1 December 2011
Roadshow Films Pty Ltd & Ors v iiNet Limited
High Court appeal
The High Court of Australia will hear the appeal in Roadshow Films Pty Ltd & Ors v iiNet Limited1 (S288/2011) on Wednesday 30 November (beginning 2:15pm), Thursday 1 December 2011 and Friday 2 December 2011 at the High Court in Canberra.
The hearing will be held in Court Room No 1. For information about court etiquette and the prohibition on electronic devices see: http://www.hcourt.gov.au/about/court-etiquette
iiNet are represented by Herbert Geer Lawyers. Counsel for iiNet are Richard Cobden SC, Richard Lancaster SC and Chris Burgess.
During the hearing of the appeal, counsel will present legal arguments as summarised in written submissions and the outline of oral submissions that will be filed by both parties.
The parties have provided the High Court with an agreed set of documents, known as the appeal books, which set out the relevant documents such as affidavits, exhibits, transcripts from the trial which the High Court will read and consider in the appeal.
On 4 February 2010, Justice Cowdroy handed down his decision - Roadshow Films Pty Ltd & Ors v iiNet Limited (No. 3)  FCA 24.2
This decision was appealed by the studios to the Full Federal Court and the appeal was heard on 2, 3, 4 and 5 August 2010.
On 24 February 2011, the Full Federal Court of Australia handed down its decision. The majority Emmett and Nicholas JJ found on behalf of iiNet: see Roadshow Films Pty Ltd & Ors v iiNet Limited  FCAFC 24.3
On 12 August 2011, the High Court granted the studios leave to appeal the Full Court’s decision.
The 34 parties who commenced the claim against iiNet (“the studios”) represent the major motion picture studios in Australia and the United States.
The Australian Federation Against Copyright Theft (AFACT) has been prominent in the conduct of the claim on the studios’ behalf. However, technically AFACT is not a party to the proceeding.
The central issue in this case is whether iiNet (in its capacity as an ISP), had “authorised” copyright infringement by its users, who were alleged to have downloaded films and TV programs using the BitTorrent protocol, in a manner which infringes copyright, via iiNet’s facilities.4
The studios’ case travels well beyond any decided case in Australia. Underlying the studios’ submissions, is that what they and AFACT wanted from iiNet is for it to take on the burden of asserting and, if challenged by a subscriber, presumably defending, the evidence of primary infringements. They wanted iiNet to have a system in which warnings only played a role as the first step to suspension and termination. They wanted the system applied to every single notification of thousands of primary acts.
To succeed the studios must prove conduct and circumstances from which it is to be inferred that iiNet authorised its subscribers and other users to engage in proved acts of infringement. In all of the facts of this case, the required authority cannot be inferred. The studios would also need to prove that any such authority was acted upon by the infringing user, which they have not.
The relevant question is what it means to authorize the doing of an act comprised in the copyright within the meaning of s 101(1).
Section 101 Infringement by doing acts comprised in copyright
(1) Subject to this Act, a copyright subsisting by virtue of this Part is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorizes the doing in Australia of, any act comprised in the copyright.
(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.
The drafting of s 101(1A) in this manner was intended to reflect the existing law, the most recent authoritative explanation of which is the High Court’s decision in University of New South Wales v Moorhouse (1975) 133 CLR 1 (Moorhouse).
In Moorhouse, the university supplied to Mr Brennan both the book from its library from which an infringing copy was made and a machine in the library enabling the copy to be made. A proper analysis of the judgments in Moorhouse show that it was providing both the photocopiers and books that made the difference there.
This case is a very different case to Moorhouse. First, unlike the Kazaa case, iiNet does not supply the software that is the engine of infringement. Secondly, there was no express or implied invitation to users of iiNet’s services to engage in copyright infringing activity. Accordingly, the factors critical to a finding of authorisation in Moorhouse are all absent here.
“sanction, approve, countenance”
The High Court in Moorhouse also held that “authorise” as used in section 101(1) of the Copyright Act means “sanction; approve; countenance”. Moorhouse does not, however, support the proposition that the Copyright Act can be construed by applying the definition “sanction, approve, countenance” in a manner where the furthest reaches of any of those terms can be applied in place of the statutory term “authorizes”.
The question of the knowledge required for a person to be held to authorise a primary act of copyright infringement is the wrong question and a false issue in the appeal. When such knowledge or reason to suspect is present, the Court must then look to the other circumstances of the case to see if authorisation may be inferred.
iiNet submits that a copyright owner cannot impose a duty to act upon a service provider merely by providing it with allegations of infringements by its customers. iiNet did not respond to the AFACT notices in the manner demanded by AFACT. It was not, however, indifferent to the issues of copyright infringement by its customer. iiNet expressly prohibited its customers using its services to infringe copyright and promoted its Freezone service which provided its customers with incentives to download legitimate copyright material.
Section 101(1A) factors
The mandatory, but not exhaustive, considerations in s 101(1A) are expressed in terms identifying them as matters of degree: the extent if any of the power to prevent, the nature of the relationship, other reasonable steps.
iiNet submits that the Court must consider the extent of that power and the implications of its exercise and balance those matters against the other facts of the case. Matters such as the knowledge of the infringing acts, the specificity or level of detail of the relevant information, the confidence level in the accuracy of the information, the extent to which the information was understood, the steps needed to use the information so as to do something about the primary acts of infringement and how reasonable it would be to take those steps may arise and will need to be balanced with all of the other facts in the case.
The studios’ case is that iiNet’s failure to take the steps it suggested following receipt of the AFACT notices amounted to authorisation. However, the reasonableness of any decision not to act as suggested is necessarily a relevant consideration in the determination of authorisation, whether as part of s 101(1A)(a) (‘power to prevent’) or (c)(‘reasonable steps’) or as part of all of the relevant facts that must be considered.
Emmett and Nicholas JJ concluded respectively that it was not reasonable to require iiNet to take the steps particularised and that it was not unreasonable for iiNet to decide not to act in this manner. There is no challenge to a finding of fact that would unseat either conclusion.
There was substantial evidence before the primary judge to support his Emmett J’s finding as to the cost, effort and complexity of reviewing and dealing with the AFACT Notices.
Section 112E and Telco Act
iiNet submits that there are two additional grounds on which the Court should find that iiNet should be found not to have authorised any infringement of copyright:
1. By operation of s 112E5 of the Copyright Act, iiNet should have been taken not to have authorised any infringement of copyright by persons who used the facilities it provided;
2. By reason of the prohibition in section 276 of the Telecommunications Act 1997 (Telco Act), iiNet did not have the “power to prevent” any infringement of copyright by an iiNet user and it would not have been “reasonable” for iiNet to take any steps inconsistent with this prohibition concerning the disclosure and use of information.6
For further information please contact:
Graham Phillips Partner 03 9641 8639 / 0411 646 770
Anthea Hancocks Chief Marketing Officer - Media 03 9641 8634 / 0408 997 298