Roadshow Films Pty Ltd v iiNet Ltd

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FEDERAL COURT OF AUSTRALIA

Roadshow Films Pty Limited v iiNet Limited [2011] FCAFC 23

Citation: Roadshow Films Pty Limited v iiNet Limited [2011] FCAFC 23
Appeal from: Roadshow Films Pty Ltd v iiNet Limited (No. 3) [2010] FCA 24
Parties: ROADSHOW FILMS PTY LIMITED (ACN 100 746 870) and PARTIES IN ATTACHED SCHEDULE 1 v IINET LIMITED (ACN 068 628 937)
File number: NSD 179 of 2010
Judges: EMMETT, JAGOT AND NICHOLAS JJ
Date of judgment: 24 February 2011
Catchwords:

INTELLECTUAL PROPERTY – authorisation of copyright infringement – copyright infringement notices served on internet service provider (ISP) alleging that users of ISP’s network were infringing copyright in cinematographic films by making them available online and electronically transmitting them to the public– whether ISP authorised copyright infringement – whether ISP had power to prevent infringement – whether ISP took reasonable steps to prevent or avoid infringement – consideration of other factors relevant to authorisation – knowledge of infringement – encouragement of infringement – inactivity and indifference to infringement – whether ISP sanctioned, approved or countenanced infringement – whether s 112E of the Copyright Act 1968 (Cth) prevented ISP from being found to have authorised infringement

INTELLECTUAL PROPERTY – acts of primary infringement – whether users of ISP’s network infringed copyright in cinematographic films by making them available online or electronically transmitting them to the public – whether the whole or a substantial part of any such cinematographic film was electronically transmitted – whether individual users committed multiple acts of infringement in relation to any such cinematographic film by making it available online and electronically transmitting it.

INTELLECTUAL PROPERTY – whether Telecommunications Act 1997 (Cth) compelled a finding that ISP could not reasonably be expected to issue warning notices to customers or suspend or terminate their accounts on the basis of the copyright infringement notices because the disclosure or use of information contained in them or business records of the ISP to which it would need to have regard for that purpose was prohibited by law.

INTELLECTUAL PROPERTY – ‘safe harbour’ provisions – whether ISP complied with relevant provisions of Division 2AA of Part V of the Copyright Act 1968 (Cth)

Legislation:

Copyright Act 1968 (Cth) ss 10, 13, 14(1), 22(6), 22(6A), 31, 39A, 39B, 86, 101, 101(1A), 112E, 115, 116AA, 116AB, 116AC, 116AG and 116AH
Copyright Amendment (Digital Agenda) Act 2000 (Cth) s 3
Copyright Regulations 1969 reg 20B, Schedule 10
Criminal Code Act 1995 (Cth) s 137.2
Federal Court Rules O 13 r 3A and O 52 r 14AA

Telecommunications Act 1997 (Cth) ss 276, 279, 280, 289 and 290

Cases cited:

Adelaide Corporation v Australasian Performing Right Association Ltd (1928) 40 CLR 481
ASIC v Citigroup Global Markets Australia Pty Limited (No.3) [2007] FCA 393
Australasian Performing Right Association Limited v Jain (1990) 26 FCR 53
Australasian Performing Right Association Ltd v Metro on George Pty Ltd (2004) 210 ALR 244
Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480
Canadian Pacific Tobacco Company Limited v Stapleton

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Details
Case
[2011] FCAFC 23
Decision Date

CaseChat Overview and Summary

The case of Roadshow Films Pty Ltd v iiNet Ltd involved a dispute between the plaintiff, Roadshow Films, and the defendant, iiNet Ltd, concerning allegations of copyright infringement by users of iiNet's network. The primary issues revolved around whether iiNet authorised, could have reasonably prevented, or took reasonable steps to prevent copyright infringement by its customers. Additionally, the court considered whether iiNet's actions complied with the 'safe harbour' provisions under the Copyright Act 1968 (Cth) and whether the Telecommunications Act 1997 (Cth) precluded iiNet from taking action based on the copyright infringement notices.

The court first addressed the issue of authorisation, determining that while mere inactivity or indifference might not suffice to prove authorisation, such conduct in conjunction with other factors could support an inference of authorisation. The court found that iiNet had not approved, sanctioned, or countenanced the acts of copyright infringement, and thus, the authorisation claim was dismissed. The court also examined whether iiNet could reasonably have prevented the infringements and whether it had taken reasonable steps to do so. The court found that iiNet had not fulfilled the conditions required under the'safe harbour' provisions, particularly failing to implement a policy for terminating the accounts of repeat infringers.

Further, the court considered whether the Telecommunications Act 1997 (Cth) prohibited iiNet from using the information contained in the copyright infringement notices for administrative purposes. The court concluded that the act did not prevent iiNet from taking appropriate actions based on the notices.

Ultimately, the court upheld the dismissal of the proceedings against iiNet, agreeing with the primary judge's decision. The appeal was dismissed, and the parties were directed to submit minutes concerning any argument related to costs.

Orders

Orders of the court

1. The appeal be dismissed.

2. The parties bring in short minutes of proposed directions concerning any argument as to costs.

Note:

Background

Background to the litigation

While mere inactivity or indifference may be insufficient, particularly where there is no knowledge or reason to suspect that infringement might occur, inactivity or indifference, coupled with other factors, may support an inference of authorisation. It may not be that every act that amounts to the countenancing of something is an authorisation. Matters of degree are involved (see Cooper’s Case at [38]).THE TECHNICAL AND FACTUAL BACKGROUND It is necessary to say something about the technical background against which the issues in the appeal arise. It will then be necessary to describe the relevant acts of infringement before describing the extent of iiNet’s knowledge of those acts and the action taken by iiNet in response to that knowledge. The Internet Not every computer using the internet is connected directly to every other computer using the internet. Rather, each computer is linked to other computers, which in turn are connected to other computers, and so on. Hence, the internet is fairly described as a network of networks of computers. For computers to be able to communicate with each other, they must use the same language. That process is facilitated by sets of rules for computers, which are referred to as protocols. Two computers that obey the relevant protocols will be able to communicate with each other. One of the primary protocols by which communication is effected between computers is the Internet Protocol. Computers operate by means of binary code. A bit is either a zero or a one. A byte is 8 bits. A kilobyte is 1,024 bytes, a megabyte is 1,024 kilobytes and a gigabyte is 1,024 megabytes. Data sent by means of the Internet Protocol is broken up into small packets, consisting of less that half a megabyte. Each packet contains a header consisting of information identifying the address from which the packet is sent and the address to which the packet is to be sent. The packet itself contains the relevant data. The Internet Protocol allocates addresses to the sending and receiving computers and then sends the packets of data from one address to the other. Such addresses are referred to as IP Addresses. An IP Address is a number rendered in binary code. To make an IP Address readable, it is converted into a number consisting of four groups of three digits, each group separated by a full stop. IP Addresses are sold in blocks to carriage service providers such as iiNet, who then allocate them to their customers to enable their customers to connect to the internet and communicate with other computers. The identity of the carriage service provider to which particular IP Addresses have been allocated is public information. Carriage service providers connect their customers to the internet by means of physical infrastructures. The customer’s connection to the infrastructure is by way of a modem, which will often be provided to the customer by the carriage service provider. The customer’s modem may communicate with the carriage service provider’s infrastructure by telephone lines or cables or by wireless transmission. The carriage service provider’s infrastructure enables it to communicate with any modem within Australia. iiNet operates facilities that allow many connections to be aggregated together at an iiNet data centre. iiNet has a connection from its data centre in Sydney to the rest of the world by means of undersea optical fibre cables. By those facilities, iiNet is able to provide connections from each customer’s modem to modems of its other customers and of customers of other service providers throughout the world.

Evidence

Evidence Before The Court

Over time, the BitTorrent Client programme will receive all of the pieces, which will be assembled together into the complete Film file. At that point, the customer who has the full Film file will be able to share the whole file with the swarm. The BitTorrent Client programme will share the file with the swarm until such time as that programme is closed on the particular computer or the .torrent file is removed from the programme. If the .torrent file is not removed and the BitTorrent Client programme is reopened, the programme will continue to share the file with the swarm. Evidence of Primary Infringement The Australian Federation Against Copyright Theft (AFACT) is an organisation set up for the purposes of assisting its members in relation to infringement of their copyrights. Its members include all of the Copyright Owners and other companies engaged in the film production industry. The members of AFACT provide funds and determine what investigations and activities will be undertaken by AFACT. From August 2007, AFACT used the services of DtecNet Software APS (DtecNet) to collect information concerning alleged copyright infringement by internet users in Australia. Between September 2007 and June 2008, DtecNet investigated 190 Australian service providers in relation to different types of file sharing protocols, including the BitTorrent Protocol. It then narrowed its investigations to the BitTorrent Protocol and targeted four Australian service providers, including iiNet. In June 2008, AFACT instructed DtecNet to prepare reports regarding copyright infringements by customers of iiNet using the BitTorrent System. It did so in the form of spreadsheets, which it provided to AFACT. The data in the spreadsheets recorded infringements in respect of one or more of the Films over a period of time by the use of individual iiNet customer accounts. An employee of DtecNet would identify a .torrent file of interest, based on information supplied by the Copyright Owners or by AFACT. DtecNet would then employ a programme known as DtecNet Agent, which is a BitTorrent Client programme, to open that .torrent file. By doing so, DtecNet Agent, as with any other BitTorrent Client programme, was able to query the Tracker, connect peers to the swarm and download pieces from those peers. DtecNet Agent employed an IP filter to ensure that it only connected to IP addresses of customers of iiNet. Initially, DtecNet Agent downloaded one complete copy of each of the Films being investigated. DtecNet employees viewed the copy to ensure that it corresponded with one of the Films. That process established that a particular file hash corresponded with one of the Films. DtecNet Agent then reconnected to the IP address of an iiNet customer at whose IP address a copy of the file or parts of the file of that Film had been available and downloaded a piece of that file from that IP address. It then matched the piece downloaded with the piece hash through the hash checking process described above. DtecNet Agent then recorded information referable to the peer from which it had downloaded that piece of the file. DtecNet Agent only downloaded one piece from each IP address and then disconnected from that IP address. DtecNet Agent downloaded a new piece from the same IP address every 24 hours.

Decision

Reasons for decision

If I had been satisfied that the respondent had approved, sanctioned or countenanced the acts of copyright infringement which have been found to have occurred, then I would have found the respondent liable for authorisation in spite of s 112E. CONCLUSION ON AUTHORISATION While I disagree with the primary judge’s reasoning in significant respects, I am nevertheless of the opinion that his Honour’s decision to dismiss the proceeding was correct. In my opinion the appeal should be dismissed. I agree with the order which Emmett J has proposed in relation to costs. OTHER MATTERSTelco Act I agree with the reasons given by Jagot J for holding that that the AFACT notices, and the information which they contained, were not within the scope of s 276 of the Telco Act. I also agree with her Honour that the respondent’s customers consented to the disclosure and use of the score information and the rumba information for the purposes of administering and managing the services provided pursuant to the CRA and that the exception provided for in s 289 therefore applied to such information. To the extent that the respondent’s services were used by persons who were not customers, I would infer that they also consented to the disclosure and use of the score information and the rumba information for such purposes. In the absence of evidence to the contrary, I think this may reasonably be inferred given that such persons elected to use a service which they may be taken to have known was made available upon terms. Accordingly, if it had been necessary for me to decide the question, I would have held that s 276 of the Telco Act did not prevent the respondent from using the AFACT information, the score information or the rumba information for the purpose of issuing warnings or terminating, suspending or restricting the supply of a service in accordance with relevant provisions of the CRA. Safe Harbour Provisions If I had come to the conclusion that the respondent was liable for authorisation, I would have held that it had not satisfied the conditions necessary to obtain the benefit of the limitations upon the relief which may be granted against the respondent specified in s 116AG(3). It is common ground that the respondent is a carriage service provider which is relevantly engaged in Category A activity as defined by s 116AC of the Act. Accordingly, in order to attract the benefit of s 116AG(3), the respondent need only comply with the conditions applicable to Category A activity as set out in the table incorporated in s 116AH(1), namely, Item 1 (Conditions 1 and 2) and Item 2 (Conditions 1 and 2). It is common ground that the respondent satisfies Conditions 1 and 2 of Item 2 and that Condition 2 of Item 1 does not apply. That leaves only Condition 1 of Item 1. It provides:The carriage service provider must adopt and reasonably implement a policy that provides for termination, in appropriate circumstances, of the accounts of repeat infringers. I have previously referred to the primary judge’s finding that the respondent had a repeat infringer policy within the meaning of this condition. I disagree with that finding. I do not think the respondent had a repeat infringer policy and I think his Honour erred in holding that it did.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.