'Authorisation' a lost opportunity in AFACT appeal

Analysis: Will the appeal solve anything?

Nearly three years after legal proceedings first began between internet service provider iiNet and content owners, the parties are about to face off in their final courtroom battle.

Meeting in Canberra’s auspicious court room no. 2 next week, experienced legal teams representing iiNet and the Australian Federation Against Copyright Theft (AFACT) will present their final arguments before a panel of five judges, several of which are themselves enthusiastic at the opportunity.

Each party is also likely to be flanked by three amici curiae or “friends of the court”, eager to share their expertise in support of each side.

But the end-game next week will be on points of law, not evidence.

There is no dispute that copyright infringements occurred; concerns about the nature and quality of evidence compiled by DtecNet are unchallenged here. Instead, the key question for the five judges to answer is whether iiNet “authorised” copyright infringement by its subscribers and what steps were reasonable to prevent such infringement.

The arguments

Section 101(1A) of the Copyright Act attempts to cover these copyright infringements by considering what controls iiNet has to prevent the infringement; the relationship between iiNet and the infringer; and whether iiNet took reasonable steps to prevent the infringement.

The studios appealing say iiNet had the controls and the relationship but did not take reasonable steps to prevent the infringement.

The ISP, for its part, will argue that 1A is not a simple test. On the same provisions, it says content owners and the courts need to appreciate how ISPs operate, their lack of day-to-day control over customers and how unreasonable it would be to act on the evidence given to it by AFACT.

It also seeks to argue that any steps taken to warn or threaten infringing users with action would be a breach of primary disclosure provisions of section 276 of the Telecommunications Act 1997.

The sides are set to combat on the legal weight of the evidence presented during the initial trial; where the studios argue substantial and frequent evidence was put to iiNet, the service provider dismisses these as mere assertions that did not compel it to act at the time of litigation.

The ISP will also run a “facilities argument” based on section 112E of the Copyright Act. This contends the ISP has not authorised a breach merely by providing a facility - access to the internet - that can be used to infringe copyright.

The full Federal Court appeared to read this as not applying if iiNet had some knowledge of the infringement.

Challenging Emmett

Separately, legal counsel for the 34 content owners represented by AFACT will focus attention on Justice Arthur Emmett’s majority ruling in February’s Federal Court appeal.

The studios will argue the requirement for content owners to provide “unequivocal and cogent evidence” of alleged infringements and to reimburse iiNet’s costs to investigate the allegations raised the bar too high for rights holders.

Further, they dispute iiNet's contention that following through on infringement notices would be complex and overly costly for the company, pointing to evidence that iiNet’s subsidiary, Westnet, had forwarded infringment allegations but was directed to cease by iiNet.

Representatives for iiNet will counter that only a small number of notices - none of them from AFACT - were passed to account holders via a manual process that would be costly if it were carried out on every infringement alleged by AFACT.

That the High Court has requested the full two days be devoted to parties’ arguments - devoting a half day to potentially hearing amici curiae - shows the seriousness with which it treats the arguments.

'Authorisation' in the balance

Regardless of the High Court’s judgment - an event still four to six months away - legal experts warn the trial will do little to solve one of the fundamental issues facing service providers and rights holders alike; the meaning of authorisation.

Despite the inclusion of s101(1A) and other attempts to amend copyright legislation dating back to 1905, the issue of authorisation remains largely an unknown quality whose application has varied through the previous decisions.

That both parties seek to draw comfort from the 1975 Moorhouse decision - while progressing diametrically opposed arguments elsewhere - points to the continuing scope for judicial interpretation.

Moorhouse is a 1975 High Court decision which found the University of New South Wales had authorised infringement by photocopier users in a library.

In a legal analysis of next week’s case, experts Kim Weatherall and Robert Burrell say it is only apt the copyright issue is tackled before an Australian court for internet service providers before it is addressed elsewhere; this country was the first in the Commonwealth to introduce the legislation, and thus the issue of authorisation.

Although they, among others, consider the High Court’s judgment will become the new foundation case law for authorisation, confusion is likely to remain on whether a party can be found to authorise if it ‘sanctions, approves or countenances’ an infringement.

Instead, Weatherall and Burrell suggest the implications at stake “are so significant and so divisive that they must be left to Parliament”.

It is an argument echoed by both sides involved in the case.

A legislative instrument exists for an industry code. Many of those affected by next week’s hearings have progressed mutual discussions for such a code, regardless of the impending judgment.

Emmett’s judgment is seen as providing a possible base on which to negotiate a regime for enforcing copyright compliance from ISPs.

The Government seems willing to mediate some of these discussions or at least provide some oversight, but unwilling to legislate soon, despite the Attorney-General’s resolve to refer evolving copyright matters to the Australian Law Reform Commission.

Second-guesswork

If the High Court does choose to revisit Moorhouse, there is a possibility they may find in iiNet’s favour that it was unreasonable for to respond to AFACT notices but also agree to reject Emmett’s requirements as going beyond what the law required.

“The questions before the High Court are, therefore, whether a graduated response scheme is required, and, if so, whether iiNet acted unreasonably in failing to have such a scheme given the information with which it was provided,” Weatherall and Burrell argue.

“The High Court can answer both of these questions without engaging in any way with the content of what a ‘reasonable graduated response scheme’ might look like.”

In that event, the studios will realise they may have lost an important opportunity to use the Emmett judgment to negotiate a friendlier industry code.

Either way the judgment will see furious lobbying to resolve an issue which will continue long after the case is decided.

As Weatherall and Burrell suggest: “Whatever the High Court decides, impassioned arguments over ISP liability, graduated response and the role of copyright in the online environment will continue.

“There is a good chance that whatever conclusion the Court reaches, there will be some demand for legislative intervention.

"That will put the issue back squarely where it belongs: in the hands of Parliament.”