+ Copyright Infringement and iiNet

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Landmark decision clears iiNet of liability in copyright infringement case.

Roadshow Films v iiNet (No. 3) [2010] FCA 24, was brought in the Federal Court by a group of 34 film producers against iiNet, Australia's third largest ISP. The film producers argued that iiNet had authorised the infringement of their copyright material by failing to take steps to prevent its subscribers from downloading movies and TV shows using BitTorrent, a peer-to peer file sharing system (the BitTorrent System).

The Australian Federation Against Copyright Theft (AFACT) had sent infringement notices to iiNet, attaching evidence that iiNet subscribers were using the BitTorrent System to infringe copyright. AFACT had demanded that iiNet suspend or terminate the infringing subscribers' internet service. It also proposed that iiNet block certain BitTorrent-related websites. However, iiNet took the position that it was not required to respond to AFACT's demands.

The significance

This is the first Australian case about an ISP's liability for copyright infringement for peer-to-peer file sharing by its subscribers, and the first decision to consider the operation of the ISP 'safe harbour' provision in the Copyright Act 1968 in detail. These provisions limit the remedies a court can order against an ISP if the ISP takes certain mitigating steps, such as adopting a policy for terminating the accounts of repeat infringers.

The case was also the first Australian trial to be followed on Twitter, which the judge allowed due to the huge national and international interest in the case.

The issue

The central issue in this case was whether iiNet was liable for authorising infringements by its subscribers by failing to take steps to prevent infringements from occurring after it had been notified that its subscribers had been infringing.

The verdict

The court held that iiNet did not authorise users' infringements, despite being aware of the infringements occurring, because:

1. iiNet's provision of internet access was one of many 'necessary preconditions' for copyright infringement by its subscribers, but not the 'means' of infringement;

2. The 'means' of infringement was rather the use of the BitTorrent System, which was not provided by iiNet.

3. iiNet did not have the 'power to prevent' infringements that is required for liability for authorisation; and

4. iiNet, by merely providing access to the internet, did not 'sanction' or 'countenance' the infringing acts.

The court then went on to say that if iiNet had been liable for authorisation, it would haven been covered by the 'safe harbour' provisions. In this case, the court held that iiNet had such a policy, even though it was informal and not in writing. It went on to find that iiNet's refusal to 'warn, suspend and terminate' its subscribers, as demanded by AFACT, was reasonable.

The film producers have lodged an appeal of the decision to the Full Court of the Federal Court, but the appeal has not been heard at the time of writing.

Online copyright infringement- can it be stopped ?

The iiNet case raises important questions about the role and responsibilities of intermediaries in online infringement. But are there ways to reduce the risk of online piracy ?

Some say the solution to online copyright infringement lies in developing new business models that offer legitimate access to digital content. It remains our view that copyright infringement will remain a problem until and unless market failure issues are addressed - by a proliferation of low-cost, accessible, alternative, lawful ways of accessing the kind of content that internet users are crying out for.

The IIA says it is ready to do what it can to act as a catalyst for new commercial models whereby win/win outcomes for the content owners and internet users can be reached. It seems that this would be essential for the digital economy to survive.

An example of one new commercial model is Guvera, a new website launched in March 2010 which offers free music downloads to Australians on the proviso that they view advertisements which are tailored to the personal details that the user provides. The advertising revenue is then used to pay rights-holders for every free download. According to its website, 'Guvera provides a search engine for consumers to find content, while dynamically matching advertisers that will pay for that content.'

But should the onus fall predominately with rights holders to create a solution? A different approach, which is espoused by the Music Industry Piracy Investigations is that we need to look at the Australian government to help achieve an effective solution to illegal P2P( peer-to-peer) file sharing and other forms of digital privacy. The creative industries are dependant on the protection of intellectual property rights, but are seeing their rights, revenues and investments eroded by widespread digital piracy.

A key focus of the debate has been peer-to-peer networks which allow users to share files, such as the BitTorrent System. Should this type of technology be banned? Arguably not. The issue is not a technological one. Contrary to popular views, BitTorrent does not offer its users anonymity. It is possible to obtain the IP addresses of all current and possibly previous participants.

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