Thinking | 23 April 2012

iiNet wins landmark High Court case

On Friday, the High Court handed down its keenly anticipated decision in the long running case between iiNet Limited (an internet service provider) and a consortium of Australian and international film and television studios (known as AFACT).

The High Court unanimously dismissed the appeal by AFACT and held that iiNet was not liable for infringements of copyright committed by its customers.

Background

In 2008, AFACT sued iiNet for ‘authorising’ the copyright infringement of iiNet’s customers, who were alleged to have downloaded unauthorised copies of films and television programs using the ‘Bit Torrent’ file sharing system.

The case demonstrates that, under the current provisions it will be difficult for copyright owners to hold internet service providers liable for authorising infringements of copyright committed by their customers.

Under Australian copyright laws, a person who authorises an infringement of copyright committed by another person can also be liable for that infringement.

Trial Decision

In the first instance, Cowdroy J of the Federal Court accepted that iiNet’s customers had committed infringements of copyright.

However, Cowdroy J rejected the claim that iiNet was liable for authorising this infringement of copyright.

Full Federal Court appeal

AFACT appealed this decision to the Full Federal Court.

The majority of the Full Federal Court (Emmett J and Nicholas J) found that iiNet did not authorise the infringement of copyright by its customers, as AFACT’s infringement notices were only assertions of copyright infringement and did not adequately explain how and why copyright had been infringed, nor provide evidence of infringement.

High Court decision

The High Court was unanimous in dismissing AFACT’s appeal.

In two separate judgments, the High Court held that iiNet had not authorised infringements of copyright committed by its customers.

Both judgments held that:

  • iiNet did not have any control over the use of the Bit Torrent system by its customers;
  • iiNet’s only real power to prevent its customers from infringing copyright using the Bit Torrent system was to terminate its contractual relationship with the customers; and
  • in the circumstances, it was reasonable for iiNet to elect not to terminate its contractual relationships with customers, particularly as the allegations of copyright infringement made by AFACT were not conclusive.

Comment

The case demonstrates that, under the current provisions of the Copyright Act 1968 (Cth), it will be difficult for copyright owners to hold internet service providers liable for authorising infringements of copyright committed by their customers.

However, there are still a number of options available to copyright owners who wish to pursue infringements on peer to peer networks.  These include taking direct action against the individual users of the peer to peer networks or bringing further claims against internet service providers based on more comprehensive evidence of infringements.

An industry agreement between ISP’s and copyright owners could be the way to address the ongoing issue of infringements by individual internet users.  Many in the industry are calling for greater collaboration.

In addition, the Australian Law Reform Commission is reviewing the exceptions to infringement under the Copyright Act 1968 (Cth), in particular in relation to the digital environment.

Contact

Ben Hamilton

Ben specialises in technology law, intellectual property and commercial contracts, trade marks and commercialisation.

James Deady

James is an commercial lawyer specialising in technology procurement, privacy, data security and intellectual property matters.

Related practices

You might be also interested in...

Intellectual Property | 4 Jul 2012

Who gets their top level domain names?

The Internet Corporation for Assigned Names and Numbers (ICANN) has recently released the proposed generic top level domains (gTLDs) which have been applied for through the new gTLD application process.

Trade Marks | 20 Jul 2016

Trade mark use in Australia: foreign distributor found liable for infringement even where the first sale of its product was overseas.

Two companies incorporated in Hong Kong which were part of a corporate group which manufactured and distributed toys to exporters in China have each been found to have infringed trade marks registered in Australia when the products were subsequently exported and sold in retail outlets in Australia.