iiNet chief executive Michael Malone has threatened to walk away from closed-door discussions with the film industry over a potential industry code to minimise copyright infringement in light of this morning's High Court judgment in the ISP's favour.
The groups had been holding talks mediated by the Attorney-General's Department in an attempt to mutually agree on an industry code that would see ISPs send warning and educational notices to infringing users.
Department secretary Roger Wilkins, who has led the talks since late last year, has said the Government prefers the mediated industry talks and a potential code over legislative changes or copyright reform.
However, the High Court's absolution of iiNet's liability for the infringement of copyright by its users had put the ISP in a stronger position during the talks.
iiNet regulatory chief Steve Dalby described the talks as an attempt by rights holders to impose their existing framework onto ISPs with little mutual negotiation.
"We get to the meetings and the rights holders say 'you need to cooperate'," he told media following the High Court's judgment this morning.
But Malone said he wasn't sure an industry code would ever provide a middle ground between the opposing sides.
"My preference would be to walk away now," he said.
A draft of the code was released in November last year by industry body the Communications Alliance ahead of iiNet's hearings in the High Court. It provided for ISPs to trial forwarding notices from rights holders which agreed to participate in an "accreditation or pre-approval process" run by an independent auditor.
However, the code had seen little support to date from rights holders and despite attempts to achieve a final draft by the first quarter of this year, delays in discussions and the impending High Court ruling meant an industry code is unlikely to be finalised for some months.
Arguments around any independent oversight of the notice regime, who would be liable for the costs of such a regime and whether there should be any Government intervention in the regime itself have remained constant through negotiations.
"I don't know how the rights holders are going to react in terms of those discussions, we certainly stand ready to recommence them," Communications Alliance chief executive John Stanton told iTnews.
He said the broader industry was willing to implement an industry scheme and participate in the discussions, a notion Dalby said he was still willing to cooperate with.
"The reality is that I'd rather be in those meetings putting our point of view and arguing from our perspective than to be sitting on on the outside waiting for a fait accompli," he said.
"Up until now it's been very much 'let's do a deal because you might lose'... we've come out of this with a very strong, very clear decision on our obligation and our rights. Our negotiating position as an industry, not just iiNet, has changed significantly and I think the tone of those conversations will be very different at the next meeting."
Malone strongly criticised the lack of participation and representation from consumer groups in the Attorney-General discussions to date, a matter that the Federal Government itself had been reluctant to back down on.
It is understood attempts by groups including the Internet Society of Australia, the Australian Communications Consumer Action Network and CHOICE have been denied so far.
Malone called for future discussions and any draft codes to be made public so "consumers can see what's lined up for them".
"Let's let the world see it," he said.
"The rights holders are now in a position where we're not obliged to defend their rights so if they want us to do something, put it out there publicly."
AFACT chief executive Neil Gane said consumer representation would be introduced at an "appropriate time", arguing that it held discussions directly with some of the groups outside of the closed-door negotiations.
A spokeswoman for the Attorney-General's Department said the Government would examine the High Court's decision closely and continue to facilitate code of conduct discussions with industry stakeholders.
"We hope that industry will continue to work together to find a range of solutions to illegal downloading," she said.