iiNet faces $4 million legal bill from copyright case

Internet service provider iiNet has set aside $4 million to deal with the current copyright case between itself and the film industry, with a further $3 million possibly earmarked for a settlement, according to managing director Michael Malone.

But the comments came as the case continued in the Federal Court, where Internet Industry Association chief executive Peter Coroneos was questioned over emails regarding the establishment of an industry code of practice that would address piracy.

Malone said at the company’s annual general meeting yesterday that the company is not in jeopardy due to the ongoing court battle against the Australian Federation Against Copyright Theft.

He said the company’s defence is “strong and well made”, and maintained his confidence that the company will not be found guilty of allowing or authorising copyright infringement on its networks.

“We firmly believe that the legal action by AFACT was an ambitious and adventurous attempt to extend liability for piracy to internet service providers who merely provide infrastructure and facilities for customer use,” the company said.

However, Malone still drew comparisons between the company’s case and a judgment handed down earlier this year that found a Melbourne footwear manufacturer breached copyright while manufacturing counterfeit Ugg boots.

Malone said based on the outcome of that case, a reasonable settlement between iiNet and AFACT would equate to about $3 million.

Meanwhile in court, the Internet Industry Association applied to act as a friend of the court, but that application was opposed by AFACT counsel Tony Bannon who maintained the organisation is a “lobby group”.

“To satisfy the rule [to be admitted as a friend of the court], they’ve got to show there’s something new or different added [in their appearance],” Bannon told the court. “There’s nothing new or different. It’s the same words [as the iiNet submissions] by a new hand.”

But during cross-examination allowed by Judge Cowdroy, Bannon said the IIA had played a role in helping iiNet develop a response to copyright infringement notices sent by AFACT.

Additionally, he said Coroneos had been involved in sending emails that expressed concern over a code of practice for the industry, as they would potentially give the impressions ISPs should be acting to stop infringements.

Coroneos had said in one email that the IIA would be against “going for a knockout blow against notification and termination” of ISP accounts. He said he was “hostile and remains hostile” regarding matching internet addresses and customer details in order to shut down customer accounts due to piracy.

The questioning came towards the end of the case, with iiNet counsel Richard Cobden finalising his closing remarks earlier in the day, but is expected the case will continue.