Posted by Elisabeth Koster
Roadshow Films and 33 other film studios yesterday lost an appeal in the Full Federal Court brought against internet service provider, iiNet.
Justices Emmett and Nicholas (Justice Jagot dissenting) upheld the first instance decision of Justice Cowdroy, who held that iiNet should not be held liable for infringement of copyright by its subscribers.
As in the judgment of Justice Cowdroy (reported in our news alert of 5 February 2010), the Full Federal Court decision turned on the question of authorisation of copyright in relation to the downloading of copyright material from the internet. Specifically, the Court considered whether an ISP could be said to have authorised the infringing acts of its subscribers where those subscribers downloaded copyrighted films and television shows without licence from the copyright owners.
The Australian Federation Against Copyright Theft (AFACT) had given evidence that it had issued notices to iiNet on behalf of the applicants. The AFACT notices contained information as to purported copyright infringement by iiNet users and requested that iiNet send warnings to those users and then suspend or terminate those accounts if the activities persisted. iiNet did not comply with AFACT's requests.
iiNet denied authorising its subscribers’ conduct, saying that it relied upon a series of steps which it says it took to prevent or avoid copyright infringement by users of its network, including:
· making its services available to subscribers upon terms which prohibited them from using services to infringe copyright;
· publishing a warning that hosting or posting infringing material was a breach of the customer relationship agreement which could result in suspension or termination of the account; and
· providing employee training to the effect that iiNet did not support or condone copyright infringement.
The issue largely turned on whether iiNet had taken reasonable steps to prevent the infringements occurring.
The majority held that iiNet's failure to take steps to issue warnings or terminate or suspend user accounts in response to allegations made in AFACT notices was not unreasonable given the evidentiary deficiencies in those notices.
Justice Emmett went further, stating that before any finding of authorisation of copyright infringement can be found, copyright owners must show that:
· the ISP has been provided with unequivocal and cogent evidence of the alleged infringing acts by the use of that service; and
· they have undertaken:
· to reimburse the ISP for the reasonable costs of verifying the particulars of the alleged infringing acts and establishing and maintaining a regime to monitor the use of the service to determine whether further acts of infringements occur; and
· to indemnify the ISP in respect of any liability reasonably incurred as a consequence of mistakenly suspending or terminating a service on the basis of allegations made by the copyright owner.
Justice Emmett found that although the evidence presented to the court supported the suggestion that iiNet demonstrated 'a dismissive and, indeed, contumelious attitude to the complaints of infringement by the use of its service', this was not sufficient to amount to authorisation of infringing acts by iiNet users.
Although the applicants did not succeed in this case, Justice Emmett said this did not necessarily preclude a finding of authorisation of infringement by a carriage service provider where a user of their services engages in infringing acts. His Honour stated:
it does not necessarily follow from the failure of the present proceeding that circumstances could not exist whereby iiNet might in the future be held to have authorised primary acts of infringement on the part of users of the services provided to its customers under its customer service agreements.
Justice Nicholas said that while an ISP 'should be given considerable latitude' when working out the details of a system providing for the issuing of warnings to those users engaging in infringing acts, a Court would find it difficult to criticise an ISP who had devised and adopted systems that 'involved taking such steps against subscribers who the ISP was satisfied had used (or permitted others to use) its facilities for the purpose of committing flagrant acts of copyright infringement'. While iiNet's failure to take steps of this nature to avoid or prevent copyright infringement was taken into account by Justice Nicholas, His Honour did not think 'the failure to take such steps merits any separate or different consideration on the basis that it somehow amounts to encouragement to infringe'.
Justice Nicholas also looked at the knowledge of the ISP in providing their services for the purpose of an infringing act. In dismissing the appeal, Justice Nicholas stated:
it cannot be inferred that a person authorises copyright infringement merely because he or she provides another person with communication facilities used by the other person to infringe copyright.
Justice Jagot (dissenting) considered that iiNet had not taken reasonable steps to prevent the infringements and as a result, held that iiNet had authorised the infringement.
All the judges held that iiNet could not rely on safe harbour provisions on the basis that it had not adopted and reasonably implemented a policy providing for termination of service of the accounts of repeat copyright infringers.
The parties have now been invited to make submissions on costs both at first instance and for the appeal. It is not yet known whether a special leave application to the High Court will be filed by the film studios.
Partners: Charles Alexander and Paul Kallenbach
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