in a quite good paper a while ago (short version here, long version here) – users and technology/communications providers are two alternative possible parties for prosecution. Either one could work.

That said, 2007 is not 2003. Things have moved on the meantime. In particular, we are seeing, I think, in more recent times a lot of effort to counter the download threat in ways more creative than ‘let’s scare them all into submission’: actions like offering DRM-free downloads, or the abandonment of publication ‘windows’ that we are now seeing in Australia in relation to television programs (in an attempt to cut down on people downloading TV so they can see it at the same time as in the US). iTunes is pretty big and important now. Suing individuals doesn’t fit with these attempts to offer what consumers want. you don’t seduce and attack consumers at once, surely… And even in the US, the campaign hasn’t been a roaring success: the Jammie Thomas case is significant, but at least before that case, file-sharing was still growing in the US, despite 26,000 suits. Unless you think Australians are more risk averse than Americans, the lack of overwhelming success to the lawsuits in the US – despite several years of lawsuits and thousands being sued – ought to make you think before introducing the approach here.

Also, there are political considerations. Copyright owners would be a bit mad to start suing consumers in Australia with an election pending. Stirring the political boat now would be unpopular with the political parties whose support may be needed in other contexts, and at other times. If copyright owners were to start suing individuals now, it would make obvious the gaping holes in Ruddock’s copyright rhetoric of last year (it’s about pirates, not normal people). Assuming that MIPI, and ARIA, would rather win friends and influence politicians, they are unlikely to want to take steps to antagonise the politicians now. How long will this be important? This factor could change after an election.

It’s also worth noting that Australia is a different place from the US. It’s a smaller market, for one thing, and politicians are closer, I suspect, here, to their constituents. Have an individual sued, and individual MPs might well pay attention in ways that even lawsuits against 26,000 individuals in the US have not forced Congress members to do.

Finally, the different legal framework in Australia means that some of the elements of US law most central to the success of the ‘sue individuals’ strategy are missing. Basically, the RIAA strategy depends on the fact that the majority of people sued will settle. 26,000 lawsuits would have imposed a signfiicant burden even on the RIAA. The whole RIAA strategy of suing masses of individuals, and seeking settlements for a few thousand dollars, is dependent on the ability to threaten damages of up to US$30,000 per infringement (or likely now, following the Jammie Thomas case, the letters will probably threaten $9,250 per song). But the threats of huge damages awards can’t be made in Australia against individuals, for reasons I’ve already explained. Which means settlement may be less likely. The whole thing looks like a LOT more trouble.

My guess? The ‘threat’ being reported in the SMH is an opportunistic statement seeking to capitalise on the deterrence value of a big lawsuit against a US individual to remind people that downloading is illegal. But I could, of course, be wrong.

Finally, can I just say, in conclusion, that I find the idea that MIPI/AFACT are trying to get a code of practice with the ISPs that would require monitoring and disconnect of internet users a simply wonderful irony. Think about it:

  1. We spend 4-5 years drafting a digital copyright law: in 2000 we get the Copyright Amendment (Digital Agenda) Act. Perhaps the one gaping hole in the reforms is the decision not to do anything about intermediary liability.
  2. We have a review of the digital agenda reforms, in which it is suggested that perhaps a system for providing certainty for intermediaries is required – like a safe harbour regime for ISPs. There’s a chance of a more certain, effective system being negotiated at this point.
  3. what happens? The US comes in with its “world’s best practice” laws in the AUSFTA. We get US-style safe harbours. Drafted, originally, in 1998. prior to the file-sharing phenomenon. Built on an assumption that the harm is caused by internet hosts, not individual users sharing.
  4. We spend the next couple of years going through a copyright reform process that does not involve ‘updating’ the AUSFTA rules because they comprehensively set out what we have to do. What we have to do does NOT include the industry’s actual preferred monitoring and disconnection system.

In other words, thanks most significantly to the AUSFTA, we never got an updated version of the safe harbours that would deal with peer-to-peer. It might have happened back in 2003. I dont’ know whether it would have, but it might have. Will it happen now? Not a chance. No Australian government in their right mind wants to have to go back to copyright law after experiencing the 2004-2006 period.

I wonder whether the cost of AUSFTA was worth the gain? (actually, I don’t wonder. I’m pretty convinced it wasn’t. See my new paper on this here).

Ah, irony is a wonderful thing.