The High Court appeal in the case between the Australian Federation Against Copyright Theft (AFACT) and iiNet is being heard from Wednesday to Friday this week.
On day one, the three judges of the High Court dismissed four of the six groups that applied to be heard as friends of the court or amici curiae.
The five judges ruled that leave should only be given to the Australasian Performing Right Association and the Communications Alliance. The other four were dismissed on the grounds that they would not be directly affected by the case or that their submissions would not help the court.
The case dates back to November 2008, when a coalition of film studios, led by AFACT, sued iiNet claiming that the ISP did not take enough action to prevent its users from illegally sharing files over BitTorrent networks, despite being presented with evidence by the AFACT.
In 2010 a single judge of the Federal Court ruled that there was no authorisation is a comprehensive win for iiNet.
In February this year the Full Federal Court upheld the decision. But this time there was a dissenting opinion and the court criticised the conduct of iiNet. Judge Emmet stated that although iiNet "demonstrated a dismissive and, indeed, contumelious, attitude to the complaints of infringement by the use of its services, its conduct did not amount to authorisation of the primary acts of infringement on the part of iiNet users".
Judge Emmett set out the steps that would need to be taken before iiNet should terminate an account. These include that iiNet has been informed in writing of the IP infringement by a specific internet protocol address and been asked in writing for steps to be taken.
On the first day of the High Court hearing, AFACT set out its case against iiNet and faced sceptical questioning from the panel of judges about what kind of warning system AFACT would like to see.
"Is not the real conundrum lying behind all of this that in an ideal world, for the copyright owners, everyone who wants to watch a film will go and pay $30 for the DVD?" said Judge Crennan.
She added that some form of royalty arrangement might work better.
Since the Full Federal Court judgment, negotiations have been taking place between the ISPs and rights owners over developing an industry solution to the problem, but little progress has been made.
A position paper by Ericsson arguing that the problem was essentially the lack of legally available content has been strongly criticised.
Last week, five of the country's largest ISPs - Telstra BigPond, Optus, iiNet, iPrimus and Internode - joined by telecoms industry body, Communications Alliance, released a set of proposals after talking to the federal government and rights owners.
But the Australian Content Industry Group (ACIG), which represents organisations including the Copyright Agency Limited, Microsoft, Australian Record Industry Association (ARIA) and the Business Software Alliance (BSA) said the proposals did not meet industry expectations.
Content owners are likely to hold out until the High Court rules in this case before handing out a verdict.
iiNet chief executive Michael Malone remains confident. "We go into this latest legal round anticipating our successes in Federal Court in February 2010 and 2011 will be reaffirmed by the High Court," he said.
"iiNet has never in any way supported or encouraged breaches of the law, including breaches of the Copyright Act," he added.
Gilbert + Tobin is advising the senior counsel who are acting for AFACT in this case. Herbert Geer Lawyers is advising the senior counsel who are representing iiNet. Australasian Performing Right Association and the Communications Alliance are being advised by Banki Haddock Fiora and Carwardine Legal Solicitors respectively.
