The Australian Small Business and Family Enterprise Ombudsman, Bruce Billson, has released a guide to raise awareness among small businesses selling online about United States’ copyright laws that can shut down their access to customers without warning.

“We have seen Australian-based small businesses have their livelihoods damaged by unfounded allegations being made under these laws and then have their products taken down without warning by the major selling platforms,” Mr Billson said.

“If you are an Australian business that sells online, you probably use a US-based platform – like Etsy, Shopify or Square. And this means that the Digital Millennium Copyright Act (DMCA) can seriously affect your business, so it is very important that you know how it works and what your rights are.

“The DMCA is part of the US copyright law and protects intellectual property. It applies to any material that goes online – this includes online shops, descriptions of services and objects, images and media.

“I am very concerned that this law is being weaponised by some unscrupulous competitors to unfairly knock out genuine Australian businesses, so my agency has created a guide to raise awareness about the DMCA among Australian businesses.

“Australian businesses need to be aware of competitors who seek to manipulate the DMCA for market advantage and understand their rights if this is used against them.”

Mr Billson said the law is designed to protect businesses from the theft of intellectual property but can sometimes be used maliciously to put genuine competitors out of business.

Under the DMCA if a person or a business believes any online content infringes on their copyright, they can contact the online service provider – Etsy or Shopify, for example – and ask them to take down that content. 

This is called a takedown notice, and the online service provider will usually remove the content without warning.

“If a small business receives a takedown notice, we recommend seeking legal advice and acting quickly and carefully,” Mr Billson said.

“A takedown notice doesn’t necessarily mean you have breached copyright law – it just means someone claims you have.  

“Australian businesses can challenge the takedown notice by contacting the person or other business that issued the notice to negotiate removal or they can issue a counter-notice.

“If you decide to issue a formal counter-notice it will put you under the jurisdiction of the US legal system and the party who made the original claim can take it to court, which can be an extremely expensive battle to fight.

“This can be a terrible dilemma because we have seen Australian companies forced out of business or lose access to a lucrative market because they could not afford to defend their economic interest. Not responding to a DMCA notice will be interpreted by the platform as a surrender to the claim of copyright violation and will see the removal of the allegedly offending product, service or content affirmed. 

“But sometimes the mere act of issuing a counter-notice causes the original party to back down and the online service provider will restore the content.”

Mr Billson cautioned Australian business not to consider their own unfounded DMCA action against competitors, warning misuse of legal protections could backfire and lead to action being taken against them.

“In all cases, Australian small and family businesses should get their own legal advice if they are hit with a DMCA notice. In addition, they can get support from my agency,” he said.

In one case brought to the Ombudsman, a DMCA notice had been issued against an Australian homewares business every time they advertised. That led to Shopify shutting down their store each time until it was resolved, but that caused the Australian business to lose sales and it took time and effort to fight the attacks. After this had happened several times, the business contacted ASBFEO, and a dedicated case manager was able to help prevent future notices being issued.

In another case, a company purporting to be a US-based brand that was located in South-East Asia raised several DMCAs against a beauty product made by an Australian business, which held an international trademark. In this case, it was wholesale customers/re-sellers who received the DMCA notices and had their access to selling platforms disabled until they stopped selling the product.

The Ombudsman’s guide to the DMCA is available at www.asbfeo.gov.au/DMCA 

IP Australia also has some useful information for businesses to protect their intellectual property overseas at IP Australia international IP

OMBUDSMAN’S MEDIA CONTACT: 0448 467 178 / media@asbfeo.gov.au