ISP iiNet had entered an "arrangement" with Roadshow Entertainment to license some of its content legally for its freezone, the Federal Court heard today.
Roadshow Entertainment was one of a number of companies in the Village Roadshow group.
Village Roadshow was a member of the Australian Federation Against Copyright Theft (AFACT) and a party to and witness in the copyright case being fought between iiNet and the film industry in court this week.
Under cross-examination, general counsel for Village Roadshow Limited, Simon Phillipson, was asked by iiNet's senior counsel Richard Cobden whether it would be correct to say that the studio sought to make its content available legally online.
Phillipson responded the studios' approach was to "exploit and derive revenue" from access to its content.
Asked by Cobden whether he would agree that the presence of legal content online "discourage[d] illegal use" of that content, Phillipson indicated he "would hope so".
Cobden questioned Phillipson on the extent of his knowledge of Village Roadshow's online content agreements, including with Apple iTunes Australia.
While he had "no [specific] knowledge of content being available through iTunes Australia", he agreed "in general terms" that it was.
Cobden then asked Phillipson whether he was "aware an arrangement was completed between iiNet and Roadshow Entertainment in last couple weeks" that licensed content from the studio's library for iiNet's freezone.
"No," Phillipson replied.
An iiNet spokesman said the licensed titles - which could be available in the freezone as early as this weekend - were predominately children's titles, including The Fairies, Saddle Club and the Wiggles.
A key part of iiNet's defence was the argument it encouraged only legal downloads over its network by offering a "freezone" of unmetered, legal content.