iiNet case: The three legal questions that matter

The internet is awash with comment on the copyright infringement action by Village Roadshow and others against iiNet.

When all is said and done, the court has to decide three legal questions.

In this article, CSP Central helps you to focus on the real issues.

First question:  Did iiNet customers infringe copyright ?

This is foundational to the applicants’ claim.  (In the Federal Court of Australia, where this claim is made, the party who starts the case is the ‘applicant’, not ‘plaintiff’.  The party on the receiving end is the ‘respondent’, not ‘defendant’.)

The case against iiNet alleges that it authorised infringement by its customers.  If the applicants can’t prove infringement by the customers, there’s no case against iiNet.

Second question:  Is there something in the circumstances that changed iiNet into something more than a mere ‘data conduit’ ?

The Copyright Act protects an ISP from copyright claims if it ‘merely’ provides the facilities used to commit a breach.

That’s why a person who simply supplies a photocopier isn’t automatically liable for unlawful copying that occurs using it.

But if the provider goes further, or has some other involvement, or the circumstances are a bit different, that protection can easily be lost.

For instance, in one very important Australian case (‘Moorhouse Case‘), a university provided a photocopier in close proximity to books in a library. The court ruled that:

  • The university should have known that this would probably result in some copyright breaches.
  • The university did not adopt measures reasonably sufficient for the purpose of preventing infringements taking place.
  • So the university was responsible for the breaches that did take place.

That kind of responsibility is called ‘authorising’ in law.

How the applicants will attack the second question

In the iiNet case, the applicants may rely on several arguments that iiNet was more than a ‘mere service provider’.

The key one that has emerged so far is that iiNet was provided with extremely detailed evidence that copyright infringement had taken place.  Apparently, it went far beyond the standard notices that we’ve all heard about many times.  It was practically the evidence for a full court case against certain customers.

The applicants will argue that an ISP with this level of detailed knowledge cannot claim the ‘mere service provider’ exception.  By allowing customers to continue to connect in the full knowledge of what had happened and what was likely to happen, iiNet lost the protection of the ‘mere ISP’ provision.

The applicants will say that under the principles in the Moorhouse Case (and others) iiNet must be held to be an authoriser of breaches that did occur.

If the court agrees with that, then iiNet is legally responsible for the breaches as if it had copied the movies itself.

Third question:  Is iiNet inside the ‘safe harbour’ ?

Australia’s copyright law contains a special protection for ISPs.  It’s called the ‘safe harbour’ law.

It can only apply where the ISP has already been found ‘guilty’ of authorising copyright breaches.  If it does apply, it prevents the court from ordering the ISP to pay damages – which is the biggest fear in a copyright case.

The ISP has to show that it is entitled to the protection of this law.  It must prove that it satisfied the conditions that apply to it.

The safe harbour conditions

To claim the protection of the safe harbour, an ISP must show that:

  • It adopted and reasonably implemented a policy that provides for termination, in appropriate circumstances, of the accounts of repeat infringers.
  • It complied with the relevant provisions of any industry code relating to accommodating and not interfering with standard technical measures used to protect and identify copyright material. (This one’s easy … there is no such code in Australia yet.)
  • Any transmission of copyright material was initiated by or at the direction of a person other than the ISP.
  • The ISP did not make substantive modifications to copyright material transmitted. This does not apply to modifications made as part of a technical process.

The problem for iiNet here is the first test:  a policy for terminating repeat infringers.

iiNet seems to consider that ‘infringer’ in this context can only refer to an ‘infringer as proven in court’, not a person alleged to be an infringer – no matter how strong the allegation.

If iiNet is correct about that, and if it does have a policy for terminating repeat infringers (as proven in court) then it can claim the protection of the safe harbour.  It could not be ordered to pay damages.

If iiNet loses the infringement argument and the safe harbour argument, damages will be massive.  We’ll explain why in a later post.

ISPs might want more detail

Here’s information about the ISP Copyright Safe Harbour Kit.

About Peter Moon

Peter Moon is a commercial lawyer with 20 years experience in the tech and telco industries.
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14 Responses to iiNet case: The three legal questions that matter

  1. john says:

    And why the plaintiff doesn’t sue Rapidshare and Megaupload??? See money can change the Laws!

  2. Asmo says:

    If these mobs had so much information, why didn’t they prosecute?

    Big business wants to portray the ISP as the cop/judge/jury and executioner in these cases, but if the ISP doesn’t dance to their tune, they take it to court. Cut out the bullsh#t and just take the offenders to court.

    As for information provided, if I were iiNet I’d refuse to do it as well. Without proper police investigation, there is little guarantee that the evidence presented is accurate, that a little “creative fudging” hasn’t occurred… And unless the police request it, I don’t see why iiNet should have to waste any time on this.

  3. Peter Moon says:

    The problem is that Australian copyright law creates two kinds of ‘offenders’ … those who copy and those who ‘authorise’ it.

    iiNet need to be concerned if they have satisfied the legal tests for ‘authorising’.

  4. bzn says:

    There is another issue that deserves mention here, if not worth doing so in courts… and that is the deeper humanistic/philosophical question of whether “intellectual property” actually exists.

    The concept of property rights did not come about by the creation of punishable laws around it, it is based on our natural sense of right and wrong that exists before laws were ever put in place, because when I take your property you lose the ability to use it. The laws are a formalisation of that natural sense.

    “Ideas as property” is a perversion of that natural sense of things, it only exists because the laws exists. That’s why no-matter how many “copying is THEFT” ads we get exposed to, most of us don’t take much notice, whereas the idea that “shoplifting is theft” is one the public internalises much more naturally.

    Open source proves that the “no patent, no incentive for creativity” argument is bunk. IP serves the interests of centralised power in government and the corporations, not the interests of humanity.

  5. Jimmy Hung says:

    ISP’s are not responsible for the actions of their users, they merely provide a service where illegal things can happen, it happens in every day life. Hell even the university I go to right now has a photocopy machine in its library.
    It’s not like it takes very little effort to download these sort of things either, usually you need a specific program, then you have to go to a specific website to download a file so you can download what you want. So this is the choice of the person who is using the internet not that of the ISP itself.

  6. scb says:

    I can agree with you bzn, but law are not decided by you and me. They are decided by organisations that have influence with politicians and media, so that is irrelevant.

  7. Peter Moon says:

    I hear what Jimmy Hung is saying, but if you read the Moorhouse case, you’ll find out why the uni copiers have certain signs on them.

  8. disillusioned says:

    It’s a real shame that this most wonderful of technologies (The Internet) and it’s faster access speeds can’t be used by the local media companies as a successful means of generating revenue. They’re greedy, ignorant, slow and appear to be just not interested. If what is currently being shown on our screens to be the best local content then no wonder people go to the web to secure more “entertaining” alternatives. Get with the program guys.

  9. Bigfish says:

    What we need here is for iinet to immediately place itself in the hands of receivers and “cut off” ALL of its customsers. The the next ISP do the same.

    It won’t take long for the howls of protest to encourage the Federal Government to review the whole thing.

    After all, the only purpose of the US-Australia FTA was to protect American Big Business…

  10. Fred Flintstone says:

    With reference to what Jimmy Hung said, the same analogy can be applied to every single person that holds a drivers license.

    We all have to prove to the authorities that we are capable of driving a vehicle and that we also know the road rules.

    So if I am driving on the road obeying the rules, yet someone goes speeding past me, runs a red light, etc, mean that you or I get punished for their crime. NO.

    Why should an ISP who merely provides the infrastructure (roads) be penalised ?????

    Surely simple logic must prevail !

  11. Fred says:

    The problem is that Copyright is automatically taking away privaledges that us as consumers should have. Its all worded for the other persons benefit. Copyright works like this “I purchase a CD with legal tender yet I dont own it so im paying to listen to music which is apparently not my property”. This whole idea is wrong. How can I buy something and not own it?

    If I buy a mobile phone outright I own it and can do whatever I wish to it. These copyright laws should be changed as its all one way – not the consumers way. If we dont own the CD and pay for it, then it should be free since ownership is not transferred. This is a bit like Holden selling me a car but saying they own it as well.

    The validity of the Copyright Act should be challenged as any Act that is passed based on political party lines is not legal, as our Commonwealth Constitution indicates political parties are not legal, therefore the Act is not legal, therefore iiNet cannot be held accountable.

    Not all Acts are legal.

  12. davedrastic says:

    Why doesn’t someone put a poll on these pages and ask iinet users if they are copyright infringers. And then perhaps probe further. Why do you illegally download, do you think there should be punishment for your behaviour and so on.

    If everyone is going to debate the legalities of this situation, wouldn’t it be fair to discuss the realities of the situation too. I don’t see any real discussion getting to the real issue at hand which is that a high proportion of Aussies think that copyright infringement is acceptable, or at least worth the risk of punishment.

  13. Bobby says:

    So, shouldn’t this guy be punished for illegally downloading and providing a mountain of evidence for doing so???

    So, he did the wrong thing — and by proving he did the wrong thing and iinet not reacting, iinet also did the wrong thing??

    Just because he did it to prove his point, doesn’t mean he shouldn’t be punished for downloading illegal content?!????

  14. Andrew says:

    Surely if they expect iiNet to look at the “evidence” it could be seen as breaching the users privacy, so thus by passing it onto police would surely be the only legal thing they could do with the documents.

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