Australia’s Federal Court rules ISPs must help prevent Copyright Infringement

Australia’s Federal Court rules ISPs must help prevent Copyright Infringement

Adam Heckman is a JD candidate at Osgoode Hall Law School and currently enrolled in the course Law & Social Change: Law & Music, in Winter 2011. As part of the course requirements, students are asked to write a blog on a topic of their choice.

In a recent ruling, the Federal Court of Australia upheld a previous decision that found that, while it is not reasonable to force Internet Service Providers (ISPs) to act as “copyright police” or face liability for authorizing infringement, they do have an important role to play in protecting copyrighted works by taking reasonable steps to prevent their subscribers from engaging in copyright infringement.

The ruling concerned a lawsuit between a group of large movie studios and iiNet, one of Australia’s largest ISPs. The studios, represented by the Australian Federation Against Copyright Theft (AFACT), claimed that iiNet was liable for authorizing copyright infringement by failing to act on the information which showed iiNet subscribers to be sharing copyrighted movies on peer-to-peer networks. iiNet refused to forward infringement notices to their subscribers that were sent to them in bulk by AFACT or to cut off alleged repeat infringers from the internet and instead suggested that AFACT “promptly direct its allegations to the appropriate authorities”.

The majority of the appeal court agreed with the trial judge that iiNet was not liable for infringement for refusing to act on the notices as a “[m]ere assertion by an entity such as AFACT, with whatever particulars of the assertion that may be provided, would not, of itself, constitute unequivocal and cogent evidence of doing of acts of infringement”.

The Court did, however, find that it would be reasonable to implement a graduated response system to prevent copyright infringement if the ISP has been provided with unequivocal proof of infringement along with an explanation of how the data was collected and a “statement verifying the accuracy of the data and the reliability of the methods used to collect it”. The type of graduated response system envisioned would involve the ISP forwarding the allegations of infringement to their customers, allowing the customer to respond to the allegation and either refute the claim or give assurances that they will refrain from committing further infringements. If the customer fails to respond within a reasonable time, the ISP would then warn the customer that their service will be suspended until a response is received. The ISP would also take steps to prevent repeated acts of copyright infringement by warning the customer that their service may be suspended or terminated in the event of further infringements.

While the ruling was a victory for iiNet in the specific circumstances of the case, the chief Judge made it clear that under different circumstances “iiNet might in the future be held to have authorized primary acts of infringement on the part of users”. This is because Australia’s current copyright law includes liability for authorizing copyright infringement. When determining whether a person, or ISP, has authorized infringement the provision states that the Court should analyze the power of the ISP to prevent the act, the relationship between the ISP and the infringer, and whether the ISP took reasonable steps to prevent or avoid the act of infringement.

In an effort to distance ISPs from liability and promote an alternative model for policing copyright infringement, iiNet recently released a paper entitled Encouraging Legitimate Use of Online Content. In their paper they outline a strategy of implementing an “impartial referee, for resolution of disputes between the parties and the issue of penalties to offenders” as shown in the diagram below:


While there has been jurisprudence on the responsibility of ISPs, Canada’s current Copyright Act is ambiguous on many issues related to ISP liability. The now dead Bill C-32 had been proposed in part to clarify the roles and responsibilities of ISPs . Canada’s largest ISPs currently employ a voluntary notice-and-notice system of forwarding copyright infringement notices to their customers. The customer’s personal information is kept confidential and their internet service is not threatened to be cut off. Bill C-32 aimed to make this system mandatory and to also require ISPs to retain records of the notification for use in any subsequent litigation. However, Barry Sookman and others argue that this type of notice-and-notice system is likely to be ineffective in changing people’s behaviour or preventing copyright infringement. Perhaps Canada can reflect on the lessons being learned in Australia while drafting Bill C-32’s successor after the third copyright modernization bill in a row has died before becoming law.