In a landmark decision, which has been closely watched around the world, Australia's third largest ISP, iiNet, has succeeded against the major motion picture studios in the US and Australia. The studios argued that by not acting on infringement notifications and allowing the ISP's users to continue to use BitTorrent to download the studios' copyright works, the ISP was authorising infringement by the users and therefore liable under the Australian Copyright Act.

The Court found that the users did infringe the studios' copyright using BitTorrent, and iiNet did not act to stop them. Yet, under the law of authorisation, the Court felt that there was a clear distinction between infringers, such as in the Court's Kazaa decision, who provided the "means" of infringement, as opposed to establishing some precondition for the infringement to occur. In this instance, the ISP had not provided the "means" of infringement, which was the BitTorrent system, and all it provided was access to the Internet which can be used for a wide variety of purposes. The ISP had no control over the BitTorrent system and was not responsible for the operation of it. It was also felt that adopting a notification, suspension and termination of customer accounts scheme would not give the ISP power to prevent copyright infringement itself or that it would be a reasonable step to pursue. The rationale for this conclusion derives from the technical complexities associated with determining infringement and the contractual relationship between the ISP and its users.

The ISP was found not to sanction, approve or countenance copyright infringement because it had done no more than provide an Internet service to its users.

In view of the Court's findings on authorisation it was not necessary for it to consider whether iiNet could rely on the "safe harbour" provisions to avoid infringement. Yet it found iiNet did have a repeat infringement policy, which would have allowed it to rely on the provisions to limit the orders the Court could make.

The Court said the law precludes authorisation of infringement, but does not impose a positive obligation on any person to protect the copyright of another.

The decision is a significant blow for the studios who are trying to bring about a change in the behaviour of Internet users. It is impractical for the studios to take action against all of the infringing users, and BitTorrent was developed for distributing large software files, not media files. The studios may appeal the decision to continue a campaign to make ISPs responsible for the actions of their customers.

The decision is available at: http://www.austlii.edu.au/au/cases/cth/FCA/2010/24.html