GLOBAL PIRACY WATCH: AUSTRALIA’S ISP LIABILITY TEST CASE

October 19, 2009

On Oct. 6, 2009 the Federal Court of Australia began trial in the case of Australian Federation Against Copyright Theft (AFACT) v. iiNet Ltd. 

In Australia, AFACT  is considered a major test case, raising the question of whether an internet service provider (ISP), as the service through which infringers gain access to illegally copied materials, enables copyright infringement and is thus responsible for it.  AFACT is seeking money damages or an injunction which could, if successful, cut the internet service of  millions of Australian customers, raising the more existential question of whether or not it would be a good idea to “shut down” the internet.

According to its website, AFACT is an organization that represents “50,000 Australians directly impacted by copyright theft including independent cinemas, video rental stores and film and television producers across the country.”  According to its motion papers, AFACT also represents, inter alia, Universal Pictures, Warner Bros. Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corp., and Disney Enterprises, Inc.

iiNet Ltd., Australia’s third-largest Internet service provider (ISP), provides internet service to millions of Aussies.

In their opening statement, AFACT lawyers claimed they found almost 98,000 iiNet customers had illegally shared material online within a 59-week period.

iiNet grounded its defense in the “reality” of internet use, arguing that there is no feasible way for ISP’s to monitor and enforce the requested protections across the entire fragmented digital informational network they control; that the infringing activity does takes place and would take place despite their best efforts to the contrary; and that monitoring of user activity at the level requested by the RIAA — I mean, AFACT — would breach their users’ right to privacy.

The outcome of the Australian case could have ramifications for internet copyright prosecution and enforcement worldwide as Australia is a party to several international intellectual property treaties, including the U.S.-Australia Free Trade Agreement.  Currently, Australia is amongst the countries negotiating the Anti-counterfeiting Trade Agreement (ACTA), including the United States, Japan, and European Union, which promises to increase international IP enforcement mechanisms in over 35 nations.

In the United States, the question of ISP liability was considered by Congress and the D.C. Circuit Court of Appeals.  The Digital Millennium Copyright Act (DMCA) of 1998 provided safe harbor legislation that indemnifies ISP’s against the infringements of their customers if the ISP follows certain procedures, which can include facilitating the dissemination of copyright infringement notices provided by copyright holders (but not providing the identities of their subscribers.  See RIAA v. Verizon, 351 F.3d 1229 (D.C. Cir. 2003)).

With the world intellectual property system inching ever closer toward global uniformity, the issue of ISP liability is still a hotly litigated issue that reflects the uncertainty about how to reconcile the need for a better IP system with the cultural and economic possibilities offered by new technologies.