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  1. 1. Chile’s Law 20,435 on Intellectual PropertyImplications Abroad for Chile’s Internet Service Provider Liability Limitations A Policy Analysis for The Government of Chile, Ministry of Foreign Affairs Conducted by: Z’leste Wanner Advisor on International Communications Policy
  2. 2. Objective Analyze Chapter III, Articles 85L-U on ISP Liability Identify Strengths and Weaknesses Discuss Conflict with US re US-Chile FTA Propose Recommendations Discuss Implications for International Relations
  3. 3. Importance of ISP Liability Provision Rampant piracy in Chile – facilitated through ISPs  400 million songs downloaded illegally annually  Chile 18th in world in terms of P2P unauthorized file sharing ISPs can cooperate in fight against piracy ISP liability provision a requirement of the US-Chile FTA
  4. 4. Chapter III, Articles 85L-U2 Fundamental Principles of Policy:1. ISPs should cooperate in the fight against digital piracy, the policy defines legal mechanisms requiring them to do so, (eg block or takedown infringing content upon notification of its existence2. ISPs should not be directly liable for what users do (eg upload or download music illegally) if they meet certain conditions established according to the nature of the service provided by the ISP (ie providers of access, host or reference sites on the Internet)
  5. 5. Distinguishing Feature: Article ÑISP not liable if removes content upon becoming “aware” of itISP “aware” upon receipt of court notification “The service provider shall be deemed to have actual knowledge whena competent court of justice, in conformity with the procedure set forth in Article 85Q, has ordered that the data be removed or access to it be disabled and theservice provider, legally served, does not comply expeditiously with such order.” (Ley Núm. 20.435, Article Ñ)Foundation: Chilean Constitution protection of individual rights to due processISPs cannot block unilaterally under its own judgment without judicial review
  6. 6. Distinguishing Feature: Article QNotice + Notice - Chile Notice and Takedown – USRights holder informs court of copyright Rights holder sends notice to ISP ofinfringement copyright infringementCourt reviews case and sends ISP complies, takes down infringingnotification to ISP contentISP notifies user within 5 working days User can counter-notice alleged infringement, and if ruled in favor, ISPCan counter-petition the claim must restore content in 2 weeksBenefit: Petition for takedown more likely Problem: Incentive for ISP to take downto be substantiated and accurate, less faster, more work for ISP, censorshipwork for ISP, censorship less likely more likely
  7. 7. Strengths Weaknesses protection of individual expression by  dependency on the courts makes limiting rights holders and ISPs from process slow and less efficient regulating or censoring internet users  limited incentive for ISPs to well balanced: rights of rights holders, cooperate with takedowns or pass along notifications ISPs, internet users  burden on copyright holders to explicit limitation of ISP from actively involve courts, requires financial patrolling its users, ensuring greater resources privacy protection and less disruption to internet, ISPs  creators do not feel the system adequately protects their judicial review component keeps Chile interests, time lost through in compliance with its commitments to judicial review results in its Constitution and the ACHR related significant losses in illegal downloads where large quantity to individual rights and rights to due can be pirated in a very short process amount of time
  8. 8. US Critique of Chile’s ISP Policy Priority Watch List for failure to comply with FTA IIPA: Chile’s policy on ISP liability, “notice plus notice” architecture is “ineffective”  does not act a deterrent because there is no threat of real consequences if the ISP does not comply with forwarding the notice  inadequate for dealing with P2P file sharing  “actual knowledge” is dependent on a court order and does not establish voluntary cooperation between rights holders and ISPs IIPA: Chile’s policy is too lenient on ISPs and users and does not establish an effective system to fight piracy
  9. 9. Recommendations Retain provision of judicial review prior to notification of copyright infringement must be retained in the policy  Maintain protections guaranteed by Constitution related to individual rights & due process  Lead the way for other Latin American countries that will adopt ISP liability provisions and subject to the same constraints of the American Convention on Human RIghts Create stronger legal incentives or penalties for ISPs to comply with the infringement notification requirement  Elect a body to be charged with enforcing compliance with sending notices, such as the Department of Intellectual Property Rights  incentivize ISPs to participate and ensure a faster, more efficient process Execute stronger enforcement of Intellectual Property Rights Increase education about intellectual property protection among the population
  10. 10. Implications for Foreign Relations Consequence:  Souring relations with the US  Continued presence on Priority Watch List  Potential reputation as bad trading partner Opportunities:  International leader in ISP liability regulation  More flexible IP regime facilitates trade relations with other countries with different regimes  Stance in Trans Pacific Partnership trade agreement negotiations, which would include a significantly more stringent chapter on ISP liability provisions