Why Australia Has Better Tools to Fight Digital Pirates Who Seize Hollywood Content (Guest Blog)

The U.S. lags behind other countries in confronting hackers who seek ransom from companies like Netflix and Disney, digital strategy veteran Mitch Singer writes

pirates of the caribbean 5

When Disney CEO Bob Iger revealed last Thursday that the ransom demand for “Pirates of the Caribbean: Dead Men Tell No Tales” was a hoax, Hollywood breathed a momentary sigh of relief. Yet the agita remains, because the entertainment industry knows it is only a matter of time before the next extortion attempt turns out to be very real.

A short time before Disney came into the cross-hairs, someone going by the name of TheDarkOverlord hacked into a postproduction house looking for Hollywood gems, and stumbled across Netflix’ season 5 of “Orange Is the New Black” just weeks before its June release. With this in hand, the content pirate did what any kidnapper would do: Demand a ransom. When Netflix refused to pay, 10 episodes of “Orange Is the New Black” turned up online.

Over in Australia, meanwhile, Foxtel, Village Roadshow and the country’s Motion Picture Association studios were taking swift action to keep their stolen movies off of The Pirate Bay website. In this classic tale of two countries, two very different stories are emerging.

With “Orange” now available in the U.S. from hundreds of infringing sites, can Netflix follow the lead of Village Roadshow across the Pacific? Along with Foxtel and the studios, it came out swinging by blocking The Pirate Bay, Torrentz, TorrentHound and IsoHunt websites, as well as streaming service SolarMovie. Users visiting those sites will see a warning page informing them the site can no longer be accessed. And it didn’t stop there, with Village Roadshow moving to block access to another 41 pirate websites, with more to come until the final knockout blow.

Australia gave Village Roadshow and other copyright holders 21st-century tools to fight piracy even when pirate websites are located outside its own country in nations without effective copyright laws. In order to block a pirate website, the copyright holder needs to:

  • Make its case to Australia’s federal court to impose an injunction
  • The court looks at the primary purpose of the pirate website
  • If it is determined that is “to infringe, or to facilitate the infringement of, copyright” then the court will order Australian internet service providers to block the website.

Australia and the European Union operate under the rationale that ISPs are in the best position to stop widespread distribution of stolen content, and to strike the right balance site blocking must play a critical role.

Back in the U.S., Netflix is not so lucky. Along with broadcast and cable networks, whose IP is also now in the hands of TheDarkOverlord, the company’s copyright enforcement tools are crippled by 20th-century technology. That means it is limited to the Notice and Take Down provisions of the Digital Millennium Copyright Act (DMCA) passed by Congress in October 1998.

Let’s look what was happening nearly two decades ago. Google was founded, Apple just launched the iMac, VHS households were at 80 percent penetration, internet penetration was low and broadband was primarily limited to universities. There was no YouTube, iTunes, Netflix. No Napster, Grokster, Torrents, cyberlockers. More importantly, there was no notion of site blocking, playback control or filtering technologies that could be used to block widespread distribution of infringing content.

In this relatively low-tech Neanderthal digital environment, ISPs and the entertainment industry negotiated the DMCA Notice and Take Down provisions. They are a part of the “safe harbor” given to ISPs, which is intended to protect them against infringement claims for copyrighted content they stored for or transmitted to consumers. No one then ever foresaw The Pirate Bay or TheDarkOverlord.

Netflix’s limited remedies today are compounded, because ISPs long ago discovered that they were better off turning a blind eye to piracy. So long as they do not have actual knowledge of apparent infringing activity, and remain unaware of the facts and circumstances surrounding it, they are free to ignore piracy. Their only responsibility upon learning of copyright infringement is to take down the infringing content. There is no duty to monitor or any responsibility to affirmatively seek facts indicating infringing activity.

“Notice and Take Down” might have been a good solution in 1998 for ISP bulletin boards but today the practice has absolutely no effect on the widespread distribution of pirated content. It is nothing more than whack-a-mole on steroids.

While Village Roadshow is kicking butt against illegal distribution of stolen content in Australia, Netflix’s remedies stateside are severely hampered and its ability to stop the widespread distribution of “Orange” is, well, not happening.

Five years ago, the U.S. Congress was poised to pass legislation that would have given Netflix the same tools we now see in use in the EU and Australia — tools that would block access to websites offering “Orange” wherever they were located if a court found that they were infringing.

Just as the Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA) were racing toward apparent victory in Congress, tech giants Google and Twitter shut down in protest and users flooded lawmakers with phone calls and emails to ditch the bill. Congress blinked and SOPA and PIPA ground to a screeching halt. Their death then leaves Netflix now with no operative means to protect its valuable content from TheDarkOverlord.

Without effective legal remedies in place or widespread use of watermark detection, we can expect more DarkOverlords to hack and steal Hollywood content, acting safely in the knowledge that Hollywood has no actual means to stop online piracy without adopting 21st Century legal and technological solutions.