1. Chile’s Law 20,435 on Intellectual Property
Implications 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
zleste.wanner@gmail.com

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. 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. Chapter III, Articles 85L-U
2 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 existence
2. 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. Distinguishing Feature: Article Ñ
ISP not liable if removes content upon becoming “aware” of it
ISP “aware” upon receipt of court notification
“The service provider shall be deemed to have actual knowledge when
a competent court of justice, in conformity with the procedure set forth in Article 85
Q, has ordered that the data be removed or access to it be disabled and the
service 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 process
ISPs cannot block unilaterally under its own judgment without judicial review

6. Distinguishing Feature: Article Q
Notice + Notice - Chile Notice and Takedown – US
Rights holder informs court of copyright Rights holder sends notice to ISP of
infringement copyright infringement
Court reviews case and sends ISP complies, takes down infringing
notification to ISP content
ISP notifies user within 5 working days User can counter-notice alleged
infringement, and if ruled in favor, ISP
Can counter-petition the claim must restore content in 2 weeks
Benefit: Petition for takedown more likely Problem: Incentive for ISP to take down
to be substantiated and accurate, less faster, more work for ISP, censorship
work for ISP, censorship less likely more likely

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. 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. 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. 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