Plunder downunder: How to read the iiTrial piracy verdict

There is real danger that iiNet's clean sweep on authorisation could lead to overconfidence in the internet industry with respect to copyright.

The High Court's judgment effectively reversed gains made by the film industry in the full bench appeal before the Federal Court. It was, in the words of Baker & McKenzie's Adrian Lawrence, "back to [being] a pretty good win for iiNet and for the ISP industry generally".

He notes the track record of rights holders in pursuing intermediaries through the Australian legal system is increasingly fraught with lack of success.

"It is becoming increasingly difficult for copyright interests to be successful in these kinds of cases, which I don't think is a deliberate bias either way, but I do think it is taking a view of how copyright works that is a strict view on the legislation, and requiring a plaintiff to make sure they absolutely have all of their ducks in a row to win a case like this," Lawrence says.

"I think that's a little bit of a theme coming through copyright cases that have made it through to the higher levels of the Australian courts in the past few years."

The High Court judgment in iiTrial does little to shed waning perceptions of ISP liability.

"A general concept that follows from the decision is there can be some sort of breathing of relief from the ISP industry to an extent that in any given set of circumstances, it's going to be a reasonably high hurdle that a copyright owner is going to have to satisfy to make an assertion of authorisation on behalf of the ISP," Griffith Hack's Wayne Condon says.

"It's not going to be in many instances that the ISP is held liable."

Clayton Utz senior associate Timothy Webb sees the judgment as effectively providing ISPs "a blanket defence" against similar allegations of copyright infringement.

But Lawrence says the door on ISP liability is not completely closed.

"If you look at the decision it doesn't absolutely say that an ISP under no circumstances could be liable. It leaves that possibility open, but it does seem that the circumstances for that to be the case would, on the High Court's reasoning, be pretty unusual," he says.

"There are a number of elements that the two decisions [majority and minority] in the High Court focused on that seem to say, 'Look, an ISP in the ordinary course is not really the right kind of defendant for these kinds of actions'."

Cooper Mills' Peter Moon is hopeful that the "chest-thumping" over iiTrial subsides so the real work can begin.

"iiNet's entitled to its day in the sun. It's run a mighty battle and it's won, so why wouldn't you have a beer and say, 'How good are we?' But then we all have to move on from that," Moon says.

"What do we as a community make out of copyright? What are we we going to do in future?

"We're going to have to take a step back and look at what all this means, and we really need a calm environment in which to do that."

Hungry for change

Within hours of the High Court judgment, the film industry began pushing for legislative reforms aimed at protecting the rights of copyright owners.

The move was unsurprising; the studios had exhausted their legal options in Australia with no clear answer on how they should police their rights in the digital age.

In addition, legislative change has long been seen as an end-game of the studios, although they must now convince a government that, until now, has favoured an industry-negotiated solution over legislative change.

"It's up to the Government if it feels legislation is warranted," King & Wood Mallesons' Maurice Gonsalves says.

"I think the position of the Government has quite consistently been for some time that they want the parties to get together and sort it out. They want the rights holders and ISPs to come together and agree on a scheme."

Such a scheme has been under negotiation for some time. Discussions have included the Federal Attorney-General's Department since late last year.

However, buoyed by the High Court victory, the Communications Alliance is anticipating major changes to the internet industry's bargaining power when the sides convene next. iiNet, meanwhile, would be happier to simply walk away.

That potentially sets up a dangerous game of chicken, circumvented only by a perceived lack of interest from both sides of politics in addressing the copyright issue with legislation.

"Anyone from AFACT who's got the courage to telephone Stephen Conroy and say, 'Minister, we would like you to introduce some restrictive new legislation', that'd be a pretty optimistic thing to do because this Government's not doing it and I can't detect any great heat from the opposition to do it," Cooper Mills' Peter Moon says.

"It's not in anyone's political interests to bash up the ISPs in the next three to five years in Australia."

One thing in the film industry's favour is the majority ruling of the High Court.

"The concept and the principles of the statutory tort of authorisation of copyright infringement are not readily suited to enforcing the rights of copyright owners in respect of widespread infringements ...," Justices French, Crennan and Kiefel wrote.

According to Baker & McKenzie's Adrian Lawrence, the statement is suggestive of the need for legislative change to combat copyright issues in the digital age.

Clayton Utz's Timothy Webb adds, "Both the majority and minority [High Court] judgments expressly indicate that these sorts of issues, to the extent [the court's] findings are not adequate to resolve the matter, are best resolved by legislative processes."

Some clues to the High Court's preference to let parliament deal with the issue are decidedly more subtle.

Says Moon, "The High Court judges sometimes give subtle backhanders to earlier judges. They're always very delicate in the way they do it.

"If you take a look at that really central range of paragraphs in the judgment - 117 through to 120 - there's a reference in paragraph 119 where they talk about attempts by earlier judges to meet 'a judicially perceived need to keep the statute law abreast of the times'.

"What they're basically saying is earlier judges tried too hard to twist the law into shape and that's not our job, That's parliament's job."

Read on for the film studio's more pressing issue - what to do now that copyright notices are dead.