Downloaders be warned, the film industry suffered a blow in the High Court but
copyright holders still have means to attack pirates, says lawyer David Moore.
A damaging blow has been dealt to the giants of the film industry in the High Court
today after it decided to dismiss their copyright infringement appeal case against
internet service provider (ISP) iiNet in a landmark ruling.
The High Court’s five judges unanimously dismissed the appeal. In a summary the
court observed that iiNet “had no direct technical power” to prevent its customers
from illegally downloading pirated content using BitTorrent.
But copyright law experts say the case is not the end of the story as more ISPs could
be targeted in future and pressure will remain on internet providers to do something
about piracy on their networks.
Today, the court said iiNet’s power to prevent customers from pirating movies and
TV shows “was limited to an indirect power to terminate its contractual relationship
with its customers”.
Further, the High Court judges said that infringement notices sent by the film
industry to iiNet did not provide the ISP “with a reasonable basis for sending
warning notices to individual customers containing threats to suspend or terminate
those customers”‘.
If the film industry had won, the decision had the potential to impact internet users
and the internet industry profoundly as it sets a legal precedent surrounding how
much ISPs are required to do to prevent customers from downloading movies and
other content illegally.
iiNet CEO Michael Malone welcomed the ruling and said Hollywood should now
focus on increasing the availability of lawful content in a timely and affordable
manner. “We have consistently said we are eager to work with the studios to make
their very desirable material legitimately available to a waiting customer base – and
that offer remains the same today,” he said.
The High Court dismissed the appeal with costs. iiNet said legal costs of the case to
date were approximately $9 million and had already been expensed.
The film industry – and content owners more broadly – want ISPs to send warning
notices and even disconnect customers from the internet following allegations of
copyright infringement. The ISPs have long said that content owners already have
sufficient remedies through the courts and it is not the job of the ISP to decide
whether someone is guilty of content piracy. The courts have so far sided with the
ISPs on this point.
Recently content owners and ISPs have been back at the negotiating table over this
issue however it is understood that a consensus has yet to be reached. The
Communications Minister, Stephen Conroy, has previously said that he was awaiting
the outcome of the iiNet case before deciding whether new legislation was needed to
crack down on illegal downloaders.
But just because iiNet won in the High Court does not mean ISPs will be off the hook
and not responsible for piracy because experts say a previous judgment in the case
paves the way for further lawsuits against ISPs.
Michael Speck, a copyright expert who ran the music industry’s case against Kazaa,
said: “In losing the case [the film industry] still got from the courts a clear road map
for how to successfully prosecute ISPs in the future and the next ISP that is
prosecuted will find it almost impossible to avoid liability.”
Kim Heitman, secretary of Electronic Frontiers Australia and a Peth-based IP lawyer,
called Speck a “wishful thinker”.
“Of course any new case can be brought against any new defendant with any new
facts including whether they have gone through a more detailed road map of
specifying the particular breach,” she said.
“But what the Chief Justice made very clear is that if you are going to take action
against end users it has to be through a legal process. It can’t be simply the content
owners asserting to the ISP that they should breach their contract with their
customer and therefore the road map is not complete in so far as it doesn’t include a
legal process against the user.”
Intellectual property lawyer David Moore, of legal firm Cornwall Stodart, said for
now ISPs are not responsible for the infringing conduct of their useres but he
believes this will change.
“At some point if the level of infringement by a particular user is of a certain scale
and is repeated then an ISPs will be expected to work with the copyright owners to
take action and I feel that’s the way that things are heading sort of based on the full
Federal Court decision and now the High Court decision,” he said.
“It’s almost forcing ISPs to work with the copyright owners to cut out illegal
downloads and the question of how they work together is perhaps somewhat grey.
There’s several issues floating around about the cost of putting in place, or the cost to
an ISP of enforcing a policy that involves sending out warning notices and potentially
terminating or suspending accounts.”
But Hamish Fraser of Truman Hoyle Lawyers said: “I think most practitioners
struggle with the idea that an ISP should be liable for the downloading of its users.”
Heitman said the decision meant that internet users could be confident they would
not be disconnect from the internet without a proper legal process and court order.
“It means that the content owners needs to decide if they are going to continue to try
to keep hold of their 20th century business model or open an online shop,” she said.
Heitman said that while it was unlikely, content owners could still sue individual
downloaders.
“In the United States recently content owners that have tried to apply to ISPs to get a
full list of the names and addresses of the people downloading have been told that
they will not get that relief from the court because they are not genuinely intending
to use the legal process,” she said.
“It’s sort of the Kill the Irishman situation where really it’s just a shake down or
copyright trolling.”
The suit against iiNet was first filed in November 2008 by a group of the biggest
Hollywood studios including Village Roadshow, Universal Pictures, Warner Bros,
Paramount Pictures, Sony Pictures Entertainment, 20th Century Fox and Disney, as
well as the Seven Network.
The film studios had sued iiNet arguing that by not acting to prevent illegal file
sharing on its network it was essentially “authorising” the activity and was therefore
liable.
But after an eight-week Federal Court trial in 2009 that examined whether iiNet
authorised customers to download pirated movies, Federal Court judge Justice
Dennis Cowdroy found that in February 2010 the ISP was not liable for the
downloading habits of its customers.
The studios appealed the decision, but again lost in a judgment handed down in
February 2011 after two of the three Federal Court appeal judges sided with iiNet.
The studios then appealed to the High Court, which heard the case between
November 30 and December 2 last year, and which delivered its judgment today.
Ben Grubb with Asher Moses – SMH – April 20, 2012 – 10:24AM