More Than a "Bit" of Win for Australian ISP

More Than a "Bit" of Win for Australian ISP

Previously cited as "the case that could shut down the internet", Roadshow Films Pty Ltd v iiNet Ltd [2012] HCA 16 (commonly known as AFACT v iiNet or the iiTrial) concluded with a unanimous decision from the Australian High Court ruling that the iiNet, an internet service provider, was not liable for copyright infringement from BitTorrent peer-to-peer file-sharing.

The Australian Federation Against Copyright Theft (AFACT), filed on behalf of the appellants, thirty-four Australian and American companies that either own or exclusively license the copyright in thousands of commercially released films and television programs. The respondent, iiNet, is Australia’s second largest DSL internet service provider. The case began nearly four years ago in November 2008, when AFACT alleged that iiNet’s conduct in ignoring repeated requests to disconnect users said to be involved in illegal content swapping constitutes authorization of copyright infringement. In response, iiNet asserted that AFACT was asking them “to be the investigator, judge and executioner” despite their failure to provide adequate evidence. The High Court agreed, noting that AFACT had not disclosed their methods (para. 138) used to obtain the information on their notices to the ISP. iiNet further claimed that “[t]he approach that AFACT has taken is akin to arguing that if a person were to use Australia Post to deliver a pirated DVD, Australia Post has authorised the pirated content on the DVD by delivering it.

Three questions, largely of fact, determined the outcome of this case. First, whether iiNet had the power to prevent primary infringements committed through BitTorrent use. Second, whether reasonable steps, such as warnings and suspension or termination of infringing accounts, were taken to prevent these infringements. And lastly, whether and to what extent the relationship between iiNet and its customers have bearing on these questions.

The Court observed that while the relationship between iiNet and its customers involved the provision of technology, iiNet had no direct power to prevent primary infringements through technical power and could only ensure that result indirectly by terminating customer contracts. Furthermore, the inaction from iiNet resulting from AFACT’s notices was not due to indifference but rather unwillingness to act based solely on information provided from AFACT.

The case at hand demonstrates a significant departure from what Matthew Rimmer called a “controversially broad approach taken by courts” concerning authorization of copyright infringement. Indeed, a host of earlier cases found intermediaries liable. In Telstra Corp v Australasian Performing Right Association [1997] HCA 41, the High Court held Telstra, a telecommunications carrier, directly liable for the playing of music by its subscribers to their clients despite the fact that Telstra had no control over the content of the music played.

Similarly, in Universal Music Australia Pty Ltd v Cooper [2005] FCA 972, Tamberlin J held that the proprietor of a website that provided links to music files on other websites was liable for authorizing copyright infringement. Tamberlin J also considered whether the “safe harbour provisions” introduced by the Australian-US Free Trade Agreement (AUSFTA) could apply to ISPs. Section 29(b)(iv)(D) requires that the service provider was “expeditiously removing or disabling access, on receipt of an effective notification of claimed infringement, to cached material that has been removed or access to which has been disabled at the originating site.” Since the ISP in question did not act expeditiously, Tamberlin J concluded that the safe harbour scheme could not apply to the website’s ISP even if AUSFTA had been inducted at the time of the infringements.

iiNet had submitted safe harbour defences, which would have been successful at the trial level had authorization of infringement been found, but were later dismissed by the Full Court, stating that iiNet had not satisfied the conditions necessary to attract the benefits of the provision.

The results of Roadshow Films Pty Ltd v iiNet Ltd also departed from another High Court ruling, University of New South Wales v Moorhouse [1975] HCA 26 (interestingly, a decision considered but not followed in CCH Canadian Ltd. v. Law Society of Upper Canada [2004] 1 SCR 339) where the failure by a university to exercise supervision over photocopying in their library amounted to authorization of copyright infringement. The facts in Moorhouse were distinguishable because “the university was responsible for the library, the books on its shelves and the photocopier, whereas iiNet is responsible for the provision of internet services but has no involvement in, or control over, the BitTorrent system” (para. 61).

The response iiNet CEO Michael Malone imparted was quite conciliatory. "Increasing the availability of licensed digital content is the best, most practical approach to meet consumer demand and protect copyright," he said. "We have consistently said we are eager to work with the studios to make their very desirable material legitimately available to a waiting customer base - and that offer remains the same today."

In contrast, AFACT began lobbying government and ISPS behind closed doors last December.

Nancy Situ is a JD candidate at Osgoode Hall Law School.