18 Aug 2011

iiNet faces High Court showdown

The iiNet copyright case is off to the High Court. Tim Webb tells BRR Media what the issues are for the High Court to consider, and how the internet industry has responded.


iiNet faces High Court showdown
David Bushby, BRR Media
Tim Webb, Senior Associate, Clayton Utz

David Bushby
We're speaking with Tim Webb, a Senior Associate in the Intellectual Property group at Clayton Utz in Sydney. Tim, the stage has been set for a final showdown between ISPs and copyright owners with the Australian Federation Against Copyright Theft getting special leave to appeal its loss against iiNet in the High Court. Was this expected by industry?

Tim Webb
Yes I believe it was David. You can never be certain with these things, as whether to grant special leave to appeal is completely at the discretion of the High Court, and it may have regard to any matters it considers relevant. However I think there are a few factors in this case that made the grant likely.

Firstly the Full Federal Court judgment involves questions of law that are of public importance. This decision has implications not just for iiNet but all ISPs and the internet industry generally. It's been subject to intense public interest from the beginning. Indeed I think the media have attended every court hearing from the first instance to the appeal to the Full Federal Court and now the High Court level.

Also the law itself isn't particularly clear in this area. The last High Court authority on copyright authorisation is a decision from 1975 so clearly it was ripe time for the High Court to look at this issue.

The final thing to add is there was a split decision in the Full Federal Court. There were three separate judgments, including one dissenting judge who would have found for the film and television studios. So where you have these differences of opinion in the lower court then that suggests there is a difficult issue appropriate for the High Court's attention.

So I think in light of all of those factors most observers did expect the High Court to grant special leave.

David Bushby
Well absolutely. There was a difference of opinion indeed, given iiNet's victory last time was very narrow in that the ISPs were not found to have an absolute defence against infringement and that once ISPs knew about infringements their statutory defence under the copyright does not apply. Adding to that iiNet's policies to enact a safe harbour provisions were found not to be good enough, but in the end it was really I guess the quality of the copyright owners' infringement notices against iiNet which let them down. So are all these findings now back up for grabs?

Tim Webb
David I think it's important to remember that the film and television companies were largely successful before the Full Federal Court except on that threshold and key issue of whether iiNet authorised copyright infringement.

Now the film and television companies have appealed that finding, so they have said the Full Federal Court erred in holding that iiNet had not authorised copyright infringements of its users. The appellants - the film and television companies - have 14 days to file and serve a Notice of Appeal reflecting that grant of special leave and then iiNet will have seven days to serve a Notice of Cross-Appeal or Notice of Contention to challenge any findings that were unfavourable to it.

So for example it could seek a ruling that it could rely on the blanket defence in section 112E of the Copyright Act or that it did have and reasonably implemented a repeat infringer policy. We'll just have to wait and see what iiNet puts in issue by its Notice of Cross-Appeal or Notice of Contention, but as a result all of the key findings you've referred to are potentially open to be determined by the High Court.

David Bushby
So have the ISPs and the copyright holders actually moved forward on this issue since then in any way, or are they waiting until the decision before they negotiate an industry-wide response?

Tim Webb
I think there are a few things to note. It has been publically reported that AFACT has recently restarted its campaign of sending notices to ISPs and it won't come as any surprise that they have sought to provide the unequivocal and cogent evidence that was referred to by Justice Emmett in his judgment of the Full Federal Court.

Now it's not clear how those ISPs have been selected by AFACT and it members but it's clear that both big and small ISPs have been targeted. How each of those has been responding to those notices is a matter for it and its lawyers. They are in a difficult position largely because of the legal uncertainty created by this very High Court appeal and so I suspect that each is seeking to minimise its risk in responding to those notices, or not responding as it decides, pending that decision.

The other thing to note is that several ISPs, and most loudly iiNet, have been repeatedly pushing and calling for the respective industries to work together on a solution to this issue. The Internet Industry Association has been working on a draft copyright code and the Communications Alliance another industry body has been in discussions with AFACT, and all of that has been publicly reported.

The difficulty though is that while ISPs and rights owners have express willingness to engage in these discussions, they disagree on the framework for that solution, and in particular a sticking point is who should bear the costs of any graduated response model - that is, of the ISPs contacting their users and as necessary suspending or terminating. So while there has been some progress I would expect all of the relevant participants to await the outcome of the High Court appeal before any permanent solution is implemented.

David Bushby
We'll certainly keep a close eye on things as it gets close to that date. Just as a reminder, when we're expected to see that being fought out and decided?

Tim Webb
Well over the next few months the parties will put on as I say the Notice of Appeal and any Notice of Cross-Appeal and then following that the written submissions outlining their arguments they want to make at the final hearing.

By the time all that occurs we'll be into the beginning of October so the likely hearing dates are either late October / early November when there are some Canberra hearing dates or otherwise early December is probably the next bet or failing both of those you're into early next year.

David Bushby
Okay. Thanks Tim I really appreciate your insights this afternoon. That was Tim Webb, a  Senior Associate in the Intellectual Property group at Clayton Utz in Sydney. If you have any questions for Tim about anything in this interview please email Tim at [email protected]

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.