The case navigated several layers of the Australian court system, with iiNet winning the initial ruling and all subsequent appeals, before finally ending up in front the High Court in December last year.

The thrust of the case hung on whether iiNet had willingly authorized the copyright infringements of its customers. Lower courts found that iiNet had no duty to police its own networks, even when AFACT supplied so-called proof of infringement by its customers.

Just moments ago, the High Court unanimously dismissed AFACT’s final appeal.

“The Court observed that iiNet had no direct technical power to prevent its customers from using the BitTorrent system to infringe copyright,” a summary of the Court’s findings read.

“Rather, the extent of iiNet’s power to prevent its customers from infringing the appellants’ copyright was limited to an indirect power to terminate its contractual relationship with its customers.”

The High Court further noted that the warning notices previously sent to iiNet by AFACT when the ISP’s customers allegedly infringed copyright “..did not provide iiNet with a reasonable basis for sending warning notices to individual customers containing threats to suspend or terminate those customers’ accounts.”

Since the notices were inadequate, iiNet could not be considered to have authorized the infringements of its subscribers when it did not act on them.

The High Court sits at the pinnacle of Australia’s legal system and its rulings cannot be appealed. Today’s decision forms a binding legal precedent on all lower Australian courts and will be taken into consideration by judges in countries with comparable legal systems such as India, Canada and the UK.

All of this factored into the reasoning of AFACT and its chief sponsor the MPAA to take legal action against iiNet, as revealed by US diplomatic cables released by Wikileaks in November 2011. The US Ambassador to Australia in 2008, Robert McCallum, reported back to Washington that iiNet was chosen because it was judged too small to put up a decent legal fight. In the cable, the Ambassador prophetically cautioned the coming legal tussle could be perceived as “…the giant American bullies [versus] little Aussie battlers….”

AFACT could never have known Wikileaks would out the plot, or that the legal case would so spectacularly backfire. Today’s decision will hurt Hollywood’s copyright enforcement agenda on multiple levels. Alongside the setting of an unwanted legal precedent, AFACT has been dealt a significant public relations blow in its ongoing lobbying efforts in Australia.

Prior to the decision, AFACT’s Managing Director Neil Gane told TorrentFreak via email, “Regardless of the outcome [today], the landscape has changed. In the three years since the case commenced, legislators, regulators and courts around the world have recognized that ISPs must play a central role in preventing online copyright theft.”

Anticipating a loss in the case, AFACT began lobbying government and ISPs behind closed doors last December. The process has been widely criticised for a lack of public consultation. While the Australian government has suggested it prefers an industry agreed model for combating copyright infringement to legislation, leaks have revealed AFACT and its lobbying partners have been pressuring for an outcome that forces ISPs into a policing role.

The option of having ISPs forced into that role through the courts has been blunted by today’s High Court decision and it can be expected AFACT will step up their lobbying efforts of law-makers directly.

Update: Both parties held separate conferences following the emphatic 5-0 High Court decision. The mood in the iiNet camp, who stand to recoup $6 million in legal fees, was jubilant.

“We’re very pleased with the results announced in the High Court,” iiNet Chief Regulatory Officer Steve Dalby said. “The five-nil judgement puts us in a much stronger position.”

AFACT’s Neil Gane was expectedly downbeat. “Both judgements in this case recognize that copyright law is no longer equipped to deal with the rate of technological change we have seen since the law of authorization was last tested,” he said.

iiNet CEO Michael Malone was keen to stress the importance of the win. “This is a world first case. No case has gone to judgement in the highest court in the land. I’ve had text messages and emails from people from all over the world,” he said.

Mr Malone said he looked forward to finding solutions to content piracy, but said a large part of the problem was content creators’ unwillingness to make their products available in a timely and cost-efficient manner. Expressing a personal fondness for hit US TV series Game of Thrones, Mr Malone lamented he was not able to access the latest episodes of the show legally in Australia.

Both Mr Malone and Mr Dalby expressed concerns about AFACT’s methods for collecting data on alleged infringers. “I dont’ have any confidence in the notices [of alleged infringement] that we’ve seen,” Mr Dalby said.

Mr Malone added that by standing up to AFACT and its Hollywood backers iiNet had enhanced its reputation in the Australian marketplace. “I’d argue [the court case has] positively impacted our reputation … Our role is to connect customers to the internet and with each other. We’re not going to remove your access without some sort of independent review,” he said.

Source: iiNet: ISP Not Liable For BitTorrent Piracy, High Court Rules

In the U.S. the MPAA was the outfit that tipped the authorities off on many of the ‘rogue’ sites that had their domain names seized in the last year. Similarly, in the U.K. the MPAA-funded group FACT carried out most of the investigative work in cases against the operators of the BitTorrent community FileSoup and the streaming site TV-Links.

Today we talk to Gavin “Tex” Warren, a private investigator who worked for the Hollywood backed group AFACT in Australia. While he mostly worked on offline piracy, his inside view allows us to learn more about how the anti-piracy agenda is sold to the outside world.

Warren became a private investigator in 2000, and prior to that he served as a detective in the Australian Federal Police for twelve years. From 2003 until 2008 he worked as an investigator, undercover operative handler and then lead investigator for AFACT. When AFACT moved their priorities from offline piracy to ISPs, they eventually let Warren go.

The Big Score

“Initially AFACT was called the Australasian Film and Video Security Office and was run out of Sydney by Mr Steve Howes,” Warren says, explaining how it all started for him in 2003. “The lead investigator here in Melbourne was another former AFP officer, Greg Hooper.”

“I had an undercover operative who worked for me (name withheld) that I shall refer to as “Short Round”. We were contracted to make purchases of DVDs and back then, VHS tapes of copyright infringing movies. In our first operation which lasted about six months, we had infiltrated a manufacturing “laboratory” and the dodgy sales team at the local trash and treasure market.”

Warren’s team then made so-called ‘trap purchases’ and all the evidence they gathered was then presented to the Victoria Police. The operation resulted in the execution of three simultaneous search warrants, netting about fifteen thousand exhibits, $30,000 cash and a dozen computer towers. It was a great success that was quickly communicated to the media.

“The press were informed and all was tied up in a neat bundle. Column inches were filled, sound bites were created and everyone was happy, except the pirates,” Warren recalls.

“This success ensured that Short Round and I had ongoing work. The AFVSO was subsumed by AFACT soon thereafter. Steve Howes was replaced by Neil Gane, a former British Hong Kong Police Inspector who had been working in Malaysia with the MPAA against piracy.”

Boosting Statistics

“At this time, Short Round and I were trotted out to meet Neil and to show him our equipment and discuss tactics. Mr Gane gave the impression of being very committed to stopping the evil scourge of piracy and was far more media savvy than his predecessor.”

“He was adamant that we needed to boost our statistics to make the media sit up and take notice and that the large numbers would make it easier to get the local Police interested. This was especially difficult to do as local police had no jurisdiction over copyright infringing product and the AFP were desperately short on manpower. We were encouraged to find links to drugs and stolen goods wherever possible.”

“We discussed the formula for extrapolating the potential street value earnings of ‘laboratories’ and we were instructed to count all blank discs in our seizure figures as they were potential product. Mr Gane also explained that the increased loss approximation figures were derived from all forms of impacts on decreasing cinema patronage right through to the farmer who grows the corn for popping.”

Gane understood that the media was an essential tool towards AFACT’s goal of getting tougher copyright legislation in place. And for this purpose, it was a good idea to bend the truth a bit. The results of this recalculation are quite amazing.

“2002 impact estimates were $100 million to today’s figure of $1.36 billion in nine years…. That’s a lot of extrapolating,” Warren says.

Courting the Police

Aside from influencing lawmakers with creative statistics, Warren and his colleagues also had to court the police on a regular basis. AFACT worked with both local law enforcement and the attorney general’s office where they delivered evidence and information to, based on their own investigations.

“Funded solely by MPAA, AFACT lobbies hard for changes to Australian law and enhance the sexiness of their case by making vague references to links to terrorism. Sometimes not so vague. I was instructed to tell police officers that the profit margins were greater than dealing heroin. It was bizarre. A twisted logic that AFACT spewed out with monotonous regularity,” Warren says.

One of the examples Warren gives is that they assumed that all burners and DVD replicators would run 24/7, making these operations appear very lucrative.

“Each burner cranking out ten discs an hour, multiplied by ten dollars per disc is potentially a hundred dollars an hour, multiplied by number of burners by hours in a year gives a yearly potential…. Very pumped up statistics.”

When the local police were convinced about the to need to follow-up on the case, Warren delivered them all the evidence they would need on a silver platter.

“In my time at AFACT we developed relationships with various police officers (detectives) and would work our cases up to a stage where we could present them with enough information, intelligence and evidence that most of the work was done. This is called a ‘walk up start’.”

“Police on the other hand would sometimes find large quantities of copyright infringing material whilst executing warrants, eg: drug warrant executions would invariably turn up some dodgy DVDs and I would get a call to come and identify the product and prepare a brief of evidence for prosecution.”

“It was a matter of educating the police officers what to look for. In this vein, I would regularly deliver half day seminars to police on their training days. It was a good system and had the effect of increasing their prosecutions and my investigations statistics. Collaboration had such a dark overtone. Cooperation is my preferred term,” Warren says.

Like many other private investigators Warren is a former police detective. And although the statistics may have been pumped a little, Warren was always careful to act within the boundaries of the law when it comes to his investigative work.

“The PI license is relatively difficult to obtain and easy to lose, therefore we tend to shy away from any activity that would jeopardize our livelihood. The key to efficient and effective investigations is to know all aspects of the various legislations that cover things such as Surveillance Devices, hidden cameras etc. At no time did I authorize or condone the breaking of any laws or rules.”

“Undercover operations, to be used in evidence, need to be squeaky clean. The last thing any investigator needs is to have evidence thrown out of court because of the breach of legislation, or compromise by way of entrapment,” Warren told TorrentFreak.

Bye Bye PI

At the end of 2007 Warren had a meeting with Neil Gane, who just returned to AFACT after serving as the Australasian Operations Manager for the MPAA for a brief while. Gane told Warren that AFACT would be focusing more on ISPs and online piracy instead of the street work Warren did.

Warren was still welcome to submit a tender for piecemeal work at an hourly rate, instead of daily. However, he later learned that his partner and former friend, Short Round, had undercut him, and was working on an as-needed basis for AFACT.

This ended Warren’s ‘career’ in the anti-piracy business. In the years that followed he continued to monitor what AFACT was up to, and he still can’t help but crack a smile when he reads about the disastrous piracy statistics AFACT tells the media about. And so do we.

Source: Private Anti-Piracy Investigator Spills The Beans

The results claimed to support the effectiveness of a 3-strikes system for copyright infringers, but those who took a closer look saw that this was not the case.

As we pointed out, the results could also show that none of the current file-sharers would be deterred, as the question was also answered by the 78 percent of people who don’t even use file-sharing software.

The press release was nothing more that a cheap and misleading marketing stunt and it’s tricks like this that are causing the anti-piracy lobby to lose credibility at a rapid pace.

Just a few hours ago AFACT came out with another press release. This time they plug the results of a study they appear to be unrelated to, conducted by the University of Ballarat’s Internet Commerce Security Laboratory (ICSL). These are the same researchers who released some rather incompetent reports in the past, but their latest study shows signs of improvement.

As AFACT is happy to point out, the researchers conclude that 97.2 percent of the most popular files on BitTorrent are infringing (and that a lot are faked). Although this conclusion is probably not too far off, not all journalists are eager to pick it up as some are starting to see that AFACT has a habit of twisting the truth.

In a piece titled “Fooling some of the media, some of the time,” Canberra Times journalist Myles Peterson explains his concerns.

When Peterson received the three-strikes study press release last week he couldn’t help but notice that News Corp newspapers received the details before ‘regular’ journalists did. Yes indeed, that is the same News Corp organization that is a partner of anti-piracy groups such as IPAF, DEAA and AFACT.

“Last Monday, The Australian ran a full-court press in print and online dubbed ‘Piracy, the disease that’s crippling our creative industries’, comprising a number of articles from various angles, all attacking the scourge of online file sharing. Articles also appeared in News Corp tabloids The Adelaide Advertiser and The Daily Telegraph,” Peterson writes.

“That’s odd, I thought. The avalanche of coverage seemed to disproportionately reference the new study. Would a media outlet co-operate with a lobby group to generate mass coverage of a topic, I wondered.”

While following up on the study, Petersen noticed that various Australian anti-piracy outfits are conveniently sharing personnel. This, added with the recent Wikileaks revelation that the MPAA is the driving force behind these groups, lead to further doubts. They were only heightened when the obvious flaws in the ‘independent’ study were pointed out by us.

Using journalists in a propaganda war orchestrated by foreign companies wasn’t a very pleasant thought to Petersen.

“The story behind the stories, both those that appeared in News Corp media and TorrentFreak’s balancing rebuttal, stayed with me, as did a series of worrying questions. Are AFACT, the DEAA and IPAF being co-ordinated by the same group of people? Are these people being directed by the Motion Picture Association of America, as the WikiLeaks cable suggested? ” he writes.

“What stuck with me most was a similar concern to one uttered recently by Australian Greens leader Senator Bob Brown. Did a group of journalists put together a press campaign based on a biased study supplied by a lobby group that represents their own employer?”

And if that’s not bad enough, in a few days the anti-piracy outfits have a meeting at the Federal General Attorney’s office to push their agenda at the highest level. The fear is that this talk will be far from balanced, and we can only hope that the hosts will be able to see through it.

“When our federal lawyers host these lobby groups at the end of the week, I hope they cast a more critical eye over any research presented than certain media outlets did. I also hope they are able to work out which person in the room represents the ACIG, AFACT, DEAA, IPAF, MPA, MPAA or all of the above,” Petersen concludes.

The good news is that the piece in the Canberra Times shows that not all journalists are indirectly working for the MPAA. Increasingly, we see skepticism towards the continuous stream of anti-piracy propaganda and more room for a sensible discussion about the topics at stake. Perhaps the tide is turning?

Source: Press Starts to Doubt Anti-Piracy Propaganda Machine

Nevertheless, this is the position Australia’s ISPs find themselves in today. They have a written ultimatum from the Australian Federation Against Copyright Theft, the anti-piracy group financed by the big Hollywood studios. Received last week, the memo gives the ISPs until close of business today to give their commitment to entering into talks to hinder online file-sharing – or suffer the consequences.

This aggressive approach has already “rubbed up” Exetel boss John Linton “the wrong way”, as Aussies might put it. He has declared that he won’t be responding to AFACT’s threats. Now, according to a new report and contrary to the result hoped for by AFACT, another ISP is trying to form a coalition with its rivals to fend off Hollywood’s demands.

A Telstra spokeswoman quoted by The Australian has confirmed that the ISP is liaising with the Communications Alliance to develop an industry-wide response to AFACT.

“Telstra remains open to discussing how we might assist copyright holders to enforce their private property rights. Given this is an industrywide issue Telstra has encouraged discussions to be facilitated by the Communications Alliance,” she said.

The Communications Alliance was set up to provide a unified voice for the Australian telecommunications industry, offer contributions to policy development and ensure the protection of consumer interests. A spokesperson confirmed that the organization is working with the ISPs to find “an industry-led solution” to online copyright issues.

Rather than adopt ISP suggestions that are unlikely to go far enough for Hollywood, AFACT appears to prefer a fairly aggressive approach to infringement touted by Judge Arthur Emmett during the iiNet trial.

Throwing their 3-cornered hats into the mix, Pirate Party Australia have rejected not only Emmett’s suggestions, but also the manner in which AFACT have approached the ISPs.

“Pirate Party Australia is opposed to the Australian Federation Against Copyright Theft’s (AFACT) latest offensive against Australian internet users,” the party said in a statement.

“AFACT’s alleged extreme demands would require ISPs to notify their customers of infringements as alleged by AFACT and disconnect them if they do not respond within 7 days.

“These veiled threats are nothing more than intimidation tactics that once again clearly display the extent that Big Media will go to in their failing attempts to protect their flawed business models. Extortion is a new low even for AFACT,” says Acting Secretary, Brendan Molloy.

“It is completely inappropriate to have closed-room discussions even before the iiNet court case has concluded, and even more inappropriate to make veiled threats to begin yet another court case for not attending these ‘voluntary talks’.”

The party concludes by urging ISPs to unite against AFACT and refuse to become their copyright enforcement officers.

Involving the Communications Alliance in AFACT discussions would seem to be a sensible move by the ISPs. In the light of this development it remains to be seen whether AFACT still feels inclined to go ahead with whatever action lies behind today’s deadline.

Source: As ISPs Mull Pact To Fight AFACT, Pirate Party Condemns ‘Extortion’

Although AFACT is still engaged in legal proceedings against ISP iiNet, having lost the latest round of action in a case now destined for the appeal court, the carefully weighed rhetoric coming from the Hollywood-backed group speaks volumes.

“AFACT has always been open to discussions and negotiations with ISPs,” said an AFACT spokesperson last week on the back of news that it has been ‘inviting’ ISPs to join them in ‘negotiations’ about dealing with online piracy.

“This is simply an invitation to ISPs to engage with us to fulfil their obligations.”

Last week Delimiter reported that the letter sent by AFACT to ISPs highlights points from the most recent hearing in the iiNet case that the movie group feels went in their favor.

It now seems clear that despite losing that round AFACT is moving now – before the appeal – to pressure the ISPs into coming on board. So what do they want? According to The Australian, who have seen a copy of a letter sent to ISP Exetel, they want “a system of graduated responses to online piracy.”

But rather than an approaching talks on a mutually beneficial and friendly footing, AFACT has chosen to do so on the back of threats that are so thinly-veiled the ISPs can be in little doubt about what might be coming next.

The ISPs have until this Wednesday to accept AFACT’s invitation to voluntarily join talks or they will face “unspecified action”.

Exetel boss John Linton said that the wording in the letter could not be seen “as anything other than a threat.”

According to a source quoted by The Australian, AFACT will be relying heavily on statements made during the iiNet case by appeal court judge Arthur Emmett in order to generate leverage against the ISPs.

In a nutshell, Emmett suggested that customers should be warned that an infringement has taken place via their account and they should be given a certain time, say 7 days, to respond to the allegation. If no response should arrive then the ISP could suspend the account until one does. During the iiNet case itself, Judge Emmett suggested going even further for repeat infringers.

“Maybe the stage is reached where it’s reasonable to say, ‘Look, you’ve had warning after warning. Maybe you’re doing other lawful things, but if you insist on doing this unlawful activity, we’re going to close you down’.” No surprise then that Hollywood like Emmett’s style.

In their ongoing attempts to meet AFACT somewhere in the middle, during March this year iiNet came up with proposals for dealing with the issue of infringement, outlined in the diagram below.

“iiNet has developed a model which addresses ISP concerns but one we think remains attractive to all participants, including the sustainable strategy of an impartial referee for the resolution of disputes and the issue of penalties for offenders,” explained iiNet chief Michael Malone at the time. He doesn’t seem to be moving from this stance today.

“The rights holders need to provide cogent and unequivocal evidence, which means a transparent and robust collection process, tested by an independent body, such as the judiciary,” said Malone.

So the question remains – will the ISPs respond to the veiled threats of AFACT and agree to meet, or will they call Hollywood’s bluff and wait for the outcome of the iiNet appeal instead?

One thing is for certain, Exetel boss John Linton says he doesn’t respond to threats and won’t be complying. We should know later this week if others take the same stance.

Source: Graduated Piracy Response Coming To Australia, Or Else

“Despite being successful on many grounds in their appeal to the Full Federal Court, the film companies will seek to overturn the ruling that iiNet did not authorise the acts of infringement that it knew occurred on its internet service,” the release reads.

For those on the other side of the debate, “successful on many grounds” actually grinds down to “lost the case for a second time” as in February the Full Bench of the Federal Court dismissed the movie industry’s appeal against last year’s judgment which found that ISP iiNet did not authorize the copyright infringements of its file-sharing customers.

Not that AFACT don’t have a point, though. If the movie industry had provided iiNet with better infringement notices in the first instance and the ISP had still not acted on them, the outcome of the case may have been different, the court decided.

“Prior to the case, iiNet was provided with substantial evidence of copyright infringement by users on its network, which iiNet accepted was 100% accurate,” said AFACT this morning. Although the words “100% accurate” don’t appear to have been used by iiNet verbatim, in court the ISP did use the word “compelling” to describe AFACT notices.

Nevertheless, two of three judges in the Federal Court found that iiNet had not authorized the infringing activities of their file-sharing subscribers and it is against this majority decision that AFACT are appealing.

“We say [the judges] did not apply the legal test for authorisation correctly,” AFACT chief Neil Gane said.

Furthermore, AFACT says that the Court’s conclusion – that iiNet did not have enough knowledge of infringements taking place in order to be found as authorizing them – was also wrong.

“We are confident of our grounds for appeal and hopeful that special leave to the High Court will be granted,” Gane concludes.

However, while AFACT are like a dog with a bone in pursuing this legal action, iiNet continues to call for the movie industry to spend their money on something more creative.

“It’s time for the film industry and copyright holders to work with the industry to make their content legitimately available,” iiNet’s Chief Executive Officer Michael Malone said today in response to AFACT’s announcement.

Malone said iiNet had received positive feedback “from both consumers and the industry” following the publication of its ‘Encouraging Legitimate use of Online Content‘ report earlier this month and that all parties should consider moving forward on that basis.

If the case does indeed move to the High Court, no decision is expected until late 2011 or early 2012.

Source: To The Bitter End: AFACT Takes BitTorrent Piracy Case To The High Court

However, once the detail of the ruling had been absorbed it became apparent that had the movie and TV industries done more to improve the quality of their infringement notices, the decision in the case could have tipped in their favor.

Neither iiNet nor the studios want their opponent’s choice of system to be imposed on them – their prolonged legal battle showed that – but it’s fairly clear that at some point a compromise of sorts will have to be reached. Today, iiNet was the first to produce a report containing what it says are the steps forward.

Titled ‘Encouraging Legitimate use of Online Content’ the report begins with the ISP’s earlier stance that in order to tackle piracy the studios have got to meet demand. Having created a product and generated desire in the market place, the report argues, the studios then limit supply with their ‘windowing’ strategy, causing frustration in the market. The message is clear – once the product is available, get it out there to the customers.

The report goes on to note that despite making the product available in a timely and convenient fashion, some people will continue to pirate media. iiNet proposes a system to deal with these individuals to be overlooked by an independent body.

“iiNet has developed a model which addresses ISP concerns but one we think remains attractive to all participants, including the sustainable strategy of an impartial referee for the resolution of disputes and the issue of penalties for offenders,” said iiNet chief Michael Malone, as quoted by Delimiter.

While offering subscribers a level of protection and outright rejecting disconnecting them from the Internet, iiNet proposes that infringers are punished within a drivers’ licence-style penalty points system.

“As with speeding fines, a low level infringement might attract a limited penalty, but then can ramp up to more serious penalties, depending on the level of infringement. The seriousness of the penalty is determined by a margin over a regulated limit,” says the report.

Continuing with the traffic/infringement analogy, iiNet says that offenses could attract “demerit points and/or fines”, the former set to expire after a set time and for single infringers, back to a clean slate.

The report suggests that infringements could be classified as ‘minor’ for a single instance, ‘major’ for multiple instances on different files, ‘serious’ for those on a ‘commercial level’ and all with their own level of penalties. But of course, proposals like this can be easily distorted by the entertainment industries.

For example, if a subscriber seeds a single torrent containing an album with multiple tracks on and off over the course of a month, is this ‘major’, i.e multiple instances on different files? If a subscriber seeds a single track in a swarm of 1,000 peers, is this ‘commercial level’ infringement? These all-important details and the disagreements they generate are what lead to prolonged legal battles.

Furthermore, iiNet suggests the establishment of a “scale of fines” could be linked to “the economic loss represented” which, in the light of some of the ridiculous and sometimes strangely mysterious reports coming out of the industry lately, is likely to make subscribers shudder with fear.

Fines could also be supported by demerit points imposed against the subscriber’s account and “when a defined limit is reached, other sanctions might be deemed appropriate.”

“These could involve charges being laid for treatment by the courts or possibly shaping of peer to peer traffic,” iiNet suggests.

To overcome the problem of subscribers being punished for the actions of others within a household, iiNet implies that the bill payer – as with individuals whose cars have been identified by cameras as committing speeding offences where they weren’t the driver – could have the option of accepting a fine or identifying the infringer so that they may be punished instead.

It will be very interesting to see what counter proposals are made by AFACT who are yet to comment on this report.

The full iiNet proposal can be downloaded here.

Source: ISP Proposes Piracy Mitigation, Detection and Punishment Framework

“While I disagree with the primary judge’s reasoning in significant respects, I am nevertheless of the opinion that his Honour’s decision to dismiss the proceeding was correct,” the ruling from Justice Emmett read. “In my opinion the appeal should be dismissed.”

While the decision was a cause for celebration in some quarters, closer analysis of the ruling left significant room for caution, in that it raised the possibility that under certain future circumstances ISPs could be held liable for infringements carried out by their users. In very basic terms, if the movie industry had provided iiNet with better infringement notices and the ISP had still not acted on them, the outcome of the case may have been different.

The ruling therefore provides guidance on how the movie, music and other copyright-related industries should proceed in future in order to more forcefully back ISPs into a corner on subscriber infringements. However, Australia’s Internet Industry Association (IIA) feels that although some outline parameters have been set by the ruling, further detail is required for affected companies to effectively manage their responsibilities.

“Having closely reviewed the recent decision of the Full Federal Court, we’ve concluded it’s both necessary and appropriate to develop a code of practice to give a wider range of internet intermediaries greater certainty around their legal rights and obligations,” said IIA chief executive Peter Coroneos this morning.

“The iiNet case has provided us with welcome guidance on where responsibilities should begin and end, but falls short in defining reasonable steps intermediaries should take in responding to allegations of infringement by their users. The Code will address this gap.”

Although AFACT’s legal action was squarely aimed at iiNet, IIA’s code will be aimed not only at ISPs but other service providers including web hosts, search engines and social media services.

AFACT has insisted all along that piracy is straightforward thievery by Internet users, but iiNet and indeed IIA’s Mr Coroneos firmly believe that infringement is a result of consumers taking steps to fill a gap between supply and demand. While not condoning piracy, both believe that if the entertainment industries provide better services, change can be brought about.

“Market failure remains a core contributor to the infringement problem,” Coroneous said. “If users have access to more and better content, when, where and in the form they choose to consume it, and at a realistic price, we’re quite confident the motivation for infringement will decline.”

In addition to the development of the Code of Practice, the IIA will renew its efforts to have the so-called ‘Safe Harbor’ provisions in the Copyright Act extended to cover not only ISPs, but other intermediaries. Coroneos said that protections similar to those available under US law do not exist under Australian legislation.

“This has left search providers, social network media, universities, auction sites, hosting and cloud services, corporate networks and others exposed to potential liability for the infringing acts of their users,” he said.

Quite how AFACT will respond to the creation of the Code of Conduct is unclear. IIA and AFACT had talks on the issue in 2007 but they came to nothing.

Source: Following AFACT v iiNet, Internet Industry Formulates Copyright Code of Conduct

Represented by anti-piracy group AFACT, nearly three dozen Hollywood and local studios took iiNet to court in 2008. In a 2009 trial the ISP was accused of doing nothing to stop its customers downloading films and TV shows but in February 2010 the Federal Court decided that iiNet was not responsible for their activities. An appeal was heard later that year and today the decision was handed down.

Justice Emmett said that the Court continued to agree that the rights of the movie companies had been infringed but could not find in their favor.

“While I disagree with the primary judge’s reasoning in significant respects, I am nevertheless of the opinion that his Honour’s decision to dismiss the proceeding was correct,” the ruling reads. “In my opinion the appeal should be dismissed.”

The ruling itself is an absolutely huge affair and will take a considerable time to digest, but at this early stage it seems quite clear that even after two years of legal battles, this fight is probably still not over.

“Even though the Copyright Owners are not entitled to the relief claimed in this proceeding, it does not follow that that is an end of the matter. It is clear that the questions raised in the proceeding are ongoing,” the ruling reads.

“It does not necessarily follow that there would never be authorisation within the meaning of s 101 of the Copyright Act by a carriage service provider, where a user of the services provided by the carriage service provider engages in acts of infringement such as those about which complaint is made in this proceeding.

“It does not necessarily follow from the failure of the present proceeding that circumstances could not exist whereby iiNet might in the future be held to have authorised primary acts of infringement on the part of users of the services provided to its customers under its customer service agreements.”

Nevertheless, on the thorny demand by AFACT that iiNet should have blindly sent out warnings and suspend customer accounts based on the information it provided, the ruling is clear.

“I do not think [iiNet] could reasonably be expected to issue warnings, or to terminate or suspend particular accounts, in reliance upon any such notice in circumstances where it has been told nothing at all about the methods used to obtain the information which lead to the issue of the notice,” it reads. “Nor should it be up to the respondent to seek out this information from a copyright owner who chooses not to provide it in the first place.”

iiNet chief executive Michael Malone said he was “relieved” at the outcome.

“Our original contention was upheld that we don’t believe we ever authorised or did anything to encourage customers to breach copyright,” he said. “We’ve won at the lower court, we’ve won at the Federal Court now in the appeal, but all this legal action hasn’t stopped one customer from downloading anywhere in Australia.”

“Same as we said last time, invite the rights holders back, let’s make the content available legally and legitimately so customers can get access to it, and let’s find a better way to be able to police those who don’t do the right thing.”

Malone went on to state that the overall problem of deciding to what extent ISPs can be held liable will have to be solved by the government.

AFACT boss Neil Gane was clearly disappointed at the decision.

“It cannot be right that, in effect, the ISP, who has the power to prevent copyright infringement online and admitted they were taking place, does not share the responsibility to stop them,” he said. “Copyright infringement now goes on unabated on the Internet.”

While Justice Emmett and Justice Nicholas dismissed the appeal, Gane said he was encouraged that Justice Jagot had sided with the movie industry.

“We take heart however, that Justice Jagot found for us and that Justice Emmett said that we were successful on many grounds.

“We will be taking our time now to examine the judgment in detail and consider all of our options.”

It is widely believed that the case will now proceed to Australia’s High Court.

Source: iiNet Fights Off Hollywood, ISP Not Responsible For Online Piracy

Tomorrow, a full bench of the Federal Court of Australia will announce their decision on whether an earlier ruling on the issue should stand or be overturned. The former would mean that ISPs and file-sharing subscribers can cautiously crack open a bottle of bubbly. The latter and opposite outcome is the one favored by the entertainment industries.

The epic legal battle dates back to 2008, when AFACT – the Hollywood-backed Australian Federation Against Copyright Theft – began legal action against ISP iiNet. AFACT claimed that the Perth-based ISP had authorized the copyright infringements of its BitTorrenting subscriber base by failing to stop them from sharing unauthorized material.

AFACT had monitored iiNet users in their allegedly illicit activities and sent corresponding infringement notices to the ISP. When iiNet failed to suspend or terminate customer accounts on the basis of these notices (which were based on untested AFACT-gathered evidence), the fight was on.

After close to a month in court during October and November 2009, with countless documents perused and a parade of witnesses heard, the Court was adjourned. For close to three months both sides had to wait for the decision of Justice Cowdroy.

In early February 2010 his ruling came, but for AFACT and the near three dozen movie and TV show companies supporting it in the case, the news was bad.

Although Justice Cowdroy agreed that the studio’s copyrights had indeed been infringed upon, he decided that iiNet did not authorize the copyright infringing activities of its subscribers and therefore could not be held responsible for their actions.

“It is impossible to conclude that iiNet has authorised copyright infringement … [iiNet] did not have relevant power to prevent infringements occurring,” Justice Cowdroy said in his judgment.

BitTorrent networks were outside the control of the ISP, Cowdroy said, adding that the ISP was covered under so-called “safe harbor” provisions.

AFACT executive director Neil Gane described the ruling as “a set back for the 50,000 Australians employed in the film industry,” and late February 2010 he announced that AFACT would appeal.

“The court found large scale copyright infringements, that iiNet knew they were
occurring, that iiNet had the contractual and technical capacity to stop them and iiNet did nothing about them,” Gane said. “In line with previous case law, this would have amounted to authorization of copyright infringement.”

The waiting since last year’s appeal seems to have gone on forever but is set to end tomorrow. Will it be victory for iiNet, ISPs and subscribers everywhere? Or will copyright holders be the ones celebrating? Tune in to find out.

Source: Landmark ISP Piracy Liability Court Ruling Due Tomorrow

Although the attacks against the MPAA and RIAA websites generated the most headlines thus far due to their profile in the United States, the attack with the most consequences was that against the UK’s ACS:Law, the notorious law firm that with its partners seeks to turn alleged infringements of copyright into a cash business. That business is now in shreds after ACS:Law bungled an attempt to bring its site back online and published its own email database to the public.

Last night, as first reported by Slyck.com, Operation Payback took aim at a new target, AFACT – the Australian Federation Against Copyright Theft. Although it took a little while for the site to go down, the attack eventually achieved its aims but now it seems that it also generated some serious unintended side-effects.

According to an announcement by AFACT’s host, Netregistry, “A DDoS attack began to take place at approximately 8:30AM AEST, with a group of hackers attacking the firewall by flooding it with connections attempting to take down all servers.”

Although referring to those charging their Low Orbit Ion Cannons as hackers is something of a stretch, and even though the attacks were eventually dealt with by Netregistry, according to Neil Gane from AFACT nearly 8,000 other websites were also taken down in the attack.

“A lot of these sites are small Australian businesses and Government web sites,” Gane told ITnews. “They have been affected by this senseless act.”

Currently Operation Payback is showing few signs that it is running out of steam. One has to wonder though. Although some will argue that there is a strong need for civil disobedience to draw attention to a cause where perhaps few are listening, things can easily take a different turn.

Although we have no cast iron evidence other than his comments, it’s believed that ACS:Law’s Andrew Crossley called in the police last week after he was harassed at home. He has since used the word ‘criminal’ to describe the actions against his website and few will disagree that taking down 8,000 websites, even temporarily and/or accidentally, is a serious affair. When some of those sites belong to a government, questions start to get asked.

Will Operation Payback continue as promised or will it stop of its own accord? Will it be stopped by force? Is it even possible to stop it by force, any more than it’s possible to stop people sharing files? Time will tell but one thing is certain. If Operation Payback was designed to generate attention, it has done that, in a very, very big way.

Source: DDoS Takes Down Aussie Anti-Pirates and 8,000 Other Sites

Members of IPAF include Australian Federation Against Copyright Theft (AFACT), Motion Picture Association (MPA), Motion Picture Distributors Association of Australia, Australian Visual Software Distributors Association and various cinema owners and DVD rental outlets such as Blockbuster.

Last year IPAF embarked on a campaign to educate Australia’s children on the evils of copyright infringement in an attempt to “motivate a change in attitudes and behavior to reduce public demand for illegal copies of film and television programs.”

While many anti-piracy groups take a fairly aggressive angle when sending their message, IPAF take a more softly-softly approach. If AFACT is bad cop, IPAF is his gentler, more reasonable-sounding counterpart.

Good cop has just launched his new nationwide anti-piracy campaign with the unusual title of ‘Accidental Pirate’.

“New research, released just today, revealed that 34% of Aussies see piracy as stealing or theft but then regularly do it by burning, buying or downloading illegal or unauthorised copies of films or TV programs,” explains IPAF. “In other words, 1 in 3 of us do something that we don’t agree with. So to describe this disconnection between actions and beliefs, we coined the phrase ‘Accidental Pirate’.”

Right. So people know piracy is ‘wrong’ but because they still carry on it’s an ‘accident’? That doesn’t seem to fit very well does it?

You can see what IPAF are trying to do though, it’s just badly executed. If you’re going to educate people on the premise that they didn’t know that their actions were ‘wrong’ in the first place (so as not to immediately antagonize them), at least don’t patronize them. “There, there, you know it’s wrong but let’s just pretend it was an accident, eh?” Please.

So what does the campaign have to say. Well, it’s pretty much standard stuff. The campaign’s homepage is running a Flash questionnaire with five questions that readers have the chance to answer. Getting a question right gets a round of applause from the assembled cinema audience, but getting one wrong gets a big X and a short lesson in copyright.

Questions 2, 3 and 5 all involve copying or buying pirated copies of real DVDs and the legalities of that. People don’t ‘accidentally’ believe that pirate DVDs are legal – do they?

Questions 1 and 4 involve file-sharing but if the industry IPAF claims to protect would simply get their act together, these questions wouldn’t even be necessary.

Question 1: Your favorite TV show has just aired overseas. It won’t be shown here for months. While browsing the web you notice it’s available for download for free. Do you download it?

Every time TV-show downloaders in Australia are asked why they do what they do, one of the top answers is always because they are treated like second-class citizens when it comes to release dates. Why do their favorite series take months to appear officially down under? Whatever the reason, it’s a very, very poor one, and no surprise people turn to BitTorrent.

Question 4: You’re browsing the Internet and come across a free download site. You notice a movie that’s just hit the cinemas here. Do you download it?

If people find those then, yes, they probably would. The movie industry is always very clear – if you see a brand new movie on the Internet it’s illegal, because we (stubbornly) don’t offer this service. This type of piracy could be all but wiped out by offering people a legal alternative at a reasonable price in their own homes.

Quiz aside, it’s all pretty much standard stuff. Movie industry people and actors rolled out to make ‘accidental’ pirates feel sorry for the little guy in the film-making world.

You can take the questionnaire for yourself. If you get any ‘wrong’ move directly to the back of the class, put you hands on your head and please try to do better in the future. And stop accidentally downloading torrents. The movie industry depends on it.

Source: Are You An Accidental Movie and TV Show Pirate?

In the meantime, AFACT would like to go a step further, as it insisted today that Internet subscribers should not only be responsible for their own infringements, but for those carried out by anyone using their account.

AFACT lawyer Christian Dimitriadis told the panel of three judges that is was irrelevant if an account holder infringed copyright or not, adding: “The fact that the user may be another person other than the subscriber doesn’t change the fact that the information relates to the personal affairs of the subscriber.”

Dimitriadis said that even though the Internet bill-payer was the only one to physically enter into an agreement with iiNet, by default all other users of that connection must also agree to be bound by the same terms. AFACT continues to argue that if subscribers break the terms of their agreement and use their accounts to break the law, iiNet has the ability and power to terminate their contracts and disconnect them from the Internet.

According to another report today, that notion has started to receive the sympathy.

In a continuation from our earlier report, yesterday two of the appeal judges questioned Justice Cowdroy’s reasoning in the original ruling which deemed that disconnecting customer accounts was an unreasonable response to infringements.

Cowdroy reasoned that from the evidence provided in the case, it could not be decided to what extent any subscriber had used their account for infringement.

Lawyer for iiNet Richard Cobden told Justice Arthur Emmett that on this basis it would unreasonable to close a customer account. Justice John Nicholas then asked if the evidence ever showed to what extent customers used their accounts for piracy.

“We’re just saying that the reasonable step that would be incumbent upon an ISP must be tailored to what has been put in front of them,” said Cobden, according to The Australian.

“And if what’s put in front of us is that there’s not a significant use of quota on an account in relation to this, it affects the question of whether the reasonable step to be taken is to turn over the whole account which, as we say, is what our learned friends seek.”

In other words, the evidence provided by AFACT – which shows that a particular account was infringing copyright at a precise moment in time – does not show to what extent an account was used to infringe copyright overall.

Justice Emmett, however, suggested that maybe an important point had been arrived at.

“Maybe the stage is reached where it’s reasonable to say, ‘Look, you’ve had warning after warning. Maybe you’re doing other lawful things, but if you insist on doing this unlawful activity, we’re going to close you down’.”

Cobden later countered that he could only go by the evidence provided in the case, and that shutting down an account was not an appropriate response to it.

iiNet weren’t the only ones to point to a lack of evidence in order to refute an argument. In the original hearing, iiNet said the existence of its legal content distribution platform, Freezone, showed that the ISP had made efforts to discourage users from sharing illegal content and that this model was a better way to deal with piracy than legal action by outfits such as AFACT.

AFACT lawyer David Catterns told the Federal Court that the existence of Freezone is irrelevant, since there is no evidence that portal reduced piracy on iiNet’s network.

The two sides also clashed on the implications of the Telecommunications Act and whether ISPs could use it as a reason not to deal with infringement notices issued by rights holders such as AFACT.

The hearing continues.

Source: Day Four: AFACT v iiNet BitTorrent Piracy Appeal

Yesterday, lawyers for AFACT argued that iiNet had the power to stop its customers infringing on the rights of the studios represented by the anti-piracy group.

Today, iiNet lawyer Richard Cobden detailed why the ISP had not acted on the copyright infringement notices it received from AFACT. He also questioned whether by receiving infringement notifications but doing nothing with them, the ISP should then be considered as an authorizer of those reported infringements.

Referring back to iiNet’s assertion yesterday that disconnecting customers would not be a “reasonable” response to infringement notices, Cobden said that AFACT never asked for a graduated response, only account terminations on the basis of its evidence – evidence which iiNet says is of questionable reliability.

Justice Arthur Emmett went on to voice concerns that the appeal in this case might never solve the dispute between the parties and that copyright infringement might continue whatever the outcome.

Emmett said that if iiNet’s assertion was accepted – that AFACT had failed to suggest “reasonable steps” the ISP could take in response to infringement notices – the anti-piracy group could simply submit new notices with new terms and then sue iiNet again.

“It just seems to me that out there is a commercial solution and there’s nothing we can do that will ultimately resolve this problem,” said Emmett.

However, as noted here, discussions between AFACT, ISPs and the Internet Industry Association (IIA) on the possible introduction of a code of conduct for dealing with infringement took place in 2007 and 2008. Those discussions effectively ended after AFACT announced action against iiNet.

The appeal continues.

Source: Day Three: AFACT v iiNet BitTorrent Piracy Appeal

As detailed yesterday, AFACT – which has chosen not to go after primary infringers (iiNet customers using BitTorrent) – says that by doing nothing to stop infringements, iiNet effectively ‘authorized’ their illegal activity which renders the ISP liable for their actions.

In the original hearing AFACT said that iiNet had full knowledge that its customers had been pirating AFACT members’ copyright works because the ISP had been given evidence to prove that. AFACT also stressed that the ISP had enough power to do something about those infringements, either by taking technical measures such as throttling, or terminating accounts.

As reported by ARN today, there are four steps to identify authorization:

A person provides the means of infringement, a person makes copyright material available, a person provides the means of infringement and whether reasonable steps were taken to prevent copyright, that is, the power to prevent.

In the original hearing it was decided that since iiNet did not provide the means to infringe as indicated in the opening guideline (as BitTorrent was out of its control) the other steps were irrelevant. AFACT is now arguing that the steps in the guideline do not have to be read in strict order.

A veteran from the earlier hearing, Richard Cobden representing iiNet insists that the guidelines be handled sequentially, as they were originally.

When it was AFACT lawyer David Catterns’ turn to speak, he returned to the topic he initiated yesterday, that iiNet had plenty of power to do something about BitTorrent infringements.

In the original hearing iiNet chief Michael Malone said privacy laws prevented the company from identifying customers, but Catterns pointed to the procedures employed by the ISP to deal with customers who send out spam. These, he said, lead to account suspension and ultimately termination.

For iiNet, Cobden said no matter which steps were taken, be they letters or throttling, AFACT would not be happy unless the measures ultimately ended in account termination. He said that this most final of sanctions would not be a reasonable action to take on the basis of notices generated by AFACT. In the original hearing, Justice Cowdroy agreed with this assertion.

According to iTNews, Catterns also referred to a press release that iiNet had sent out earlier about its legal battle with AFACT. The fact that the ISP chose to use BitTorrent (it ran its own installation of RivetTracker) to distribute the announcement, argued Catterns, sent a message that it the ISP had no intention of doing anything about infringements.

The hearing continues.

Source: Day Two: AFACT v iiNet BitTorrent Piracy Appeal

Village Roadshow, Universal Pictures, Warner Bros Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, Disney Enterprises, Inc. and the Seven Network took iiNet to court in the hope that a judge would find the ISP responsible for copyright infringements carried out by its customers.

The Australian Federation Against Copyright Theft lost the case but didn’t give up. They said there was a “fundamental error” in Judge Cowdroy’s original ruling – that AFACT had sued the wrong person and should’ve gone after actual infringers – and earlier today the pair faced each other in Federal Court for the appeal.

From early reports coming out of the Court, nothing much appears to have changed.

AFACT continues to insist that iiNet authorized its customers to illegally download movies by simply not stopping them from doing so. ‘Authorized’ is the key word here. AFACT have chosen not to go after the BitTorrent users referred to in the case – the so-called ‘primary’ copyright infringers. Going after these individuals is “undesirable” it insists. Instead they want the Court to rule that iiNet ‘authorized’ their infringements, which would make the ISP liable for their actions.

Representing AFACT, David Catterns told the panel of three Federal Court judges that despite being provided with huge numbers of IP addresses and times of copyright infringements carried out by their customers – data which iiNet chief Michael Malone labeled “compelling evidence” – the ISP did nothing to stop further illicit activity.

In his opening salvo, Catterns put forward the case the of one iiNet customer in particular. Referred to in court as ‘RC-08′, the user had allegedly seeded 40 copyright works during 2008 and 2009. Catterns claimed that at some point ‘RC-08′ had exceeding his monthly traffic limit and iiNet had advised him to upgrade his package along with the suggestion that he could “get more of the stuff you love”.

This contact iiNet had with their customer was a point at which the ISP could’ve acted to prevent infringement, he argued.

Catterns went on to state that while iiNet takes action to deal with the menace of spam, the ISP did nothing to block or otherwise tackle file-sharers on its network. He suggested that iiNet could have taken a broad range of actions such as sending out letters, throttling customers’ connections, right through to suspending accounts.

At this very early stage it seems that AFACT are simply restating points they made in the first hearing, points which almost totally failed to convince Judge Cowdroy to rule in their favor. It is difficult to see what they can say in order to change the direction of the original decision but one thing is almost certain.

“Neither the original case nor this latest appeal will stop piracy,” said iiNet chief Michael Malone earlier. “Even if in the unlikely event they won the appeal.”

Source: Day One: AFACT v iiNet BitTorrent Piracy Appeal

Village Roadshow, Universal Pictures, Warner Bros Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, Disney Enterprises, Inc. and the Seven Network took iiNet to court in the hope that a judge would find the ISP responsible for the copyright infringements of its customers.

Judge Justice Dennis Cowdroy shattered that dream and iiNet won its landmark case. Quickly AFACT announced it would appeal the judgment which it said had left an “unworkable environment for content creators and content providers” and represented “a serious threat to Australia’s digital economy.”

Its now being reported that beginning on August 2nd and running for the next 4 days, the appeal will be heard by a full bench of the Federal Court. The time allocated is a dramatic reduction over the month long saga of the first hearing.

“We go into this latest legal round anticipating we will come out in an even stronger position than when we won in February,” iiNet chief Michael Malone told The Australian.

AFACT’s appeal will consist of 15 areas where they believe original case judge Justice Cowdroy got his decision wrong, but even if the Federal Court agrees, Malone believes an AFACT victory would be a hollow one.

“Neither the original case nor this latest appeal will stop piracy — even if in the unlikely event they won the appeal,” he concludes.

Source: iiNet v AFACT Anti-Piracy Case Appeal Set For August 2010

However, under the AFACT umbrella, Hollywood lost its most prominent case against ISP iiNet after the court decided that the ISP was not responsible for the infringements of its subscribers.

Despite being ordered to pay all costs, AFACT announced it would not only go back to court in an attempt to avoid paying them, it would also appeal the entire decision, claiming that the judge was wrong on just about every point.

This stubborn attitude hasn’t gone down well, with many observers openly criticizing Hollywood’s bullish stance and insisting it should accept defeat graciously. But of course, that’s not going to happen. After all, what could they do having failed to force ISPs to carry the can? Start suing file-sharers RIAA-style?

Worryingly, an AFACT spokeswoman quoted in a News.com.au article this morning (which has since inexplicably disappeared), said the anti-piracy group now has that armageddon option under consideration. She claimed they are yet to make a final decision.

In the meantime it’s back to the old FUD strategy to try and scare people away from file-sharing networks.

“If you’re using (torrents) (we) can see every movie you want, everyone who is sharing it and everyone who has it on their hard drive,” said the AFACT spokeswoman. “It’s very public what you do and as copyright holders we have a third-party company that is mining all that information and sending it to Internet Service Providers,” she added.

Well that’s not going to scare iiNet customers very much is it?

Nevertheless, AFACT claims there are a number of things ISPs can do to stop piracy, including banning access to torrent sites. Thing is, generally they aren’t, and with this latest iiNet decision there is even less incentive for ISPs to send out warnings or even temporarily suspend accounts, as shown by Exetel which recently reversed its policy.

But there are other ways to encourage reductions in piracy. You don’t have to sue ISPs, spread FUD or imply that suing end users is an option under consideration. Instead of being aggressive towards customers, why not try to pull them onside?

The Intellectual Property Awareness Foundation (IPAF) was created to “promote the value of the industry by raising awareness, understanding and appreciation of intellectual property, and its role and value in society.” In other words, this is a more outwardly friendly anti-piracy group that aims to educate and persuade rather than deal the traditional death-by-lawyer.

Today IPAF announced the appointment of a new CEO, ex-Sony and Fox director Gail Grant who will lead the organization “to motivate a change in public attitude away from piracy” and “encourage supporting the more than 50,000 people employed in all aspects of the industry through the enjoyment of original and legitimate film and television experiences.”

Fair enough. Persuading the public is certainly better than beating them into submission. But there is a problem. While IPAF plays softly-softly with its consumer friendly image, its main sponsors are doing completely the opposite. In case you’re wondering, those sponsors are AFACT and the MPA.

As earlier pointed out by iiNet chief Michael Malone and countless others, the best way to combat piracy is to make movie and TV content available online readily and cheaply. Maybe the studios could get together and create a new group with a CEO dedicated to that, instead of spending money on all of these other good-cop/bad-cop groups with conflicting messages.

Source: After iiNet Victory, Where Now For Anti-Piracy Down Under?

Village Roadshow, Universal Pictures, Warner Bros Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, Disney Enterprises, Inc. and the Seven Network took iiNet to court, claiming that the ISP did nothing to stop its customers from sharing copyright media via BitTorrent and was therefore liable for their infringements.

Judge Justice Dennis Cowdroy disagreed, and handed a huge victory to iiNet.

Today marked the deadline for AFACT to appeal the decision and as expected, they did just that.

In a statement the anti-piracy group said there were good grounds to appeal a judgment which it is dramatically claiming has left an “unworkable environment for content creators and content providers and represents a serious threat to Australia’s digital economy.”

AFACT boss Neil Gane said the judgment conflicted with established copyright law in Australia.

“The court found large scale copyright infringements, that iiNet knew they were
occurring, that iiNet had the contractual and technical capacity to stop them and iiNet did nothing about them,” he said. “In line with previous case law, this would have amounted to authorization of copyright infringement.”

Gane went on to state that the ruling rendered so-called ‘safe harbor’ provisions of copyright ineffective. “If this decision stands, the ISPs have all the protection without any of the responsibility,” he said.

AFACT’s appeal, filed with the Fedral Court today, consists of 15 areas where they believe Justice Cowdroy got it wrong. An analysis of the appeal grounds can be found here.

Chief of iiNet, Michael Malone, said Justice Cowdroy’s judgment was unequivocal and the company is confident the Court will stand by its original ruling, noting that more legal proceedings will not provide a solution.

“It is more than disappointing and frustrating that the studios have chosen this unproductive path,” Mr Malone said in a statement. “This legal case has not stopped one illegal download and further legal appeals will not stop piracy.

“The studios themselves admitted during the court hearings that making content freely and cheaply available online was an effective way to combat piracy. People are crying out to access the studios materials, so much so some are prepared to steal it. A more effective approach would be for the studios to make their content more readily and cheaply available online,” notes Malone.

Upon losing the original trial, AFACT was ordered to pay iiNet’s legal costs, revealed to be $5.7 million ($5.08 million USD). Earlier this week AFACT said it will return to court in order to avoid paying some of the costs.

The appeal hearing for the original case is likely be held this year and according to iiNet’s Michael Malone, it should take up significantly fewer days than first time around.

Source: AFACT Blasts Judge, Will Appeal iiNet ISP Liability Decision

The studios it represents, Village Roadshow, Universal Pictures, Warner Bros Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, Disney Enterprises, Inc. and the Seven Network took legal action against iiNet, claiming that the ISP did nothing to stop its customers from sharing copyright media via BitTorrent.

As part of the defeat, AFACT was ordered to pay iiNet’s legal costs, recently revealed to be a staggering $5.7 million ($5.08 million USD). Despite the ruling, AFACT says it will now return to court to avoid paying some of the costs. The anti-piracy group says that even though the final verdict went against them, elements of the trial went in their favor, so they believe they should not have to pay iiNet for defending those parts.

One area of claim was highlighted by AFACT spokesperson Rebecca Tabakoff, who said that early on in the trial iiNet conceded that its customers did indeed share copyright material, despite earlier claims they did not.

“[iiNet] spent a lot of time in the lead up to the trial not conceding that their customers had infringed copyright. The judge awarded all costs against applicants but iiNet was not successful on all fronts,” she explained.

Tabakoff indicated that AFACT would present other arguments to see if costs could be recouped elsewhere.

iiNet managing director Michael Malone believes that since AFACT lost the case, they should pay the costs.

“We didn’t ask to be sued. They came to us and sued us and they lost, so I don’t see why we should be paying any of their legal expenses,” Malone told ZDNet.

Malone says that money spent on legal action would be better off spent serving customers better.

“I look at the amount of money we have spent on litigation, and no doubt there would have been a lot more [spent] by the studios. Think of what that could have been spent on if it was applied to online content instead.”

This attempt by AFACT to challenge the instruction to pay iiNet’s legal costs will be heard on February 25th, the same day by which it must appeal the original ruling in order to take it to the High Court.

Source: Anti-Piracy Group Loses In Court, Doesn’t Want To Pay Costs

Last year 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 took legal action against iiNet, claiming that the ISP did nothing to stop its customers from sharing copyright media via BitTorrent.

The ISP refuted the claim with a multi-layered defense, which was heard then adjourned in November 2009.

Passing his verdict today, Justice Cowdroy ruled that while the studio’s copyrights had indeed been infringed upon, iiNet did not authorize the copyright infringing activities of its subscribers and therefore the ISP could not be held responsible.

Notably, Justice Cowdroy said that iiNet had no control over BitTorrent networks and the ISP was covered under so-called “safe harbor” provisions.

“It is impossible to conclude that iiNet has authorised copyright infringement … [iiNet] did not have relevant power to prevent infringements occurring,” Justice Cowdroy said in his judgment.

AFACT had insisited during the original court case that iiNet should forward copyright infringement warnings to its customers on behalf of AFACT members, but the judge ruled that this was not the way copyright infringements should be handled.

Electronic Frontiers Australia said the outcome of the case was the “application of common sense” and Pirate Party Australia also welcomed the decision.

“This is a good decision by Justice Cowdroy, and reflects that there is no legal basis or obligation for any ISP to act in the interest of copyright holders, or to expect that they should disconnect any entity upon allegation of infringement without judicial oversight and due process,” said Rodney Serkowski, Party Secretary.

“Essentially an ISP should be considered similar to the postal service – they simply carry data in the form of packets, and that communication should be considered private,” he added.

In a statement, iiNet said it had “never supported or encouraged breaches of the law, including infringement of the Copyright Act of the Telecommunications Act,” adding that the company had always been a “good corporate citizen and an even better copyright citizen.”

After the huge distraction of this prolonged legal battle, iiNet said it would now like to get on with business, adding that it looks forward to working with the entertainment industry to make content available legally to reduce illicit file-sharing.

AFACT executive director, Neil Gane, said his group was extremely disappointed with the Court’s ruling.

“Today’s decision is a set back for the 50,000 Australians employed in the film industry,” he said in a statement.

“But we believe this decision was based on a technical finding centered on the Court’s interpretation of the how infringements occur and the ISPs’ ability to control them. We are confident that the Government does not intend a policy outcome where rampant copyright infringement is allowed to continue unaddressed and unabated via the iiNet network,” he added.

AFACT will have to pay all of iiNet’s substantial legal costs. Thus far, the group has declined to confirm whether it will appeal the Court’s decision.

Source: Movie Studios Lose Landmark Case Against Aussie ISP

Lead barrister for AFACT, Tony Bannon, continued with his aggressive approach to this case by issuing warnings to Australia’s Internet service providers on the issue of copyright infringement.

He said that iiNet and other ISPs who don’t want to handle copyright infringement notices (such as those issued by his clients) are happy to take money from their subscribers, but are shirking their responsibilities. The solution to this, he said, was for them to shut down.

“They [ISPs] provide a facility that is able to be used for copyright infringement purposes. If they don’t like having to deal with copyright notices then they should get out of the business,” he said, as quoted by ITNews.

This reluctance to deal with infringement notices at the behest of the studios has been one of the main points of contention in the case. The studios feel that iiNet should hand infringement notices to their customers and even disconnect them, while iiNet feels that it has no obligation to do so under the law, particularly when acting on the unverified evidence of a 3rd party.

Bannon went on to say that iiNet had made zero effort to deal with even a small percentage of the alleged infringements on their network, commenting: “…they say they can’t send a single notice to anybody, it’s like saying they can’t stop physical violence happening to the person next to them because there’s physical violence happening all around the world.”

Bannon said he believed that terminating a customer or two on allegations of infringement would have sent out a clear message to other potential infringers. But of course, iiNet knows that if they complied with that request the studios would be back saying “you did it there, why can’t you do it here…here….here….here…..”

Bannon went on to say that while iiNet denied it had any control over BitTorrent clients and the potential for users to operate them for infringing purposes, it did have the power to render the software useless.

“But if the user isn’t online there’s nothing the BitTorrent client can do to infringe,” Bannon told the court.

For its part, iiNet sits firmly behind Section 112E of the copyright act:

A person (including a carrier or carriage service provider) who provides facilities for making, or facilitating the making of, a communication is not taken to have authorised any infringement of copyright in an audio visual item merely because another person uses the facilities so provided to do something the right to do which is included in the copyright.

Earlier the Internet Industry Association (IIA) had applied to contribute to the case as amicus curiae, or ‘friend of the court’. Justice Cowdroy decided today that the industry group would have little to add to the case, since the issues it planned to raise had already been covered in detail by iiNet, mostly concerning the ISP’s commitments under the Copyright Act and Telecommunications Act 1997.

Earlier this week at their annual general meeting, iiNet boss Michael Malone gave company shareholders some painful news. The costs of defending the AFACT case had amounted to $4m AUD (approx $3.7m US).

The court proceedings are scheduled to conclude today, but the verdict will not be issued for several months.

Source: AFACT v iiNet: Epic BitTorrent Copyright Case Concludes

The case progressed in the Federal Court today, with iiNet barrister Richard Cobden continuing with his closing submissions.

As detailed earlier in the case, after AFACT sent many thousands of copyright infringement notices to iiNet, the ISP responded by sending them to the police. Cobden defended that decision today, claiming that the notices could constitute evidence of copyright crimes.

While the studios had earlier insisted that they would never sanction unlawful investigation methods, ITNews quotes Cobden as saying that in gathering that evidence, it was likely the investigators themselves had also committed offenses, breaching section 132AJ(1) of the Copyright Act.

The barrister said that both investigators committed primary acts of infringement online, and while AFACT had earlier claimed that iiNet users burned copyright material onto DVDs after downloading it, in fact the only evidence of that being done relates to the copies made by AFACT investigators.

Continuing to attack the evidence provided by AFACT and its anti-piracy partner DtecNet, Cobden returned to an earlier assertion that DtecNet investigators did not behave as normal BitTorrent users would. Regular users would allow their torrent client to connect to any peers, but DtecNet filtered out any that weren’t issued with iiNet IP addresses.

ARN quotes Cobden as saying this action was “foolish” as it slowed download times to several days. As we heard earlier in the case, this led to investigators counting the same infringement more than once.

Last week, Cobden argued that AFACT hadn’t provided any evidence that iiNet customers had engaged in copyright infringement as they were only sharing small parts of files (such is the nature of BitTorrent), rather than the “substantial” parts, as required under the law. In order to prove his point, Cobden went on to cite an earlier copyright case.

In 2002, Australian TV station Channel 9 sued Channel 10 citing infringement under the Copyright Act 1968. Channel 10 had broadcast short sections of Channel 9 programs The Today Show, Who Wants to be a Millionaire, Days of Our Lives and Sale of the New Century in their television show called The Panel. The view was that of the 11 segments played, only 3 were long enough to constitute infringement.

As anti-piracy tracking companies such as DtecNet only record an instance of alleged copyright infringement timed to a single second, Cobden is arguing that there is no evidence to prove any “substantial” part of any movie was shared by iiNet users.

Cobden went on to insist that in order to confirm that evidence of infringement provided by AFACT was indeed accurate (before passing notices to their customers), it would be necessary for the ISP to breach copyright.

“If one wanted to check the DtecNet evidence and see on a range of IP addresses supplied by iiNet that infringing material was online, the only way to do it would be to use the BitTorrent client like DtecNet did, construct the parameters of the IP address range, locate the file and compare it to details in the spreadsheets,” said Cobden, as quoted by ITNews.

Cobden said that if iiNet passed unproven infringement notices to its customers, it would face problems if the account holder disputed the claims. After all, iiNet had only AFACT’s word that an infringement had been carried out, but absolutely no proof or other information to have a meaningful discussion on the issue.

It is likely that Cobden will finish his closing submissions next Tuesday 24th. The Internet Industry Association’s application to become a ‘friend of the court’ will be heard on the afternoon of that day, bringing the original date forward by two days.

The case will then end either next Wednesday or Thursday, but readers are advised not to hold their breath for the verdict – it could take several months to arrive.

Source: AFACT v iiNet: Tiny Bits of BitTorrent Transfers Aren’t Illegal

The case continued in the Federal Court, with iiNet barrister Richard Cobden beginning his closing submissions.

Referring to the allegations by AFACT that it detected around 97,000 instances of copyright infringement carried out by iiNet subscribers, Cobden said that there was actually only sufficient evidence to prove that a single subscriber had carried out any. That individual was the mole planted by AFACT and DtecNet to carry out deliberate ‘infringements’ on behalf of the plaintiffs.

iiNet’s protection under Safe Harbor provisions which limit a carrier’s liability under the Copyright Act remained intact, since no infringer had been identified other than AFACT’s own investigator. Since he was authorized by the plaintiffs, he committed no offenses and could not even be accurately categorized as an infringer. On this basis, iiNet did not disconnect him.

Cobden admitted that AFACT’s method of counting infringements indicated that it’s possible that from a sample of 20 iiNet users, on average they could have downloaded two to three movies each in the reported monitoring period of 59 weeks.

“It’s clear from the accounts that ultimately the [infringing] activity is likely to account for a very modest percentage of that user’s activity [and] a very modest percentage of their quota,” said Cobden as reported by ITNews.

Cobden went on to say that this didn’t amount to the “dramatic” amounts of infringement alleged by AFACT, so there was no evidence that this activity drove the uptake of iiNet high-bandwidth accounts from which the ISP profited.

Disconnecting users on such limited numbers of infringements shown on the sample accounts would have been a disproportionate response, he added.

The iiNet barrister also spoke in detail on iiNet’s privacy responsibilities under Section 112E of Australia’s Telecommunications Act, which he said undermined AFACT’s claims that by not complying with its requests it authorized the infringing activities of its subscribers. Detailed information on this key aspect of iiNet’s defense can be found here.

iiNet was never legally obliged to deal with AFACT infringement notices, Cobden told the court, noting that the law concerning copyright “authorization” does not require any ISP to suspend or terminate a customer’s account.

Cobden attacked allegations by AFACT that iiNet’s business model relies on illegal file-sharing, saying that the anti-piracy outfit had a distorted view of the world.

“In many ways the applicants look at everything that iiNet does entirely through the prism of their own concern for copyright infringement,” he said, noting that the company had been in business for many years and had simply kept up with offerings from its rivals Telstra and Optus.

“Once you take that prism away and look at it in terms of business and keeping up-to-date with technologies, and keeping its customers happy, almost every document, internal document, takes on an entirely different reflection,” he added, as quoted by ZDNet.

Cobden said there was zero evidence to back up AFACT allegations that iiNet users burned downloaded material onto CDs and DVDs and distributed them. This, he said, significantly decreased the number of copyright infringements claimed by AFACT.

iiNet’s legal team will continue with their closing submissions next week.

Source: AFACT v iiNet: Safe Harbor Protection Intact, Says iiNet

The case continued in the Federal Court, with AFACT continuing to make its closing submissions, marked by further attempts by barrister Tony Bannon to ruin the credibility of key iiNet witnesses Michael Malone and Steve Dalby.

Referring yet again to iiNet CEO Michael Malone’s earlier and multiple assertions that his company could not disconnect subscribers on mere allegations from a 3rd party, Bannon pointed that Malone had earlier referred to the evidence collected by anti-piracy tracking company DtecNet in a more positive light.

“But when asked the question in cross-examination, the truth is they regarded the notifications as compelling evidence,” said Bannon according to ITNews.

Based on what Bannon tried to insist was a contradiction, that “compelling” and “mere allegations” were incompatible when referring to the same material, Bannon asked the judge to disregard iiNet’s evidence.

Although earlier information about DtecNet’s methods were revealed in a closed-court session, CW reports that the anti-piracy company operated by downloading a portion of a file from iiNet subscribers while recording the IP address, the time of the transfer and the date, the protocol, the client id and a hash value.

Reiterating his earlier claims, Bannon insisted that chief regulatory officer Steve Dalby had deliberately exaggerated his claimed lack of understanding of BitTorrent and the infringement notices sent to iiNet by DtecNet. While Dalby had said that he had waited for AFACT to send more information, in fact internal iiNet email evidence showed that Dalby had discouraged further investigation, he said.

Bannon went on to state that companies like iiNet benefit greatly from illicit file-sharing, since the activity consumes a lot of bandwidth – the commodity the ISP sells to its customers.

Referring to an iiNet press release from late 2008 where the company said it would defend the court case, Bannon said the ISP had stated it could not disconnect a customer on a simple allegation. This, he said, amounted to assuring customers of their safety when carrying out illicit file-sharing.

Earlier in the case, iiNet claimed to have taken “reasonable steps” to deal with infringement on its network, an assertion roundly criticized by Bannon. The AFACT barrister said that iiNet has a technique to limit a subscriber’s access to the Internet if they don’t pay their bills, so this could easily be applied when an allegation of illicit file-sharing is provided by his client.

Bannon also said that since Westnet, the company iiNet had earlier acquired, already had a system in place to notify infringers, it was a “nonsense” to say that iiNet hadn’t got the facilities to deal with AFACT notices.

Bannon went on to tell the court that iiNet’s participation in discussions 4 years ago with the Internet Industry Association to create a code of conduct to deal with copyright infringement allegations, also did not constitute “reasonable steps”, since it didn’t address the “day to day” problems. Furthermore, he said that the overall plan by the ISPs was to aim at “doing nothing”.

Going on to strengthen his claim that iiNet “authorized and encouraged” the infringements of its customers, and in the face of iiNet failing to carry out any actions that could be described as “reasonable steps”, Bannon asserted that this meant that the ISP effectively allowed its subscribers to do whatever they liked on their Internet connection.

The case continues.

Source: AFACT v iiNet: Judge Asked To Disregard iiNet Evidence

The case continued in the Federal Court, with AFACT making its closing submissions and tearing into iiNet witnesses CEO Michael Malone and chief regulatory officer Steve Dalby.

The film industry, represented by chief barrister Tony Bannon, labeled Malone’s evidence as “incredible”, “evasive” and unreliable. Bannon said iiNet gave nothing but excuses for not acting on such notices and that Malone’s assertion that copyright laws should should be changed or an industry code introduced before he could act on infringement notices were “extreme”.

Since only Malone and Dalby appeared for cross-examination on behalf of iiNet, Bannon took the opportunity to criticize the company for not putting forward other staff from the company, who, Bannon claimed, would be better placed to answer the questions during the trial.

Bannon said this had put Malone and Dalby in the position of providing evidence on matters they knew nothing about, citing the pair’s lack of BitTorrent knowledge as a prime example.

“To put forward these two gentleman as the extent of familiarity of BitTorrent in the company is an entirely inaccurate picture of a company which plainly has a mass of technical expertise,” said Bannon, as reported by ITNews.

“It beggars belief that a company which paints itself as an Internet pioneer doesn’t have a level of knowledge within that company that knows exactly how the BitTorrent client works,” he added.

On an earlier claim where the iiNet CEO claimed to understand the BitTorrent protocol by not the operation of a torrent client, Bannon said it was a nonsense, to which insult to injury was added when it was revealed that iiNet operated its own BitTorrent tracker.

Bannon said it was clear to him that the only individuals in the court who claimed to know little to nothing about torrents were Malone and Dalby, but in reality the company understood the system perfectly well. Its motive for this stance, he said, was so that the company could distance itself from the accusations of authorizing the copyright infringements of their customers.

Bannon also heavily criticized Dalby’s evidence when he claimed to have the company’s policy on taking action only against repeat infringers “in his head”, insisting that no such policy exists.

iiNet is also asking the court to find its own terms and conditions both unenforceable and unreasonable, said Bannon as quoted by CW.

Although iiNet has asserted time and again in the case, that if a court ruled that someone had infringed copyright the ISP would disconnect them, the AFACT barrister said that iiNet’s own terms alone gave them the right to disconnect copyright infringers, and dismissed the ISP’s claims that the clause was unenforceable.

AFACT claims that iiNet engaged in secondary acts of infringement when it failed to stop its subscribers sharing illicit files on their network, citing the legal principles established in the 1975 case known as University of NSW v Moorhouse, details of which can be found here.

According to another report, the case could run over into a fifth week to 19th November and beyond to allow enough time for iiNet lawyers to prepare the company’s closing submissions.

The case continues.

Source: AFACT v iiNet: Barrister Tears Into iiNet Key Witnesses

The case continued Friday in the Federal Court, with iiNet’s chief regulatory officer, Steve Dalby, taking the stand following his first appearance Thursday afternoon.

Yesterday, Dalby recalled having difficulty in understanding some of the terminology utilized by AFACT in the infringement notice spreadsheets it submitted to iiNet.

Dalby told AFACT barrister Tony Bannon that iiNet had told AFACT there was an issue with some items being unclear in the spreadsheets.

“There was no legend associated with this spreadsheet. I had to make an assumption. We asked AFACT for more information,” ITNews quotes Dalby as saying.

Bannon then criticized Dalby for not being specific and expecting AFACT to guess at which terms were not understood, but Dalby pointed out that he expected AFACT to contact the ISP for clarification.

Further discussion took place on the issue of IP addresses and how iiNet allocates them to customers. Time and again, Dalby explained that IP addresses are allocated to a customer account and they do not necessarily represent any particular computer that the customer may use.

In what is becoming a recurring theme, today Dalby told the court that iiNet had no intention of forwarding AFACT’s copyright infringement notices to its customers purely on their allegations.

“Our position was that we should not be doing AFACT’s work,” said Dalby. “If we had received authorization by way of court order, that would have changed our position.”

AFACT went on to tender a draft e-security code of practice from the Internet Industry Association (IIA) created earlier this year. It proposes that in future, ISPs could contact, and maybe even disconnect subscribers, who have malware-ridden computers which negatively affect networks. Despite Justice Cowdroy indicating that its relevance was peripheral to the case and wouldn’t but much use when he comes to make his decision, it was allowed.

Dalby said he believed that iiNet had not been involved in the draft and he was personally unfamiliar with it. CW reports that he had been quoted on the issue in the media, but Dalby said that it was a regular occurrence for the press to call him to comment on issues he was not yet familiar with, and in this particular case his comments were “neutral and non-committal”.

In September we reported that Australia’s Internet Industry Association (IIA) felt it had something to offer these court proceedings. IIA applied to be amicus curiae, a ‘friend of the court’, but AFACT objected, insisting the group would not be impartial and would favor iiNet.

The decision on whether this will be allowed or not has been delayed until next week.

In an indication that AFACT still objects to an IIA appearance, Bannon said that “….there’s a conceivable possibility they don’t want to add anything other than to say ‘hear, hear’,” apparently to the amusement of the court.

AFACT barristers are scheduled to make their closing statements next Monday afternoon.

Source: AFACT v iiNet: ISP: “We Should Not Be Doing AFACT’s Work”

The case continued Thursday in the Federal Court, with iiNet CEO Michael Malone taking the stand for the fourth consecutive day, and possibly his last.

Not unusually for a copyright trial involving BitTorrent, the issue of The Pirate Bay was raised.

Yesterday AFACT barrister Tony Bannon incorrectly suggested that iiNet’s very own BitTorrent tracker’s functionality had been taken down, later to discover that in fact the court’s network blocked BitTorrent transfers.

Bannon indicated that he would like to be able to give a courtroom demonstration of The Pirate Bay Thursday, and the judge agreed that it would be possible to lift the block so he could do so.

According to ITNews, Bannon was today true to his word.

After the demo, Bannon enquired of Malone whether iiNet had a desire for its subscribers to be able to access the world’s largest tracker, “…when the only purpose it serves is providing a way to download unauthorized copies of films?”

This question was met with objection from iiNet barrister Richard Cobden, who argued that customer “desire” was irrelevant to the case. The judge, Justice Cowdroy, was also keen to discover the relevance.

Bannon then became the latest in a long line of movie and music industry lawyers to reveal that should his clients win the case, they will take legal action to have not only the world’s largest tracker blocked from iiNet’s customers, but other similar sites.

He also revealed that around 50% of the alleged copyright infringements in the case came courtesy of The Pirate Bay.

Then Bannon attempted to show that by allowing its customers to access The Pirate Bay, iiNet effectively sanctioned and authorized their infringing activities.

“We seek Mr Malone’s position as to whether or not his customers should have access to sites such as this,” said Bannon.

However, after legal argument, Bannon withdrew the question.

Malone did, however, concede that iiNet had taken no steps to block The Pirate Bay, but qualified this by indicating that the company didn’t possess the means to do so. Bannon asked if it was technically possible and Malone replied that he could achieve a primitive block with additional equipment, but even that could be easily circumvented

“To completely and conclusively block access to The Pirate Bay, I believe it to be beyond our technical capability or of any ISP,” replied Malone.

Asked by Cobden if iiNet had ever blocked any web sites, Malone said the company had not.

This technical inability led to iiNet pulling out of the Australian government’s filtering trials, reports ComputerWorld. Malone has been an outspoken critic of the filtering scheme, labeling it “fundamentally flawed” and saying his company would only participate in the trials to prove that filtering would fail.

The case continues.

Source: AFACT v iiNet: It’s Impossible to Block The Pirate Bay

The case continued Wednesday in the Federal Court, with iiNet CEO Michael Malone taking the stand for the third consecutive day.

Again AFACT barrister Tony Bannon tried to portray iiNet as an encourager of copyright infringement on its network, by referring to iiNet marketing where the ISP measures bandwidth in terms of how much music or TV episodes people can download. Malone said the company did this simply to give a customer an easier barometer by which to measure their consumption.

When questioned on the music aspect, Malone said the company referred to legal downloads, such as those from iTunes. Bannon countered by saying this could not be the case, since iiNet did not count downloads from iTunes towards a customer’s bandwidth quota.

According to iTWire, a welcome email from iiNet to new customers ended with, “Thanks for choosing iiNet. Happy downloading.”

By drawing attention to the above ponts, AFACT hopes to show that iiNet encouraged infringements, thereby losing its safe habor protection as a carrier.

CW reports that AFACT presented press articles regarding the levels of BitTorrent transfers on the Internet, in the context of actions taken by ISPs in order to limit P2P traffic.

In one article, Malone had said that BitTorrent transfers accounted for around 50% of all Internet traffic and admitted in court that BitTorrent had been used on iiNet’s network since it became available. He went on to agree that while much of this traffic involved the transfer of movies and TV shows, he didn’t feel that “..every young person in Australia is downloading illegally using BitTorrent.”

One exchange apparently raised a laugh in the courtroom when Bannon accused Malone of attracting heavy-usage customers in order to boost iiNet profits.

“I would prefer [those customers] go to someone else and let someone else be sued,” said Malone.

“And you’re happy to take their money in the meantime?” Bannon asked.

“Yes,” he replied.

Yet again, Bannon raised the issue of iiNet’s failure to forward AFACT copyright infringement allegations to its customers. However, an email presented from the Internet Industry Association’s Peter Coroneos, indicated that he was concerned that doing so could lead to an assumption that ISPs are responsible for the actions of their customers.

In the email exchange with Malone, Coroneos said it would be preferable and advantageous for all involved if the content owners could provide some legal alternatives.

After Bannon showed the court documentation showing policies in place at rival ISPs to deal with allegations of copyright infringement, Malone again confirmed that iiNet has no formal policy on how to deal with these type of allegations, noting that the company had yet to be presented with evidence of what he described as a “repeat infringer”.

Earlier in the case, Malone had defined a repeat infringer as one who had been proven as such by a court, but Bannon mocked Malone, asking if the iiNet CEO had just heard what he’d said and would he like to think about the question again for a moment.

Malone said he didn’t and Bannon accused him of treating the proceedings as a game.

The case continues tomorrow.

Source: AFACT v iiNet: Half of All iiNet Traffic is BitTorrent

Continuing first from yesterday’s proceedings, ITnews reported an exchange between iiNet CEO Michael Malone and movie industry barrister Tony Bannon, over Malone’s understanding of BitTorrent.

Malone told the court that while he had an understanding of the protocol, he had never used uTorrent, the client used earlier by Bannon to give the court a technical demonstration. Bannon’s demo used iiNet’s own tracker (an installation of RivetTracker) which it has used to distributed several press releases which all relate to the trial.

It is difficult to see where Bannon was going with his questioning, but it began with an admittance by Malone that the torrent files were intended to be used by people with access to a BitTorrent client. Malone then denied that the releases were specifically targeted at iiNet customers, noting that anyone can access them

Under further questioning regarding the inclusion of a note in the torrent files dialogue box indicating the files were non-pirated, Malone reiterated that while he had an understanding of the BitTorrent protocol, he did not have experience of the client used by Bannon

Then, with an apparent deafness towards Malone’s perfectly clear response, and demonstrating an apparent ignorance between a BitTorrent client and the BitTorrent protocol, Bannon sought to press Malone into admitting to his 400,000 customers that he didn’t understand BitTorrent.

Again, Malone stated that he didn’t know how to put a comment on a torrent file, but Bannon persisted in trying to get Malone to admit that he knows how uTorrent 1.8.4 works, but Malone said he’d never used it. There could, however, be people in iiNet who had, he conceded.

Bannon then said that in the last 24 hours the torrent file functionality for the press releases had been removed. Malone said that if it had, he certainly hadn’t requested it, asking Bannon how he was attempting to access the Internet, suggesting that a firewall in the court was stopping the transfer.

TorrentFreak’s checks show a single seeder on each torrent and each one worked absolutely perfectly.

Moving on to iiNet’s handling of copyright infringement allegations, iTWire reports that Bannon tried to paint a picture that iiNet’s policy of forwarding AFACT notices to the police was little more than a cynical attempt to pretend that they were dealing with them, when in fact they were not.

For the umpteenth time in this case, Malone said that he was under no obligation to act on mere allegations from AFACT which were not backed up by a court order.

“AFACT was telling us to disconnect customers without further ado,” said Malone. “The question is, what should we do when confronted with illegal activity? And our response is, report it to the proper authorities.”

While iiNet said it had always been policy to forward the notices to the police, ITWire notes that evidence emerged that the company had sent notifications twice, although there was no indication of how many infringement notices were in each batch.

Yesterday Malone said that the evidence provided by tracking company DtecNet’s investigation was “compelling” and should be reviewed by a third party and the courts. In the face of this statement, Bannon asked Malone why he had not taken action based on AFACT’s allegations.

“This is a right,” said Malone, “not an obligation of iiNet.”

These days arguments in favor of anti-piracy action seem almost incomplete with the obligatory reference to child pornography, as we heard in yesterday’s propaganda piece from CBS. This case is no different.

Bannon put it to Malone that if the evidence provided was “compelling” and Malone had received “compelling evidence” that an iiNet customer was accessing child porn, would the company allow the user to do so “day after day?”

Of course, any allegations of this nature would involve the police, and the police or the courts would do the investigation, get the proper paperwork and order iiNet to comply, which they naturally would. Malone said that on mere AFACT allegations of civil infringement (as apposed to an infinitely more serious and jailable criminal offense), such action would not be permitted.

Bannone then pressured Malone to admit that “…you’re happy to tell your customers this from the witness box,” that iiNet will not disconnect subscribers for infringing copyright.

At this point one has to wonder if Bannon is deaf or just plain stubborn. It is absolutely crystal clear to anyone following these proceedings that yes, iiNet will disconnect customers for copyright infringement, providing there has been due process and a court has ruled that disconnection is appropriate.

The case continues tomorrow.

Source: AFACT v iiNet: – Pirates Will Be Cut Off With a Court Order

Today, iiNet CEO Michael Malone was questioned at length over dealings he had with Westnet, another ISP which was acquired by his company for AUS $81 million in May 2008.

Westnet had developed an automated system to pass on infringement notices from copyright holders to its customers, a process which Malone earlier described as “making more work for no benefit,” and was said to be scathing in defense of due process and consumer rights.

“Taking the opposing argument, a random third party is lodging an unsubstantiated accusation against a customer and you’re passing it on?” wrote Malone in an email to Westnet, continuing, “Your current approach is doing damage to the industry and iiNet’s position on this matter.”

According to itNews, today Malone admitted he had “hit the roof” when he had discovered Westnet’s policy on infringement notices.

When any company acquires another there is often a need to standardize procedures and policies, and with iiNet and Westnet the position was no different. Malone said that whenever he found differences in policies between the two companies he took steps to bring those of Westnet into line with those at iiNet. He also stated that he was unaware that Westnet had failed to follow his instructions and adopt iiNet group policy following the acquisition.

One of the reasons he sought to change the Westnet policy, he said, was to bring the company into line with the position held by the Internet Industry Association on the issue.

Cross-examining Malone on iiNet’s role in providing a broadband service which enabled users to share movies using BitTorrent, senior counsel Tony Bannon for the movie industry referred to infringement notices sent to iiNet for the Sony movie, Pineapple Express.

According to CW, Malone responded that as a mere service provider, iiNet had no way of knowing if any of its customers were engaged in copyright infringement, but could confirm that the individual who allegedly committed the breaches was still an iiNet customer.

The company was not aware, however, if the customer continued to breach copyright.

The case continues tomorrow.

Source: AFACT v iiNet: Day 9 – AFACT Attacks iiNet Piracy Policy

After AFACT dropped the claim that iiNet was a primary infringer by caching copyright works on their servers, according to ZDNet the case will now examine a sample of 20 iiNet customer accounts.

Earlier in the case, AFACT submitted evidence that it claimed showed around 95,000 breaches of the studios’ copyrights by iiNet subscribers. iiNet barrister Richard Lancaster cross-examined AFACT lawyer Michael Williams on techniques used by AFACT’s investigators to count these alleged breaches of copyright.

The recording of these claimed breaches were described by iiNet lawyer Richard Cobden during day two of the trial as a “novel composition and adventurous” and “a dramatic extension of the application of the law”. He then went on to describe AFACT’s claims of 94,942 infringements as “artificially inflated by a contrived process”.

It was then revealed in court that AFACT had probably counted some of the same infringements more than once – if it checked in the morning for infringements and then again in the afternoon, if the same infringement on an individual’s computer was still ongoing, AFACT counted it as yet another infringement, not a single extended one.

Another process AFACT used to record alleged breaches of copyright breach was by using a Reverse DNS Lookup – a process used to determine a domain name associated with a an IP address by using the Domain Name System (DNS) available on the Internet.

iiNet’s lawyer Richard Lancaster said this was not a reliable method since DNS records were often out of date. Lawyer for AFACT Michael Williams agreed this method was “not 100 per cent reliable”.

While re-addressing the possibility that AFACT was relying on evidence which artificially inflated the number of alleged infringements, following cross-examination both AFACT and iiNet conceded that technical issues can cause iiNet subscribers to leave and then reconnect to the network, resulting in the same iiNet users being allocated multiple IP addresses during an online session. If AFACT was tracking these particular users, it would then identify each IP address as a separate infringement, which would inflate their claims on numbers of infringements.

Of course, the accuracy of such evidence is important, since any damages awarded for, say, 50,000 breaches, would be substantially less than 95,000 breaches.

“If the judge finds further down the track that iiNet is guilty of the claims AFACT is making – which I don’t believe they will – because they are seeking damages, the number of offences does matter in terms of the final decision on what the damages will be,” an iiNet spokesman told ARN.

Today’s proceedings bring an end to the first two weeks of hearings in the case. It will resume November 2nd.

Source: AFACT v iiNet: Day 8 – Anti-Piracy Evidence Lacking

Today iiNet’s lawyers cross-examined representatives from 20th Century Fox, Disney, Warner and Paramount via video link.

After being accused earlier in the trial of having deals in place with BitTorrent Inc, ZDNet reports that Paramount admitted it had a deal with the company for it to prevent illegal copies of its movies being shared via its BitTorrent software. However, this seems more likely to be a filter applied to search results on the BitTorrent.com site, rather than any obstruction in the software itself. Any notion that BitTorrent Inc spied or spies on users of its software in order to restrict their activities would be a disaster for the company.

Paramount could not confirm if the deal prevented piracy or not but acknowledged that it ran from October 6 2006 until October 6 2008, and had now expired. Paramount had an option to extend it for a further year, but did not.

As mentioned in our earlier coverage, iiNet lawyers suggested that the publishing of studio logos (including that of Paramount) on the BitTorrent.com website could have caused some confusion for potential BitTorrent downloaders.

However, according to a report, Paramount could be set to lodge a formal complaint with BitTorrent Inc over what it described as “unauthorized use” of its logo. This development seems to be somewhat of a cheap shot by Paramount. Their logo has been on the BitTorrent.com site for a very long time (and remains there today) so the ‘revelation’ in court that it exists there should hardly come as a surprise – they were business partners after all.

iiNet lawyers put it to 20th Century Fox anti-piracy boss Ronald Wheeler that making material available online helped to reduce piracy. While he could not confirm that immediately, he did say that because content is available online, it counters the argument that the only way to obtain the content is illegally.

Warner representative David Kaplan confirmed that his company also had a deal with BitTorrent Inc but although he couldn’t be certain, he felt the deal had expired since the MPA hadn’t kept him updated about it.

iiNet lawyers also produced a document which was alleged to be license agreement between Warner and the defunct Wurld Media, to distribute content via P2P. While Kaplan admitted the deal was now dead, he confirmed the authenticity of the document.

A further interesting development came after AFACT chief Neil Gane admitted that his organization’s investigative techniques – hiring someone to pretend to be a regular iiNet customer in order to engage in file-sharing of copyright works with other iiNet customers – could be construed as copyright infringement in itself.

In last week’s court sessions, iiNet lawyers put it to Gane that AFACT could have been involved in condoning copyright infringement, referring to the actions mentioned in the previous paragraph.

Gane admitted that there would have been occasions where AFACT’s own investigators had undertaken an activity which had been described by iiNet lawyers as “an infringement of copyright”.

“And that’s something you will tolerate happening at your own premises?” said iiNet lawyer Richard Cobden.

“It’s an investigative technique,” Gane replied

The case continues.

Source: AFACT v iiNet: Day 7 – Investigators Condoned Infringement?

After Justice Cowdroy allowed several documents to be used in court yesterday which were used by iiNet’s legal team to cross-examine AFACT witnesses, senior counsel Tony Bannon for the movie industry said he wants to subpoena the Internet Industry Association (IIA) for documents it says relates to meetings held with ISPs in 2006/2007 on how to handle p2p copyright infringement.

The documents are required for further cross-examination of witnesses. Earlier IIA had applied to be a friend of the court, an application to which AFACT objected.

Also revealed in court today is that iiNet is on the brink of launching an online kids entertainment service. Nothing particularly unusual about that, until one learns of iiNet’s business partner – TV company Village Roadshow, one of the litigants in the case. The content will be free to view and iiNet won’t even count the bandwidth its customers use on these downloads.

AustralianIT notes that iiNet was due to announce the service in around a month’s time, but will now launch it this weekend.

A computer forensics investigator who was previously a key witness in the 2004 KaZaA trial, was called by iiNet’s legal team today. Nigel Carson, a key witness for AFACT, was questioned on whether an IP address alone is enough to identify an individual infringer.

Carson admitted that any ISP account could have multiple users in the same household and could have other unauthorized 3rd-party users if a wireless router was compromised.

He further admitted that to accurately identify a precise individual, a court order and police action could be required to interview account holders and other individuals living at the address.

The open court session was also closed for the continuing cross-examination of DtecNet’s CTO Kristian Lockegaard which began yesterday.

The case continues to the end of this week, where there will be a two week gap before the court reconvenes for a further two weeks.

Source: AFACT v iiNet: Day 6 – IP Address Alone Is Not Enough

Today’s evidence included that given by anti-piracy tracking company DtecNet’s CTO Kristian Lokkegaard. The day ended in a closed court session where the inner workings of the company were discussed – if ever there needed to be something discussed completely in the open, this is it, but it wasn’t to be.

Lokkegaard’s cross-examination centered around the question of DtecNet’s operations. When the company tracked BitTorrent users, did it behave in a normal way, as a regular BitTorrent user would?

iiNet lawyer Richard Lancaster put it to Lokkegaard that his company deliberately filtered their connections to other BitTorrent users to ensure that only iiNet customers were tracked. Lokkegaard agreed with this assertion but couldn’t confirm if his company had also filtered by country.

Lancaster put it to Lokkegaard that an ordinary BitTorrent user would not filter IP addresses, but Lokkegaard said this was untrue, saying that users can filter out IP addresses that they don’t want to connect to.

“Users do that to avoid connecting to companies like ourselves. They will typically try to stay away from something that looks like a corporation because a lot of people would potentially suspect them of being a non-private user,” he said.

While there are techniques and software available to enable BitTorrent users to filter connections to other users – for example using a blocklist in conjunction with software such as Peer Guardian – it’s a bit of a stretch to say that “ordinary” BitTorrent users would take such measures.

Indeed, it would be extremely empowering for BitTorrent users to know the IP addresses that DtecNet operate their tracking systems from – to know those would render their entire operation useless, if “ordinary” users took such measures. But they most definitely do not – most “ordinary” users take no measures at all.

When pressed, however, Lokkegaard conceded that it would be unusual for BitTorrent users to take measures in order to only connect to peers on the same ISP.

The same could not be said about AFACT investigator Aaron Herps. When he was cross-examined it was put to him that he had employed an IP address filter which enabled him to connect to only iiNet IP addresses.

“Is that something an ordinary user of uTorrent would use?” said iiNet barrister Richard Cobden.

“Many users do, yes,” responded Herps.

But of course, he didn’t answer the question. While it is completely possible to only connect to BitTorrent users on a particular ISP, “ordinary users” absolutely do not do this. It would be entirely reasonable and true to state that “ordinary users” have no idea this is even possible.

Lokkegaard’s cross-examination will continue tomorrow.

Source: AFACT v iiNet: Day 5 – Anti-Piracy Tech is Secret

Yesterday the court heard from iiNet barrister Richard Cobden, who described how
several of the plaintiffs and members of the MPAA had previously entered into contracts with BitTorrent Inc, the source of the official BitTorrent software.

He said that the logos of these studios appeared on BitTorrent.com (placed directly under the ‘free download’ link for the official BitTorrent client) and also on Mininova.

This lead Cobden to declare that the studios “….have engaged, at least from the logos on BitTorrent Inc, in the promotion of BitTorrent, the vehicle for all infringement in this case.”

Today AFACT barrister Tony Bannon criticized iiNet for these claims, describing them as “an excellent example of iiNet’s intent to focus not on legally relevant and factually indisputable matters but to focus on the legally irrelevant.”

Bannon said that the claims show that iiNet wishes to give the court the impression that his clients encouraged the exact same copyright infringement they now complain about in this case, going on to call the claims “legally irrelevant” and noting that the contacts with BitTorrent.com were terminated last year.

While Bannon insisted the details of those contracts are confidential, he was prepared to reveal that they included terms which required BitTorrent Inc to filter out torrents from their search engine which linked to illicit copies of the studios’ movies. He also said that iiNet knew that the contracts had been terminated but had not relayed that fact to the court, or when it spoke to members of the media.

However, an iiNet spokesperson seemed unrepentant. “The fact is the logos are still on the BitTorrent sites and serves the argument we are making, which is a couple of clicks away from where the logos are, you can download things. Part of the argument we are making in relation to all that is when it comes to what are ‘reasonable steps’ for iiNet to take about illegal downloading when they are not even asking BitTorrent to do the same thing?”

Earlier this week, iiNet had presented information to the court which showed that its competitors – other ISPs operating in a similar manner – also did not give in to AFACT demands that they should disconnect their copyright-infringing customers, backing up claims that iiNet had been singled out by the movie industry.

Tony Bannon criticized iiNet for producing this evidence, describing it as meaningless and “….an attempt to take the case outside of the real issues.”

AFACT boss Neil Gane briefly appeared on the witness stand and was questioned by iiNet barrister Richard Cobden. The exchange ended in a dispute over what confidential material can or cannot be used in the case.

Judge Cowdroy will decide on the issue by next Monday when Neil Gane retakes the stand.

Source: AFACT v iiNet: Day 4 – BitTorrent Deals “Irrelevant”

Today a very interesting and somewhat unexpected angle to iiNet’s defense was revealed by the ISP’s barrister, Richard Cobden.

Earlier AFACT had insisted that iiNet did nothing to discourage its subscribers from downloading copyright material and therefore condoned their behavior, but it seems that the studios aren’t exactly blameless when it comes to encouraging the use of BitTorrent.

It now appears that the studios themselves were a source of potential confusion experienced by new BitTorrent users when they were trying to decide (if they were aware at all) what is ok to download and what is not when using the protocol.

Cobden told the court that several of the plaintiffs and members of the MPAA had previously entered into contracts with BitTorrent Inc, the source of the official BitTorrent software.

Furthermore, the logos of these studios appeared prominently on BitTorrent.com and also on Mininova, leading Cobden to declare that the studios “….have engaged, at least from the logo on BitTorrent Inc, in the promotion of BitTorrent, the vehicle for all infringement in this case.”

Cobden then went on to show how a user would go about obtaining the BitTorrent client, noting the above-mentioned logos were placed directly under the ‘free download’ link for the official BitTorrent client.

Once the client was downloaded, the user was then prompted to start searching the web for things to download, but despite the contracts between the studios’ and BitTorrent Inc, nowhere did it indicate that users should not download the studios material, said Cobden.

Downloads of pirate material could be found a couple of clicks away from the studios logos, he added, including links to Torrentz.com and Mininova. Furthermore, despite the agreements the studios had with BitTorrent.com, iiNet had no relationship with that or any other torrent site.

Cobden went on to say that while AFACT seemed only too happy to pressure iiNet to take action against alleged copyright infringers, it took no action against them directly, preferring the ISP to carry the costs of defending the studios’ copyrights instead.

He said that the studios had put forth ”exuberant rhetoric” in respect of the alleged infringements, but iiNet said it conducted itself in similar ways to its rivals Telstra and Optus – who it appears also took no action based on AFACT allegations.

Time and again AFACT has claimed that since iiNet took no action against its allegedly infringing subscribers, this was tantamount to condoning their illegal activities, but unfortunately for the anti-piracy group, this argument was quickly turned around on them by iiNet’s lawyer.

Since AFACT nor the studios took any legal action directly against alleged copyright infringers, they too must’ve condoned their copyright infringements.

The case continues.

Source: AFACT v iiNet: Day 3 – Studios Promoted BitTorrent

AFACT said that the email documents, which were seen by CW, show that the ISP could have done more to deal with the alleged infringements.

AFACT’s barrister, Tony Bannon, noted that iiNet training documents indicated that the ISP knew its customers were using P2P networks, which he said showed the the ISP knew what its customers were doing. Of course, just because iiNet knew the protocols or networks being used by its subscribers, it doesn’t necessarily follow that they knew the copyright status of material being transferred. Indeed, with BitTorrent, monitoring and identification (by, for example, using fingerprinting techniques) is almost impossible.

The emails, which were sent between iiNet CEO Michael Malone and bosses of another ISP, Westnet, which at the time was being acquired by iiNet, were said to contain discussions of how to deal with AFACT infringement notices.

According to ITnews, Malone asked how Westnet dealt with these infringement notices. Westnet had developed an automated system to pass on infringement notices to its customers, a process Malone described as “making more work for no benefit.”

While Westnet said it was “acting with conscience” when it passed the AFACT infringement notices on to customers, Malone was said to be scathing in defense of due process and consumer rights.

“Taking the opposing argument, a random third party is lodging an unsubstantiated accusation against a customer and you’re passing it on?” wrote Malone in an email, continuing, “Your current approach is doing damage to the industry and iiNet’s position on this matter.”

After AFACT ended its opening statements around lunchtime, the court heard those from iiNet.

Richard Cobden for the ISP characterized AFACT’s case as a “novel composition and adventurous” and “a dramatic extension of the application of the law”. He then went on to describe AFACT’s earlier allegations of 94,942 infringements as “artificially inflated by a contrived process”.

Cobden said that AFACT incorrectly counted these infringements. According to CW, AFACT counted the same infringements more than one – if it checked in the morning for infringements and then again in the afternoon, if the same infringement on an individual’s computer was still ongoing, AFACT counted it as another infringement, not a single extended one.

Tomorrow will see the end of iiNet’s opening arguments and then it will be AFACT’s turn to call its first witnesses.

This section of the case is scheduled to run for two weeks, then everyone will take a break for another two. The case will then conclude after a further two weeks of hearings.

Source: AFACT v iiNet: BitTorrent Piracy Claims “Artificially Inflated”

The studios – Village Roadshow, Universal Pictures, Warner Bros Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, Disney Enterprises, Inc. and the Seven Network (all under the umbrella of AFACT) – claim that iiNet knew about the copyright infringements of its subscribers, yet did nothing about them.

The case, officially known as Roadshow Films Pty Ltd ACN 100 746 870 & Ors v iiNet Ltd ACN 068 628 937, is particularly serious, since its outcome could determine if ISPs can be held liable for the infringing actions of its customers.

Earlier, AFACT investigators claimed to have recorded around 100,000 copyright infringements carried out by iiNet’s customers using BitTorrent.

For the benefit of the court proceedings, AFACT presented just under 30,000 sample infringements covering 86 copyright works, including two Batman movies, Spiderman 3, Happy Feet, Pirates of the Caribbean and TV shows The Simpsons, Family Guy, Bones and Heroes.

The Angelina Jolie movie Wanted was the title claimed to be most infringed by iiNet’s subscribers, with Will Smith’s Hancock coming in second place. Both clocked up more than 1,000 instances of alleged infringement.

“By making those films available in those 29,914 instances, iiNet customers invited any and every user of the freely available BitTorrent software program to download any and every part of those infringing copies,” said an AFACT lawyer. He then went on to speculate that the 29,914 figure would have to be multiplied many times to get the overall picture of the making available carried out by iiNet’s customers.

AFACT claimed that it had sent information about these infringements to the ISP and demanded that iiNet disconnect the culprits, but the ISP did nothing.

AFACT barrister Tony Bannon also said that iiNet failed to enforce its own user agreement, which includes a clause prohibiting its users from using the service for illegal activities.

Bannon went on to argue that iiNet benefits from piracy since illegal downloaders use a lot of bandwidth and the more they use, the more the ISP makes. He said that disconnecting them would mean that iiNet would lose a customer, something the ISP wishes to avoid, hence the lack of action.

It’s always been somewhat of a mystery why AFACT chose to single out iiNet for legal action, particularly since all other ISPs in Australia have been operating on a similar basis. However, when iiNet made an earlier request to include as evidence how other ISPs responded to AFACT complaints, it was denied.

However, after Bannon gave a video presentation of AFACT’s investigator downloading Batman Begins using BitTorrent, Justice Cowdroy then asked if he could be shown other ISPs said to be facilitating file-sharing.

“Can you show me, Mr Bannon, how many other internet providers are providing the same sorts of information? What other ones right now are doing this?” he said, noting that that iiNet had appeared just four times.

Bannon could not recall the names of the other ISPs and the judge indicated he would be keen to see a live BitTorrent demonstration, rather than just a recorded demo.

The case continues. The defense will present its case later this week.

Source: AFACT v iiNet – The BitTorrent Battle Begins

AFACT’s position in the case – officially known as Roadshow Films Pty Ltd & Ors v iiNet Ltd – is that iiNet “failed 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.”

AFACT previously demanded disconnection for those iiNet subscribers alleged to have infringed their copyrights by sharing material using BitTorrent. iiNet refused to comply and legal action against them followed.

In addition to AFACT’s assertion that iiNet committed secondary acts of infringement, i.e it is responsible for the copyright infringing actions of its subscribers (something it denies), AFACT had earlier claimed that iiNet engaged in primary infringement too.

Now, just days before the trial begins, AFACT has withdrawn this key part of its claim against iiNet.

The ridiculously optimistic primary infringement claim centered around AFACT’s assertion that iiNet cached the illicit content being shared by their file-sharing customers on their own network, which effectively turned the ISP into a distributor of copyright works. Of course, this is how all ISPs and indeed the Internet works – by simply copying digital data from one place to another.

A spokesman for iiNet told AustralianIT that the withdrawal indicated that AFACT’s legal team had earlier “fundamentally misunderstood” how an ISP works and had been “clutching at straws”.

Indeed, it is very difficult to disagree with this assessment, but AFACT remains upbeat.

“The authorization part of the case, which says iiNet failed to prevent online copyright theft of customers, has always been the main part of the case. The cache and conversion claims were always subsidiary,” said an AFACT spokesperson.

This isn’t the first time that AFACT has removed a key claim against iiNet. Earlier the anti-piracy group alleged iiNet was a primary copyright infringer and directly responsible when it refused to disconnect alleged pirates within its subscriber base. The allegation, know as “conversion”, is that iiNet interfered with the studio’s “right of possession”, a breach of their rights. It was later withdrawn.

The outcome of the case will be hugely significant in Australia. If AFACT wins, all ISPs in Australia could be held legally liable if they are made aware of copyright infringers on their network yet fail to take action against them.

Source: Anti-Piracy Group Drops Ridiculous Claim Against ISP

Now Australia’s Internet Industry Association (IIA) is set to request permission to join the fight.

IIA has more than 140 members and has applied to offer its expertise to the proceedings as amicus curiae (friend of the court), as explained by iiNet’s chief regulatory officer Steve Dalby;

“What an amicus is required to do is to provide information that is to the public interest that may or may not come out of the evidence provided by the parties.”

However, while iiNet has welcomed IIA getting involved, the same enthusiasm is not shared by AFACT. Since iiNet is a member of IIA, AFACT claims that it would be impossible for the industry association to be neutral on the issue.

AFACT went further with its accusations of non-impartiality by claiming that IIA had been working with iiNet on the background of the current case. However, according to the ARN report, iiNet denied that IIA had assisted with the case.

Dalby insists that IIA’s involvement in the case would not prove provide iiNet with an advantage and said that iiNet works with IIA and lots of other groups adding, “We would happily work with the movie industry if it was prepared to work with us to develop systems to distribute its products.”

The judge in the case will decide if IIA’s application will be accepted shortly and the trial itself will begin in less than a month on October 6th.

Source: Anti-Piracy Group Objects To Friend of the Court Application

Earlier we reported how AFACT had got an individual to sign up as an iiNet customer and commit a kind of ‘authorized copyright infringement’ in order to gather evidence on alleged pirates. AFACT then complained to iiNet of this individual’s ‘infringements’ but iiNet took no action against him, boosting the claims that the ISP knew about piracy, but did nothing about it.

Now, according to an iTNews report, iiNet has been ordered by Australia’s Federal Court to hand over the records of twenty ‘pirate’ customers. The information will include IP addresses allocated to these individuals and their “download histories” – it is far from clear what these records will consist of or how detailed they are.

The information will be used as evidence in the case, but fortunately for these twenty individuals, information which personally identifies them will be removed. The disclosures could’ve been even greater in number, since Steve Dalby from iiNet told iTnews that AFACT originally wanted the details from 300-400 customer accounts to be handed over.

An AFACT spokesman confirmed that several of the twenty accounts had been nominated by the anti-piracy group since these were tracked transferring material by their investigator.

Executive Director of AFACT Adrianne Pecotic commented, “We are confident that the sample of twenty accounts ordered by the Court to be provided by iiNet will be more than adequate to illustrate the infringing behaviour of iiNet’s subscribers.”

On the other side, iiNet has voiced concern that so far AFACT has refused to hand over documents which would reveal if it made copyright-related demands such as those outlined in this case to ISPs other than iiNet. Steve Dalby of iiNet said they were trying to work out why AFACT and its Hollywood paymasters had chosen to pick on one Australian ISP to take action.

“AFACT hasn’t told us what it is we didn’t do; they have simply said we didn’t take reasonable steps to stop copyright infringement on our network. What we’re trying to understand is what arrangements are defined as reasonable,” iiNet’s Dalby told iTnews.

“There are 400 ISPs operating in Australia. If we were expected to take specific actions that nobody else is required to undertake, we would argue that is quite unreasonable. So we are asking AFACT the question while under the confidentiality of the court – what agreements do you have with other ISPs?”

iNet will get their way on this request, as the court has ruled that the ISP can see any “form of demand” AFACT has served on other ISPs in Australia.

Source: ISP Ordered To Hand Over Records of Pirate Customers

The studios, under the umbrella group AFACT, stated that iiNet “failed 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.” AFACT had demanded disconnection for alleged infringers but iiNet refused. According to AFACT, since iiNet knew that its subscribers were infringing copyright, it too was breaching copyright by “authorizing” the infringements. Legal action followed.

Just recently AFACT was forced to drop some of the charges against iiNet, withdrawing the claim that the ISP was the primary copyright infringer and directly responsible when it refused to disconnect alleged pirates within its subscriber base. The allegation, know as “conversion”, is that iiNet interfered with the studio’s “right of possession”, a breach of their rights.

AFACT tried to convince Federal Court Judge Justice Dennis Cowdroy that iiNet was guilty of “conversion” but he disagreed, kicked out the claim and ordered the studios to pay iiNet’s costs for that element.

The remaining claim against iiNet is that the ISP is liable for the copyright infringing actions of its subscribers, something it denies. However, AFACT are increasing the pressure on iiNet to again admit that its customers are pirates, something it tried to do earlier. They say that since they have lots of evidence that iiNet’s subscribers are pirates, iiNet should just admit it and stop wasting the court’s time.

“AFACT has presented evidence of tens of thousands of instances of copyright infringement by iiNet’s users,” said a spokesperson for the anti-piracy group. He claimed that iiNet had already accepted the validity of that evidence adding, “To make those acknowledgements and not accept that those customers are engaged in copyright infringement is simply a tactic by iiNet designed to delay and frustrate the running of the case.”

iiNet chief Michael Malone disagreed, saying that it’s not up to iiNet to admit anything, it’s up to AFACT and the studios to bring the evidence. “If they come and say that a person is committing piracy, it’s their obligation to prove that,” he said.

The case is due to return to court 9th June 2009.

Source: Studios Urge ISP to Admit Piracy, Stop Wasting Court’s Time

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.

Source: ISP Refuses to Admit Customers Are BitTorrent Pirates

The studios want iiNet to disconnect alleged infringers, but the ISP has refused to do so. Adrianne Pecotic, Executive Director of the Australian Federation Against Copyright Theft said that the studios were forced to sue, since iiNet failed to take action against its customers. The case returns to the federal court shortly, but the lead up to this action proves interesting.

With the approval of AFACT, the Hollywood studios started a secret investigation back in June this year. After employing investigator Aaron Herps (and getting him to join up as an iiNet customer) and Copenhagen-based anti-piracy firm DtecNet for its software resources, they went online from 2 July to 30 October. Herps then actively shared copyright works via BitTorrent in a quest to gather evidence to prove that iiNet authorized the copyright-infringing activities of its own subscribers. But how would they prove this?

After the 18 week investigative period, the studios had collected the IP addresses of many thousands of iiNet subscribers, which were handed over to iiNet boss, Michael Malone, who later commented, “They send us a list of IP addresses and say ‘this IP address was involved in a breach on this date’. We look at that and say ‘well what do you want us to do with this? We can’t release the person’s details to you on the basis of an allegation and we can’t go and kick the customer off on the basis of an allegation from someone else.”

Crucially, the studios felt they had an ace up their sleeve in the shape of their investigator and now iiNet customer, Aaron Herp. Herps’ own ‘infringements’ were reported to iiNet along with everyone else’s, but of course, iiNet took no action against him, bolstering the claims that the ISP knew about piracy, but did nothing about it.

Interestingly, as Herps was actually authorized to share the movies and TV shows by the studios, he committed no copyright infringement, so if iiNet had disconnected him, they would have been acting incorrectly. It’s unclear what bearing this will have on the case.

Instead of taking direct action itself, iiNet handed all the evidence provided by the studios directly to the police. “So we say ‘You are alleging the person has broken the law; we’re passing it to the police. Let them deal with it’,” said Malone.

Ultimately it will be for the court to decide if iiNet ‘authorized’ the infringements, but the claims center around a number of assertions – that iiNet knew that its users were infringing copyright and that it took no action against them (i.e warnings, disconnection), that the ISP did not enforce its own terms of service (no sharing of copyright works) and that this liberal environment encouraged iiNet’s users to share more files.

According to Business Spectator, a hearing will take place tomorrow which will decide a date by which iiNet will have to file a defense, a defense they have promised to mount, vigorously.

Similar to elements of the DMCA, the ISP has a defense under Copyright Act 1968 – Sect 112E: A person (including a carrier or carriage service provider) who provides facilities for making, or facilitating the making of, a communication is not taken to have authorized any infringement of copyright in an audio/visual item merely because another person uses the facilities so provided to do something the right to do which is included in the copyright.

However, the Copyright Act 1968 – Sect 116AH states, “The carriage service provider must adopt and reasonably implement a policy that provides for termination, in appropriate circumstances, of the accounts of repeat infringers.”

However, proving that someone is an infringer takes more than a simple allegation, and it could hardly be considered ‘appropriate’ to disconnect someone on this basis. Time for Justice Dennis Cowdroy to decide.

Source: Movie Studios Spied On ISP’s BitTorrent Users

Today, through an AFACT (Australian Federation Against Copyright Theft) press release, 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 that they are to sue iiNet for copyright infringement.

The companies state that they are 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.”

Adrianne Pecotic, Executive Director of AFACT said that the studios were forced to sue, since iiNet failed to take action against its customers who the studios claim are committing copyright infringement. Chris Chard, Managing Director of Roadshow Entertainment, claims their titles Happy Feet, No Reservation and I am Legend had all been pirated by iiNet customers using BitTorrent.

The studios want iiNet to disconnect infringers, but up to now, iiNet has refused to do so. Mark White, chief operating officer at iiNet told APC that his company would consult with the Internet Industry Association (IIA) to formulate a response.

“Our view is pretty straightforward. We don’t condone or support piracy in any form, and people who choose to pirate content should face the force of the law,” he said. “This is an industry issue, and we’ve been talking with the IIA, and we’ll work with them in terms of handling it.”

iiNet’s CEO Michael Malone said that the company disputes AFACT’s claims that they refused to do anything about the problem, telling Computerworld, “They send us a list of IP addresses and say ‘this IP address was involved in a breach on this date’. We look at that say ‘well what do you want us to do with this? We can’t release the person’s details to you on the basis of an allegation and we can’t go and kick the customer off on the basis of an allegation from someone else’. So we say ‘you are alleging the person has broken the law; we’re passing it to the police. Let them deal with it’.”

Of course, it is not unusual for movie studios, copyright holders and commentators to skim over the details in claiming that it’s trivial to kill copyright infringement, it absolutely is not. Just this week, Mike Mulligan of Jupiter Research said in a piece entitled “Why Music Can’t ‘Just Be Free’”, that all P2P developers (and presumably ISPs in this case) have to do is “support their claims off innocence by embedding filtering mechanisms into their apps.” TorrentFreak wrote to Mike offering to present precise details of his suggestions to Vuze, LimeWire, Shareaza and Morpheus but, unsurprisingly, there has been no response.

The problem is clearly not lost on Michael Malone: “I think they genuinely believe that ISPs have a secret magic wand that we are hiding and if we bring it out we can make piracy disappear just by waving it.”

The legal action against iiNet was filed in Australia’s Federal Court on November 20th (today), and the proceedings will continue December 20th 2008.

Source: Movie Studios Sue ISP Over BitTorrent Piracy

“DVD and other piracy can now be more profitable than drug trafficking,” AFACT’s director of operations Neil Gane told The Australian. “That’s why crime organizations are going into it.”

It might not sound familiar to some of you, but a similar claim was made some four years and 9500 miles away, in the UK. Back then, during a campaign called “piracy is a crime” they made similar allegations (see the top of this page, court. wayback machine), allegations that didn’t stand up to scrutiny back then, when we first encountered them.

Do these? Well, the article in question makes use of the infamous LEK study, and even the MPAA knows it’s inaccurate (pdf). So, it’s not exactly off to the best of starts. Unfortunately, that’s also the only start. Despite a trawl of the websites and press releases put out by the two organizations (the other being Foxtel), there is only one recent link (doc) between drugs and ‘piracy’ and that is the prosecution of ONE MAN just over a month ago, for cultivating cannabis, and what is described as ‘multiple copyright offenses’.

So, we’ve gone from one guy, with 3,300 movies+TV shows and growing some cannabis (total punishment, 7 month suspended sentence, and a 2 year good behavior order) to Organized Crime. Despite the utter failure of the similar campaign in the UK years earlier (where the only thing remaining of the campaign is the ‘You wouldn’t steal a…” advert) Australia seems determined to try and make it work.

However, there is a plus side, in that AFACT have established a market price it believes consumers feel to be the worth of a DVD. In all their estimations of yearly capacity, they give a ‘street value’ of roughly $5AUS, which is about $4.77 US (3 Euros, or £2.40). In this they differ from the campaign in the UK, where the value given was some 20 times greater. In this, while telling lies, they are also more truthful.

In the end, no ‘criminal gang’ will forego their drugs, weapons or other lucrative money-making operations for DVD piracy. The reasoning is as plain as it is simple. With drugs, or guns they have small, highly valuable goods that can’t be easily obtained elsewhere. As the world becomes increasingly connected, and peer-to-peer becomes simpler to use, more reliable, less time consuming AND more powerful, the potential returns on selling bootleg DVDs reduces, ask Tony. Ten years ago, people had dial-up, and hard drives were maybe big enough for 2-3 DVDs. Now you can buy terabyte hard drives, and even the TorrentFreak researcher, living in the middle of rural Georgia, 10 miles from the nearest shops, has an 8Mbit connection.

The reasons for comparisons become clear when you hear the comments of Foxtel’s head of Fraud, Mark Mulready (a ‘former police prosecutor and detective’), who told The Australian “Police should have all the same investigative tools to fight piracy they currently have for organised drug trafficking or money laundering,” so, as usual, it’s about not having to spend time and money on civil cases, but having the taxpayer foot the bill, and the ability to use law enforcement to patch their business model.

Rehashing failed campaigns is a sign that the industry has no new ideas, and is desperately trying to avoid dealing with the root of the problem , themselves and their greed. When even the police are so into ‘piracy’, that there are too many to prosecute, it’s time to stop sticking your head in the sand, and deal with the causes.

Source: Australian Drug Mafia to Sell Pirated DVDs?

The origin of these movies is not clear, but it is probable that they’ve been downloaded via p2p at some point, either on these systems, or on the personal systems of officers and transferred over.

Senior officials of the SA police force have been made aware of the findings, including its commissioner Mel Hyde. However, police sources have told press that there will not be any investigation into this, citing the large numbers of police officers involved.

The Australian Federation against Copyright Theft (AFACT) has said it will write to the commissioner to seek an explanation, presumably as to why the police officers are being let off with what it considers a heinous crime. Quite ironically, AFACT boasts of “working closely with police” – perhaps this closeness has shown the police officers involved just how unimportant and meaningless this so-called ‘crime’ is in the grand scheme of things.

If the officers do go unpunished, it could create a favorable precedent for filesharers in South Australia. If police officers, who are expected to be held to a greater level of accountability regarding the law, show this level of contempt for the current copyright laws, are unpunished, it will make it harder to convince a court that regular citizen should be punished for similar acts.

On the other hand, if the officers are punished under the law, which allows for upto AUS$60,500 (About US$55,700 or 35,500Euro) per infringement and up to 5 years imprisonment, the ability to effectively police the state will be severely diminished.

Either way, this case will bring to a head the vastly disproportionate penalties for an act that, as yet, has never been proven to be even financially damaging. One thing is certain, when even the police officers join large numbers of citizens in flouting such laws, the law’s place in society should be called into serious question.

The South Australian police force had not responded to requests for comment at the time of publication.

Source: Australian Police Caught Pirating Movies

The Music Industry Piracy Investigations (MIPI) in conjunction with the Australian Federation Against Copyright Theft (AFACT) have been pressurizing Australian Internet Service Providers to take action against those it accuses of infringing its copyrights.

They have informed ISPs that they require them to send warning notices to their customers informing them of their infringing behavior and warning of the likely consequences. They have also issued demands that ISPs disconnect their customers from the internet, should they be accused of sharing copyright works.

According to The Age, Sabiene Heindl – General Manager of MIPI – is signaling a new strategy after Australian ISPs dug their heels in and refused to co-operate with MIPI’s demands. The Internet Industry Association (IIA) wrote to MIPI and explained that they felt they weren’t responsible for the actions of its customers and should not be required to monitor them, effectively refusing to become the industry’s copyright police.

In a letter, the IIA suggested that copyright holders should look for their rights to be enforced by using the existing tools provided by the Australian courts and copyright law.

The IIA quite rightly believes that the labeling of someone as an infringer should only be done by the courts, not by an organization such as MIPI or AFACT, a point outlined in its letter: “The distinction between an infringer and an alleged infringer has been raised as an important legal standard which ought not be undermined by us.”

In response, Heindl explained: “We would hope that the ISPs and the record companies could come up with an alternative solution. That said, if that solution cannot be reached, and at this stage it’s because of the ISPs refusing to play ball, then we may have no alternative other than to take legal action.”

Originally created to curtail physical piracy, 2004 saw MIPI involved in high drama when it raided the offices and home addresses of people involved with Sharman Networks and Brilliant Digital Entertainment. Two universities and 4 ISPs were also raided during the search for evidence to support their case against KaZaA.

In 2005, MIPI was restructured to concentrate on educating the public about file-sharing, although this didn’t stop them raiding an ISP in their quest to get a BitTorrent hub shut down.

It’s likely that 2007/8 will see MIPI ‘educating’ file-sharers with the threat of lawsuits which are hugely expensive, have been tried extensively in the United States and generally, do not work.

Source: Australians Next on the P2P Lawsuit Hitlist