Roadshow v iiNet HCA Appeal: first impressions

This morning the High Court of Australia unanimously ruled that iiNet did not authorise the infringement of copyright by its users.

AFACT sent iiNet notices alleging that its users were infringing the copyrights of its members by downloading and uploading movies using Bittorrent. AFACT then argued that iiNet had a responsibility to do something to prevent further infringements by its users. In a unanimous judgment, the High Court ruled that iiNet had no positive duty to disconnect users.

On a quick initial reading, this is a strong, unanimous judgment that clearly limits the scope of authorisation liability in Australia. The High Court rejected the attempt to extend the concept of authorisation through the fairly loose dictionary definition of ‘countenance’, which threatened to encompass mere inactivity. The Court stressed that something else was required to give rise to authorisation. Importantly, the High Court did not examine whether the vague obligation to terminate in the safe harbours implies that the concept of authorisation should be expansively read to encompass ISPs.

Some interesting points:

  • Section 112E “provides protection where none is required” or exists from “an abundance of caution” : AFACT argued that because iiNet knew of allegations of infringement, it was tacitly supporting (‘countenancing’) infringemnet on its network. Justices Gummow and Hayne pointed out that

    “The progression urged by the appellants from the evidence, to “indifference”, to “countenancing”, and so to “authorisation”, is too long a march.” ([146])

    Both judgments stressed that something more was required for iiNet to be ‘authorising’ infringement, reading the definition of ‘authorisation’ in light of s 112E: “A person (including a carrier or carriage service provider) who provides facilities for making, or facilitating the making of, a communication is not taken to have authorised any infringement of copyright in an audio – visual item merely because anot her person uses the facilities so provided to do something the right to do which is included in the copyright.”

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  • Power to prevent: French CJ, Crennan and Kiefel JJ found that iiNet had no ‘direct’ power to prevent infringement ([65]). Both judgments stressed that iiNet’s power is limited to terminating the account of alleged infringers, which did not appear to be a relevant power to prevent ([65], [137]). Justices Gummow and Hayne pointed out that termination would go much further than preventing infringement: “it would deny to the iiNet customers non-infringing uses of the iiNet facilities.”
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  • Reasonable steps: Both judgments found that the power to terminate was not a reasonable one to exercise, for a number of reasons:
    1. users can easily get a new ISP ([73], [139]);
    2. iiNet would be required to investigate the allegations itself, which would be difficult ([74]-[75]);
    3. the information provided by AFACT “did not provide iiNet wi th a reasonable basis for sending warning notices to individual customers containing threats to suspend or terminate those customers’ accounts”; (see also [138]) This is probably the weakest part of the judgment – the High Court at times seems to suggest that the details that AFACT subsequently provided about the DTecNet process and notices was of much higher quality than original notices. However, the High Court certainly did not go as far as Emmett J in providing an extensive list of steps that could be taken to found the obligation (FCAFC at [210]);
    4. any wrongful termination would render iiNet liable to users ([75]).
    5. “the width of the terms in which the proposed duty is cast would present iiNet and other ISPs with an uncertain legal standard for the conduct of their operations” (Gummow and Hayne JJ, [116])
    6. any such duty “would achieve for copyright owners, but at the expense of the ISP, the suspension or disconnection by their ISP of subscribers from the internet, a remedy which would not be available to the copyright owners were they themselves to sue the subscribers” (Gummow and Hayne JJ, [116])

Where does this leave us? Probably with some lobbying for legislative change. In the US, ISPs have voluntarily enacted some form of private graduated-response or notice-and-notice scheme. Importantly, the strength of this decision should give Australian ISPs a large degree of certainty in the scope of authorisation, which should mean that they will not be easily pressured to enter into a similar contractual regime. That will leave the struggle to the legislative arena, and it’s anyone’s guess where that goes from here. (For more information on graduated response schemes, Brian Fitzgerald and I have a paper about the difficulty of asking ISPs to impose penalties on users in the UNSWLJ)

Edit: I think what troubles me most about this decision is what it doesn’t cover. It’s a strong decision on the law of authorisation, but it continues to characterise the essential copyright debate as between technology companies and copyright owners. Users and their interests are almost wholly left out of the picture. The High Court mentioned, briefly, the potential impact of termination on users, but certainly did not build it into the test of reasonable steps in any clear way. Until we see a real framework to evaluate copyright tensions in a way that is inclusive of user interests, I think copyright law will continue to struggle with a serious legitimacy problem.