Page 82 - A Study on the Role of UGC Platforms in Copyright Law：An Intermediary-oriented Approach

A Study on the Role of UGC Platforms in Copyright Law: Chapter 3 Copyright Rules for Online Intermediaries: From Safe Harbour to a New Intermediary Liability Scheme
An Intermediary-oriented Approach

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defeats the Sony safe harbour rule. This was followed by the Ninth Circuit Court of Appeal
in the Fung decision. 140
2) Other jurisdictions

Other jurisdictions have not had many cases regarding ISPs’ liability for P2P providers.A
search of Lexis HK showed that the entire Commonwealth, consisting of 53 member states,
generated only four published decisions on ISPs’ liability for copyright infringement by P2P
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providers.
Before the US Supreme Court delivered its decision in Grokster, the Supreme Court
of the Netherlands issued its opinion in KaZaA. The latter case concerned liability for the
copyright infringement of another P2P software, KaZaA. The Dutch Supreme Court
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declined to hold KaZaA liable for user infringement based on insufficient evidence of
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KaZaA’s ability to control the infringing activities of its customers. Under the safe harbour
privilege, KaZaA quickly spread to Australia and the US, generating significant loss to
copyright industries.
Learning a lesson from the Netherlands decision, both the Australian court and the US
court became more sympathetic to copyright owners. A few months after the US Supreme
Court’s injunction in the Grokster case based on inducement liability, the Federal Court of
Australia required Sharman, an Australian ISP that used the KaZaA software, to turn off
the P2P service. Though Dutch court observed in the KaZaA case that P2P provider was
144
145
unable to control the infringing activities participated in by its users, the Australian court
took a best-preventer approach and applied the authorisation doctrine, claiming that ‘Sharman
146
was in a position to prevent or restrict users’ access to identified copyright works’. Rather
139 Though the members of the Supreme Court were unanimous in finding Grokster liable for the users’ infringing activities
and found it was ineligible for the Sony safe harbour protection, two concurring opinions showed that there were different
attitudes towards the application of the Sony rule. Justice Ruth Bader Ginsberg (joined by Chief Justice Rehnquist and Justice
Kennedy) said the Sony rule was inapplicable in this case because Sony was used principally for a lawful use (91%) whereas
Grokster was almost exclusively used for infringing purposes (90%). Because Grokster was what Posner called ‘a service
that is capable of lawful use but is substantially used for unlawful purposes’ (in the Aimster decision), Ginsburg endorsed
Posner’s reasoning and imposed liability on Grokster. (MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 944 (2005)).
However, Justice Breyer (joined by Justices Stevens and O’Connor) held that the estimated 10% non-infringing use has
already met Sony's standard of ‘substantial’. The real question, according to Breyer, was how to construct a more intrusive
Sony test providing ‘greater revenue security for copyright holders’. (MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 960
(2005)).
th
140 Columbia Pictures v. Fung, 710 F.3d 1020, 1029, 1032 (9 Cir. 2013).
141 In LexisHK, I used ‘All Commonwealth Cases’ as my case source, ‘peer’ and ‘liability’ and ‘copyright’ and ‘service provider’
as the search terms, and found 58 results covering six cases involved with ISPs’ liability for their P2P service. Among them,
four cases are related to the ISP’s copyright-infringing liability for users’ infringement and two cases are involved with ISPs’
liability to disclose certain users’ information.
142 Vereniging BUMA, Stichting STEMRA v KaZaA, B.V. [2004] E.C.D.R. 16
143 Ibid.
144 Universal Music Australia Pty Ltd v Sharman License Holdings Ltd. [2005] FCA 1242 (2005) 220 ALR 1. 100.
145 See supra note 143 and accompanying text.
146 Universal Music Australia Pty Ltd v Sharman License Holdings Ltd. [2005] FCA 1242 (2005) 220 ALR 1. 100, 106.

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