24th February, 2010

The impact on the iiNet copyright case on the Music Industry

In a landmark decision delivered last Thursday, the Federal Court of Australia has held that iiNet, and all Australian ISPs, do not have an obligation to prohibit copyright infringement across their networks. This verdict is regarded to have global implications as it now sets a strong precedent in how courts may deal with ISPs worldwide.

During the 3 month trial industry body AFACT (Australian Federation Against Copyright Theft) argued that iiNet authorised the copyright infringement by not actively preventing its customers from downloading movies via BitTorrent protocols.

In its defence, iiNet argued that it could not be held liable for its customer’s actions, much in the same way as Australia Post is not held liable for the trafficking of illegal substances across its networks. iiNet also stated that, under law, its customers are innocent until proven guilty and it was not the ISP’s duty to judge them.
Justice Cowdroy agreed with iiNet that there was no obligation to actively protect the copyright of third parties. The Judge stated that ISPs have no control of the BitTorrent system and cannot be expected to be responsible for it. Justice Cowdroy also discredited the three-strikes and you’re out system heralded by France as the solution to internet piracy.

The verdict is a set back not just for the film industry but for music as well. Music, like film, is subject to rampant piracy over the internet and is ultimately in the same boat as AFACT. If AFACT won this case the onus of protecting copyrighted material would be shifted onto ISPs and illegal downloading would have been curtailed significantly. Now another option must be found.

While ultimately the may appeal the Federal Court’s decision, AFACT have hinted that their approach may shift to lobbying Government, identifying a change in policy as the solution.

iiNet CEO Michael Malone stated that he was interested in finding a new solution to copyright theft – not through enforcement regimes but through new and legitimate access models in which internet users legally interact with copyrighted content. Which we think sounds a bit like an invitation. While litigation has been the path that’s been taken almost universally worldwide, Malone’s suggestion indicates that the most successful options at combating piracy could be in the creation of new business models.