Day 16: iiNet authorised infringing acts, says film industry

First day of closing statements.

The film industry's barristers yesterday commenced closing statements in the Federal Court in Sydney as the copyright case against ISP iiNet entered its fourth and final week of hearings.

Lead barrister Tony Bannon read extensively from the Copyright Act and the judgement in Moorhouse and Angus & Robertson vs. the University of NSW - case law the industry has previously referenced in its attempts to establish that iiNet ‘authorised' copyright infringement on its network.

Bannon said that the industry would argue that iiNet's alleged failure to enforce the terms and conditions of its customer relationship agreement amounted to authorisation of the infringing acts.

"Even after a time iiNet accepts infringements occurred, they have continued to take the active step of connecting and reconnecting every day these customer accounts on which the infringing activity has occurred," Bannon told the court.

He argued that iiNet found itself "between a rock and a hard place" - imposing a term in customer agreements that its service not be used for copyright infringing purposes, in part to gain protection of the safe harbour provisions in the Copyright Act, but then not enforcing those terms.

"The failure to enforce [the customer relationship agreement] has the consequence that it authorises [the infringement]," Bannon argued.

"It plainly does not want to enforce [the terms]."

Bannon also argued that evidence provided by iiNet's chief regulatory officer Steve Dalby under cross-examination had proven the ISP did not have the Telecommunications Act in mind when it did not enforce the terms of its customer agreement.

iiNet has argued in the case that the Telecommunications Act prevented it from matching customer data from its systems to data of alleged copyright infringements.

The ISP's chief Michael Malone said in evidence last week that the provisions of the Telecommunications Act that enabled iiNet to use customer data for purposes such as billing did not extend to third parties outside of the specific agreement between iiNet and the customer.

Malone also said that merely passing on alleged infringement notifications to customers could be a breach of the Act.

But Bannon claimed yesterday that, aside from in the current case, the Telecommunications Act "had never been raised" by other industry players as a reason not to pass on notices of alleged infringement.

"The [email] communications with Telstra and other ISPs [surfaced through discovery] demonstrated that no other ISP thought there was any substance in the point," Bannon argued.

"The fact that Westnet was issuing these notices [to its customers] indicated there was no substance to that point.

"And there is no substance. It's an absurd conclusion to say customers don't authorise [the use of] that information for the purposes of enforcing an obligation they knowingly consent to [in the customer relationship agreement]."

Bannon argued iiNet could not rely on "their own deficiency in their own agreement" as a reason not to pass on notices of alleged copyright infringement.

"The respondent can't have it both ways. They can't say, ‘Look we have a [copyright] term of the agreement, give us credit for that', and then say ‘Because we don't have customer consent to use the information to send them a notice that they breached [the agreement] it's unenforceable," Bannon stated.

"We rely on them to enforce that [customer relationship agreement] provision but it's an unenforceable provision because of the Telecommunications Act, they say. There's no basis for that in the Telecommunications Act. Certainly I never thought there was."

Bannon also likened iiNet's suggestion that it would act on a court order to either pass on the notices or disconnect customers as inviting a situation where "one chases one's tail."

"A court order presupposes the finding of authorisation," Bannon argued.

"Their position of only acting on a court order of course presupposes their stern defence in these proceedings."

The case continues. You can follow the case in-full here. For a background on the case, click here.