Roadshow Films Pty Ltd v iiNet Limited (No. 3) [2010] FCA 24

Court: Federal Court of Australia

Judges: Cowdroy J

Date decided: 4 February 2010

The Summary

In delivering this case, and cognisant of the length of the entire judgment (at 636 paragraph and over 200 pages), Cowdroy J provided a clear, informative and useful summary of his decision. The summary is available here. This may be sufficient for your needs; however, for those who are interested, a more detailed discussion of the full judgment follows.

The Facts

34 major film studios and their licensees in Australia ('the applicants') (by and with support from The Australian Federation Against Copyright Theft (AFACT)1)) brought action against iiNet ('the respondent'), the third largest internet service provider (ISP) in Australia, for authorising copyright infringement.
The applicants are the copyright owners of a number of cinematograph films. The applicants alleged that the copyright in their films had been infringed by illegal downloading and sharing of the films via a BitTorrent (or peer-to-peer (P2P)) network by subscribers of iiNet. The applicants notified the respondent of this alleged infringing behaviour by a series of notices identifying the conduct and the IP address from which it originated. The applicants asked the respondent to take action against the relevant subscribers, by issuing warnings and terminating accounts. The respondent took no such action, and as a result, the applicants alleged that the respondent was authorising the copyright infringements.
In particular, the applicants “alleged that the respondent knew or had reason to suspect that the iiNet users were engaged in, and were likely to continue to engage in, such conduct; took no action in response to notifications sent on behalf of the applicants which claimed that iiNet users were engaging in the conduct referred to above; offered encouragement to iiNet users to engage in or to continue to engage in the conduct; failed to enforce the terms and conditions of its Customer Relationship Agreement (‘CRA’) by which its internet services were provided; continued to provide services to those subscribers who were engaging in the conduct complained of; and through the respondent’s inactivity and indifference, permitted a situation to develop and continue whereby iiNet users engaged in such conduct.”2)

The Technology

Cowdroy J provides a technical background to the case (detailing how IP addresses and the BitTorrent Protocol operate) at paragraphs [43]-[78]. He gives an interesting summary of his findings at paragraph [70]: “To use the rather colourful imagery that internet piracy conjures up in a highly imperfect analogy, the file being shared in the swarm is the treasure, the BitTorrent client is the ship, the .torrent file is the treasure map, The Pirate Bay provides treasure maps free of charge and the tracker is the wise old man that needs to be consulted to understand the treasure map.”

The Evidence

Credibility of Mr Malone (CEO of iiNet)

Justice Cowdroy goes through the evidence in this case in a great deal of detail. In doing so, he rejected the applicants' attacks on the credibility of Mr. Malone, CEO of iiNet. He says at [135]: “The Court rejects the submission that Mr Malone 'like iiNet itself, has been compromised by his extreme views on the role and responsibilities of an ISP.' Merely because the views expressed by Mr Malone did not accord with the interests of the applicants does not render those views 'extreme'.” He further states:

“Mr Malone’s evidence acknowledged that was there was no written policy (as distinct from written material which evidenced the policy). However, he and Mr Dalby (the Chief Regulatory Officer of the respondent: see [193]) were aware of the outline of a procedure or policy, which the respondent had formulated, namely that if a Court ordered a subscriber account be terminated or if a Court found that a subscriber of the respondent infringed copyright or a subscriber admitted infringement, the respondent would terminate that subscriber’s account. When Mr Malone explained that no one had been terminated because no one had been found to infringe copyright he was asked whether this was some kind of ‘//joke//’.

>It is the Court’s prerogative to decide whether the respondent had a repeat infringer policy of the kind referred to in the Copyright Act. It should not be assumed that the respondent did not have a policy and that consequently Mr Malone was untruthful. The Court observes that this subject matter was a prime example of the intemperate cross-examination of Mr Malone. The respondent’s policy was not a joke, and its conduct was entirely consistent with the policy as outlined even though it may not have been the kind of policy that the applicants anticipated. As will be explained in more detail in Part F, since there are no statutory requirements for a ‘repeat infringer policy’, the Court concludes that the respondent’s policy as described by Mr Malone was sufficient to constitute a policy for the purposes of the Copyright Act. It is no less so merely because the respondent’s policy was one which was not envisaged by the applicants. The Court rejects the applicants’ suggestion that Mr Malone’s testimony on this issue bears upon his credit.”((Roadshow Films Pty Ltd v iiNet Limited (No. 3) [2010] FCA 24 per Cowdroy J at [157]-[158].))

BitTorrent usage

Cowdroy J noted that one of “the more adventurous submissions” of the applicants was that bandwidth, downloading or quota usage by iiNet users was somehow synonymous with copyright infringing conduct (at [239]). Cowdroy J observed that this was based on two propositions (both of which would need to be accepted by the Court if the applicants' submission was to hold up): (1) that the vast majority of BitTorrent usage infringes the applicants' copyright and (2) that the vast majority of bandwidth used by the respondent's subscribers was related to BitTorrent usage.3)

The Court rejected this submission. Cowdroy J found:

“There is evidence before the Court of examples of the use of BitTorrent that is legitimate, that is, use that does not infringe anyone’s copyright. One example is the distribution of media, for example games such as World of Warcraft (a highly popular game with many millions of players) and television programs, such as Joost. The operating system Linux (an open-source competitor to Microsoft Windows) is also distributed by means of BitTorrent. While these examples are unlikely to account for a large proportion of BitTorrent traffic, they will constitute some proportion of that traffic...

>...While there can be no doubt that infringements of the applicants’ copyright are occurring by means of the BitTorrent system, there is insufficient evidence before the Court to determine whether infringement of the applicants’ copyright is the major, or even a substantial, part of the total BitTorrent traffic. This should be contrasted with Kazaa and Cooper [2005] FCA 972; 150 FCR 1 when the applicants in those proceedings were music companies and, as a matter of fact, it was known that Mr Cooper’s website was being used almost exclusively for infringing music files...and the Kazaa system appeared to be used for, or was considered by its users to be, ‘a free music downloading search engine’: see Kazaa at [151]. That is, the means by which the infringements occurred in those proceedings were clearly being predominantly used to infringe the applicants’ copyright in those proceedings. The evidence is not the same in these proceedings...

>...The above analysis is not intended to be dismissive of the infringer’s conduct. However, it demonstrates that the claim made throughout these proceedings that bandwidth usage or downloading is somehow necessarily, predominantly or even significantly copyright infringing, is simply not established on the evidence. The Court finds the applicants’ attempt to cast a pall over internet usage, such that it is assumed to be infringing, unless otherwise shown, is unjustified. The Court does not find that there is any evidence that the majority or even a substantial usage of the bandwidth allocated by the respondent to its subscribers relates to the infringement of the applicants’ copyright.”((Roadshow Films Pty Ltd v iiNet Limited (No. 3) [2010] FCA 24 per Cowdroy J at [242]-[250].))