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ISP Liability – the latest Australian developments
Whilst it has been on the radar for some years now, the question of liability of internet intermediaries for copyright infringement has certainly become the most talked about issue in copyright circles in Australia this year.
Developments include the Full Federal Court’s appeal decision in Roadshow Films Pty Limited v iiNet Limited , AFACT’s announcement that it will seek leave to appeal the decision in the High Court, comments by the Attorney-General that legislative reform may be on the agenda, the Internet Industry Association’s announcement that it intends to fastrack development of a code of conduct, and the release by ISP iiNet, of a paper detailing a potential model for the policing of copyright infringement.
The focus on ISP liability intensified in February, with the Full Federal Court’s appeal decision handed down in iiNet’s favour. Whilst at first glance the decision appeared to be a win for iiNet, a closer reading revealed a number of mitigating factors, which led the executive director of the Australian Federation Against Copyright Theft (AFACT), Neil Gane, to conclude that, “While we did not prevail due to the finding of the court on a narrow, technical issue, we did succeed in terms of the court finding in our favour across a range of key issues.” 
These findings included, firstly, that ISP liability could be proven with an improved notification process, and secondly, that iiNet would not be eligible for protection under the safe harbour provisions, due to deficiencies in its implementation of a policy for regular infringers. Lawyers and legal academics are considering the implications.
In the same week the appeal decision was handed down, the Attorney General spoke at a conference in Sydney [see last month’s newsletter for details] at which he flagged possible review of the Copyright Act , listing the ‘safe harbour’ provisions as one of the matters in need of attention, as well as the issue of an industry-negotiated solution to the problem of online infringement.
March 11 saw the Internet Industry Association (IIA) announce its intention to begin developing an industry code of practice for internet intermediaries. An IIA press release quoted [retiring] chief executive Peter Coroneos as stating: “The iiNet case has provided us with welcome guidance on where responsibilities should begin and end, but falls short in defining reasonable steps intermediaries should take in responding to allegations of infringement by their users. The Code will address this gap." 
The IIA also expressed its intent to pursue reform to the Copyright Act, to expand the current application of the safe harbour provisions to include a wider range of other intermediaries, such as search providers, social media platforms, hosting companies and universities.
The next development was iiNet’s release of a discussion paper entitled “Encouraging legitimate use of Online Content: An iiNet View” , which outlines the ISP’s view on the changing nature of content delivery and proposes a model for policing infringing activity, callilng for an independent body to be the intermediary between rights holders, ISPs and consumers [see our recent news story iiNet calls for a new independent body to police illegal downloading].
Finally, in the closing days of March, AFACT’s Neil Gane announced that the film companies which had brought the case against iiNet would be seeking leave to appeal to the High Court to overturn the Full Federal Court’s appeal decision in favor of iiNet. Gane said the film companies would make the case that iiNet did have sufficient knowledge of users’ infringing activity: "The Full Federal Court unanimously found that iiNet had the power to prevent the infringements of its users from occurring and that there were reasonable steps it could have taken, including issuing warnings…However two judges of the Full Court went on to find that iiNet had not authorised the infringements of its users…We say they did not apply the legal test for authorisation correctly."
The chief executive of iiNet, Michael Malone, responded with the statement that continuing legal action between rights holders and ISPs was not the solution to the problem and that even a High Court win by the film companies would not curb unauthorised distribution of material. According to Malone: "It's time for the film industry and copyright holders to work with the industry to make their content legitimately available".
It is too early yet to see how matters will unfold. The only certainty is that 2011 will be a big year for copyright in Australia.
 Roadshow Films Pty Limited v iiNet Limited  FCAFC 23
 AFACT Press Release – 25/2/2011 at http://www.afact.org.au/pressreleases/2011/25-2-2011.html
 IIA Press Release – 11/3/2011 at http://www.iia.net.au/index.php/all-members/881-iia-fastracks-industry-copyright-code.html
 available from http://www.iinet.net.au/press/releases/201103-encouraging-legitimate.pdf