Copyright infringement - inside the legal minefield

By Pat Pilcher

Who is responsible for illegal download or distribution of copyright material - the customer or the ISP?
Who is responsible for illegal download or distribution of copyright material - the customer or the ISP?

Several weeks ago the Australian high court ruled in favour of Aussie ISP iiNet in a landmark legal battle where AFACT (Australian Federation Against Copyright Theft) argued that iiNet was as guilty as some of its subscribers of online copyright infringement.

The ruling sent ripples through global intellectual property community and potentially has implications for New Zealand with local copyright infringement laws soon to be bedded down.

AFCT have announced that it intends to appeal the ruling. To find out more on how and why this is happening, as well as what the possible legal implications are locally, I caught up with Rick Shera, an IT legal specialist, and partner at Lowndes Jordan

What is the legal argument at the heart of the AFACT vs iiNet case?

Rick Shera: AFACT, on behalf of 34 major film and TV companies, argued that the ISP iiNet, had authorised its customers to infringe copyright in a number of films and TV shows. Because authorising infringement is itself an infringement, AFACT argued that iiNet was also a copyright infringer.

The real question in the case was whether the fact that iiNet's customers were file sharing unlicensed copies of films and TV shows over iiNet's internet connections meant that iiNet had a responsibility to stop them doing so. If it did not do that AFACT said, it had effectively condoned that infringement and was liable itself.

iiNet argued that by forwarding the numerous allegations of infringement by customers that it received from AFACT, to the Australian Police, it had done all that was required of it and had not authhorised its customers to infringe - therefore, it itself had not infringed.

In a comprehensive 150-plus page decision, the Judge found against AFACT on most counts. In doing so, not only did he throw out AFACT's argument that iiNet had authorised the infringements, but he also cast doubt on the way that the film and TV companies collected and presented evidence of infringement, recognised that questions about whether an iiNETs customers had infringed copyright or not are complex legal ones, and would be costly for most ISP to determine. Also he questioned whether it is fair to expect an ISP to act as judge and jury on these sort of questions, based just on allegations made by copyright owners.

The Judge also found that iiNet's policy of not terminating its customers' internet connections just because it received complaints from copyright owners was reasonable. So, he said, even if iiNet had authorised the infringements (which he said they didn't), it would still have had a full defence under the so called "safe harbour" provisions in Australia's Copyright Act.

What is the basis of Afact's appeal against the recent ruling in favour of iiNet?

Rick Shera: AFACT has appealed all aspects of the judgement. Of course it will want to overturn the authorisation aspect of the case. However, the question of whether an ISP has or has not authorised infringement will always be dictated by the facts each time, so this may not be a precedent where the facts are different.

What may well be more important for AFACT in this appeal is overturning the Judge's observations on evidence collection standards and the reasonableness or otherwise of iiNet's termination policy. Those are issues which go to the heart of the way in which AFACT and its international affiliates (such as NZFACT) operates, and could make their operations more difficult.

How robust do you think their appeal is from a legal and ethical perspective?

Rick Shera: The judgement is very robust and will be difficult to overturn I think. The appeal itself has only just been lodged so there is not a lot of information on how exactly AFACT thinks it will be able to attack it.

AFACT had better take a different approach to what it has taken in the case so far, it was heavily criticised by the Judge for its personal attacks on iiNet personnel at the trial. Reading the judgement, it is not hard to see that the Judge had little sympathy for AFACT's approach or for its assumption that ISPs have some sort responsibility to police the internet.

So are domestic and international pressures are likely to be driving Afacts appeal?

Rick Shera: This is the first judgement in the in the world on an ISP's liability for copyright infringement by its customers. That is an issue which is being furiously debated in the US, UK, France, Canada and other countries.

We have our own debate on the issue here in NZ with Section 92A and the internet blackout which forced the Government to go back to the drawing board. Therefore, this case was and is being closely watched all over the world. Whatever happens, it will be very influential.

AFACT is an offshoot of and is funded by the Motion Picture Association of America, so not only will it be wanting to overturn the decision for Australian purposes but it will also be very concerned not to let such a damaging precedent be taken up in other countries.

Not only that, but aspects of this judgement are relevant to what is being suggested for ISPs in the Anti Counterfeiting Trade Agreement (ACTA) that New Zealand and other countries are currrently negotiating in secret.

The Judge's ruling that iiNet's refusal to obey AFACT's requests to terminate it's customers internet connections based solely on AFACT's allegations (a "three strikes" policy) was reasonable adds weight to New Zealand's rebuttal of such suggestions by other countries in those negotiations and cannot be ignored.

Pat Pilcher is an employee of Telecom, but his views do not represent those of the company.

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