Hearings have begun for what is likely to be a protracted legal battle between the “Big Movie Studios” and not-so-small-fish in the local ISP pond, iiNet. A massive 34 plaintiff parties are accusing Australia’s third largest internet service provider of authorising copyright infringement.

Under Australian copyright law, a person who is not the owner of certain copyright material may still infringe if that person authorises another to commit an act which itself is infringing. The gist of the “Big Movie Studios” claim is that, by allowing infringements to occur on its network and not doing enough to prevent such infringements from occurring, iiNet has essentially “sanctioned, countenanced and approved” the illegal activity quite obviously occurring on its network.

Nothing new is likely to come out of this case in relation to the law in Australia on the “authorising infringement” angle. It will be interesting, however, to keep tabs on what this case says about the interplay between those infringement provisions and the “Safe Harbour” provisions afforded to “carriage service providers” (legal jargon for essentially internet service providers, or other telecommunications providers) in the Copyright Act.

Division 2AA of the Copyright Act limits the types of remedies available for those claiming copyright infringement against carriage service providers such as iiNet. Remedies are generally limited according to certain types of conduct engaged in by the carriage service provider. Currently, four types of conduct are covered:

• “merely” providing facilities for transmission or storing copyright material for an intermediate or transient period during transmission;

• automatic caching

• storing copyright material at the direction of a user; and

• referring users to other online locations.

To qualify for these “Safe Harbour” provisions, a carriage service provider must qualify for the limitations by maintaining certain standards, depending on the category of conduct in which they engage. Failure to comply will mean that a claimant has open to it, once infringement is proved, the whole gamut of remedies for copyright infringement, including damages or an account of profits, additional damages and possibly exemplary (or more colloquially, “flagrant”) damages.

The importance, then, of this case, will come down to what the Federal Court has to say about what iiNet has done to curb any infringement occurring, and whether this is enough to, firstly, ground a finding of “authorising infringement” and secondly, qualify for the “Safe Harbour” provisions. Counsel for the “Big Movie Studios” have been reported as saying that 94,942 instances of illegal downloads had been found to have occurred within the first year of the ISP being investigated (see here). If the news reports and the opinions of the “Big Movie Studios” are accurate, iiNet may find itself without a (peg) leg to stand on.

- Daniel Lo

Read about Actuate IP’s copyright dispute and IP dispute services.