Oz ISP, employee and principal held liable for copyright breaches

Money well spent

Any long term value in the judgment?

Despite the decision in their favour, the recording industry’s celebrations may be fleeting. On January 1, 2005 the Australian/US Free Trade Agreement (FTA) took effect. Under the FTA so-called “safe harbour” provisions were inserted into the Copyright Act. The effect of these amendments was to provide a defence for internet service providers excluded liability for damages for copyright infringement upon certain conditions".

The FTA provisions create four safe harbours for carriage service providers. These cover the transmission, caching, hosting and referencing of infringing materials. Eligibility for safe harbour protection is depends on fulfilling certain obligations including in same, cases the removal of content stored or cached material, or the termination of customer accounts.

This case was decided on the basis of the law as it existed prior to the FTA amendments, so this case may not be a useful precedent with respect to ISP conduct after January 1, 2005.

The position of ISPs may further be further complicated by the forthcoming ISP’s Code of Conduct which the Internet Association of Australia (IIA) has been working on with copyright holders. According to the IIA, it is moving to finalise an industry code of practice “for ISPs, webhosts and other 'carriage service providers' in relation to copyright in online content". Such a code may include the principles for the issue of takedown notices and related matters.

32 months and counting

The ComCen case has had a lengthy and expensive looking history. This case commenced with the execution of Anton Piller orders made by Justice Emmett on October 17, 2003. The Anton Piller raids were conducted by the recording industry. The execution of the Anton Piller order followed a MIPI investigation which had commenced in November 2002. In effect, nearly three years of work, time and effort has gone into this court case.

Anton Piller raids involve the execution of civil search and seizure warrants by private enforcement units, and have been used by the recording industry in other leading cases, including the current Kazaa case. Anton Piller raids have been described by some critics as “excessive and heavy handed".

Since 2003 the parties have been to court with respect to this matter numerous times. For example, the case proceeded from October 25 to 29, 2004, and from February 7 to 11, 2005. In a related hearing, in January 2005 the Federal Court allowed MIPI to continue its search of Comcen's computers and servers after it was alleged that the ISP refused to let forensic investigators gain access to its facilities.

During the course of proceedings, the applicants and respondents were represented by a QC, two SCs, nine barristers and four firms of solicitors. The costs associated with these proceedings were probably very high. How much money was spent in this case? And do the record companies consider it money well spent, considering the recent legislative changes.

Daniel and the recording industry

Initially, Mr Cooper the first of the respondents was unrepresented, and in the judgment his honour thanked counsel for stepping in to assist Mr Cooper in what was “a complex case.

With only eight employees ComCen was certainly no Telstra or Optus (Australia’s two largest ISPs). The ISP operated out of Camperdown, a small suburb not far from the centre of Sydney, while Mr Cooper was based in Queensland. It is likely that a case against a small ISP was viewed by the recording industry as its best opportunity to push for a test case with a satisfactory result. The respondents also lost the public relations war, which seems to becoming increasingly important in modern copyright infringement cases.

Conclusion

The decision in the ComCen case appears to raise more questions than it answers, especially for ISPs.

  • What is the current legal position of Australian ISPs with respect to the conduct of their subscribers?
  • What is the current legal position of Australian ISP employees and managers with respect to the conduct of ISP subscribers?
  • Do Australian ISPs have a duty of care to ensure that their subscribers do not contravene the Copyright Act?
  • If so, does this duty of care extend to other forms of illegal conduct?
  • What about the privacy of ISP subscribers?
  • Will ISP subscribers have to vet the contents of their website in advance, in order to satisfy their ISP that no legislation has been infringed?
  • Will personal subscribers have to submit their “blogs” to their ISPs in advance in order to satisfy their ISP that the blog does not contain any defamatory statements which could result in ISP liability?

The case has been decided, but the law is certainly not settled. With clenched teeth and shaking heads, we wait for the next one ... ®

Alex Malik is a lawyer, music industry commentator, and academic researcher at the University of Technology in Sydney. From 1997 to 2000 he was a Senior Legal Officer at the Australian Communications Authority, based in Canberra. From 2000 to 2002 Malik's was ARIA's Legal Counsel. In 2001 Malik participated in the Consultative Forum of the Copyright Law Review Committee examining Copyright and Contract, representing ARIA, PPCA and IFPI. Malik is currently undertaking a PHD in law, with a specialisation in copyright law in the digital age. He can be contacted at Alex.Malik@student.uts.edu.au

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