The ongoing issue of whether or not an internet service provider ("ISP") authorises copyright infringement when its customers illegally download films, is now a step closer to being resolved.

Last year the case of Roadshow Films Pty Ltd v iiNet Ltd saw Roadshow Films (together with 33 other major film production companies from the USA and Australia) bring an action against the internet service provider iiNet, with the assistance of the Australian Federation Against Copyright Theft ("AFACT").

In this case, the Federal court of Australia had to consider whether or not iiNet 'authorises' copyright infringement by allowing its customers to use the internet service they provide to download films.

According to Justice Cowdroy, the "critical issue in this proceeding was whether iiNet, by failing to take any steps to stop infringing conduct, authorised the copyright infringement of certain iiNet users". In the law of authorisation there must be a distinction between the "provision of the 'means' of infringement compared to the provision of a 'precondition' to infringement occurring". In other words, just providing a way in which people can download films versus actively creating a situation in which it will occur.

It was found that iiNet had not infringed copyright by simply providing access to the internet because that was not the "means" for infringing copyright. Rather, the "means" for the infringement was through the BitTorrent system something which iiNet has no control over.

In this case it was found that iiNet had not authorised any copyright infringement by its customers.

Roadshow Films, and the other production companies, then launched an appeal against the decision. The full Federal Court dismissed the appeal again on the basis that iiNet did not authorise its customers infringements. However, this time the decision produced a mixed result because it was found that an ISP could be found liable for authorisation if it did not take action in suspending or terminating a customer's account if sufficient information was provided through an 'infringement notice' issued by the copyright owners.

Such information should include:

  1. informing the ISP, in writing, of particulars of the acts of infringement of copyright through use of IP addresses of customers;
  2. requesting, in writing, that the ISP inform the customer of the allegations, invite the customer to respond and also set out other certain warnings and information;
  3. providing unequivocal evidence to the ISP that infringement of the copyright occurred through use of the service in question and should include enough information to enable the ISP to verify the accuracy of the allegations; and
  4. an undertaking by the copyright owners to:
    1. reimburse the ISP for its reasonable costs for verifying the information and for establishing a process whereby the ISP can monitor the internet use;
    2. indemnify the ISP for any liability it reasonably incurred from mistakenly suspending and/or terminating a customer's account, based on allegations from the copyright owner.

In this particular case the Court noted that points 1 and 2 were satisfied by notices sent by AFACT. However the requirement under point 3 simply included assertions with no means of verification. In relation to point 4 the copyright owners had not offered to reimburse iiNet for any costs incurred in complying with the demands in the infringement notices.

Even though iiNet won the appeal it certainly does not mark the end of the matter. On 24 March 2011, the Applicants filed an application for special leave to appeal to the High Court of Australia..... watch this space for further developments!

The result of the initial appeal case has however brought further clarity regarding the question of authorisation and the steps that an ISP should take to address copyright infringement by customers, if provided with sufficient information.

The world is now watching as the result of the High Court proceedings may shed even more light on the complex issue of copyright infringement in Australia and overseas.

For more information on this case please contact Delvene Michael at Coleman Greig on ph 02 9635 6422 or email dmichael@colemangreig.com.au.

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