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Landmark Australian Ruling Deals a Blow to Three Strikes Down Under

February 4, 2010 , , , ,

For those of us who believe that the Internet should remain an open, democratic and non-discriminatory platform, with few exceptions, the last two years have brought a steady stream of bad news from Down Under. First, there were rumblings that Australia was seeking to implement a “three strikes” policy toward those accused of online filesharing. Next, New Zealand came close to instituting its own three strikes mandate, though thanks to the efforts of activists, that deeply-flawed law was struck down at the last minute. Finally, after a number of previous, failed attempts, the Australian government announced that it plans to mandate the use of real-time filtering technologies on public ISPs sometime during the next year.

Just when it seemed like no one in the Australian and New Zealand governments appreciated the damaging effects of such policies, an Australian federal court judge has ruled that the ISP iiNet is not responsible for the actions of its subscribers. In the landmark ruling (full text here), which will likely have ramifications in the U.S. and elsewhere, the judge rebuffs Hollywood’s attempt to require iiNet to act as a copyright cop, dealing a blow to three strikes in the process. Let’s take a closer look.

In November of 2008, a group of 34 Hollywood studios, including Columbia, Disney, Paramount, Sony, Twentieth Century Fox and Warner Brothers (i.e. 5/6 of the MPAA), filed suit against iiNet, one of Australia’s top three largest ISPs. Based on tests conducted during the summer of 2008, the studios claimed that not only had iiNet failed to stop users from trading copyrighted films on filesharing networks but that the ISP itself had violated copyright law by storing and transmitting these films on its network. Australia, like the United States, has a “safe harbor” provision in its law that shields ISPs from liability for the actions of users, provided that ISPs take “reasonable steps” to address the illegal transmission of data. In filing suit against iiNet, Hollywood was attempting to nail down a definition for this ambiguous phrase, preferably one that would require copyright filtering, a three strikes policy or some other unnecessarily blunt weapon.

During the case, iiNet argued that “mere allegations” of infringement from copyright holders do not compel it to take action against its users–rather, a user should only be disconnected from the Internet pursuant to a court order. This is an argument that we’ve made time and again when discussing calls for three strikes mandates; users should not be cut off from our most important conduit for education, economic opportunity and civic engagement based upon a mere allegation of infringement–especially when that allegation comes from an industry whose track record in accurately identifying infringers is embarrassing at best.

In his decision, Justice Cowdroy agreed that an accusation of infringement does not constitute proof that an infringement took place, stating in no uncertain terms that, “notices along do not make the user’s activity blatant, or even conclusively determine that the user is an infringer”. He goes on to agree with iiNet’s argument, stating that the “mere provision of access to [the I]nternet is not the means to infringement” and that, furthermore, “iiNet has no control over [the] BitTorrent system and [is] not responsible for [the] BitTorrent system”. As Cory Doctorow over at Boing Boing notes, it would have been nice if he had added that BitTorrent is no more responsible for the infringement of its users than iiNet, as both companies merely provide users with the means with which to transfer data.

Regardless, this landmark decision at last clears up one of the major points of contention in Australia’s safe harbor provisions, by deciding that iiNet did indeed take “reasonable steps” to prevent infringement on its network and as such, is shielded from liability under the safe harbor provisions. Seeing how Justice Cowdroy’s decision was based in large part on U.S. case law, we should hope that this understanding of ISP safe harbors comes home to roost; here in the U.S., there is still much uncertainty regarding the “policy that provides for the termination in appropriate circumstances of subscribers and account holders” that the DMCA requires.

Following the verdict, iiNet managing director Michael Malone was heard to say the following to reporters: “I think the best way for us all to stop the copyright violations–it doesn’t help iiNet either–is to make material legitimately available for customers”. Of course, only the studios can ensure that their content is legitimately and widely available online, at a fair price and in a convenient format–that is, if they’re not too busy filing misguided lawsuits around the globe.