A secret copyright treaty being hammered out behind closed doors by the nations in the region and rights holders threatens to derail an Australian internet industry code being written to deal with online piracy.

The Internet Industry of Australia was moved to write the code responding to rising intellectual property theft following the recent AFACT v iiNet ruling in the Federal Court.

But it was surprised to learn its efforts were at risk of being obsoleted by a secret draft treaty that has severe penalties for its disclosure.

The association's code of practice for internet intermediaries such as ISPs, search, hosting and social-media providers was "necessary and appropriate" for them to gain "certainty around their legal rights and obligations”, said IIA's outgoing chief Peter Coroneos.

Although the iiNet appeal provided guidance on intermediaries' responsibilities, it fell short on what reasonable steps they should take to respond to allegations of infringement levelled against their users.

The association's code will close this gap, Coroneos said. The IIA did not condone infringement but had identified market failure as the crux of the problem.

“If users have access to more and better content, when, where and in the form they choose to consume it, and at a realistic price, we're quite sure the motivation for infringement will decline,” he said.

Blindsided

But Coroneos was surprised to learn of the Trans Pacific Partnership agreement, which could be an obstacle to the code.

The partnership drew negotiators from the US, Australia, Brunei, Chile, New Zealand, Singapore, Peru, Malaysia and Vietnam.

The leaked draft from the Santiago talks outlined extensive new powers for rights holders beyond those required by current law:

A new legal regime of ISP liability

ISPs to identify internet users

Established damages for the rights holder

Criminal enforcement for technological measures beyond WIPO internet treaties, even when there is not copyright infringement

Outlawing parallel trade in any copyrighted good

95-year copyright minimum term for works for hire

“Now that this leak has surfaced we will be giving it close attention and seek consultations with [Department of Foreign Affairs and Trade] in order to avoid a repeat of the ACTA debacle,” Coroneos said.

“We would hate to see another ACTA debacle emerge through this process.”

He said the leaks showed there were controversial issues around intermediary liability: “This is all the more reason why the IIA is seeking to establish greater clarity around where intermediary liabilities should begin and end”.