Landmark Australian internet piracy case will influence NZ

The Australian High Court today upheld two lower court decisions that iiNet - the largest independent internet service provider - was not liable for alleged illegal downloading of films and TV shows by its customers through peer-to-peer services such as BitTorrent.

Thirty-four Hollywood film and TV studios had taken collective action against the ISP in what was widely seen a test case of global significance.

A High Court summary of the decision said: “The court observed that iiNet had no direct technical power to prevent its customers from using the BitTorrent system to infringe copyright in the appellants’ films.

"Rather, the extent of iiNet’s power to prevent its customers from infringing the appellants’ copyright was limited to an indirect power to terminate its contractual relationship with its customers."

An industry group representing the Hollywood studios, the Australian Federation Against Copyright Theft (AFACT), had argued iiNet was aware of alleged copyright infringement by its customers - in part because AFACT sent iiNet infringement notices each week for a year from July 2008.

iiNet argued it was not reasonable for it to be expected to monitor its customers and terminate their accounts if copyright infringement was found.

The ISP ignored the notices, taking no action against its customers.

Today, the High Court said iiNet's inactivity after receiving the AFACT notices could not be inferred as authorising its customers alleged piracy.

Influential on NZ
Lowndes Jordan partner Rick Shera told NBR the unanimous decision "will be very influential in New Zealand and, indeed, worldwide".

Mr Shera says: "It is the first ultimate appellate Court decision anywhere to rule on whether an internet service provider is liable when its users infringe copyright – in copyright law terms, whether the ISP has 'authorised' the infringements.

"This has been a burning issue in New Zealand with the section 92A debacle and then the replacement infringing file sharing legislation, but it applies more widely than that. The few decisions we have on 'authorisation' don’t come anywhere near this.

"So, we’ve had to look to overseas court decisions to try to predict what the law might be here in New Zealand."

The problem with that is that Australia has been out of step with other influential countries we look to, like the UK and Canada, Mr Shera said.

"That’s been a worry for ISPs and other online service providers who increasingly seem to be being targeted by copyright owners, because it’s created uncertainty."

The Megaupload prosecution is the latest high-profile example, he said.

"What the iiNet decision does is bring Australia back into line with a narrower view of an ISP’s liability.

"Whether you agree with the decision or not, at least we now have a far greater degree of certainty, which is good for business."