In the first decision of its kind in the United Kingdom, the England and Wales High Court (EWHC) in July forced BT, the UK's largest Internet Service Provider (ISP), to block its customers from accessing a file sharing website because the ISP was found to have 'actual knowledge' of customers accessing the website to infringe the copyright of film and television studios. The outcome stands in contrast to a recent decision of the full bench of the Federal Court of Australia which ruled that an ISP was not liable for copyright infringements caused by its customers using 'BitTorrent' technology to illegally download films and television shows.
The UK Decision
The case, Twentieth Century Fox Film Corp & Ors v British Telecommunications Plc  EWHC 1981 (Ch), was brought to the EWHC by the combined force of Twentieth Century Fox, Universal, Warner Brothers, Disney, Paramount and Columbia (the studios) seeking an injunction under s 97A of the Copyright, Designs and Patents Act 1988 (the CDPA). The studios sought to force BT to block access to a file-sharing website known as Newzbin.
During the trial BT accepted that it was a 'service provider' under the CDPA, but opposed the grant of the injunction on various grounds including that the key concepts of 'actual knowledge' and 'use' had not been established.
Justice Arnold found that each of the requirements had been met. Firstly, BT's service had been 'used' to infringe copyright. This was true of both the end users and the operators of the Newzbin website. Previous case law had held that an ISP was an 'intermediary' within the relevant provision even though it only provided Internet access and did not offer any other service. The end users, in downloading files illegally, were 'using' BT's service to infringe copyright. The operators of the website also used BT's services to infringe copyright in these films.
Second, BT had 'actual knowledge' and despite s 97A of the CDPA requiring knowledge, it does not require the ISP to know about each and every single instance in which its service had been used to breach copyright The court found that the section enables injunctions against the person best placed to bring the infringing activities which it knows to be occurring to an end. What constitutes 'knowledge' is important here. His Honour stated that what 'must be shown is that the service provider has actual knowledge of one or more persons using its service to infringe copyright. The more information the service provider has about the infringing activity, the more likely it is that the service provider will have actual knowledge'. He continued, 'it is not essential to prove actual knowledge of a specific infringement of a specific copyright work by a specific individual'.
While this case may appear at first to mean that UK based ISPs are liable to block illegal file sharing activity on their networks, it is important that the judgment be seen in its own particular context. The BT case followed directly from a previous decision about the Newzbin website in which the Court had found that the website's main function was to provide material which infringed copyright and this case only eventuated after the website had been shut down but re-emerged some time later hosted on a server outside of the court's jurisdiction. Further, BT had existing technology and capability available to effectively block the Newzbin site. The Court found that it would not be an onerous imposition on BT to block the Newzbin site if the injunction were granted, as this was a practice that BT already engaged in to some extent in order to block customers from accessing child sexual content.
The iiNet decision
In a decision that appears to be in contrast to the UK decision the current Australian authority holds that an ISP is not liable under the Copyright Act for breaches carried out by its customers. This case is currently on appeal to the High Court.
In Roadshow Films Pty Ltd v iiNet Limited  FCAFC 23 the Full Federal Court dismissed an appeal from the studios against a finding that the ISP, iiNet, did not authorise users' copyright infringements in circumstances where iiNet customers illegally downloaded content using BitTorrent peer to peer technology. The Full Court heard an appeal from a 2010 decision before Justice Cowdroy who had found that iiNet had not authorised any copyright infringement by its customers. The Full Court dismissed the studios' appeal on the basis that iiNet did not authorise its users' infringements. Although the decision has been viewed as a 'win' for ISPs, the decision is not really a clear victory or an indication that ISP have nothing to worry about.
Although the court dismissed the appeal, it did not affirm the trial judge's reasoning, and in particular it did not follow the view that iiNet did not provide the 'means' of infringement. The Full Court found that iiNet had both a contractual and technical power to prevent its customers from continuing with copyright infringements by suspending or terminating the customers' service. On the key issue of authorisation, the Full Court, by two judges to one, held that iiNet had not 'authorised' the infringement of its users. By refusing to act on notices received from the copyright owners, iiNet was not unreasonable, because the notices were not adequately specified and did not adequately detail the methods they used to identify the infringements.
While the decision went the way of iiNet, all three Judges made it clear that they did not approve of iiNet's conduct. Indeed the judgments all but indicate what it will take for a future claim against an ISP to succeed. Justice Emmett noted that if the copyright owners had been more specific in their notifications to the ISP, more open about the way in which they had gathered the relevant data, and had been prepared provide undertakings as to the costs of litigation, iiNet might have actually been found liable for authorising copyright infringement.
The film studios have applied for and been granted special leave to appeal to the High Court of Australia. The High Court will hear the case later this year.
Although the English High Court and the Full Federal Court of Australia were required to rule on different legislative provisions, the facts at play were similar. While the Australian court stated that the copyright holders needed to provide a higher level of particularity in their notifications of copyright breach, the English court held that the level of knowledge of breach required for it to order an injunction did not need to be overly specific.
While there is no equivalent injunctive provision that requires actual knowledge under Australian law at present, the English decision may yet play an important role in future attempts to address internet piracy at the ISP level by way of a legislative solution. The outcome of the iiNet appeal to the High Court is awaited eagerly.
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