Just what is behind the iiNet case?

This commentary is by John Lambrick, the general counsel of RMIT University in Melbourne.

commentary Landmark Federal Court legal action by the Australian Federation Against Copyright Theft (AFACT) against ISP iiNet highlights the competing interests of ISPs and rights holders in respect of unauthorised filesharing, and should expose the inability of the Australian Copyright Act to satisfactorily resolve the issue.

AFACT will seek to establish that iiNet "authorised" a breach of copyright by failing to take steps to prevent iiNet's account holders from engaging in unlawful filesharing, and in particular by refusing to forward AFACT's complaints to the relevant account holders.

No doubt iiNet will argue that by referring the complaints to the police it complied with its obligations under the Copyright Act. However, even if iiNet is found to have "authorised" a breach by its account holders, iiNet will not be liable for damages if it complied with its obligations under the "safe harbour" provisions of the Act.

The best [AFACT] can probably hope for is an order that the infringing accounts be terminated.

The "safe harbour" provisions generally require ISPs to terminate the accounts of repeat infringers, but they do not require an ISP to do so merely on the basis of an assertion by a rights holder that a breach has occurred.

Importantly, the Act does not require ISPs to cooperate with rights holders, meaning that rights holders are ordinarily required to seek court orders to force ISPs to reveal the identity of unlawful downloaders so that the rights holders can take legal action against them.

Obviously, it is logistically and financially impossible for rights holders to deal with all infringers in this manner, and ISPs will quite reasonably argue that they would breach the privacy of their account holders by revealing details without a court order. AFACT has attempted to overcome this by requesting ISPs to onforward its complaints to the account holders.

This stalemate has led to the legal action by AFACT. Will it succeed? iiNet may be found to have "authorised" a breach by its account holders if the Court considers that iiNet acted unreasonably by not passing on AFACT's complaints.

iiNet may be in some trouble here by claiming that it acted appropriately by referring the complaints to the police. iiNet would know that unauthorised downloading (as distinct from distributing) is not a criminal offence, and it is no wonder that the police showed no interest in the matter. But in any event AFACT will not be entitled to damages. The best it can probably hope for is an order that the infringing accounts be terminated.

Apart from a general exercise in sabre rattling, the AFACT legal action may also be part of a strategy to require the Federal Government to force ISPs to cooperate with rights holders in an attempt to reduce unauthorised filesharing, as has occurred in the United Kingdom and in France.

Under the U.K. arrangement a memorandum of understanding has been signed between the government, ISPs and rights holders which initially involves rights holders identifying infringing use and requires the ISPs to then contact the relevant users. The scheme is still a work in progress and may be supplemented by legislation, but early indications are that it is having some effect.