AFACT v iiNet
Encyclopedia
Roadshow Films Pty Ltd & Ors v iiNet Ltd (commonly known as AFACT v iiNet) was a court case between members of the Australian Federation Against Copyright Theft (AFACT) and other movie and television studios (a total of 34 applicants) and iiNet
Ltd. It related to the issue of iiNet allegedly allowing 100,000 illegal film, TV and music downloads through BitTorrent to occur during a 59 week period over their service.
This case was important in Australian copyright law
because it tested provisions laid out in the Australia-United States Free Trade Agreement
's resultant copyright law and has set a precedent for future lawsuits concerning the responsibility of Australian internet service providers with regards to copyright infringement
via their services.
The Federal court handed down its judgment on this case on 4 February 2010, finding in favour of iiNet and awarding costs.
, Warner Bros Entertainment, Paramount Pictures
, Sony Pictures Entertainment
, Twentieth Century Fox Film Corporation, Disney Enterprises, Inc, the Seven Network
and others AFACT claimed that iiNet “had ignored requests from the companies to discipline its customers for breaking copyright laws.” iiNet's managing director, Michael Malone, claimed that "iiNet cannot disconnect a customer's phone line based on an allegation. The alleged offence needs to be pursued by the police and proven in the courts. iiNet would then be able to disconnect the service as it had been proven that the customer had breached our Customer Relations Agreement,"
On a directions hearing on 6 February 2009 AFACT claimed that the three major issues were; whether iiNet authorized the acts of infringement, whether iiNet was liable for the actions of its customers and whether the safe harbor provisions of the Copyright Act 1968
protected iiNet. In February 2009, iiNet revealed that it had received legal assistance from its competitor, Telstra
.
In March 2009, Broadband Minister Stephen Conroy
commented on iiNet's defence. Conroy said in response to iiNet as having "no idea if any customers are illegally downloading music" that this defence was "stunning" and "a classic". The Shadow Communications Minister Nick Minchin
criticised the Minister for publicly discussing an active case and suggested he was deflecting attention away from proposed mandatory internet filtering
.
More than A$1 million was paid to iiNet for legal costs in developing a defence that was not needed after AFACT made an adjustment to their claim. AFACT removed a claim called conversion which suggested iiNet was using copyright to its own advantage by allegedly allowing customers to illegally download copyrighted material. These changes also delayed the court case because iiNet was awarded more time to amend their defence.
On day three it was revealed that iiNet received 1,356 notices requesting "takedown" action against customers, from various sources in a one week period in early December 2008. General counsel Richard Cobden argued that "Acting on [all these] notifications is simply unreasonable and burdensome and inappropriate".
iiNet was also found to have in place an anti piracy policy and while that was not up to the standards demanded of them by AFACT, it was considered acceptable to the court that iiNet did not authorise copyright infringing activities on their network.
Justice Cowdroy also found that iiNet cannot be held responsible for anything done by its users on the BitTorrent network since iiNet does not have control over the network, and the ISP Safe Harbour provisions apply.
Justice Cowdroy found in favour of iiNet, dismissing the case with costs
It is believed that this ruling will have substantial ramifications internationally in regards to dealing with copyright infringers on an ISP level.
In a statement released by the executive director of AFACT, Neil Gain, the copyright organization has 21 days to appeal the judgement. However, they are looking towards lobbying the government instead to have laws change to place responsibility for copyright protection in the hands of the ISPs themselves. Sabiene Heindl, the general manager for the anti-piracy arm of the music industry, MIPI, has stated that as a result of this case, MIPI has no choice but to sue individual copyright infringers directly.
It was believed that the government, in particular then Prime Minister
Kevin Rudd
and Communications Minister Stephen Conroy
would attempt to introduce legislation into parliament to modify laws regarding this case to prevent ISPs from using the safe harbour provisions as an excuse to avoid protecting copyright. However, Conroy released a statement saying that he has no plans to push for such an amendment and for ISPs and AFACT to have a "mature" approach to dealing with copyright enforcement.
and Nicholas
found that iiNet had not authorised the infringement of copyright, with Justice Jagot
dissenting.
However Justice Emmett made additional comment:
Since the decision has been released, a number of notable Australian Intellectual Property law academics, David Brennan and Kimberlee Weatherall have suggested the outcome is not very favourable for ISPs.
A number of key findings which were established in the appellant court were:
has revised their policy of blocking Internet access, of users who receive infringement notices, until the organization receives an acknowledgment that the infringement was received by the end user. Instead, Exetel will now simply forward the infringement notice to the end user and not interfere with their connection. Optus
, Australia's second largest ISP has provided a similar modification in their copyright policing, claiming they will not reprimand or otherwise penalise users who perform copyright infringement on their networks as well.
IiNet
iiNet Limited is Australia's second largest internet service provider with over 1.3 million customers as of 15th August 2011. Their focus is primarily on ADSL-based Internet access, using their own ADSL2+ infrastructure, and reselling Telstra ADSL1. iiNet also provides dial-up and voice...
Ltd. It related to the issue of iiNet allegedly allowing 100,000 illegal film, TV and music downloads through BitTorrent to occur during a 59 week period over their service.
This case was important in Australian copyright law
Australian copyright law
The copyright law of Australia defines the legally enforceable rights of creators of creative and artistic works under Australian law. The scope of copyright in Australia is defined in the Australian Copyright Act 1968 , which applies the national law throughout Australia...
because it tested provisions laid out in the Australia-United States Free Trade Agreement
Australia-United States Free Trade Agreement
The Australia – United States Free Trade Agreement is a preferential trade agreement between Australia and the United States modelled on the North American Free Trade Agreement . The free trade agreement was signed on 18 May 2004, ratified by the U.S. House of Representatives on 14 July 2004 by a...
's resultant copyright law and has set a precedent for future lawsuits concerning the responsibility of Australian internet service providers with regards to copyright infringement
Copyright infringement
Copyright infringement is the unauthorized or prohibited use of works under copyright, infringing the copyright holder's exclusive rights, such as the right to reproduce or perform the copyrighted work, or to make derivative works.- "Piracy" :...
via their services.
The Federal court handed down its judgment on this case on 4 February 2010, finding in favour of iiNet and awarding costs.
Background
The case to be brought against iiNet was filed on 20 November 2008. Speaking on behalf of Village Roadshow, Universal PicturesUniversal Pictures
-1920:* White Youth* The Flaming Disc* Am I Dreaming?* The Dragon's Net* The Adorable Savage* Putting It Over* The Line Runners-1921:* The Fire Eater* A Battle of Wits* Dream Girl* The Millionaire...
, Warner Bros Entertainment, Paramount Pictures
Paramount Pictures
Paramount Pictures Corporation is an American film production and distribution company, located at 5555 Melrose Avenue in Hollywood. Founded in 1912 and currently owned by media conglomerate Viacom, it is America's oldest existing film studio; it is also the last major film studio still...
, Sony Pictures Entertainment
Sony Pictures Entertainment
Sony Pictures Entertainment, Inc. is the television and film production/distribution unit of Japanese multinational technology and media conglomerate Sony...
, Twentieth Century Fox Film Corporation, Disney Enterprises, Inc, the Seven Network
Seven Network
The Seven Network is an Australian television network owned by Seven West Media Limited. It dates back to 4 November 1956, when the first stations on the VHF7 frequency were established in Melbourne and Sydney.It is currently the second largest network in the country in terms of population reach...
and others AFACT claimed that iiNet “had ignored requests from the companies to discipline its customers for breaking copyright laws.” iiNet's managing director, Michael Malone, claimed that "iiNet cannot disconnect a customer's phone line based on an allegation. The alleged offence needs to be pursued by the police and proven in the courts. iiNet would then be able to disconnect the service as it had been proven that the customer had breached our Customer Relations Agreement,"
On a directions hearing on 6 February 2009 AFACT claimed that the three major issues were; whether iiNet authorized the acts of infringement, whether iiNet was liable for the actions of its customers and whether the safe harbor provisions of the Copyright Act 1968
Australian copyright law
The copyright law of Australia defines the legally enforceable rights of creators of creative and artistic works under Australian law. The scope of copyright in Australia is defined in the Australian Copyright Act 1968 , which applies the national law throughout Australia...
protected iiNet. In February 2009, iiNet revealed that it had received legal assistance from its competitor, Telstra
Telstra
Telstra Corporation Limited is an Australian telecommunications and media company, building and operating telecommunications networks and marketing voice, mobile, internet access and pay television products and services....
.
In March 2009, Broadband Minister Stephen Conroy
Stephen Conroy
Stephen Michael Conroy is an Australian politician and the current Minister for Broadband, Communications and the Digital Economy in the Gillard Ministry...
commented on iiNet's defence. Conroy said in response to iiNet as having "no idea if any customers are illegally downloading music" that this defence was "stunning" and "a classic". The Shadow Communications Minister Nick Minchin
Nick Minchin
Nicholas Hugh "Nick" Minchin is a former Australian politician, serving as a Liberal member of the Australian Senate representing South Australia from July 1993 to June 2011, and a former cabinet minister in the Howard Government....
criticised the Minister for publicly discussing an active case and suggested he was deflecting attention away from proposed mandatory internet filtering
Internet censorship in Australia
Internet censorship in Australia currently consists of a regulatory regime under which the Australian Communications and Media Authority has the power to enforce content restrictions on Internet content hosted within Australia, and maintain a "black-list" of overseas websites which is then...
.
More than A$1 million was paid to iiNet for legal costs in developing a defence that was not needed after AFACT made an adjustment to their claim. AFACT removed a claim called conversion which suggested iiNet was using copyright to its own advantage by allegedly allowing customers to illegally download copyrighted material. These changes also delayed the court case because iiNet was awarded more time to amend their defence.
Arguments
The plaintiffs, who are represented by Tony Bannon SC, started by arguing that iiNet is failing to enforce its own user agreements which stipulate that users are not to illegally download files. Early in the proceedings Bannon claimed that "there were 94,942 instances of iiNet customers making available online unauthorised copies" of movies during a 59-week period from 23 June 2008.On day three it was revealed that iiNet received 1,356 notices requesting "takedown" action against customers, from various sources in a one week period in early December 2008. General counsel Richard Cobden argued that "Acting on [all these] notifications is simply unreasonable and burdensome and inappropriate".
Judgement
Justice Cowdroy found in favour of iiNet, claiming that AFACT had misled the court in regard to the number of infringing users, and, while iiNet users did infringe, this was not the responsibility of iiNet to deal with:"iiNet is not responsible if an iiNet user uses that system to bring about copyright infringement ... the law recognises no positive obligation on any person to protect the copyright of another"
iiNet was also found to have in place an anti piracy policy and while that was not up to the standards demanded of them by AFACT, it was considered acceptable to the court that iiNet did not authorise copyright infringing activities on their network.
Justice Cowdroy also found that iiNet cannot be held responsible for anything done by its users on the BitTorrent network since iiNet does not have control over the network, and the ISP Safe Harbour provisions apply.
Justice Cowdroy found in favour of iiNet, dismissing the case with costs
Additional Comments
One of iiNet's witnesses in the case was iiNet Managing Director and CEO, Michael Malone. Justice Cowdroy was invited by the applicants to find that Malone was not a credible witness, being neither truthful nor reliable. In a sharp rejection of this submission, Justice Cowdroy held (at 132-133):132. The applicants have mounted a vigorous challenge to the credibility of Mr Malone, asserting that he was neither a truthful nor reliable witness. It has been submitted that the Court should not rely on his evidence except where it is against his interests or it is independently corroborated. It is submitted that Mr Malone was determined to advocate the respondent's cause at every opportunity and where he sensed a conflict between that cause and the truth, he was prepared to subordinate the latter in favour of the former.
133. The Court rejects the attack on the credit of Mr Malone. Mr Malone was an impressive witness who remained consistent (for the most part) in the evidence he gave during three days of gruelling and unnecessarily hostile cross-examination.
Consequences
As a result of this outcome, the court has set a precedent stating that ISPs are not responsible for what their users do with the services the ISPs provide them. Costs for the trial were awarded to iiNet as part of the ruling. AFACT has previously indicated it will appeal an adverse judgment.It is believed that this ruling will have substantial ramifications internationally in regards to dealing with copyright infringers on an ISP level.
In a statement released by the executive director of AFACT, Neil Gain, the copyright organization has 21 days to appeal the judgement. However, they are looking towards lobbying the government instead to have laws change to place responsibility for copyright protection in the hands of the ISPs themselves. Sabiene Heindl, the general manager for the anti-piracy arm of the music industry, MIPI, has stated that as a result of this case, MIPI has no choice but to sue individual copyright infringers directly.
It was believed that the government, in particular then Prime Minister
Prime Minister of Australia
The Prime Minister of the Commonwealth of Australia is the highest minister of the Crown, leader of the Cabinet and Head of Her Majesty's Australian Government, holding office on commission from the Governor-General of Australia. The office of Prime Minister is, in practice, the most powerful...
Kevin Rudd
Kevin Rudd
Kevin Michael Rudd is an Australian politician who was the 26th Prime Minister of Australia from 2007 to 2010. He has been Minister for Foreign Affairs since 2010...
and Communications Minister Stephen Conroy
Stephen Conroy
Stephen Michael Conroy is an Australian politician and the current Minister for Broadband, Communications and the Digital Economy in the Gillard Ministry...
would attempt to introduce legislation into parliament to modify laws regarding this case to prevent ISPs from using the safe harbour provisions as an excuse to avoid protecting copyright. However, Conroy released a statement saying that he has no plans to push for such an amendment and for ISPs and AFACT to have a "mature" approach to dealing with copyright enforcement.
Appeal to the Full Court of the Federal Court
AFACT appealed to the full bench of the Federal Court, and was dismissed. Justices EmmettArthur Emmett (Australian judge)
Arthur Robert Emmett is a judge of the Federal Court of Australia, a position to which he was appointed on 3 February 1997.Justice Emmett lectures in Roman law at the Sydney Law School, where he holds the title of Challis Lecturer in Roman Law. On 22 May 2009, the University of Sydney conferred...
and Nicholas
John Nicholas (judge)
John Victor Nicholas is an Australian judge. He has been a Judge of the Federal Court of Australia since November 2009. Prior to his appointment, Nicholas practised as a Senior Counsel in Sydney, principally in commercial law....
found that iiNet had not authorised the infringement of copyright, with Justice Jagot
Jayne Jagot
Jayne Jagot is an Australian judge. She has been a Judge of the Federal Court of Australia since 3 September 2008. She was previously a judge of the New South Wales Land and Environment Court....
dissenting.
However Justice Emmett made additional comment:
"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"
Since the decision has been released, a number of notable Australian Intellectual Property law academics, David Brennan and Kimberlee Weatherall have suggested the outcome is not very favourable for ISPs.
A number of key findings which were established in the appellant court were:
- • Justice Emmett [274] and Justice Jagot[477] found that ISPs can be found liable for authorising their users for infringement under specific circumstances.
- • Account holders were liable for infringements on the customer account in the context of disconnection due to repeat copyright infringement. [525], [526][s 116AH, item 1]
- • ISPs were not afforded protection under the Telecommunications Act [288]
- • 112E of the Copyright Act 1968 (known colloquially as the facilities defense), and one which equated an ISP to Australia Post and often cited by groups such as the Internet Industry Association and other supporters was found by the trial judge and all three appellant judges as not a valid defense.
- • All three appellant justices [272], [524], [803] found that iiNet would not have been afforded protection under the "Safe Harbours" negotiated in the copyright act, as they did not have a policy to deal which allowed for termination of repeat infringers in appropriate circumstances.
ISP Response
Following the ruling, several major Australian ISPs have refined their approach to piracy infringement warnings. ExetelExetel
Exetel is an Australian ISP which provides ADSL, web hosting, VoIP, and other internet services to customers across Australia. Exetel's headquarters are based in offices in North Sydney and its switching centre is in a secure Data Centre facility in the Sydney CBD...
has revised their policy of blocking Internet access, of users who receive infringement notices, until the organization receives an acknowledgment that the infringement was received by the end user. Instead, Exetel will now simply forward the infringement notice to the end user and not interfere with their connection. Optus
Optus
SingTel Optus Pty Limited is the second largest telecommunications company in Australia, and is a wholly owned subsidiary of Singapore Telecommunications...
, Australia's second largest ISP has provided a similar modification in their copyright policing, claiming they will not reprimand or otherwise penalise users who perform copyright infringement on their networks as well.
Appeal to the High Court
On 24 March 2011 AFACT announced that it had sought leave to appeal the Full Court's verdict to the High Court of Australia. The application for special leave was approved and the hearing is expected to be from 1 December 2011. The submissions are on the High Court's website at http://www.hcourt.gov.au/cases/case-s288/2011, and include a number of applications for intervener or amicus curiae (friend of the court) status from third parties.External links
- Full judgement in AustLII
- Articles in Computerworld AustraliaComputerworldComputerworld is an IT magazine that provides information for senior IT leaders. It is published in many countries around the world under the same or similar names. Its publisher is International Data Group. Computerworld serves the needs of IT management via print and online...
about the court case - Articles in TorrentFreak about the court case
- IIA Reference ISP Safe Harbour Provisions in Australia