iiNet Decision Good News For ISPs

The High Court in Roadshow v iiNet has unanimously rejected the film and television industry’s bid to make internet service providers liable for authorising infringement of copyright by their subscribers.

This ends the run of victories by Hollywood against the illegal downloading of films and television programs, from the shutting down of Napster, Kazaa and Grokster to the successful prosecutions against Pirate Bay and Megaupload.

While the overall decision of the High Court was unanimous, the reasons were given in two judgements: Chief Justice French and Justices Crennan and Kiefel in one decision and Justices Gummow and Hayne in the other.

These two decisions were more of a division of labour than a difference of opinion.

Split reasoning usually furnishes two decisions that can be distinguished and used to different ends by agile legal minds, but in this case the decisions seem structured to form an impenetrable judicial wall over which no legal leaps of logic may be made.

Roadshow and its co-appellants argued that because iiNet did not act after being provided information on infringers by the Australian Federation Against Copyright Theft (AFACT provided IP addresses and the packets of copyrighted material being downloaded by BitTorrent software), iiNet authorised the infringements of certain subscribers.

Roadshow submitted that to have the power to cancel infringing subscribers’ access to the Internet, yet stand by and do nothing — all the while armed with AFACT’s information — meant that iiNet at the very least "countenanced" this conduct and therefore authorised it.

In the first judgment French, Crennan and Kiefel refer to Justice Jacobs’ decision in Moorhouse where Jacobs relied on the dictionary definition of "authorisation" to mean "sanction, approve, countenance".

They criticise this dictionary use of the word "countenance", saying it "has been observed that some of the meanings of ‘countenance’ are not co-extensive with ‘authorise’", concluding that this "highlights the danger in placing reliance on one of the synonyms for ‘authorise’ to be found in a dictionary."

They point out that the Copyright Act has been amended since Moorhouse to explicitly refer to three specific criteria in s.101(1A):

1. the power to prevent the infringement
2. the nature of relationship between the primary infringer and the person allegedly authorising them, and
3. what reasonable steps have or have not been taken to prevent the infringement including any code of practice.

French, Crennan and Kieffel hold that these statutory clauses are all that need to be considered, not the word "countenance" as used in Moorhouse.

So Roadshow don’t even get to first base under s.101(1A) because iiNet never had the power to prevent its subscribers from committing the infringements:

"Even if it were possible to be satisfied that iiNet’s activity after receipt of the AFACT notices and its subsequent media releases, ‘supported and encouraged’ its customers to continue to make certain films available online, s101(1A) …makes it plain that that would not be enough to make iiNet a secondary infringer. An alleged authoriser must have a power to prevent the primary infringements."

In finding that iiNet had no such power of prevention they refer to iiNet having no involvement with the BitTorrent system and no power to control it; that iiNet did not host the infringing content, nor did iiNet assist its customers to find that content; how it cannot prevent users downloading BitTorrent software and using it, nor identify what content is being downloaded; iiNet cannot remove the infringing content from a subscriber’s computer, or filter or block a user from downloading it.

The cancellation of the entire connection was therefore not a power specific to preventing the infringement itself.

Their decision is an emphatic rejection of the dissenting decision in the Full Federal Court appeal decision of Justice Jagot. In her decision she cited media releases issued by iiNet in response to the the legal action taken against them, in which they told their subscribers they would not be disconnected because of any notices from AFACT.

Justice Jagot found this to be a Kazaa-like encouragement to infringe. Kazaa’s conduct in supporting and actively encouraging its users to join the download "revolution" was found to be "countenancing" and thereby an act of authorisation beyond merely making the Kazaa software available to users.

French, Crennan and Kiefel found that the lack of any power of prevention by iiNet "makes it plain that that would not be enough to make iiNet a secondary infringer".

It is also a rejection of the suggestion by Justice Emmett in his Full Federal Court decision that a more complete notice of infringement from AFACT to iiNet would have sufficed. AFACT and the Film and Television Industry had put much store in Emmett’s decision as suggesting that it was possible to successfully sue an ISP for authorisation of infringement by its subscribers if the notice were sufficiently detailed.

French CJ, Crennan and Kieffel JJ held:

"The final conclusion shows that the concept and the principles of the statutory tort of authorisation of copyright infringement are not readily suited to enforcing the rights of copyright holders in respect to widespread infringements occasioned by peer-to-peer file sharing, as occurs with the BitTorrent system."

The decision of Justices Gummow and Hayne are equally emphatic. Looking at the notion of authorisation as a "duty of care" they held that "the width of the terms in which the proposed duty is cast would present iiNet and other ISPs with an uncertain legal standard for the conduct of their operations".

They were equally critical of reliance upon "countenancing" so far as to hold that:

"The appellants rely upon the notion of ‘countenancing’ to encompass acts or omissions which are less precise or explicit than those involved in ‘sanctioning’ or ‘approving’," and "The progression urged by the appellants from the evidence, to ‘indifference’, to ‘countenancing’ and so to ‘authorisation’, is too long a march."

Gummow and Hayne have I think, also closed the door on Emmett’s argument that a clearer infringement notice would be sufficient grounds for the termination of a subscribers account as it:

"would deny to the iiNet customers non-infringing uses of the iiNet facilities. And, in any event, in the absence of an effective protocol binding ISPs (and there is no such protocol) the iiNet subscribers whose agreements were cancelled by iiNet would be free to take their business to another ISP."

Court actions now seem exhausted. If ISPs are to have a role in the enforcement of copyright on the internet regulation will have to be by way of industry agreement between the ISPs and copyright content owners and their licensees, or failing that, by intervention of the Government to broker an agreement or legislate one.