iiNet beats Hollywood studios again, but High Court challenge looms

The Federal Court dismissed an appeal by the Australian Federation Against Copyright Theft group against telco iiNet yesterday but the movie studios say the Court ruled partly in their favour and experts are tipping a High Court battle.

Two judges said the appeal should be dismissed, one ruled in AFACT’s favour and several of the judges’ comments suggest they weren’t impressed with the manner in which iiNet has handled the case.

Justices Arthur Emmett and John Nicholas ruled in iiNet’s favour but Justice Jayne Jagot dissented.

Minter Ellison partner and copyright law expert Charles Alexander says he would be surprised if AFACT was not considering an appeal given the scope of the case.

“I think it’s probably a matter that should be heard in the High Court,” he told SmartCompany.

“Certainly they will be encouraged by the fact one of the judges dissented and encouraged by the fact Justice Emmett was not very enthusiastic about iiNet’s behaviour.”

AFACT said the effect of the judgement was 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 said.

Although the judges found that iiNet was not liable for its customers’ copyright infringements the two judges in agreement said the case wasn’t exactly clear cut.

AFACT refers to a part of the ruling which says it would be reasonable for iiNet to take steps to suspend or terminate a customer’s account.

Justice Emmett said he was not satisfied by the ISP’s “contumelious” demeanour.

“While the evidence supports a conclusion that iiNet demonstrated a dismissive and indeed contumelious attitude to the complaints of infringement by the use of its services its conduct did not amount to authorisation of the primary acts of infringement on the part of iiNet users,” he said.

Justice Nicholas said that “it cannot be inferred that a person authorises copyright infringement because he or she provides another person with communication facilities used by the other person to infringe copyright”.

Justice Jayne Jagot, who dissented, took a different view, writing that not only did iiNet authorise the copyright infringements but that the company had decided it would take no action on the notices of infringement provided by AFACT.

Jagot wrote that the tone of iiNet’s discussions was “difficult to reconcile with its stated position to AFACT that it was ‘very concerned’ about AFACT’s allegations”.

Jagot said iiNet could not rely on safe harbour provisions, which state that iiNet doesn’t have to disconnect users unless actively directed to by authorities.

Emmett said the case shows “the questions raised in the proceedings are ongoing” and stated that AFACT was successful in a number of aspects.

”It does not necessarily follow from the failure of the present proceeding that circumstances could not exist whereby iiNet might in the future be held to have authorised primary acts of infringement on the part of users,” Emmett said.

The decision differs from Justice Cowdroy’s judgement last year which ruled that iiNet was not liable for the infringements of its customers.

The tone of yesterday’s ruling suggests that while iiNet is not liable for its customers’ actions there is a possibility it could be in the future.

AFACT is expected to seek leave to appeal to the High Court but must do so within the 28 days.

AFACT executive director Neil Gane said outside the court yesterday that while it is too early to comment on next steps “we will be taking our time now to examine the judgement in detail and consider all of our options”.

For now Alexander says the case won’t have much scope to inform other decisions.

“In this particular case I don’t think it has any broader implications … but I do believe it is a matter that needs to go to the High Court.”

iiNet chief Michael Malone welcomed the decision, saying that “we urge the Australian film industry to address the growing demand for studio content to be delivered in a timely and cost effective manner”.