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iiNet wins landmark copyright stoush

The film industry has lost its Federal Court battle against local internet service provider iiNet over alleged copyright theft after a 2:1 decision. While a High Court appeal is widely anticipated the film industry, under the banner of the Australian Federation Against Copyright Theft (AFACT), lost no time on calling for the Government to legislate and force ISPs to do more to prevent copyright theft.

AFACT said it would study the judgement and review its options, which include an appeal to the High Court of Australia. Both it and iiNet have however already lobbed the copyright ball into Canberra's court, both calling for an overhaul of copyright legislation to bring it up to date with the internet era.

A clearly relieved iiNet CEO Michael Malone, who was in court to hear today's judgement handed down by Justice Emmett, said later that there now needed to be 'more clarity for carriage providers and telcos' and that clarity needed to come from the Federal Government. Asked whether new technologies alone could fix the problem of unauthorised copying or piracy, Mr Malone said; 'I don't believe this is a technology problem, it's a societal problem.'

'Let's find a middle way. This has wasted two years and hasn't fixed anything,' said Mr Malone who said that copying had continued unabated while the court case continued.

AFACT, representing the film-makers has always claimed that iiNet, through its business practices effectively authorised copyright infringement, and not acted to clamp down on people using its network to engage in copyright theft.

But in February 2010 Justice Cowdroy's decision cleared iiNet of copyright breaches and awarded costs against AFACT.

AFACT then appealed that decision, nominating 15 separate grounds for appeal.

Handing down the judgment in Sydney this afternoon Justice Emmett said he had concluded that the appeal should be dismissed although it had succeeded in a number of respects he said. Justice Jagot concluded that the appeal should be allowed, while Justice Nicholas agreed with Justice Emmett that the appeal should be dismissed.

The appeal judges have agreed costs need further consideration and a directions hearing is set for March.

Neil Gane, executive director of AFACT, said that although the organisation took heart from Justice Jagot's dissenting decision, which argued in favour of the appeal, the majority decision of the Federal Court suggested that; 'ISPs don't have to lift a finger,' to prevent copyright theft taking place via their networks.

'It was not the decision we were hoping for,' he said. It will be a year tomorrow since AFACT launched its appeal and at that time Mr Gane said; 'If this decision stands, the ISPs have all the protection without any of the responsibility.

'By allowing internet companies like iiNet to turn a blind eye to copyright theft, the decision harms not just the studios that produce and distribute movies, but also Australia's creative community and all those whose livelihoods depend on a vibrant entertainment industry.'

Today Mr Gane pointed to the IPSOS study released last week which suggested that $1.37 billion was lost to the Australian economy as a result of movie theft.

Where both AFACT and iiNet agree is that Australia's laws are out of synch with technology.

They differ however on how legislation should be tweaked.

Mr Gane pointed to laws in the UK, France, Taiwan and Korea, and currently pending in New Zealand which establish a role for ISPs in monitoring and preventing copyright theft by their customers. Mr Malone meanwhile indicated that it was the end user who was responsible for, and hence liable for, copyright theft, rather than the provider of communications services.

Asked whether the movie companies would perhaps seek to make examples of individuals by prosecuting copyright abusers Mr Gane said that he believed ISPs were in the best position to deal with their customers.

Although both sides are seeking Government action, it seems unlikely that Canberra will do much until any High Court Appeal is held. AFACT has a month to weigh its options.

In the meantime the parties will be back in court for a directions hearing on March 11 which will seek to determine how the legal costs - which run into many millions of dollars - will be divvied up. Mr Malone said today that iiNet's legal bill stood at $6.5 million.

iiNet shares, which had been suspended pending the announcement of the decision rose 2 per cent to $2.55 as news of the judgment filtered out.



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