Roadshow and others told to 'hit the road' in copyright case

Internet service providers across Australia will be able to breathe a collective sigh of relief today after the decision of Roadshow Films Pty Ltd and Ors v iinet Limited (No. 3) [2010] FCA 24, which was handed down this morning by Cowdroy J in the Federal Court of Australia.

In a judgment of some 636 paragraphs and almost 200 pages His Honour found that although customers of internet service provider (ISP) iinet had committed widespread copyright infringement and even though iinet was aware of many of these infringements, it did not authorise and was therefore not liable for these infringements under section 36(1) and section 101(1A) of the Copyright Act 1968 (Cth) (Act).

The case against iinet was coordinated by the Australian Federation Against Copyright Theft (AFACT), a coalition of Australian and overseas film and television companies (including Universal Pictures, the Seven Network and Roadshow Films).  AFACT had investigated iinet’s activities over a period of more than 12 months, had collated approximately 3000 pages of evidence relating to alleged breaches, and had repeatedly sent notices to iinet advising of its customers’ copyright breaches.

His Honour criticised the plaintiffs for its single-minded approach to pursuing iinet as something that ‘must be done’ to address the issue of copyright infringement, despite the fact that iinet was not encouraging or directly benefiting from these infringements. In particular, he was critical of the plaintiffs’ attitude towards iinet’s key witnesses during cross-examination (including CEO Michael Malone) and its exaggeration of the number of infringements that were likely to have occurred.

In the course of his lengthy decision, His Honour identified three principle reasons why iinet could not be found to have authorised the infringements of its customers:

• firstly, unlike in other high profile cases, such as Cooper(1) and Kazaa(2), there was no evidence that iinet had done anything more than provide the internet service to its customers, much less that it had approved of or obtained direct commercial benefit from the infringements;
• secondly, that a scheme for notifying, terminating or suspending accounts was not a relevant ‘power,’ nor a ‘reasonable step’, to prevent copyright infringement under the Act; and
• thirdly and most importantly, there was a clear distinction between providing the ‘means’ of infringement (which in this case was the constituent parts of the Bit Torrent filesharing system) which iinet did not have control over, and providing a necessary precondition to infringement (in other words, the internet service). 

His Honour dismissed the plaintiffs’ case and awarded costs in favour of iinet.

Conclusion

The significance of this case is more in what was not decided than what was. If the plaintiffs’ case had been successful, ISP’s would have effectively been required to monitor access and potentially terminate contracts with customers on the basis of information provided by a third party copyright owner or representative.

In an age where internet access is an essential service to individuals and businesses across Australia and around the world, it would have been commercially disastrous for customers and ISPs alike if the outcome of this case required ISPs to terminate accounts for alleged copyright breaches before those breaches are proven in court.  Such an unfortunate outcome may have quickly led to massively increased litigation for unlawful termination of contracts by ISPs.

While it is yet to be seen how the film and television industry will respond to this decision, the case clearly identifies the need for copyright owners and their representatives to carefully target only those parties actively engaged in infringing or actively authorising copyright infringement, rather than parties (such as ISPs) who might appear to be an adequate scapegoat for the widespread copyright infringement that evidently occurs in Australia and overseas. 

For more information please do not hesitate to contact Wayne Zappia on 9288 6931 or Daniel Butler on 9288 6714.