Earlier this month we reported that the Federal Court had
dismissed a claim by a multi-national alliance of motion picture
and recording industry companies, represented by the Australian
Federation Against Copyright Theft (AFACT), that
iiNet, Australia's third largest internet service provider, had
authorised copyright infringement by failing to stop its customers
from using the otherwise legitimate BitTorrent file sharing
software system to download copyrighted movies. On 25 February
2010, AFACT lodged an appeal against that ruling, sparking another
potentially lengthy round of court action.
It is understood that AFACT's Notice of Appeal contains 15
grounds for appeal and is expected to be heard later this year. The
grounds have not yet been made publically available but AFACT has
indicated in a statement that it views the Federal Court's
decision as rendering the "safe harbour regime
ineffective" for ISPs.
AFACT had collected evidence showing that iiNet's customers
were using the BitTorrent system (free software that allows a user
to easily share video and audio files with other internet users) to
download copyrighted movies. AFACT informed iiNet of this copyright
infringement and asked it to take steps to prevent its customers
from downloading the movies, including requiring iiNet to cancel
its infringing customers' subscriptions and to block certain
websites. iiNet refused. The dispute eventually came before the
The Court was satisfied that the conduct of iiNet's
individual customers in downloading the movies amounted to
copyright infringement but held that iiNet, whilst it knew of the
infringements, had not authorised them. The Court distinguished
providing the 'means of infringement', such as a webpage
dedicated to peer-to-peer file sharing which could amount to
authorisation, from merely providing the pre-condition to
infringement. Merely providing access to the internet did not
amount to providing the 'means of infringement', which in
this instance was the use of the BitTorrent system. iiNet had no
control over it and was not responsible for operating it. The
various measures AFACT asked iiNet to undertake were not relevant
'powers' to prevent the doing of the infringing act, nor
were they 'reasonable steps' that needed to be taken to
prevent it, as required by the Copyright Act.
The outcome of the iiNet case had been the subject of much
nervous speculation by ISPs. Had iiNet been held to have authorised
infringement, it would have allowed the entertainment industry to
focus on the major ISPs to achieve broad enforcement measures,
rather than making many single claims against individual copyright
infringers. The potential cost to ISPs to establish effective
measures to prevent such infringement is high. This could have led
to many smaller ISPs going under. Whilst the Court at first
instance recognised the legitimate interests of the industry to
prevent what it acknowledged was large scale infringement through
use of the BitTorrent system, this interest does not make ISPs
responsible for protecting and enforcing their rights in this
Given the scale of ongoing infringement and the amount of lost
revenue at stake, it was widely expected that an appeal would be
launched. We will provide a further update once the appeal is heard
and judgment is handed down in this important case for the internet
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