Roadshow Films Pty Limited v iiNet Limited [2011] FCAFC 23 (24 February 2011)

In a landmark 2-1 decision (Jagot J dissenting) with three separate judgments, the Full Federal Court yesterday dismissed an appeal against last year’s decision that found internet service provider iiNet was not liable for the infringement of copyright by its users.1

The Australian Federation Against Copyright Theft, a coalition of 34 film studios headed by Village Roadshow, had sought damages from iiNet for authorising the illegal sharing of films through the BitTorrent protocol on iiNet's network. In its defence, iiNet claimed that it did not have specific knowledge of infringements taking place and that the studios had not adequately identified the alleged infringers.

The Full Federal Court divided over whether iiNet authorised infringement

A decisive issue in the case was whether iiNet had authorised infringements occurring on its network by ignoring letters sent to it by movie studios alleging infringing activities by iiNet users. Under the Copyright Act 1968 (Cth), a person infringes copyright if they ‘authorise’ another person to (among other things) make books, films, music and other material in which copyright subsists available online.2 AFACT argued that by failing to act on its letters, iiNet had effectively authorised the infringing file-sharing taking place on its networks. At first instance Justice Cowdroy held that although iiNet’s supply of internet services were a precondition to the infringing file-sharing, it did not provide the means by which the infringements occurred.

While not agreeing with all aspects of Justice Cowdroy’s findings, on appeal Justices Emmett and Nicholas agreed that iiNet had not authorised copyright infringement by its users. Justice Jagot, on the other hand, found that iiNet had in the very least ‘countenanced’ the infringements and by its conduct had shown ‘tacit approval’ of them.3

There was no decision yesterday as to who would bear the costs of the appeal.

No clear victory for internet service providers

This long-awaited decision is a serious blow to the film industry, which is looking to shift the burden of enforcing copyright infringements onto internet service providers. However it is not an unequivocal victory for ISPs either. Both Justices Jagot and Emmett admonished iiNet for its ‘dismissive and, indeed, contumelious attitude to the complaints of infringement’,4 while Justice Emmett further noted that his findings on authorisation in favour of iiNet were not ‘the end of the matter’.5 Justices Nicholas and Emmett, who both found there was no authorisation, suggested that their findings may have been different had AFACT provided unequivocal proof to iiNet of the infringing conduct. Justice Emmett even provided a checklist of the steps a copyright owner would need to take to support a finding of authorisation.6

Next steps: a High Court appeal, or Commonwealth intervention?

AFACT has not yet indicated whether it will seek leave to appeal the decision to the High Court, however both sides have called upon the Federal Government to intervene in the matter and clarify the responsibilities of ISPs in policing the infringing activities of their users.8 Such an intervention may see further amendments to the Copyright Act such as the 'three strikes' policy gaining momentum overseas or the development of an industry code of practice.9

Whether the third act of this legal trilogy is played out in the High Court or Parliament, it will no doubt be a blockbuster.