How much control does AFACT have?

analysis As the epic High Court legal battle between iiNet and the film studios wrapped up, the theme of the three-day trial was clear: it is a matter of choice versus control; iiNet's and AFACT's.

Although the case centres around whether iiNet authorises its users to share copyrighted materials through BitTorrent, AFACT's motive is clear: force the ISPs to stop customers from downloading and infringing in the first place.

On the first day of the court hearing, AFACT counsel Tony Bannon made it clear that it wasn't in the film studios' interests to go after individual users to stop downloading, because even if a few users were picked out and made an example of, it was obvious that the group couldn't track down every single user.

"The cost-benefit analysis of pursuing an individual case against one individual user for downloading three films or three records would be a use of the judicial system which the court would not be wildly enthusiastic about," he said. "The very fact that it is so unworkable and so implausible and so illogical and costly, because you will always lose money, because you will never get your costs back anyway, that is an inbuilt protection for the users themselves.

"They know that rights holders cannot track down everybody."

Not to mention, as Justice Gummow pointed out, that there can often be a public reaction to such lawsuits.

Instead, AFACT is pursuing ISPs to enact a policy of providing a graduated warning system that includes the threat of suspension, in order to prevent future infringements of copyright. AFACT argued that ISPs should have such a system in place, otherwise every time that user shares another copy through BitTorrent, the ISP is authorising that infringement, and is liable.

Bannon also argued that it is in iiNet's commercial interest to deter BitTorrent usage, and pointed to iiNet's Freezone, which allows customers access to content through iTunes, iView or FetchTV that doesn't count towards their monthly quota, saying that BitTorrent is a bandwidth hog. He continued that while iiNet could not control the first instance of copyright infringement, by implementing a warning system, it would deter not only future infringements by that user, but would also send a message to customers that such a practice was wrong.

But what role do content owners play in the control of their own content? Content owners have control of their price in a world where DVDs and Blu-Rays are still cost prohibitive enough to make BitTorrent seem to be a viable alternative, Justice Crennan said.

"Is not the real conundrum lying behind all of this that in an ideal world, for the copyright owners, everyone who wants to watch a film will go and pay $30 for the DVD?

"It only costs a few cents to download it, which probably lies behind perceptions about the nature of the conduct of downloading, probably explains why infringement is rife, so that it is very difficult, is it not, just by referring to an obligation to send notices, to get some efficacy into the sending of the notices, or to get the balance right between the stake of the copyright owners in what is happening and duties on the service providers?"

Bannon, in his reply, said that how well a warning notice worked was a function of whether the ISP would threaten to turn off a user, effectively ignoring the last part of the question about how to balance responsibilities between service providers and copyright owners.

The fact that AFACT overlooked the issue is not completely surprising. As Ellen Broad, the Australian Digital Alliance's copyright law and policy adviser, said in a blog post yesterday, while content providers have been successful in implementing legislation to protect their own interests, they haven't come to the game in making their content easily accessible and affordable, despite the fact that this is entirely within their control.

"Despite succeeding on a number of demands for stronger copyright protections, content industries have continued to resist making content available for all users. Consumers in Australia still wait weeks, and sometimes months, to access the same content available readily in other jurisdictions, and generally at higher prices," she said. "Despite the convenience and affordability of iTunes rental, for example, movie studios still choose only to make new releases available for sale outright."

It's also arguable that the vast majority of piracy within Australia comes in the form of television. Although Australia is improving with "fast-tracked" content, such as Glee, airing hours after it does in the US, or Doctor Who airing within a week of its UK release date, if this content is available anywhere else first, then there will always be people who can't hold out.

As Broad said, in this situation, although iiNet is making every effort to deter piracy through content on Freezone, it's still ultimately limited by the content owners not making that content available.

"All iiNet can do in the current environment for digital content is direct users to sites like iTunes and encourage them to take advantage of the Freezone," she said. "They can't control consumer choice as to how much they're willing to pay for legitimate content, how long they're willing to wait for it or whether they'll resign themselves, in the internet environment, to not being able to access content at all."

Broad's question to the copyright holders on what point they should implement their own reasonable steps to reduce copyright infringement is key, and one that the High Court judges seemed to take on-board during the case, often interrupting AFACT counsel and placing much more focus on the arguments made by AFACT over the course of the two days. But you would expect the party that brought the case before the High Court to face much more scrutiny by the judges.

Even as we examine the possibilities for copyright owners to hinder copyright infringement, we have to realise that it isn't the main thread of the case, which is authorisation. Through iiNet's control of the internet, does it approve of customers' choices of what to do using that connection?

Although I believe that things look good for iiNet at this point, it may all come down to the application of a 46-year-old photocopy case applied to the digital world.

Legal precedent

In the 1970s, short-story writer Frank Moorhouse took the University of New South Wales to court, alleging that the copyright of his work The Americans, Baby had been infringed, because a copy was made of it using the university library photocopy machine. The case made it to the High Court, where it was ruled that by making the photocopier available to students in a place where books are also provided, the library was authorising the infringement of the copyright of those books.

The Moorhouse case is held up as a guide to the legal system around copyright infringement; however, as technology has advanced so far in 46 years, it is difficult to see how relevant the case still is. In this situation, AFACT argues that iiNet is the university library, the photocopier is BitTorrent and internet access provides the availability of all those books to be copied by the students — iiNet's customers.

But iiNet argued that parts of the Moorhouse case are not applicable, because iiNet doesn't control the access to BitTorrent, nor does it house the "books" itself; it merely provides access to copyright material through the provision of access to the internet.

The court also examined a 1988 UK case between CBS Songs and Amstrad, where Amstrad was found not to have authorised the copyright infringement of customers who bought its double tape-deck system, and used it to make copies of music, because the company warned against copyright infringement. The fact that the company knew that the product "might" be used to infringe on copyright was not enough to imply authorisation. iiNet counsel Richard Cobden used this example to say that if Amstrad had not released a product with two tape decks, a competitor would have. Similarly, if iiNet had implemented a notices or termination policy for infringers, they would likely go to an ISP that didn't have such a system in place.

More recent legislation was examined in the infamous 2005 case between Stephen Cooper and Universal recordings over links to music downloads that Cooper made available on his website, hosted by ISP E-Talk. Cobden argued that the difference in this case was that the ISP was advertising on Cooper's website, and vice versa. This, by extension, means that the ISP was aware of the infringement, and was authorising it.

Whatever the judges do finally decide — whether iiNet should have controlled the infringements or not — it will set a legal precedent for copyright cases in this country for years to come.