Safe harbours

7.58 The exceptions recommended in this Report are not intended to replace the safe harbour scheme in pt V div 2AA of the Copyright Act. The purpose of the safe harbour scheme, as Robert Xavier explained, is to give carriage service providers ‘some protection from the otherwise unavoidable risk of liability for inadvertently hosting or communicating infringing material on behalf of their users’.^[51]

7.59 This chapter is not about third parties facilitating or authorising copyright infringement, for example, by hosting user generated content that infringes copyright or by providing a digital locker that some customers might use to illegally share pirated music with strangers. A safe harbour may provide appropriate protection from secondary liability, where such protection is warranted and subject to conditions.^[52] The scope of this protection is being reviewed, and is outside the Terms of Reference for this Inquiry.

7.60 Instead, the focus of this chapter is on third parties facilitating uses of copyright material that, if performed by the end user, would be covered by an exception—for example, by providing a digital locker that some customers might use to store legally obtained music for private use.

7.61 Although a safe harbour may protect third parties from both types of potential copyright infringement, in the ALRC’s view, the Act should also provide for exceptions to copyright for some types of third party activities, and that fair use is best suited for these purposes.

7.62 Some stakeholders suggested that the safe harbour scheme was either sufficient for, or the preferred method of dealing with, third party facilitators.^[53] However, the ALRC agrees with those who suggested that suitable exceptions and a safe harbour scheme were both necessary.^[54] The safe harbour scheme does not provide an absolute defence to infringement, and it places certain obligations on service providers, such as an obligation to remove infringing content when given notice.^[55]

7.63 In the ALRC’s view, third parties should not need to rely on a safe harbour scheme to make fair use of copyright material, although they may need to rely on the safe harbour scheme for unfair uses.^[56] The safe harbour scheme may be necessary for other activities, but not for fair use or otherwise non-infringing activity. In fact, some third party fair uses will be highly productive and transformative, and should therefore be encouraged, rather than merely tolerated.