AFACT to appeal against iiNet in copyright infringement case

Studios appeal against an 'unworkable online environment for content creators'

The Australian Federation Against Copyright Theft (AFACT) will appeal the loss of its copyright infringement case against ISP, iiNet, in the Federal Court of Australia earlier this month.

In a statement, the 34 film studios that are represented by AFACT said there were "good grounds of appeal from a judgment that has left an unworkable online environment for content creators and content providers and represents a serious threat to Australia's digital economy".

"The court found large scale copyright infringements, that iiNet knew they were occurring, that iiNet had the contractual and technical capacity to stop them and iiNet did nothing about them," AFACT executive director, Neil Gane, said in the statement. "In line with previous case law, this would have amounted to authorisation of copyright infringement."

Justice Cowdroy dismissed the case in February this year, following a five-month investigation that uncovered instances of copyright infringements by users of iiNet's services. Justice Cowdroy found the ISP did not authorise the acts of its customers, despite acknowledging copyright infringement.

The AFACT Notice of Appeal contains 15 grounds for appeal and is expected to be heard later this year. The grounds have not yet been made publically available but Gane said AFACT viewed Justice Cowdroy's decision as rendering the "safe harbour regime ineffective".

"This decision allows iiNet to pay lip service to provisions that were designed to encourage ISPs to prevent copyright infringements in return for the safety the law provided," he said in the statement.

"If this decision stands, the ISPs have all the protection without any of the responsibility.

"By allowing internet companies like iiNet to turn a blind eye to copyright theft, the decision harms not just the studios that produce and distribute movies, but also Australia's creative community and all those whose livelihoods depend on a vibrant entertainment industry."

The news comes on the same day AFACT took iiNet back to court to use a directions hearing to try to recoup court costs in sections of the case which were upheld. AFACT said it will also claim for expenditure during what the group says were delays by iiNet in admitting the presence of copyright infringements on its network. Justice Cowdroy's ruling came after film companies including Village Roadshow, Universal Pictures, Warner Bros Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, Disney Enterprises and the Seven Network, the Australian licensee of some of the infringed works, filed a legal action against iiNet in November 2008.

They commenced action against iiNet following a five-month investigation that uncovered instances of copyright infringements by users of iiNet's services.

Although AFACT waited until the last possible day to lodge its appeal, legal experts had predicted the development. After the initial Federal Court decision, Melbourne University associate professor, David Brennan, said an appeal was likely and interested parties are "probably looking at 2011 or 2012 before a final judicial determination". "I think it is wrong to see this as the be all and end all," Brennan told Computerworld after the trial decision.

"This is simply the opening battle or the first chapter in the legal story. It will, I think, have to play out all the way to the High Court and I wouldn't be surprised if the High Court granted leave either way the decision goes in the full Federal Court. I think the dissatisfied party would seek leave to the High Court after the full Federal Court decision and there is some degree of likelihood the High Court would grant that."

Both parties have suffered considerable financial expense to date in pursing the case and AFACT was ordered to pay iiNet's costs to the tune of $4 million.

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