There have been some interesting developments in a legal action that could be the end of the Internet as we know it. 

The case is the Australian Federation against Copyright Theft (AFACT) against iiNet.  The case concerns copyright piracy through the use of peer-to-peer technology known as BitTorrent. 

The case will be the first in Australia, to test the scope of an ISP’s liability for copyright infringement by its customers under the provisions of the Copyright Act 1968. 

Background 

Briefly, AFACT, (on behalf of the film and television studios), are alleging that iiNet has authorised copyright infringement by failing to take adequate steps to prevent sharing and downloading of movies and television shows via BitTorrent. 

The BitTorrent protocol is a peer-to-peer file sharing protocol used to distribute large amounts of data in portions from multiple locations.  The main idea behind the protocol is sharing.  Users upload files while they are downloading, allowing files to be distributed evenly and efficiently.  Unlike other file-sharing protocols the more users transmitting the file the more efficient the process. 

The BitTorrent protocol has made it possible to upload and download large files such as movies, video games and music videos.  All of these downloads are potentially in breach of the owner’s copyright. 

Copyright explained 

Copyright is regulated by the Copyright Act 1968 and is a set of exclusive rights given to the owner of a piece of work, whether it be a sound recording, book, movie, computer program etc.  The rights include the right to reproduce or copy the work, broadcast the work or communicate the work in public. 

If a person infringes these rights, without the owner’s permission, the owner may bring an action for breach of copyright.  There are a number of exceptions, however, it is not necessary to outline them for the purposes of this article. 

In this case, AFACT are alleging that iiNet knew that copyright breaches were going on but did nothing to prevent copyright infringements by its customers.  In effect, iiNet authorised the infringements, because it: 

• knew or had reason to suspect that the iiNet customers were infringing copyright;
• took no action in response to notifications sent by or on behalf of AFACT which identified that the iiNet customers were engaging in copyright infringement;
• offered encouragement to its iiNet customers to engage in copyright infringement;
• failed to enforce its own terms of service;
• continued to offer internet service to iiNet customers who were engaging in copyright infringement or whose iiNet services were being used by other iiNet customers to do so’;
• through its own inactivity permitted a situation to develop and continue where iiNet customers engaged in, or continued to engage in, copyright infringement. 

Major issues of the case 

This case poses a number of interesting questions:

• What, exactly, are ISPs required to do when they become aware that users are potentially infringing copyright? 
• How much responsibility will Australian courts put on intermediaries (in this case ISPs) for taking action against copyright infringement?  
• What does the requirement that an ISP ‘adopt and reasonably implement a policy that provides for termination, in appropriate circumstances, of the accounts of repeat infringers’ really mean? 

We have seen through cases such a as Kazaa and more recently, Cooper, that the Australian courts have been ready to impose liability on people it thought were profiting from copyright infringement. 

Potential impacts on the Internet and ISPs 

Whether AFACT succeeds or fails in this case, the affect on the Australian’s use of the Internet will be enormous. 

Potentially:

• ISPs will disconnect individual users accused of copyright infringement, without proper investigation, for fear of being sued.
• Individuals will not have any avenue of reply or ability to contest or disprove the allegations made by the copyright owners. The only avenue would be to sue their ISP.
• Thousands of individual users are likely to be severely punished for small-scale copyright infringement. 

Further, whatever happens, the Federal Government will be considering the current laws regarding copyright infringement for ISPs and will likely change them. 

The case is currently in the Federal Court and whoever wins, it will probably be appealed to the High Court, so there is still a while to go before there is clarity.  The case is receiving wide media attention, but I have found that http://www.itnews.com.au/ is the most comprehensive. 

For further information or advice on this topic, please contact Russell Morley, Senior Lawyer, by email at rmorley@talbotolivier.com.au.