Does an ISP have to prevent its customers from infringing
copyright? When is an ISP liable for its customers' copyright
infringement? iiNet's unanimous victory in the High Court this
morning has given some guidance (Roadshow Films Pty Ltd v iiNet
Limited  HCA 16),
and left the Full Federal Court's decision standing.
As a result, copyright owners will find it hard to prove ISPs
are liable for their customers' copyright infringement, and
legislative reform might be necessary. It does not mean, however,
that ISPs will never be liable.
iiNet, its customers and the Copyright Act
iiNet is an Australian ISP. The Australian Federation Against
Copyright Theft (AFACT) served it with notices which alleged that
iiNet's customers were infringing the copyright of the major
film studios by sharing and downloading films and TV shows via the
BitTorrent peer-to-peer protocol.
The copyright owners and their exclusive licensees then launched
legal action against iiNet, alleging that it had authorised its
users' copyright infringement.
What is authorising copyright infringement?
This turns on two key sections of the Copyright Act 1968 (Cth):
section 101 and 112E. Section 101 says you can infringe copyright
by authorising another's copyright infringement. In considering
whether authorisation has occurred a court will look at:
the extent (if any) of the person's power to prevent the
the nature of any relationship between the person and the
copyright infringer; and
whether the person took any other reasonable steps to prevent
or avoid the doing of the copyright infringement, including
complying with any relevant industry codes of practice.
Section 112E however says that carriage service providers such
as ISPs will not authorise copyright infringement merely because
another person uses their facilities to infringe copyright.
Did iiNet authorise its customers' copyright
There were four facts that Roadshow said showed iiNet had
authorised the copyright infringement:
its provision of the internet connections, a necessary but
insufficient step for the acts of primary infringement;
its technical ability to control the use of its service and its
contractual ability to issue warnings and suspend or terminate
the evidence provided by the AFACT Notices given before and
after it commenced proceedings; and
its lack of action in response to the AFACT Notices.
The High Court said mere indifference to its customers'
infringing activities does not mean an ISP is authorising it:
"The extent of iiNet's power was limited to an indirect
power to prevent a customer's primary infringement of the
appellants' films by terminating the contractual relationship
between them. The information contained in the AFACT notices, as
and when they were served, did not provide iiNet with a reasonable
basis for sending warning notices to individual customers
containing threats to suspend or terminate those customers'
How does this help copyright owners?
Any allegation of authorisation will of course turn on the
facts, but this decision suggests it will be quite hard to show an
ISP has done so. The High Court's view that indifference is not
authorisation, combined with the need for quite specific
infringement notices, will make this a challenging route for
This doesn't mean that ISPs can sit back and relax. They
must not encourage their customers' primary infringements.
As Chief Justice French and Justices Crennan and Kiefel pointed
out, the authorisation provisions were introduced before
peer-to-peer software was available, and as a result:
"the concept and the principles of the statutory tort of
authorisation of copyright infringement are not readily suited to
enforcing the rights of copyright owners in respect of widespread
infringements occasioned by peer-to-peer file sharing, as occurs
with the BitTorrent system."
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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