Roadshow Films v iiNet

AFACT v iiNet
Court	Federal Court of Australia
Full case name	Roadshow Films Pty Ltd & Ors v iiNet Ltd
Date decided	4 February 2010
Citation(s)	[2010] FCA 24
Judge(s) sitting	Justice Dennis Cowdroy

Roadshow Films Pty Ltd & Ors v iiNet Ltd (commonly known as AFACT v iiNet) was a court case between members of the Australian Federation Against Copyright Theft (AFACT) and other movie and television studios (a total of 34 applicants) and iiNet Ltd. It related to the issue of iiNet allegedly allowing 100,000 illegal film, TV and music downloads through BitTorrent to occur during a 59 week period over their service.

This case was important in Australian copyright law because it tested provisions laid out in the Australia-United States Free Trade Agreement's resultant copyright law and has set a precedent for future lawsuits concerning the responsibility of Australian internet service providers with regards to copyright infringement via their services.

The Federal court handed down its judgment on this case on 4 February 2010, finding in favour of iiNet and awarding costs.

Background

The case to be brought against iiNet was filed on 20 November 2008. Speaking on behalf of Village Roadshow, Universal Pictures, Warner Bros Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, Disney Enterprises, Inc, the Seven Network and others AFACT claimed that iiNet “had ignored requests from the companies to discipline its customers for breaking copyright laws.” iiNet's managing director, Michael Malone, claimed that "iiNet cannot disconnect a customer's phone line based on an allegation. The alleged offence needs to be pursued by the police and proven in the courts. iiNet would then be able to disconnect the service as it had been proven that the customer had breached our Customer Relations Agreement,"

On a directions hearing on 6 February 2009 AFACT claimed that the three major issues were; whether iiNet authorized the acts of infringement, whether iiNet was liable for the actions of its customers and whether the safe harbor provisions of the Copyright Act 1968 protected iiNet. In February 2009, iiNet revealed that it had received legal assistance from its competitor, Telstra.

In March 2009, Broadband Minister Stephen Conroy commented on iiNet's defence. Conroy said in response to iiNet as having "no idea if any customers are illegally downloading music" that this defence was "stunning" and "a classic". The Shadow Communications Minister Nick Minchin criticised the Minister for publicly discussing an active case and suggested he was deflecting attention away from proposed mandatory internet filtering.

More than A$1 million was paid to iiNet for legal costs in developing a defence that was not needed after AFACT made an adjustment to their claim. AFACT removed a claim called conversion which suggested iiNet was using copyright to its own advantage by allegedly allowing customers to illegally download copyrighted material. These changes also delayed the court case because iiNet was awarded more time to amend their defence.

Arguments

The plaintiffs, who are represented by Tony Bannon SC, started by arguing that iiNet is failing to enforce its own user agreements which stipulate that users are not to illegally download files. Early in the proceedings Bannon claimed that "there were 94,942 instances of iiNet customers making available online unauthorised copies" of movies during a 59-week period from 23 June 2008.

On day three it was revealed that iiNet received 1,356 notices requesting "takedown" action against customers, from various sources in a one week period in early December 2008. General counsel Richard Cobden argued that "Acting on [all these] notifications is simply unreasonable and burdensome and inappropriate".

Judgement

Justice Cowdroy found in favour of iiNet, claiming that AFACT had misled the court in regard to the number of infringing users, and, while iiNet users did infringe, this was not the responsibility of iiNet to deal with:

"iiNet is not responsible if an iiNet user uses that system to bring about copyright infringement ... the law recognises no positive obligation on any person to protect the copyright of another"

iiNet was also found to have in place an anti piracy policy and while that was not up to the standards demanded of them by AFACT, it was considered acceptable to the court that iiNet did not authorise copyright infringing activities on their network.

Justice Cowdroy also found that iiNet cannot be held responsible for anything done by its users on the BitTorrent network since iiNet does not have control over the network, and the ISP Safe Harbour provisions apply.

Justice Cowdroy found in favour of iiNet, dismissing the case with costs

Additional Comments

One of iiNet's witnesses in the case was iiNet Managing Director and CEO, Michael Malone. Justice Cowdroy was invited by the applicants to find that Malone was not a credible witness, being neither truthful nor reliable. In a sharp rejection of this submission, Justice Cowdroy held (at 132-133):

132. The applicants have mounted a vigorous challenge to the credibility of Mr Malone, asserting that he was neither a truthful nor reliable witness. It has been submitted that the Court should not rely on his evidence except where it is against his interests or it is independently corroborated. It is submitted that Mr Malone was determined to advocate the respondent's cause at every opportunity and where he sensed a conflict between that cause and the truth, he was prepared to subordinate the latter in favour of the former.

133. The Court rejects the attack on the credit of Mr Malone. Mr Malone was an impressive witness who remained consistent (for the most part) in the evidence he gave during three days of gruelling and unnecessarily hostile cross-examination.

Consequences

As a result of this outcome, the court has set a precedent stating that ISPs are not responsible for what their users do with the services the ISPs provide them. Costs for the trial were awarded to iiNet as part of the ruling. AFACT has previously indicated it will appeal an adverse judgment. It is believed that this ruling will have substantial ramifications internationally in regards to dealing with copyright infringers on an ISP level.

In a statement released by the executive director of AFACT, Neil Gain, the copyright organization has 21 days to appeal the judgement. However, they are looking towards lobbying the government instead to have laws change to place responsibility for copyright protection in the hands of the ISPs themselves. Sabiene Heindl, the general manager for the anti-piracy arm of the music industry, MIPI, has stated that as a result of this case, MIPI has no choice but to sue individual copyright infringers directly.

It was believed that the government, in particular then Prime Minister Kevin Rudd and Communications Minister Stephen Conroy would attempt to introduce legislation into parliament to modify laws regarding this case to prevent ISPs from using the safe harbour provisions as an excuse to avoid protecting copyright. However, Conroy released a statement saying that he has no plans to push for such an amendment and for ISPs and AFACT to have a "mature" approach to dealing with copyright enforcement.

Appeal to the Full Court of the Federal Court

Main article: AFACT v iiNet Ltd

AFACT appealed to the full bench of the Federal Court, and was dismissed. Justices Emmett and Nicholas found that iiNet had not authorised the infringement of copyright, with Justice Jagot dissenting.

However Justice Emmett made additional comment:

"While the evidence supports a conclusion that 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"

Since the decision has been released, a number of notable Australian Intellectual Property law academics, David Brennan and Kimberlee Weatherall have suggested the outcome is not very favourable for ISPs.

A number of key findings which were established in the appellant court were:

• Justice Emmett [274] and Justice Jagot[477] found that ISPs can be found liable for authorising their users for infringement under specific circumstances.

• Account holders were liable for infringements on the customer account in the context of disconnection due to repeat copyright infringement. [525], [526][s 116AH, item 1]

• ISPs were not afforded protection under the Telecommunications Act [288]

• 112E of the Copyright Act 1968 (known colloquially as the facilities defense), and one which equated an ISP to Australia Post and often cited by groups such as the Internet Industry Association and other supporters was found by the trial judge and all three appellant judges as not a valid defense.

• All three appellant justices [272], [524], [803] found that iiNet would not have been afforded protection under the "Safe Harbours" negotiated in the copyright act, as they did not have a policy to deal which allowed for termination of repeat infringers in appropriate circumstances.

ISP Response

Following the ruling, several major Australian ISPs have refined their approach to piracy infringement warnings. Exetel has revised their policy of blocking Internet access, of users who receive infringement notices, until the organization receives an acknowledgment that the infringement was received by the end user. Instead, Exetel will now simply forward the infringement notice to the end user and not interfere with their connection. Optus, Australia's second largest ISP has provided a similar modification in their copyright policing, claiming they will not reprimand or otherwise penalise users who perform copyright infringement on their networks as well.

Appeal to the High Court

On 24 March 2011 AFACT announced that it had sought leave to appeal the Full Court's verdict to the High Court of Australia. The application for special leave was approved and the hearing was held from 30 November to 2 December 2011 . The submissions are on the High Court's website at [1], and include a number of applications for intervener or amicus curiae (friend of the court) status from third parties.

See also

• Internet in Australia

External links

• Full judgement in AustLII
• Articles in Computerworld Australia about the court case
• Articles in TorrentFreak about the court case
• IIA Reference ISP Safe Harbour Provisions in Australia