Client Alert

Who does this affect?

Copyright owners and telecommunication providers.

What do you need to do?

As the issue of ISP liability for P2P infringement is a hot topic, watch this space for further developments.

Authors
Maurice Gonsalves  
Partner

Edwina Whitby  
Solicitor

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Maurice Gonsalves  
Partner
T +61 2 9296 2166

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Sydney
Patrick Gunning  

Melbourne
Robert Cooper  
Natalie Hickey  
Cheng Lim  

Brisbane
John Swinson  

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The Federal Court delivered a landmark copyright decision which has determined that internet service providers are not liable for the copyright infringement of their users or subscribers when they download cinematograph films in a manner which infringes copyright.

Background

In November 2008, Roadshow Films Pty Ltd and 33 applicants commenced copyright infringement proceedings against iiNet Ltd, Australia’s third largest provider of internet services. The applicants, which include major Hollywood motion picture studios, are the owners and exclusive licensees of copyright in major motion pictures and television programs, including Batman Begins, the Harry Potter series and Mamma Mia!.

The nature of copyright means that the applicants have the exclusive right to do certain acts in relation to their films, such as make a copy of the film and communicate the film to the public. The applicants argued that iiNet authorised the infringement of these rights by allowing its customers to use iiNet’s internet services to engage in peer to peer file sharing of the applicants’ films.

iiNet’s services used to commit primary infringement of copyright

The applicants and the Australian Federation Against Copyright Theft (AFACT) produced evidence showing that iiNet users or subscribers had engaged in peer to peer file sharing of the applicants’ films by means of the BitTorrent protocol. Justice Cowdroy was satisfied that iiNet users had made available online, electronically transmitted and copied the applicants’ films using iiNet’s internet services, without the licence of the relevant copyright owners.

iiNet did not authorise infringement of copyright

Justice Cowdroy held that iiNet had not “authorised” the acts of copyright infringement of its customers, within the meaning of section 101(1) of the Copyright Act 1968 (Cth). In determining whether iiNet had authorised the acts of infringement, Justice Cowdroy found that iiNet did not satisfy the test for authorisation as set out in section 101(1A) and cases such as Moorhouse, Cooper and Kazaa. His Honour found that:

• mere provision of internet access to the internet is not providing the “means” of infringement. In this case, the means of infringement was use of the BitTorrent protocol, which was not created or controlled by iiNet;

• iiNet did not have power to prevent copyright infringement under s101(1A)(a) of the Copyright Act merely because it could have implemented a scheme for the notification, suspension and termination of customer accounts. Further, such a scheme is not a reasonable step for the purposes of section 101(1A)(c) of the Copyright Act;

• iiNet did not sanction, approve or countenance the infringing file sharing of its users, in contrast to the respondents in Cooper and Kazaa who intentionally structured their websites and software to facilitate infringement.

Section 112E of the Copyright Act would not have prevented a finding of authorisation

Although not a formal finding, Justice Cowdroy indicated that if iiNet’s conduct had amounted to authorisation, it was not covered by the protection afforded to carriage services providers under s112E of the Copyright Act. The section provides that a carriage service provider is not taken to have authorised any infringement of the copyright in an audio-visual item merely because another person uses its facilities in a manner which infringes copyright.

iiNet protected by Safe Harbour Provisions of the Copyright Act 1968

Under the “Safe Harbour Provisions” of the Copyright Act, remedies that are available against a carriage service provider like iiNet are limited where certain conditions are met. Under section 116AH(1), this includes the condition that iiNet “adopt and reasonably implement a policy that provides for termination, in appropriate circumstances, of the accounts of repeat infringers”.

The Court was satisfied that iiNet had a repeat infringer policy for dealing with copyright infringers (notwithstanding that there was no written policy) and accordingly, would have been protected under section 116AH(1).