In a split decision on February 24, the Full Federal Court rejected an appeal brought by a coalition of Australian film studios and led by the Australian Federation against Copyright Theft (AFACT) but criticised the conduct of iiNet (the ISP involved in the case).
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".
In November 2008, the coalition 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.
Section 101(1) of Australia's Copyright Act states that when deciding whether a person has authorised copyright infringement the court must take into account a series of factors, including taking "other reasonable steps to prevent or avoid the doing of the act", including complying with industry codes of practice.
In February 2010 the Federal Court found that iiNet had not authorised infringement stating that the BitTorrent system, not internet access, provides the means of infringement.
At a glance |
|
Jurisdiction |
Australia |
Copyright owner |
Australian Federation against Copyright Theft |
Other parties involved |
iiNet |
Court |
Full Federal Court of Australia (Emmett, Jagot and Nicholas) |
Decision |
Appeal denied |
Key terms |
ISP liability, infringement authorisation, safe harbours, BitTorrent |
Although the Full Federal Court has upheld this decision, Judge Jagot dissented and the 807-paragraph decision is more favourable overall for copyright owners.
The Full Court concluded that the film companies' case failed on the fact that its infringement notices did not contain enough information. This means that iiNet's decision not to act on those letters did not amount to authorisation of infringement.
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.
iiNet should then inform the customer and ask them to respond with a set period of time and warn that the account will be suspended if infringement continues. At this point it can then terminate access.
Emmett also stated that the copyright owners should reimburse iiNet for the cost of investigating the infringement and indemnify the ISP in case it wrongly terminates an account.
The Full Federal Court also found that, if iiNet had been found to be authorising infringement, the safe harbour provision in Australia's Copyright Act would not have applied because iiNet did not have a reasonable termination policy in place.
"From a copyright owner's perspective, it's now pretty clear what they need to do," said one lawyer who did not want to be quoted. "This decision should give comfort to copyright owners and should cause ISPs a bit of concern," she added.
Michael Malone, CEO of iiNet, welcomed the decision and called for the Australian film industry to work with ISPs to ensure "to address the growing demand for studio content to be delivered in a timely and cost effective manner to consumers".
On the day after the decision, Australia's attorney general Robert McClelland said that the government will "carefully consider" the iiNet ruling and will look closely at the outcome of any industry discussions.
"I think a case like this is a good catalyst for the parties to get together," said Kate Haddock, a partner of Banki Haddock Fiora, which acted for two copyright associations that intervened in the case.
McLelland also announced a government consultation on expanding the definition of "carriage service providers" that qualify under the safe harbour provisions to include other companies that provide online services, such as Google or Yahoo!, and said that the Australian Law Reform Commission would be asked to look at the issue of copyright.
The Full Federal Court has arranged a hearing to decide costs in the case and will revisit costs for the primary case.
AFACT is expected to apply for leave to appeal the decision to the High Court. Haddock told Managing IP that the dissenting opinion in this decision makes it more likely that the top court will take on the case.
Gilbert + Tobin advised Roadshow Films in the case. Herbert Geer acted for iiNet. Banki Haddock Fiora represented the Media, Entertainment and Arts Alliance, which was supported by the Screen Actors Guild, and the Australasian Performing Right Association.
