ISP wins first round against Hollywood studios

Appeal likely in precedent-setting download case

SYDNEY -- Hollywood studios have lost the first round of a precedent-setting legal case they brought against Australian Internet Service Provider iiNet, after Federal Court Justice Dennis Cowdroy found that the ISP was not liable for the downloading habits of its customers.

In a summary of his 200-page judgment dismissing the Australian Federation Against Copyright Theft's claims Thursday, Justice Cowdroy said that iiNet had not intended to infringe copyright and had not authorized its customers to infringe copyright, although it did have knowledge of infringements. He ordered AFACT to pay costs.

"iiNet did not authorize infringement of copyright by its users," Cowdroy said. "In the law of authorization there is a distinction to be drawn of the means of copyright infringement ... the mere provision of access to the Internet (does) not authorize infringement."

Instead he said the copyright infringements occurred using BitTorrent and other peer to peer sites.

"iiNet has no control of the BitTorrent system and is not responsible for its use by users," Justice Cowdroy said. "iiNet is not responsible if an iiNet user uses that system to bring about copyright infringement ... the law recognizes no positive obligation on any person to protect the copyright of another," he added.

AFACT, whose 34 members include all the Hollywood studios as well as Australian companies Roadshow Films, the Seven Network and others, said the ruling was disappointing.

"Today's decision is a setback for the 50,000 Australians employed in the film industry," AFACT executive director Neil Gane said. "We believe this decision was based on a technical finding centered on the court's interpretation of the how infringements occur and the ISPs ability to control them."

"We are confident that the Government does not intend a policy outcome where rampant copyright infringement is allowed to continue unaddressed and unabated via the iiNet network," Gane said.

AFACT has three weeks to appeal the decision. It's widely expected to do so.

iiNet, for its part, welcomed the judgment.
"Today's judgment is a vindication of that and the allegations against us have been proven to be unfounded," the company said in a statement.

"In relation to copyright holders, we conclude by again saying we do not, and never have supported, encouraged or authorized illegal sharing or downloading of files in breach of the copyright laws.
"We are eager to engage with the film industry and copyright holders to make this material legitimately available."

iiNet is Australia's third-ranked ISP with about 750,000 broadband users.