Copyright infringement and ISPs: Roadshow Films Pty Limited v. iiNet Limited (2011) F.C.A.F.C. 23.

Author:Chapple, Sara
Position:Internet service providers - Australia
 
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  1. BACKGROUND

    iiNet Limited ("iiNet') is an internet service provider that provides an internet connection to thousands of computer users within Australia. In 2009, 34 major motion picture studios ("Copyright Owners") brought an action against iiNet on the grounds that it had breached copyright by authorizing the illegal downloading of movies by its users. The allegation was that iiNet customers used a 'BitTorrent" program ("BitTorrent') in order to communicate copies of copyrighted films to the public over the internet, and that iiNet authorised these infringements.

    BitTorrent is a file-sharing program that allows computer users seeking particular data to participate in the distribution of that data. BitTorrent breaks up large files into small pieces in order to transfer those large files efficiently between computers. Pieces are requested by users and reassembled into a whole file. It was through this program that iiNet users copied, and communicated copies, of films to the public. It was not in dispute in the case that iiNet knew that this form of file sharing was occurring.

    From July 2008, the Australian Federation Against Copyright Theft (1) issued weekly notices ("AFACT Notices") to iiNet alleging that infringements had occurred. The AFACT Notices contained details such as the date and time at which infringements took place, and the IP addresses of infringing users. These notices required iiNet to act to prevent its customers from continuing to infringe copyright, iiNet also received hundreds of automatically generated notices from the USA each week, which also alleged infringement ("Robot Notices").

    iiNet required each of its customers to enter into a customer relationship agreement. The conditions of this agreement included a clause that stated that any conduct infringing copyright was a breach of the agreement, and could result in the suspension or cancellation of the customer's account. This was also stated on the iiNet website. However, it was alleged that when iiNet was notified of the infringements by the AFACT Notices, it did not take any action to terminate or suspend the accounts of users. It was on this basis that the copyright owners alleged authorisation.

  2. THE LEGISLATWE FRAMEWORK

    Section 86 of the Copyright Act 1968 (Cth) ("Copyright Act") provides that copyright is the exclusive right to:

    * make a copy of a film;

    * cause the film to be seen in public; or

    * communicate the film to the public

    The term 'communicate" is defined in s. 10 of the Copyright Act to include:

    * making a film available online; or

    * electronically transmitting a film.

    This is further qualified by s. 14 of the Copyright Act, which provides that "a reference to the doing of an act in relation to ... other subject-matter shall be read as including a reference to the doing of that act in relation to a substantial part of the ... other subject matter ...".

    Sections 101(1) and (1A) of the Copyright Act prescribe the conduct that will infringe copyright. These sections are in the following terms:

    (1) Subject to this Act, a copyright subsisting by virtue of this Part is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorizes the doing in Australia of, any act comprised in the copyright.

    (1A) In determining, for the purposes of subsection (1), whether or not a person has authorised the doing in Australia of any act comprised in a copyright subsisting by virtue of this Part without the licence of the owner of the copyright, the matters that must be taken into account include the following:

    (a) the extent (if any) of the person's power to prevent the doing of the act concerned;

    (b) the nature of any relationship existing between the person and the person who did the act concerned;

    (c) whether the person took any other reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice.

    ...

    Section 112E of the Copyright Act provides that a carriage service provider (defined in the Telecommunications Act 1997 (Cth) in such a way as to include the services provided by an internet service provider such as iiNet) "is not taken to have authorised any infringement of copyright in an audio-visual item merely because another person uses the facilities so provided to do something the right to do which is included in the copyright."

    Division 2AA of Part V of the Copyright Act, which consists of sections 116AA to 116AJ (the "Safe Harbour Provisions"), imposes limitations on the remedies against carriage service providers for infringement of copyright. Section 116AC provides for the following:

    A carriage service provider carries out a Category A activity by providing facilities or services for transmitting, routing or providing connections for copyright material, or the intermediate and transient storage of copyright material in the course of transmission, routing or provision of connections. Section 116AG(3) provides that where copyright is infringed in the course of carrying out a Category A activity, the relief that a Court may grant against a carriage service provider is limited to one or more of the following:

    (a) an order requiring the carriage service provider to take reasonable steps to disable access to an online location outside Australia;

    (b) an order requiring the carriage service provider to terminate a specified account

    In deciding whether to make an order under s. 116AG(3), the Court must have regard to:

    (a) the harm that has been caused to the owner or exclusive licensee of the copyright; and

    (b) the burden that the making of the order will place on the carriage service provider; and

    (c) the technical feasibility of complying with the order; and

    (d) the effectiveness of the order; and

    (e) whether some other comparably effective order would be less burdensome.

    The Court may also have regard to any other matters that it considers to be relevant.

    In addition, s. 116AG(1) provides that before the limitations set out in s. 116AG(3) apply, a carriage service provider must satisfy certain conditions. These are set out in section 116AH(1). The relevant provisions in respect of Category A activities include the following:

    1) The carriage service provider must adopt and reasonably implement a policy that provides for termination, in appropriate circumstances, of the accounts of repeat infringers.

    2) If there is a relevant industry code in force--the carriage service provider must comply with the relevant provisions of that code relating to accommodating and not interfering with standard technical measures used to protect and identify copyright material.

    Section 116AH(2) provides that nothing in those conditions requires a carriage service provider to monitor its service or to seek facts to indicate infringing activity, except to the extent required by an industry code. It was common ground that there was no relevant industry code at the time of the alleged infringements.

  3. DECISION AT FIRST INSTANCE

    At first instance in the Federal Court before Cowdroy J, the Copyright Owners argued that iiNet users had communicated films to the public by making copies available online, and by transmitting them electronically via the Internet. (2) The Copyright Owners alleged that iiNet had authorised such conduct in contravention of s...

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