[ edit: full decision is now available: Roadshow Films Pty Ltd v iiNet Limited (No. 3)  FCA 24. More commentary to come. ]
More analysis on iiNet, after I have seen the written summary of the judgment. Justice Cowdroy found that iiNet did not ‘authorise’ the infringements of its users. In coming to this conclusion, Cowdroy J drew a distinction between iiNet and Moorhouse, Jain, Metro, Cooper, and Kazaa based upon what it meant to provide the ‘means’ of infringement:
“There does not appear to be any way to infringe the applicants’ copyright from the mere use of the internet. Rather, the ‘means’ by which the applicants’ copyright isinfringed is an iiNet user’s use of the constituent parts of the BitTorrent system. iiNet has no control over the BitTorrent systme and is not responsible for the operation of the BitTorrent system.”
This is very interesting; it suggests that not every link in the chain that enables infringement will constitute providing the ‘means’ of infringement. It seems to make sense, but it does change the way we have come to think about infringement. Having said that, Cowdroy J did not find that ss 39B and 112E, which insulate a provider from liability where it merely “provides the facilities” for infringement, would have prevented iiNet from being liable. This suggests that the scope of ss 39B and 112E are not particularly greater than the Moorhouse test for infringement, which is something the Philips Fox report suggested, but has never been made clear.
Interestingly, as a finding of fact, Cowdroy J found that iiNet had actual knowledge of infringements and did not act to stop them.
So, the decision was based primarily upon the Moorhouse test for infringement – whether iiNet ‘sanctioned, approved, or countenanced’ the infringements of its users. Justice Cowdroy found, in relatively strong terms, that iiNet could not be seen as authorising any infringements, as “iiNet has done no more than to provide an internet service to its users.” His Honour contrasts this clearly with the most recent secondary liability cases, where there was clearly bad faith in the actions of the providers: “This can be clearly contrasted with the respondents in the Cooper and Kazaa proceedings, in which the respondents intended copyright infringements to occur, and in circumstances where the website and software respectively were deliberately structured to achieve this result.”
In coming to this conclusion, Cowdroy J worked through the requirements for authorisation liability in s 101, which include the extent of iiNet’s power to prevent infringements and whether iiNet took any reasonable steps to prevent or avoid infringements. Very interestingly, His Honour found that a scheme for notification, suspension and termination of customer accounts is not “a relevant power to prevent copyright infringement” pursuant to s 101(1A)(a); nor is it a ‘reasonable step’ pursuant to s 101(1A)(c). It seems that here the Judge must have been impressed with iiNet’s arguments that disconnection of internet access is not a correct or reasonable response to allegations of copyright infringement. Given the way in which Cowdroy J distinguished the earlier authorisation cases, it seems that the factors in 101(1A) are more likely to be relevant where the provider has some sort of more fine-grained control over the network or service that provides the actual ‘means’ to infringement; not just a big switch on the entirety of a customer’s network connection.
This is an excellent finding of fact – it shows that Cowdroy J rejects AFACT’s argument that it would be ‘reasonable’ to disconnect users based upon unproved allegations of infringement. Clearly a win for the interests of users.
This finding of fact in itself is sufficient to allow iiNet to escape liability. Justice Cowdroy, however, also made some findings of facts on the safe harbours, in case of any appeal. Interestingly, His Honour held that the safe harbours would have covered iiNet’s actions if it were liable for authorisation; the critical finding here is whether iiNet reasonably implemented a policy for termination of the accounts of repeat infringers. In explicitly turning to US authority, Justice Cowdroy found that though it was not a policy of the form that AFACT would have liked, iiNet did reasonably implement a repeat infringer policy. There’s not much detail on this point in the summary, but this will be an important consideration in the future. We were a bit concerned for a while that the safe harbours, which many of us had assumed were designed to cover ISPs in iiNet’s position, did not provide adequate certainty. It seems that that may now have been rectified, at least for passive ISPs, and the interpretative battle lines will have to be redrawn around content providers now – particularly sites like YouTube who are more directly involved in any infringements.
All in all, this seems like a very strong win for iiNet. The two main findings of fact – that iiNet did not ‘authorise’ and that iiNet’s policy was ‘reasonable’ – will make it extremely difficult for AFACT to appeal. Having said that, an appeal does seem inevitable. I will provide some more information when the full text of the judgment is available.