Roadshow Films Pty Ltd & others v iiNet Ltd (commonly known as AFACT v iiNet) was a case, commenced in the Federal Court of Australia, and then heard on appeal in the Full Federal Court and High Court of Australia.

The litigation was commenced by Roadshow Australia and other movie and television studio members of the organisation then known Australian Federation Against Copyright Theft (AFACT) against iiNet, which in 2008 was Australia's third-largest Internet service provider (ISP).

The trial was one of the first to be live-tweeted in Australian courts, and was done so with permission of the judge.

AFACT claimed that iiNet authorised primary copyright infringement by failing to take reasonable steps to prevent its customers from downloading and sharing infringing copies of films and television programs using BitTorrent.iiNet sued over BitTorrent piracy, 20 November 2008. Retrieved 23 January 2009

The trial court delivered judgment on 4 February 2010, dismissing the application and awarding costs to iiNet. An appeal to the Full Court of the Federal Court was dismissed by Emmett and Nicholas JJ (Jagot J dissenting). A subsequent appeal to the High Court was unanimously dismissed on 20 April 2012.

This case is important in copyright law of Australia because it tests copyright law changes required in the Australia–United States Free Trade Agreement, and set a precedent for future law suits about the responsibility of Australian Internet service providers with regards to copyright infringement via their services.

Background The case against iiNet was filed on 20 November 2008.Notice of Filing and Hearing in the Federal Court of Australia . Retrieved 23 January 2009. Speaking on behalf of Village Roadshow, Universal Pictures, Warner Bros. Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, Disney Enterprises, Inc., the Seven Network and others, AFACT claimed that iiNet "had ignored requests from the companies to discipline its customers for breaking copyright laws." The managing director of iiNet, Michael Malone, claimed that "iiNet cannot disconnect a customer's phone line based on an allegation. The alleged offence needs to be pursued by the police and proven in the courts. iiNet would then be able to disconnect the service as it had been proven that the customer had breached our Customer Relations Agreement,"

The film companies' representative, AFACT, had conducted investigations into peer-to-peer-file-sharing network BitTorrent and found evidence that iiNet users had infringed the film companies' copyright. As of July 2008, AFACT sent notices to iiNet, providing information that iiNet users were using BitTorrent to infringe the copyright of the film companies. However, those notices had not enclosed AFACT's methodology. AFACT requested that iiNet prevent its users from infringing copyright through the suspension or termination of accounts of relevant users. The ISP did not act on AFACT's request, stating that, while copyright infringement was not approved, iiNet was not liable to take action on the basis of allegations.

On a directions hearing on 6 February 2009 AFACT claimed that the three major issues were; whether iiNet authorized the acts of infringement, whether iiNet was liable for the actions of its customers and whether the safe harbor provisions of the Copyright Act 1968 protected iiNet. In February 2009, iiNet revealed that it had received legal assistance from its competitor, Telstra.

In March 2009, Broadband Minister Stephen Conroy commented on iiNet's defence. Conroy said in response to iiNet as having "no idea if any customers are illegally downloading music" that this defence was "stunning" and "a classic". The Shadow Communications Minister Nick Minchin criticised the Minister for publicly discussing an active case and suggested he was deflecting attention away from proposed mandatory internet filtering.

More than A$1 million was paid to iiNet for legal costs in developing a defence that was not needed after AFACT made an adjustment to their claim. AFACT removed a claim called conversion which suggested iiNet was using copyright to its own advantage by allegedly allowing customers to illegally download copyrighted material. These changes also delayed the court case because iiNet was awarded more time to amend their defence.

Arguments The applicants, who were represented by Tony Bannon SC, started by arguing that iiNet was failing to enforce its own user agreements which stipulated that users were not to illegally download files. Early in the proceedings Bannon claimed that "there were 94,942 instances of iiNet customers making available online unauthorised copies" of movies during a 59-week period from 23 June 2008.

On day three it was revealed that iiNet received 1,356 notices requesting "takedown" action against customers, from various sources in a one-week period in early December 2008. General counsel for iiNet Richard Cobden argued that "Acting on [all these] notifications is simply unreasonable and burdensome and inappropriate".

Judgement The trial judge, Justice Cowdroy of the Federal Court, found in favour of iiNet, dismissing the case with costs. The court found that AFACT had misled the court in regard to the number of infringing users, and, while iiNet users did infringe, this was not the responsibility of iiNet to deal with:

iiNet is not responsible if an iiNet user uses that system to bring about copyright infringement ... the law recognises no positive obligation on any person to protect the copyright of anotherAsher Moses (4 February 2010). iiNet slays Hollywood in landmark piracy case. The Age. Fairfax Media.

It was also found that iiNet had in place an "anti-piracy policy" and while that was not up to the standards demanded of them by AFACT, it was considered acceptable to the court that iiNet did not authorise copyright infringing activities on their network.

Justice Cowdroy found that the provision of internet access by iiNet was not the "means" of infringement. Rather, the "means" was the exploitation of BitTorrent, which iiNet had no control over, in a deliberate manner to infringe copyright."Federal Court decision on iiNet vs. film and television studios" Australian Copyright Council. Justice Cowdroy determined that iiNet did not have adequate power to prevent users from performing unlawful downloads and had not sanctioned, approved or countenanced copyright infringement. Since iiNet does not have control over the BitTorrent network, and the ISP Safe Harbour provisions apply, iiNet could not be held responsible for anything done by its users on the network.

Additional comments

One of iiNet's witnesses in the case was iiNet Managing Director and CEO, Michael Malone. Justice Cowdroy was invited by the applicants to find that Malone was not a credible witness, being neither truthful nor reliable. In a sharp rejection of this submission, Justice Cowdroy held (at 132–133):

132. The applicants have mounted a vigorous challenge to the credibility of Mr Malone, asserting that he was neither a truthful nor reliable witness. It has been submitted that the Court should not rely on his evidence except where it is against his interests or it is independently corroborated. It is submitted that Mr Malone was determined to advocate the respondent's cause at every opportunity and where he sensed a conflict between that cause and the truth, he was prepared to subordinate the latter in favour of the former.

133. The Court rejects the attack on the credit of Mr Malone. Mr Malone was an impressive witness who remained consistent (for the most part) in the evidence he gave during three days of gruelling and unnecessarily hostile cross-examination.

Consequences As a result of this outcome, the court has set a precedent stating that ISPs are not responsible for what their users do with the services the ISPs provide them. Costs for the trial were awarded to iiNet as part of the ruling. AFACT has previously indicated it will appeal an adverse judgment. It was believed that this ruling will have substantial ramifications internationally in regards to dealing with copyright infringers on an ISP level.Tim Lohman (4 February 2010). iiNet outcome of global significance: Budde. Computerworld. IDG Communications. Retrieved 29 December 2011.

In a statement released by the executive director of AFACT, Neil Gain, the copyright organization has 21 days to appeal the judgement. However, they are looking towards lobbying the government instead to have laws change to place responsibility for copyright protection in the hands of the ISPs themselves. Sabiene Heindl, the general manager for the copyright enforcement arm of the music industry, MIPI, has stated that as a result of this case, MIPI has no choice but to sue individual copyright infringers directly.

It was believed that the government, in particular then Prime Minister Kevin Rudd and Communications Minister Stephen Conroy would attempt to introduce legislation into parliament to modify laws regarding this case to prevent ISPs from using the safe harbour provisions as an excuse to avoid protecting copyright.Trevor Clarke (9 February 2010). Rudd non-committal on copyright law change chances. Computerworld. IDG Communication. Retrieved 29 December 2011. However, Conroy released a statement saying that he has no plans to push for such an amendment and for ISPs and AFACT to have a "mature" approach to dealing with copyright enforcement.

Appeal to the Full Court of the Federal Court AFACT appealed to the full bench of the Federal Court, and was dismissed on 24 February 2011.Josh Taylor (25 February 2011). iiNet win puts onus on ISPs: lawyers. ZDNet. CBS Interactive. Retrieved 29 December 2011.. The majority of the Full Court stated that liability was not established as the copyright owners had not provided sufficient information and verification to support their allegations.

Justices Emmett and Nicholas found that iiNet had not authorised the infringement of copyright, with Justice Jagot dissenting. However Justice Emmett made additional comment:

While the evidence supports a conclusion that iiNet demonstrated a dismissive and, indeed, contumelious, attitude to the complaints of infringement by the use of its services, its conduct did not amount to authorisation of the primary acts of infringement on the part of iiNet users.

Since the decision has been released, notable Australian intellectual property law academics David Brennan, and Kimberlee Weatherall have suggested the outcome is not very favourable for ISPs.

Key findings which were established in the appellant court were: Justice Emmett, and Justice Jagot, found that ISPs can be found liable for authorising their users for infringement under specific circumstances. Account holders were liable for infringements on the customer account in the context of disconnection due to repeat copyright infringement. [s 116AH, item 1]. ISPs were not afforded protection under the Telecommunications Act 112E of the Copyright Act 1968 (known colloquially as the facilities defense), and one which equated an ISP to Australia Post and often cited by groups such as the Internet Industry Association and other supporters was found by the trial judge and all three appellant judges as not a valid defense. All three appellant justices, found that iiNet would not have been afforded protection under the "Safe Harbours" negotiated in the copyright act, as they did not have a policy to deal which allowed for termination of repeat infringers in appropriate circumstances.

The Full Court's judgement was followed by negotiations for legislative and industry-based solutions to resolve the issue of online copyright infringement, but these had not reached a conclusion by the time of the subsequent High Court appeal decision in 2012.

Authorisation of infringement

Joint judgement