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Is that AFACT? Copyright federation pursues its quarry to High Court

By Johanna Gibson, David Pearce, Jeremy Phillips and Ilanah Simon.

Secondary liability on the internet is definitely the flavour of the month. Yesterday night the IPKat reported on the liability of a search engine for contributory infringement of copyright -- and this morning the spotlight turns on Australia, where the question whether internet service providers (ISPs) are liable for the acts of their subscribers is set to get the country's top judges scratching their heads as they seek the right answer.  Thanks to the Kat's friend Catherine M Lee, this weblog can bring you the following information:

"Are Australian ISPs liable for the copyright infringements of their subscribers? The High Court, the top court in Australia, may soon be asked to give an answer.

Proceedings between 34 members of AFACT (the Australian Federation Against Copyright Theft) and the ISP iiNet (the third largest ISP in Australia) have been ongoing for over two years and attracted considerable interest in Australia and overseas. AFACT had investigated copyright infringement occurring by means of a peer-to-peer system known as the BitTorrent protocol by subscribers and users of iiNet?s services. The information generated from these investigations was then sent to iiNet by AFACT, with a demand that iiNet take action to stop the infringements occurring, though the measures AFACT asked iiNet to take were not clearly stated. iiNet failed to take any steps to stop infringing conduct. Did this mean that iiNet had authorised the copyright infringement of certain users?

In November 2008, numerous AFACT members commenced legal proceedings against iiNet. The case came before Cowdroy J sitting in the Federal Court, commencing in October 2009 and lasting for 20 days. In February 2010, Cowdroy J found that iiNet did not authorise the infringements of copyright of the iiNet users. His Honour reached this conclusion following three primary findings: 

1. the mere provision of access to the internet was not the ?means? of authorising infringement. Rather, the ?means? by which the AFACT members? copyright is infringed is an iiNet user?s use of the constituent parts of the BitTorrent system, something over which iiNet has no control or responsibility.
2. a scheme for notification, suspension and termination of customer accounts was not (in this instance) a relevant power to prevent copyright infringement or a reasonable step to take.
3. iiNet simply cannot be seen as sanctioning, approving or countenancing copyright infringement: iiNet has done no more than to provide an internet service to its users.

The AFACT members appealed to the Full Federal Court. This appeal was dismissed by the majority (Nicholas and Emmett JJ, Jagot J dissenting) in February 2011. However despite this, the AFACT members ended up in a stronger position than they were following the first instance decision of Cowdroy J. The main reasons for this were that: 

1. Emmett J in effect also ruled that, in certain circumstances, ISPs would be obliged to act on infringement notices when provided with ?unequivocal and cogent evidence of the alleged primary acts of infringement by use of the ? service in question? or be considered to have authorised infringement (at [210]).
2. All the justices agreed that iiNet could not protect itself by claiming that it was a "Safe Harbour" for it did not have a policy to deal which allowed for termination of repeat infringers in appropriate circumstances (Emmett J at [272], Jagot J at [524], Nicholas J at [803]).

Nonetheless, on Thursday 24 March 2011, the members of AFACT indicated that they would seek leave to appeal to the High Court. In a press release issued on behalf of the Australian and US film studios, AFACT Executive Director Neil Gane suggested that the appeal would make the case that the Full Federal Court had incorrectly applied the legal test for authorisation and that iiNet did have sufficient knowledge of the acts of infringement committed by its subscribers.  iiNet's response to this move, reflected in its own media release of the same date, is that more litigation is not a solution and that it is time for the studios to work with the internet industry to make their works more readily and cheaply available online".

The IPKat looks forward to a High Court decision on the thorny issue of the responsibility for ISPs for copyright infringement committed by their subscribers in light of the new ISP provisions in the Copyright Act 1968 introduced as a result of the Australia-US Free Trade Agreement. Merpel however wonders whether it is a task for parliament and not the courts to make downloaders accountable for their infringing actions without imposing burdensome requirements on ISPs.

Full post as published by IPKat on March 29, 2011 (boomark / email).