Who’s right with internet copyright?

14 October 2011 | Matthew Swinn

A recent case in the Federal Court of Australia has opened the door for copyright holders of creative content, like movies, to pursue internet service providers for breaching intellectual property rights in sharing their material. To take this a step further, this could mean other organisations operating on the internet might be liable for infringement of intellectual property rights by third parties. For example eBay might be liable for facilitating the sale of counterfeit luxury goods. Instead of rights holders going after every small infringement, they can look to the facilitator. Watch this space.

Well the battle in Australia over online copyright infringement is about to heat up.

The Full Court of the Federal Court of Australia has recently decided in favour of one of Australia’s biggest ISPs, iiNet, that it is not liable for infringements of copyright undertaken by subscribers using a file sharing network to share movies. But the ISPs like iiNet shouldn’t take comfort from this decision. The only reason the film companies lost was because of the poor quality of the evidence that they were provided of infringements.

The Court expressly left open the prospect of a future case with a different outcome and one of the judges, in a surprising move, even laid out a roadmap for rights holders to follow in dealing with ISPs to provoke them into enforcing a graduated response system, that is to say a system of warning, suspension and termination in respect of future infringements.

So we can expect to see the copyright industries taking more and more action against ISPs to provoke them into this type of response. But it seems to me that if an ISP could be liable for copyright infringement then why not also trademark infringement or other infringements of intellectual property rights. 

Louis Vuitton in France, L’Oreal in the US for instance have taken action against eBay in relation to the sales of counterfeit products on the eBay service, seeking to hold eBay liable. They’ve had mixed success in other jurisdictions but nobody’s tried that angle yet here in Australia.

So the iiNet case seems to me to open the door and raise the possibility for rights holders to take action against the facilitators, that is to say people hosting third party content. So that might be ISPs but it might equally be the likes of eBay, Facebook, Twitter, who might all now be found liable for infringements of intellectual property rights where they fail to take action in the face of cogent evidence of infringements taking place on their networks.

So the iiNet case is a very interesting one for the online industry who will no longer just be able to pay lip service to IP infringements and its also equally interesting for rights holders who perhaps now have an avenue to take action against the facilitators of online infringement, rather than needing to take action against every last infringer separately.

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Matthew Swinn

Partner. Melbourne
+61 3 9672 3155