Roadshow Films v iiNet – A Very Brief Summary

Some of our readers may have followed the Roadshow Films v iiNet case with interest, read about it in the papers, or tweeted about it.  In February 2010 the Federal Court of Australia, sitting as a single judge, delivered its decision in the iiNet case.  The Federal Court concluded that the internet service provider (ISP), iiNet Limited, was not liable for its users’ copyright infringements via the BitTorrent file sharing network.  The film company plaintiffs then appealed to the Full Court of the Federal Court, which handed down its decision on 24 February this year.  The Full Court (by a 2:1 majority) agreed that iiNet was not liable.  However, it is clear from the appeal decision that the iiNet case will not be the last word on ISP responsibility for online copyright infringement.

To explain the case made against iiNet, it is necessary to understand what the copyright law treats as infringement.  Copyright is a bundle of exclusive rights given to the owner of copyright in relation to certain types of “creative” works.  Not only is it an infringement of copyright to exercise these rights without permission, it is also an infringement to “authorise” another person to exercise these rights without permission.  In the iiNet case, the central question was whether the ISP “authorised” its users’ infringements of the film companies’ copyright.

The iiNet case generated a huge outpouring of articles and blog posts over the internet. A frequent theme or comment that came up ran along the following lines: “Of course iiNet shouldn’t be liable!  Should Australia Post be liable if someone posts a bomb threat?” Unfortunately, such analogies aren’t particularly helpful or persuasive. The extension of liability to third-party facilitators (sometimes called “intermediaries”) isn’t a terribly new idea in copyright law, (or even civil law generally). For example, in the early part of last century, concert hall owners were sometimes found to be liable for infringing concert performances. As copying technology developed, allegations of infringement were also made against manufacturers of VCRs and cassette tape recording equipment.  In the leading Australian case UNSW v Moorhouse (1975), the High Court of Australia found the university liable for providing photocopying machines in its library without taking sufficient reasonable steps to prevent copyright infringement.

What then are sufficient reasonable steps to prevent copyright infringement in the internet access context?  All three appeal judges in the iiNet case thought that it was open for iiNet to send warning notices and to suspend or terminate customer accounts when it receives allegations of copyright infringement. However, the two majority judges, who concluded that iiNet was not liable, found that the particular allegations sent by the film companies’ representative were deficient because they lacked sufficient explanation about the data collection methodology. One of the majority judges also thought that the copyright owners should have made financial contributions to help iiNet put a “warning, suspension and termination” scheme in place.

Given iiNet’s narrow escape, it is very likely that Australia will follow the trend of other countries and adopt some form of legal or industry-agreed solution to the problem of online copyright infringement.  That might involve setting up a specific body to deal with copyright infringement allegations that occur over an internet connection. The Internet Industry Association, the peak representative body for ISPs, announced after the iiNet decision its development of an industry code. An industry code might include, for example, standard procedures to forward notices of copyright allegations, standard processes to dealing with disputes, remedies or sanctions.  Copyright owners might then be able to turn to these industry processes, instead of the legal process, to enforce their copyright in the internet context.

At the time of writing, the unsuccessful film companies have announced their application to appeal to the High Court, the highest court in Australia. If the appeal is heard, the High Court will provide further guidance to ISPs on their duties and obligations under the current state of copyright law.

Whatever form of solution is ultimately adopted, it is important to consider the interests of the consuming public (after all, we are stakeholders in the copyright balance), and to promote new business models that make it easier, cheaper and more convenient to access legal content.

Wen H. WU is a Lawyer at Corrs Chambers Westgarth.  The views expressed are those of the author.

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