ISP Refuses to Admit Customers Are BitTorrent Pirates

Last year seven Hollywood studios teamed up to sue iiNet, Australia’s third largest ISP. iiNet is accused of authorizing its customers to infringe copyright, but in court today it refused to accept that was the case. iiNet has yet to decide if it will admit that its customers engaged in copyright infringement using BitTorrent.

Several studios including Village Roadshow, Universal Pictures, Warner Bros Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, Disney Enterprises, Inc. and the Seven Network (the top rated free-to-air broadcaster in Australia), announced last year that they were to sue Australian ISP iiNet for copyright infringement.

The studios stated that they were suing iiNet for “failing to take reasonable steps, including enforcing its own terms and conditions, to prevent known unauthorized use of copies of the companies’ films and TV programs by iiNet’s customers via its network.” The studios had demanded that iiNet disconnect alleged infringers based on the evidence collected when they spied on iiNet’s subscribers, but the ISP refused, hence the legal action.

The case, officially known as Roadshow Films Pty Ltd & Ors v iiNet Ltd (but commonly referred to as AFACT v iiNet Ltd) was filed on 20 November 2008 and the parties were in federal court today. During a previous hearing in February, iiNet vigorously denied it had ever authorized its subscribers to commit copyright infringement using BitTorrent, but had not yet come to a decision over whether it was prepared to admit its customers engaged in copyright infringement at all. In part, today’s motion was intended to get iiNet to make a decision.

However, iiNet still refused to admit that its users engaged in illicit file-sharing, even in the face of evidence provided by Danish anti-piracy tracking company DtecNet. The studios say that the DtecNet evidence, when cross-referenced with the ISPs own logs, will prove infringement took place.

“How you [iiNet] can not admit that films are being made available online [by iiNet users] is, quite frankly, beyond us,” said AFACT counsel Tony Bannon. “As soon as they [iiiNet] admit there are infringements going on in their system and they do nothing, the authorization case is almost a shut door,” he added.

iiNet’s counsel Richard Cobden said that he had only recently received required additional information but now the defense has that, iiNet would make a decision on admitting infringement – or not, on April 1st 2009. iiNet does not have to admit that its users infringed and if it takes this track AFACT will have to prove as much instead.

One interesting line of discussion leading up to the admission (or otherwise) on April 1st, involves some of the mechanics of BitTorrent. The defense is questioning if transferring files via BitTorrent is equivalent to “making available to the public”, since BitTorrent transfers take place on a one-to-one, individual-to-individual basis.

The defense is also querying that since BitTorrent transfers are made by breaking up files into thousands of pieces when uploaded, this may not be enough to prove that any subscriber uploaded a substantial part of a file, which is required for ascertaining infringement under the law. For their part, the studios say these two issues are irrelevant.

One seemingly ridiculous claim from the studios is that iiNet’s customers not only illegally downloaded and distributed copyright movies, but also burned them onto DVD in order to share them with their friends, or even sell them. Good luck with getting DtecNet to prove that, it’s impossible, particularly since the studios have already admitted they don’t know who the alleged infringers are.

Perhaps the most worrying aspect of the case is that according to the studios, as soon as they report an alleged infringement to the ISP, the ISP is now aware that infringement is taking place and is obliged to take action under the law. If it fails to take action the ISP is breaking the law by effectively authorizing the infringement, opening itself up to damages claims. One strike and you’re out?

The full case will be heard in October.

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