ISP iiNet beats studios in movie piracy case

IINET has won a landmark Federal Court battle against a clutch of Hollywood movie studio heavyweights which alleged the Perth-based internet service provider had encouraged copyright violations.

The federal government and overseas observers have monitored this case very closely. Australian Federation Against Copyright Theft (AFACT) took iinet to court saying that iiNet was legally liable for alleged copyright infringement activity by its customers.<laugh-out-loud>

AFACT, which is really just running around for Village Roadshow and some other hollywood heavy weights, argued that iiNet should have taken "reasonable steps" to act on infringement notices that contained internet addresses of computers using the ISP's service to allegedly share illegal movies and music on peer-to-peer file networks.

But the Federal Court today found iiNet did not encourage copyright violations by allowing users to download pirated movie files over its network.

In a short ruling read to the court early today, Justice Dennis Cowdroy said the critical issue in the proceeding was whether iiNet authorised copy infringement of "certain iiNet users".

"While I find that iiNet had knowledge of infringements occurring, and did not act to stop them, such findings do not necessitate a finding of authorisation. I find that iiNet did not authorise the infringements of copyright of the iiNet users," Justice Cowdroy said.

He later explained that in making his decision, that iiNet had no control over the peer-to-peer file sharing system called BitTorrent which was used for illegal file sharing and therefore could not be held liable for its operation.

"There does not appear to be any way to infringe the applicants copyright from mere use of the internet. Rather, the means by which the applicants' copyright is infringed is an iiNet users' use of the constituent parts of the BitTorrent system. iiNet has not control over the BitTorrent system and is not responsible for the operation of the BitTorrent system," Justice Cowdroy said.

Had the decision gone against iiNet it would have broken a status quo which has allowed ISPs to avoid the burden of policing the internet on behalf of copyright owners for over a decade.

iiNet welcomed the judgment, saying it never supported or encouraged breaches of the law including infringement of the Copy Right Act of the Telecommunications Act.

“Today’s judgment is a vindication of that and the allegations against us have been proven to be unfounded,” iiNet said.

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