Justice Cowdroy has thrown out the case against the Australian Federation Againts Copyright Theft (AFACT), stating the ISP did not facilitate copyright infringement.
He told a packed but small court room in the Federal Court that he sought advice from US authorities on copyright law and examined the infamous trial against Kazaa in his decision.
Cowdroy found iiNet only provided Internet access and, in doing so, had no responsibility for copyright infringement and abuse of peer to peer applications like BitTorrent.
"iiNet did not authorise infringement of copyright by its users," Cowdroy told an audience of 70.
"In the law of authorisation there is a distinction to be drawn of the means of copyright infringement... the mere provision of access to the Internet [does] not authorise infringement."
"iiNet has no control of the BitTorrent system and is not responsible for its use by users."
He said the prevalence of copyright abuse over peer to peer does not justify the case "merely that something must be done to stop it"
iiNet posted a summary of its position in February, setting out its defence. Among other things, it quote Part V, Division 2AA of the Copyright Act which sets out a statutory regime, commonly known as the “safe harbour regime” which the ISP said "limits the remedies available against carriage service providers for infringement of copyright provided that the carriage service provider complies with relevant conditions".
The Kazaa case cited by Justice Cowdroy refers to the dramatic legal battle between file-sharing software developer, Kazaa, and the entertainment industry. Kazaa agreed to pay at least $US100 million to four record companies and an additional amount to motion picture companies to settle two lawsuits.
The Australian Federation Against Copyright Theft (AFACT) has said it will consider appealing to the High Court were it to lose the case.
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