In a judgement delivered this morning, the Federal Court of Australia has held that an internet service provider is not liable for infringements of copyright committed by its customers. The case is one of the first reported judgements anywhere in the world regarding the liability of an internet service provider for authorising the infringing acts of its customers.

Background

A consortium of 34 companies (including major film and television studios) commenced proceedings in 2008 against iiNet Limited (iiNet), an Australian internet service provider.

The film and television studios claimed that iiNet was liable for copyright infringements committed by iiNet's customers, in particular, the downloading of unauthorised copies of film and television programs.

Under the Copyright Act 1968 (Cth) (the Act) a person who authorises an infringement of copyright committed by another person can be liable for that infringement. It is well established that a party will authorise an infringement under the Act if it 'sanctions, approves or countenances' the infringement.

Decision

The Court found that:

  • infringements of copyright had been committed by iiNet's customers who downloaded unauthorised copies of film and television programs using the Bit Torrent system (a system for sharing and downloading files over the internet); and
  • iiNet had knowledge that infringements were occurring and did not act to stop the infringements (such as by suspending or terminating the internet accounts of the relevant customers).

However the Court held that:

  • iiNet only provided access to the internet and did not provide the 'means' by which the infringements were conducted (specifically the Bit Torrent system);
  • iiNet's failure to suspend or terminate the accounts of the customers suspected of committing the infringing acts did not mean that it had authorised the infringement; and
  • by merely providing an internet service to its users, iiNet was not sanctioning, approving or countenancing to the acts of its customers.

Accordingly it was held that iiNet had not authorised the infringements committed by its customers.

In addition, the Court held that iiNet could have relied on the 'safe harbour' provisions of the Act, which limit the liability of carriage service providers, such as internet service providers, for copyright infringements committed by their customers, provided certain requirements under the Act are met (such as the adoption and implementation of a policy regarding repeat infringers).

Risks for service providers

Although iiNet was successful, this case illustrates the risks that internet service providers, website operators and other similar parties can potentially be liable for authorising infringements of copyright committed by their customers.

The case is also a reminder of the potential benefits to carriage service providers of the 'safe harbour' provisions of the Act.

Given the significance of the case, it is quite likely that the film and television studios may appeal the decision.