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Thursday, 06 October 2011 16:08

'Authorisation' key to AFACT v iiNet High Court appeal

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iiNet says High Court judges hearing the appeal in the copyright case it has been fighting against the movie studios will have to make a decision as to exactly what action, or non-action, by an ISP would constitute authorising its customers to download copyrighted material, and that this decision will bring much needed clarity to the industry.

Graham Phillips, a partner in law firm Herbert Geer who has been acting for iiNet throughout the case, said: "The case is primarily around the authorisation issue so that will be at the heart of it - whether or not iiNet is found to have authorised infringement by its users'¦This is the first time the High Court will have seriously looked at the authorisation issue since the Moorhouse case in 1975."

He explained that, because of the short time allowed for the hearing (two days) the focus of argument had to be much tighter than in the initial hearings. "The other issues that we have run as further lines of defence will be more on the fringes - the 'mere conduit defence', that iiNet is just a facilities provider and the privacy arguments in the Telecommunications Act'¦

"Both sides say they win based on an assessment of Moorhouse, but both sides arguments are poles apart which shows there is a lot of uncertainty in how to read what is the principal authorisation case. So it is important for the High Court to give some clarity on how you determine authorisation."

According to an article by Lionel Docker in the Media and Arts Law Review (2002) "In the Moorhouse case, the University of New South Wales (UNSW) had placed a number of photocopying machines in its library for the use of students. A copy of an anthology of short stories by Frank Moorhouse was copied and was used as the subject of a test case on authorisation. The High Court held that the conduct of UNSW in placing photocopying machines in its library for the use of students without any copyright warning notices or supervision constituted an invitation to students to infringe copyright."

The Copyright Act was subsequently amended to provide protection in relation to photocopiers installed in libraries or archives provided that a copyright notice is prominently displayed. The Digital Agenda Act extended that protection to computers installed in libraries or archives.

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Phillips said: "There are a number of mandatory factors the court must look at in determining authorisation and we characterise the studios' approach to those as a 'yes no' test. But we read the language of the statute as being qualitative: what it the nature of an ISP's power to prevent breach of copyright - which we argue is indirect in comparison to someone like BitTorrent - and what are the appropriate circumstances [under which an ISP could act]?

"The ISP does not provide the content, it does not provide the software that is used for infringement. So we argue the ISP is much more indirectly involved, And if you walk through the various mandatory arguments that the court must consider regarding reasonable steps and knowledge, we say that the studios have very much taken that yes-no approach, for example in the case of knowledge, they say that a reason to suspect is sufficient knowledge but we say that much more specific an unequivocal evidence is needed."

He added: "The court will also focus quite closely on what authorisation means as opposed to synonyms like 'approve', 'sanction', 'countenance'. We argue that you cannot take the weakest of those, 'countenance'. We think it is very important for the Court to decide where to land on that one. If it chooses the weakest, iiNet, and other ISPs would be required to much more quickly take action if they receive information from rights holders."

According to one summary of the Moorhouse judgement (a 2005 newsletter from Stephens Lawyers and Consultants, "The court interpreted 'authorise' to have its dictionary meaning of 'sanction, approve, countenance'."

More recently in a blog dated 1 September 2011, Australian lawyer Brendan Scott explores the issued in great depth - iiNet: The History of 'Authorisation' and 'sanction, approve, countenance' - and observes "No dictionary I have gives 'sanction, approve, countenance' as the meaning of authorise."

The initial hearing in the iiNet case, in the Federal Court in Sydney was before Justice Dennis Cowdroy. He found that iiNet was aware of copyright infringements by its users and had not acted to stop them but nevertheless had not authorised copyright infringement.

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The movie studios, represented by AFACT, appealed that decision and in February 2011 two of the three judges on the Full Bench of the Federal Court in Sydney agreed with Cowdroy. However AFACT touted the outcome as a partial victory saying: "The effect of this judgement is that an ISP can no longer claim that they have no responsibility for the known repeat infringement of their customers' accounts. Further, the court provides guidance for future cases against ISPs who fail to prevent known copyright theft on their network."

AFACT was successful in its application to have the High Court hear a further appeal.

In the Federal Court hearings, according to iiNet's manager regulatory, Steve Dalby, trolley loads of evidence was presented but the High Court rules permit much more limited information in support of a case. "We were required to lodge our submission last night [5 October]. It is required to be in a specific format'¦There is a 20 page limit but we managed to get an extension to 30 pages."

He added that iiNet was planning to prepare, and circulate widely a summary of its submission.

Phillips said the High Court had not indicated whether there would be three, five or seven judges hearing the case and they have not yet been identified, although iiNet expects Justice Gummov who has a strong interesting in intellectual property to be one of them.

There will be a number of interveners - parties representing both sides that have an interest in the outcome. APRA, ARIA, MEAA and SAG have identified themselves as interveners on the side of the movie studios. Interveners supporting iiNet have not yet emerged. As iiNet is the respondent, they have a later date by which to register their intent and be present.

The hearing is scheduled to run over two days on 1 and 2 December Phillips said, and a judgement is expected around April.

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