From: newmatilda.com 27 January, 2009.
Film pirates beware! Some of Hollywood’s biggest distributors are out to get you. Raena Lea-Shannon explains the implications of a test case against iiNet for "authorising" film piracy.
In late November last year, Roadshow Films and six other major film and television companies and their affiliates commenced proceedings in the Federal Court against the internet service provider, iiNet, claiming that the ISP authorises the piracy of their content.
The implications of this case are far-reaching as it will determine what role, if any, ISPs will play in policing our access to films, music and games well into the future. The prospect of 34 applicants — among them the biggest film production studios in Hollywood — all lined up against the one defendant, has in itself the ingredients of a blockbuster feature film. The hearing of this case will be the finale to a saga that began in the library of the University of New South Wales way back in 1975.
Back then, some UNSW students photocopied the works of the acclaimed Australian author, Frank Moorhouse, who decided to sue for copyright infringement. In Moorhouse v University of New South Wales the High Court held that UNSW was liable for the acts of its students because the university was authorising their infringement of copyright by placing photocopiers in the library for their use.
At the time, there was no provision in the Copyright Act that expressly referred to "authorisation", but the Court found against UNSW taking into consideration: The university’s power to prevent the infringement; the nature of the relationship between the university and its students; and the lack of reasonable steps taken by the university to stop the students using the photocopiers for piracy.
This decision laid down the principles in copyright law in Australia of "infringement by authorisation".
The next chapter in the story came in 1997, when Telstra was found liable for the "unauthorised public performance of music by means of diffusion to subscribers over Telstra’s public switched telephone network". Translated into plain English: Telstra got done for providing music-on-hold to its customers. This decision was a serious problem for telecommunications companies the world over, so much so that an article was added to the World Intellectual Property Organisation (WIPO) Treaty, to which Australia is a signatory, that:
"It is understood that the mere provision of physical facilities for enabling or making a communication does not in itself amount to communication within the meaning of this Treaty …"
Or, in plain English: Don’t shoot the messenger.
So, in 2000, when the Copyright Act was being revamped to bring it up to date for the world wide web, the Government enacted legislation that implemented the new article. The Copyright Amendment (Digital Agenda) Act 2000 was a massive house-keeping exercise in copyright law. As well as replacing some arcane distinctions, the new so called "safe-harbour" provision was created. Under the provision, a "Carrier Service Provider" (which includes telephony and internet service providers and anyone else providing services over the internet) should not be liable merely because someone uses their facilities to infringe copyright.
Bundled in with all this reform, the principles in the Moorhouse decision were enacted. A code of conduct would now be taken into consideration when deciding "what reasonable steps had been taken to prevent infringement".
However, from the start, ISPs could not see any benefit to them of a code of conduct. They were — and remain — concerned that any code of conduct would make them the front line enforcers of copyright infringement rather than the courts. As was pointed out in The Digital Agenda Review Report and Recommendations January 2004 commissioned by the Commonwealth Attorney-General’s Department:
"The Internet Industry Association maintains in public statements that there are significant issues of liability for any ISP that seeks to act in accordance with a code of conduct (including exposure to potential liability to an aggrieved customer if the alleged activity is in fact not infringing activity) and as such it cannot agree on a code of conduct without a statutory indemnity."
From the other side of the argument, the copyright owners would like to impose a system whereby ISPs are obliged to carry out investigations on their behalf and notify the offending customers of illegal activity. Statutory indemnity would mean that the Copyright Act would protect the ISPs from any liability to its subscribers should the investigations and reports made on behalf of the copyright owners fail to prove infringement. The same issues are currently being argued across the ditch in New Zealand over recent amendments to their copyright act.
Senator Richard Alston, then Minister for Communications, Information Technology and the Arts, was satisfied that this legislation would do the trick. He said: "The government has been mindful of the particular perspective of the carriers and ISPs who are facilitating the delivery of content over the internet. Accordingly, the bill limits and clarifies their liability and makes it plain that we do not adopt the strict liability approach that some other regimes have applied in this and other contexts."
Senator Kate Lundy’s words at the time are worth recalling. She said she did not think that it was possible to come up with all the answers with this one piece of legislation, but that it was feasible "to build a bridge between the old and the new — putting those distributors and producers on notice that they are going to have to find new methods of conducting their business and earning their money as corporations and, at the same time, leave open the opportunity for development and for new relationships to be created between artists and consumers".
Things then heated up when Sharman Networks called on the safe-harbour provision to shelter its Kazaa file sharing software from the music industry — without success. Justice Wilcox, (although finding that the Kazaa software was eligible for protection), blew Sharman out of the safe-harbour with a finding that the company was in fact "more than a messenger" in relation to the Kazaa website.
Included in his reasons was that the Kazaa website exhorted users to increase their file-sharing and criticised record companies for opposing peer-to-peer file-sharing of music.
What is therefore going to be of crucial importance to the decision in the iiNET case will be whether the court finds that iiNET has done something more than being a mere messenger.
The "something more" that the Federal Court is being asked by the plaintiffs to consider include allegations that iiNET: took no action in response to notifications sent on behalf of the applicants; offered encouragement to iiNET users to engage in, or continue to engage in, infringement of the plaintiffs’ copyright; failed to enforce terms and conditions prohibiting use of iiNET services to infringe copyright; continued to offer iiNET services to customers who were infringing the plaintiffs’ copyright; and, through its own inactivity and indifference, permitted a situation to develop and continue where iiNET users engaged in or continued to infringe the plaintiffs’ copyright.
Internet service providers have argued that they are subject to obligations to their subscribers under the Telecommunications Act and Privacy Act. Giving away information about subscribers can be an offence and in breach of their own terms of service with subscribers. How, if at all, will the court take that into consideration? Is it possible for the parties to settle the matter and come up with a code of conduct that works?
The outcome of this case will define the relationship under Australian law between ISPs and the film, television and music industries for quite some time and that relationship will determine how Australians will entertain themselves well into the future. Watch this space.