Friday, April 20, 2012

iiNet in the High Court: A long march from "indifference" to "authorisation"

And so, finally, we reach the end of this saga, which commenced in the Federal Court in 2009 (with the gathering of data by AFACT commencing in 2008), Roadshow Films Pty Ltd v iiNet [2012] HCA 16.
In two joint judgments, (French CJ, Crennan and Kiefel JJ and Gummow and Hayne JJ) the High Court unanimously held that iiNet had not authorised the infringement of copyright by its customers who were distributing and accessing films using BitTorrent.
Both judgments focus specifically and narrowly on the concept of authorisation. The judgments avoid becoming entangled or distracted by questions such as what all those overlapping sections (s101(1), s 101(1A) and s112E) actually mean!  The Gummow and Hayne JJ judgment does observe that s112E "seems to have been enacted from an abundance of caution" [para 113]. They also leave the safe harbour provisions alone given their defeat in the Full Federal Court.
The judgments both progress on the basis that the test is to apply the questions from s101(1A):

"In determining, for the purposes of subsection (1), whether or not a person has authorised the doing in Australia of any act comprised in a copyright subsisting by virtue of this Part without the licence of the owner of the copyright, the matters that must be taken into account include the following:
(a) the extent (if any) of the person's power to prevent the doing of the act concerned;
(b) the nature of any relationship existing between the person and the person who did the act concerned;
(c) whether the person took any other reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice."

These are treated largely as questions of fact, with the answer to be drawn from the findings on these facts. See para 63:
"The appeal can be determined by asking interrelated questions informed by s 101(1A). Did iiNet have a power to prevent the primary infringements and, if so, what was the extent of that power (s 101(1A)(a))? Did reasonable steps to prevent those infringements (after receipt of the AFACT notices) include warnings and subsequent suspension or termination of the accounts of all customers identified as infringing the appellants' copyrights (s 101(1A)(c)), if such customers failed to cease communicating infringing material using the BitTorrent system? How does the relationship between iiNet and its customers (s 101(1A)(b)) bear on each of those questions? It will be observed that these are largely questions of fact and the ultimate question of whether iiNet authorised the infringements will be an inference to be drawn from those facts." [see also para 135 for Gummow and Hayne JJ judgement].

The French judgment then considers the contractual and factual relationship between iiNet and its subscribers. Noting the lack of an industry code which would given iiNet greater guidance regarding how to act in the face of infringement notices, their Honours conclude that iiNet in fact had little power to prevent infringement. Termination on the basis of an AFACT notice was not regarded as sufficient to require termination of a user's service and terminated customers could easily obtain their internet services from elsewhere. iiNet's refusal to act was not indifference but rather a recognition of their own limited power and the limitations of the AFACT notices.

Drawing upon tort law, Gummow and Hayne JJ consider the scope of "authorisation" in this context. They conclude that the arguments for authorisation liability seek to impose a positive duty of care on iiNet which could only be discharged by taking active steps regarding infringement by customers [para 115]. They conclude that: "the power of iiNet as an ISP with respect to the use of facilities provided to subscribers was limited by the nature of their commercial relationship; iiNet could not control the choice of its subscribers and other users to utilise the BitTorrent software, nor could iiNet modify the BitTorrent software or take down the appellants' films which were made available online." [para 137]

The provision by iiNet of internet connection, combined with its technical and contractual controls, and its lack of response to the AFACT notices did not constitute a case of authorisation of primary infringement: "The progression urged by the appellants from the evidence, to "indifference", to "countenancing", and so to "authorisation", is too long a march."[para 143] It was not unreasonable for iiNet to refuse to take the steps to disconnect users on the basis of the AFACT notices.

This decision leaves the way open for a statutory response to the secondary liability question: see para 79.

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