AFACT v iiNet: Copyright holders continue to push industry code

Both AFACT and presiding judge, Justice Emmett, have looked to an industry code of conduct to counter copyright infringement, but stalled discussions may not restart

The appeal case between Internet service provider, iiNet and the Australian Federation Against Copyright Theft (AFACT) has come to a close after four days, with the panel of judges expected to reveal its decision sometime after 20 August, pending further documents from legal counsel.

No matter who wins, litigation is looking likely to escalate to the High Court.

However, it is also becoming clear that a commercial code of conduct may be the only way to resolve the issue of addressing copyright infringement among users.

One of the judges presiding over the appeal case, Justice Arthur Emmett, argued that without a commercial agreement, either claimant in the case could simply restart legal proceedings once the appeal was decided.

During its appeal, AFACT pushed for a code wherein it would deliver evidence of infringement - as it had done to iiNet in 2007 and 2008 - upon which service providers would conduct graduated steps towards termination if the user did not comply with warnings.

“We have to detect these infringements, fix our friends with knowledge, depending on whatever codes are adopted,” he said.

However, debate still rages as to who would bear the costs of implementing the relevant policies and automation systems required to warn and potentially terminate or throttle those users who have been found to infringe copyright.

Discussions around such a code are believed to have been initiated as early as 2005, though have broken down on at least two occasions prior to the initial case between AFACT and iiNet.

During the appeal AFACT’s legal counsel, David Catterns, reiterated correspondence between the copyright body and industry representative body, the Internet Industry Association (IIA) which showed the two groups has discussed a code which encompassed various steps taken against users “short of termination”, including a three strikes policy, throttling bandwidth or “play-penning” users only into websites hosted by the service provider.

A letter signed by AFACT executive director, Adrianne Pecotic, to the IIA on 8 August 2007 effectively severed discussion about the code.

In the letter Pecotic said that, in the circumstances, AFACT and its music industry equivalent - Music Industry Piracy Investigations (MIPI) - felt the discussions were going nowhere and would instead litigate IIA members, as it did with iiNet.

Speaking to Commsday, iiNet chief regulatory officer, Stephen Dalby equated Pecotic’s correspondence to a “smack-down” for the IIA, which evidenced AFACT’s “idea of cooperation is for ISPs to disconnect our customers when they demand it”.

“If we don’t do their bidding they’ll tie ISPs up in the courts,” he said.

According to Dalby, iiNet would prefer negotiating commercial agreements with content owners rather than through litigous bodies like AFACT.

IIA chief executive officer, Peter Coroneos, told Computerworld Australia that the industry body would wait for the appeal decision and potential High Court action before taking further steps in discussions. However, he believed Justice Cowdroy’s decision in the initial case ruled out any negotiations in the near future.

“It’s interesting that they should now want to restart discussions, now that iiNet has won the case,” Coroneos said about AFACT’s intentions.

“In the light of a very clear legal distinction that has now been drawn between the role of ISPs on the one hand, and those who would provide the means of infringement, we presently see no basis for re-engagement around an industry code of practice. To do so would be to concede that ISPs have responsibilities here, when the law of the land clearly stated that they do not.”

There has been no evidence so far iiNet is willing to back down from the stance that it will not terminate or investigate its subscribers without a court order, decision or admission from the subscriber themselves.

Throughout the case, AFACT’s legal counsel, David Catterns and Christian Dimitriadis, have argued that iiNet could take reasonable steps towards those users AFACT alleged to have infringed copyright. They argued that iiNet’s defence of inadequate terms in its customer relationship agreement did not prevent it from warning its users or changing the terms and conditions of the agreement to make that possible.

AFACT’s legal representatives also argued that the holder of Internet subscription should be held responsible for alleged copyright infringement on the account, even if they personally did not download the material in question.

iiNet’s legal representatives, Richard Cobden and Richard Lancaster, countered that the service provider could not act on the data without acting unlawfully, by either matching data of alleged copyright infringers or disclosing customer information.

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