Virtual Private Networks: A new frontier for copyright infringement in Australia

July 17, 2024

Introduction and summary

A virtual private network (VPN) can offer many benefits - but using a VPN is no defence if that use means you are breaching contract prohibitions or you are infringing intellectual property rights. In this article, Robyn Chatwood and Peter Divitcos explain the position in Australia.

What is a virtual private network?

A virtual private network (VPN) is a system that creates a secure internet connection between one computer and another (or between networks) in a way that restricts certain (usually public) access to users who do not have direct access to it.

An example is an office network which allows secure access from outside the office over the internet.

Some VPNs involve connections between sites belonging to the same organisation (intranets). Others instead join sites belonging to multiple organisations (extranets). It is the potential of this latter category that is the focus of this article.

VPN systems typically use protocols to tunnel traffic and involve various levels of security. VPN can make online connections anonymous. By connecting to a VPN server in another country, users can change their IP address. This can help if you want to connect to a website in that other country - as the website will recognise the connecting user as from the country in which the VPN is based rather than the country in which the user is based.

Some VPNs are specifically designed to prevent websites from monitoring or tracking the connecting user without their consent.

Why do users want to use a virtual private network?

Some users want to use VPN technology because they are "geo-blocked" - that is, the website denies access to it or to its services to users outside specific locations. Often such geo-blocking is based on the user's IP address or country. A user who is geo-blocked is then prevented from accessing the content even if lawfully entitled to access it.

Streaming platforms go to great lengths to manage their channels and distribution and geo-blocking technology can prevent consumers from using technology to watch movies and TV shows not available in their home country, such as in Australia. Similarly, music, video game and live sport streaming platforms control access to copyright material - often due to their licensing arrangements and permissions.

Consumers look for VPN services¹ that work reliably and bypass geographic restrictions.

What are content providers doing about VPNs?

The universal nature of the internet challenges territorial copyright licence arrangements that restrict the reproduction and communication of content to a designated geographic area. Copyright owners (and their licensees) providing digital content use geo-blocking to permit online users in a designated country to access the content and to block users who access the content from a device located outside those countries.

VPNs allow consumers to bypass geo-blocking by routing internet traffic through a server in a remote location within the permitted area.

The response from streaming platforms to the increasing use of VPNs has been to deploy VPN-detection technologies.

The most recent Consumer Survey on Online Copyright Infringement report commissioned by the Australia's federal Attorney-General's department showed that of the Australian community:

• 61% of survey respondents consumed content lawfully with the balance consuming some content in ways that are likely to be unlawful;
• 72% access entertainment online, including television, films, music, video games and sports; and
• 26% use a VPN service to access content from other countries that is geo-blocked from Australia.²

Use of VPN-detection technology may avoid the need to take legal action against a consumer, action that may result in a consumer backlash or involve navigating and enforcing intellectual property rights across borders and complex legal terrain.

Is using a VPN unlawful in Australia?

Using a VPN or other device in Australia to access online content made available in other countries where the content might otherwise be geo-blocked for Australia means:

1. a copyright owner or its licensee may not be earning all they should from their creative works - and for some licensees (including those in the streaming eco-system), this may be in breach of the contractual licensing arrangements with the copyright owner; and
2. there is a risk that the user of the device may be circumventing a "technological protection measure" in contravention of streaming contractual arrangements or Australia's copyright laws.

Australia's federal Copyright Act 1968 (Cth) (Copyright Act) prohibits:

1. an act results in the circumvention of an access control technological protection measure (ACTPM);³ or
2. the manufacture, import, distribution, offer, provision or communication of a device that is a circumvention device for a technological protection measure (TPM);⁴ or
3. the provision or offering of a service that is a circumvention service for a TPM.⁵

The Australian Copyright Council (the independent, non-profit organisation representing the peak bodies for professional artists and content creators and many major copyright collecting societies in Australia) has the view that some geo-blocks are TPMs and that using a VPN to get around geo-blocks to download or stream copyright material can be an infringement of copyright. ⁶

Is a VPN an access control technological protection measure?

In our view, geo-blocking may be an ACTPM but it is not certain. The analysis is complex - and requires some consideration of:

• whether the VPN is used by, with the permission of, or on behalf of, the owner or exclusive licensee of the copyright material in connection with the exercise of copyright; and
• whether the VPN controls access to the copyright works in the sense that it requires the application of information or a process to gain access to the works.

Deeper analysis is needed of whether the information or process occurs with the permission of the owner or exclusive licensee of the copyright material.

Assuming geo-blocking is an ACTPM and VPN software circumvents it, then doing acts that result in its circumvention are, under the Copyright Act:

1. unlawful only in circumstances where the vendor or user of the VPN software knew, or could have reasonably known, they would be used to circumvent the geo-blocking TPM; and
2. lawful in circumstances where the vendor or user of the VPN software did not know, or could not have reasonably known, they would be used to circumvent them.

Is a VPN a technological protection measure?

Making the same assumption that geo-blocking is a TPM, under the Copyright Act, if the VPN software is a device manufactured, imported, distributed, offered, provided or communicated to circumvent the TPM or a service provided or offered to circumvent a TPM, then selling or providing VPN services would be unlawful if both the following circumstances apply:

1. the devices or services:
   
   a. either are promoted, advertised or marketed as having that purpose or use; or
   
   b. have limited other commercially significant purpose or use; or
   
   c. have no purpose or use other than circumvention of the TPM; or
   
   d. are primarily or solely designed or produced to enable or facilitate the circumvention of the TPM; and
   
   
2. the vendor of the VPN service knows, or ought reasonably to know, that the device or service is a circumvention device or circumvention service for a TPM.

Are VPN service providers and their users at risk of infringing copyright?

There may be a risk of infringing intellectual property rights under Australia's copyright laws for:

• manufacturers, importers, distributers, providers, offerors, communicators or sellers of a device designed to gain access to music, movies, TV shows, live sport, video games and apps protected by technological protection measures such as access controls present in geo-blocks;
• users of such devices; or
• other businesses that take actions which result in bypassing copyright material protected by technological protection measure controls.

If infringing, the Copyright Act provides a range of remedies for copyright owners and their licensees such as civil remedies (such as injunctions) against persons who breach Australia's anti-circumvention laws. In some cases of copyright infringement under the Copyright Act, criminal offences also apply.

In addition to infringement of copyright laws, users and VPN service providers may also be at risk of breaching contractual obligations if they have entered into agreements with the content providers or owners and the commercial arrangement prohibits use of VPNs, or circumvention of ACTPMs, TPMs or geo-blocks.

Website blocking provisions against carriage service providers

Also to bear in mind is that Australian copyright laws contains provisions which allow owners of copyright material to obtain an injunction ordering carriage service providers to block websites or online locations where the content infringes copyright.

Some VPN operators may be carriage service providers as that term is categorised under Australian telecommunications laws and an injunction against a VPN operator may be available for permitting users to make use of the carriage service to access websites offering infringing content.

What should copyright owners, their licensees and users do?

Copyright owners (and licensees) including streaming platforms

Copyright owners or licensees should:

• review their contractual arrangements including any terms of services and consider how they deal expressly with geo-blocks and access control technological protection measures or other technological protection measures;
• consider if they have sufficient contractual protection in their arrangements relating to third parties reproducing or publishing copyright material - for example, considering if the agreements deal adequately with users circumventing measures designed to protect unauthorised access to the material;
• consider whether they are in a position to take action against others involved in circumventing geo-blocking technology used to control access to copyright content;
• consider their contractual exposure if they are permitting customers to access copyright material by unauthorised means - particularly customers bypassing geo-blocking protections;
• review their multi-territorial licence strategy and approach to ensure the key risks are managed.

Manufacturers, suppliers and sellers of VPNs

Manufacturers, suppliers and sellers of VPNs should take advice on these matters and also:

• consider if their businesses might be in the position where they know (or might reasonably know) their services will be or are being used to circumvent geo-blocking or access control technological protection measures and other technological protection measures;
• not promote, advertise or market the VPN service for circumventing geo-blocking or other potentially infringing uses; and
• seek contractual protections from distributors or resellers to minimise the risk that the VPN software will not be used for such purposes or any unlawful purposes and will not be promoted, advertised or marketed for unlawful purposes.

Dentons can assist you with advice on intellectual property protection and risks. Please contact Robyn Chatwood, Joy Atacador, Vanessa Gore, Peter Divitcos or your usual member of the Dentons IP & Technology team for further information.

1. Another device that is used to bypass geo-blocking is a custom Domain Name System (DNS) system.
2. Orima's 2022 Consumer Survey on Online Copyright Infringement commissioned by the Australian Attorney-General's Department, page 9.
3. Copyright Act, section 116AN.
4. Copyright Act, section 116AO.
5. Copyright Act, section 116AP.
6. See Fact Sheet Geo-blocking, VPNs & Copyright published 1 November 2019 by the Australian Copyright Council accessed on 9 July 2024 at https://www.copyright.org.au/browse/book/ACC-Geo-blocking,-VPNs-&-Copyright-INFO127.
7. Copyright Act, section 115A.
8. Telecommunications Act 1997 (Cth).