Redbubble chief Martin Hosking: Without copyright safe harbour, Pinterest and Reddit would've been "sued out of existence" if they started in Australia

Redbubble chief executive Martin Hosking says the federal government’s decision to remove a safe harbour provision from legislation to amend Australia’s copyright laws has put the future of prominent local startups at serious risk.

Hosking, who founded Redbubble in 2006 and listed it on the Australian Securities Exchange 10 years later, told StartupSmart Australia will never see the emergence of global platforms like Pinterest or Reddit “because they would immediately get sued out of existence” under the country’s current copyright laws.

His comments come after federal communications minister Mitch Fidield last week dropped a safe harbour provision from the Copyright Amendment (Disability Access and Other Measures) Bill 2017, which is currently before Parliament — a decision that has also drawn strong criticism from members of the Labor Party.

A safe harbour provision would offer startups and other tech companies operating digital marketplaces, or platforms with user-generated content, protection from legal action for individual breaches of copyright.

“The bill was the subject of extensive consultation with copyright users and rights holders,” Fifield said in a statement about the decision.

“Provisions relating to safe harbour were removed from the bill before its introduction to enable the government to further consider feedback received on this proposal whilst not delaying the passage of other important reforms.”

Shadow minister for the digital economy Ed Husic has slammed the decision, telling the Parliament on Tuesday that Australian startups are considering going offshore because of the situation.

StartupSmart understands that members of the Labor Party are actively discussing how to take on the government over the issue and further consultations will take place with those affected in the community, including tech companies and copyright holders.

Hosking says Australia is “the only country in the OECD [Organisation for Economic Cooperation and Development] which does not have safe harbour”. While he says Redbubble takes copyright “extremely seriously” with a dedicated team of 10 whose sole responsibility is this area, he believes Australia’s legal environment has put the company under serious threat.

“In the case of Redbubble, we’ve been specifically exposed,” Hosking says.

“In the absence of safe harbour provisions, we’re being sued by the Hells Angels despite the fact the trademark they’re talking about is registered in the United States … it’s a very serious issue.”

Without safe harbour, Hosking claims successful, multimillion-dollar tech companies founded in Australia, such as Envato and 99Designs, are at risk, although Envato declined to comment on the issue when contacted by StartupSmart.

“The battle is being portrayed as this is a conflict between News Corp and Australian culture or Facebook and Google,” Hosking says, in reference to the large corporations that are also affected by this part of the copyright laws.

But Hosking believes the real issue is that Australia’s copyright laws are outdated.

“The concern for me is the internet depends on user-generated content … We need to update the laws to deal with that simple reality,” he says.

StartupAUS chief executive Alex McCauley echoes this sentiment.

“Australia’s copyright laws have still not caught up to the realities of the internet,” McCauley said in a statement.

According to McCauley, copyright safe harbour is “international best practice” and without a “safe harbour regime”, a whole category of new tech companies and startups in Australia is in jeopardy.

“Without it Australian startups will be held back from participating in the rich global market for content and ideas … We risk losing great businesses like these, and stifling the growth of others, if we don’t develop a strong safe harbour framework like such as they have in the US, Singapore, the UK and other EU countries,” McCauley says.

Ed Husic: Dropping safe harbour provision is “policy cowardice”

Speaking in the Senate on Tuesday, Husic said while he largely supports the government’s legislation, the Turnbull government has turned its back on the startup community by choosing to remove the safe harbour provision.

Husic said “there is no reason you wouldn’t support this bill, it is a great bill” because it will benefit people with a disability such as visual impairment by improving their access to content. But, he said, “that’s the limit of my compliments for this bill.”

Husic claimed the Turnbull government has committed “policy cowardice” and back-peddled on promises it made a few years ago to enact a safe harbour regime.

“An inability to have an effective safe-harbour regime in this country — which was supposed to be in this bill — means that jobs are on the line. Businesses are on the line,” he said.

“We are looking at a government that championed itself as being the innovation government, the one that would see all these new firms sprout up, particularly in the tech space. These firms are now actively looking to go overseas because this bill—and the policy cowardice that is wrapped up in this bill—was unable to work out a way to allow those firms to continue in this country. That is the problem with this bill.”

Husic said Redbubble alone has enabled 63,000 Australian artists to generate millions of dollars in income through its marketplace.

“Right now, their commercial prospects have been put under pressure … this is nothing to sneeze at,” Husic said.

“We do not celebrate these companies enough. This is a great, great company. We should be supporting these companies. We should have legislation in this parliament that says: ‘You know what? We want to make sure you survive.’”

Husic declined to provide further comment when contacted by StartupSmart.