Indexing Free-for-All - US District Court Issues Injunction against Canadian Supreme Court De-indexing Order

After the decision in the Canadian Supreme court in the Equustek case, many, including this writer, raised concerns about the possible abuse of the precedent set by the case. The de-indexing of online content, while well-intentioned in the removal of infringing content, could still be used as a sword more than a shield against legitimate infringement, including against free speech. This writer for one awaited the first application of the case, particularly in a jurisdiction that leans more towards free speech, and seems like the wish has been granted by the District Court of the Northern District of California only a few weeks ago.

The case of Google LLC v Equustek Solutions Inc. concerns the same subject matter as the Canadian case. In short, Equustek sued Google seeking to force Google to block websites selling infringing goods all over the world, not just in Canada where Google had blocked the websites selling the goods. The Supreme Court of Canada ultimately issued the order, and forced Google to block access to the websites all over the world.

Google challenged this ruling in the United States, arguing that the order conflicts with the First Amendment right to free speech, and disregards the Communication Decency Act, which affords immunity to interactive service providers.

Justice Davila first looked at the CDA, which affords immunity from claims to "…providers of interactive computer services against liability arising from content created by third parties". This means that should another publisher, using these services, publish infringing content Google couldn't be sued for that infringement. Even so, to qualify for immunity three criteria need to be satisfied: (1) the company is a "provider or user of an interactive computer service"; (2) the information in question was "provided by another information content provider"; and (3) the Canadian order would hold it liable as the "publisher or speaker" of that information.

Looking at the first criterion, Justice Davila concluded that Google was a 'provider of interactive computer services'. This means that the company provides "…any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server", which encompasses Google's search facility, among other services.

As the content, i.e. the website and the information contained in it (including the infringing goods for sale), was provided by Datalink and not Google, the second criteria was also easily fulfilled. The provision of Google's search facility relies on the company 'crawling' websites on the Internet, which it then indexes and makes available through search results. This allows for users to discover the content, which Google does not post, clearly being provided by 'another information content provider'.

The First Amendment - the best kind of pop-up

Finally, the third criterion looks at whether Google would be held liable for the content provided by another under the order made by the Canadian Supreme Court as the 'publisher or speaker' of that content. According to the order Google has to "…de-index the Datalink websites [from its global search results]… [because it is] the determinative player in allowing the harm to occur".

Per the decision in Barnes v Yahoo!, "…removing content is something publishers do, and to impose liability on the basis of such conduct necessarily involves treating the liable party as a publisher of the content it failed to remove". This liability as a third party for the non-removal of content, should Google not do so when ordered, clearly treats Google as the publisher of that content rather than a mere intermediary with no liability.

Justice Davila therefore considered that Google was immune from the claim under the CDA.

The Court then turned to the question of free speech and irreparable harm. Justice Davila swiftly determined that the Canadian order restricts Google's activity protected by the CDA, and deprives of it of benefits given by US federal law. Similarly an injunction wouldn't serve the public interest, as free speech would be restricted if websites "…were to face tort liability for hosting user-generated content". This has been particularly legislated against through the CDA. As the Internet and other interactive computer services "…offer a forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity", the legislature deemed it required protecting for that purpose to flourish.

Justice Davila issued the injunction against the Canadian order as it "…undermines the policy goals of [the CDA] and threatens free speech on the global internet".

The decision is a very interesting one, and strongly advocates for the protection of the Internet from blanket orders requiring the removal of content globally. This writer is very much a proponent of this approach, as, amongst its faults, the Internet is a bastion of freedom and dissemination of information (including this blog as a very example of that). Infringements should be dealt with appropriately, but blanket de-indexing orders might not be the best way; however, with this in mind, third-party service providers do have to take some responsibility on the removal of content when needed.

Watch the Fight - Court of Appeal Affirms Blocking Order for Cartier Against ISPs

Just as was discussed last week, the issue of counterfeit goods has plagued many retailers, brand owners and online sellers for years, with the availability of Chinese (or otherwise) manufactured counterfeit items being sold for pennies on many websites. While qualitatively often worse than the real thing, the lost sales and revenues from the counterfeit business are what ultimately matter, and brand owners have tried to combat this issue through various means. One such tool has been to utilize the ISPs as third-party intermediaries in stopping access to these sites, and with a High Court ruling allowing for ISPs to be possibly on the hook for this enforcement (more on which can be found here), the matter seemed all but settled. The providers appealed the case, and the Court of Appeal handed down its decision only a couple of weeks ago.

As a brief primer to those who are not familiar with the case, Cartier International AG & Others v British Sky Broadcasting Ltd & Others dealt with the sale of counterfeit Richemont goods, encompassing the Cartier and Montblanc brands specifically. The goods were sold on a set of specific websites, and the claimant pursued an order to block access to these websites through the ISPs. They contested the application, which was subsequently given to the claimant, for which the ISPs appealed to the Court of Appeal.

The first point of contention discussed by the Court was that of jurisdiction, specifically under Article 8(3) of the InfoSoc Directive, Article 11 of the Enforcement Directive (and the lack of its implementation into UK law) and section 97A of the UK Copyright, Designs and Patents Act 1988, which, arguably, does not allow for the granting of an injunction under domestic law in the UK. Cartier contended the assertion that the lack of implementation of Article 11 of the Enforcement Directive did not preclude jurisdiction, which stemmed from section 37 of the Senior Courts Act 1981.

A blocking order: the red card of the Internet

Lord Justice Kitchin, who delivered the majority judgment, determined that, although the ISPs are not guilty of any wrongdoing (as they did not encourage or participate in the infringement themselves) nor did they owe a duty of care (per CBS Songs v Armstrad) to Richemont, the court's would still have jurisdiction to give the order in the case. The rejection of this would, per his assessment: "...impose a straightjacket on the court and its ability to exercise its equitable powers which is not warranted by principle". The ability to impose injunctions was not restricted to apply to only infringers, and could be used in 'new ways'. This extension was also, in his view, fully covered by Article 11 of the Enforcement Directive.

The law Lord saw no issues with the provision of the order by law, especially in the light of limitations to the rights and freedoms set out in the Charter of Fundamental Rights of the EU.

To be able to issue a blocking order certain threshold conditions have to be observed. These are, as set out by Lord Justice Kitchin: "...First, the ISPs must be intermediaries within the meaning of the third sentence of Article 11 [of the Enforcement Directive]. Secondly, either the users or the operators of the website must be infringing the claimant's trade marks. Thirdly, the users or the operators of the website must use the services of the ISPs. Fourthly, the ISPs must have actual knowledge of this". After some discussion (which this writer consciously omits for brevity's sake), the Court did determine that the threshold conditions were indeed satisfied in this instance.

Finally, the Court dealt with the matter of principles to be applied  when considering the imposition of a blocking order. These were set out by Lord Justice Kitchin: "...the relief must (i) be necessary; (ii) be effective; (iii) be dissuasive; (iv) not be unnecessarily complicated or costly; (v) avoid barriers to legitimate trade; (vi) be fair and equitable and strike a "fair balance" between the applicable fundamental rights; and (vii) be proportionate". Primarily what these conditions operate as are a safe-guard for too broad, onerous and one-sided orders, allowing for a certain degree of leniency to be applied in the consideration of any blocking orders. This, however, has to be assessed with the substantiality of the websites in mind (one would think this would encompass user amounts, sales and accessibility, and the number of websites applied for, for example) and the need for remedies to properly function as safeguards to abuse.

Lord Justice Kitchin did see that the order could be justified in the light of the above principles in this instance. The Court ultimately disallowed the appeal and sustained the order.

The decision was by no means without its issues, and one primary concern was raised by Lord Justice Briggs on costs. While the majority agreed that the costs and time should be imposed on the ISPs, Lord Justice Briggs saw that these should be not placed on the ISPs, but the rightsholders (and this writer, agreed with him, as the ISPs, functioning as non-active entities in the infringement process, would be unduly burdened by the possibility of dozens/hundreds of blocking orders and their subsequent costs). Even though the costs are largely modest, as observed by Lord Justices Kitchin and Jackson, burdening the ISPs with them would seem onerous, especially considering they derive no benefit from the exploitation of those rights.

In the end the case is a very interesting example of the law adapting to its new playing field, and while it does provide a great opportunity for rightsholders, it does also cause some concern for ISPs and the automation of enforcement on the Internet.  In any event, this writer does envision the case possibly being appealed to the Supreme Court, who would have the final say in the matter.

A Positive Signal - No Liability for Providers of Free WiFi, Says AG Szpunar

As discussed on this very blog over 6 months ago, free public WiFi is something we all take for granted, even if just a little. Having access to the worldwide web at most restaurants, coffee shops and even the Underground in London is nearly ubiquitous in the developed world, and one that presents both opportunity for its users and liability for those who provide it, especially when it comes to the infringement of intellectual property rights. The CJEU has been slated to answer the question of third-party liability for those who provide free WiFi in the case of copyright infringement, and awaiting that the opinion of Advocate General Szpunar has given their answer as to this highly important question.

The case of Tobias McFadden v Sony Music Entertainment Germany GmbH deals with Tobias McFadden, who owned a business selling and renting lighting and sound systems for various events, and offered free WiFi access at his store for any visiting patrons. The Internet connection offered had no password protection, nor did Mr. McFadden monitor the users taking advantage of the free WiFi. In early September 2010 such a user downloaded a song illegally using his WiFi connection, and Sony Music subsequently took him to court for copyright infringement as a liable third party.

The Regional Court of Munich referred the matter to the CJEU, who had to answer several questions relating to Article 12(1) of the E-Commerce Directive, pertaining to whether the provision of the WiFi would amount to the provider as being a mere conduit, or whether they would be liable for the infringement indirectly.

The Advocate General grouped the questions into two more specific references: "...whether a professional person... who, in the course of business, operates a free, public Wi-Fi network, falls within the scope of application of Article 12 [as a mere conduit]", and therefore is not liable for the infringement of any other parties using that WiFi (questions 1-3); and, if Article 12 does apply, the he needs to interpret the limitation of liability of intermediary service providers in that Article (questions 4-9).

The Scope of Article 12

The scope of Article 12 hinges largely on the potential economic nature of the provision of the service, as defined in Article 2(a) of the same Directive, and the meaning of 'providing' access to a network under Article 12.

A lack of WiFi would cause some issues

The Advocate General addressed the first point by concluding that the provision of free WiFi would indeed be an economic activity, as "...where, in the course of his business, an economic operator offers Internet access to the public, even if not against payment, he is providing a service of an economic nature, even if it is merely ancillary to his principal activity". The Advocate General added onto his point, setting out that the provision of the Internet access necessarily takes place in an economic context, that "[a]ccess to the Internet may constitute a form of marketing designed to attract customers and gain their loyalty. In so far as it contributes to the carrying on of the principal activity, the fact that the service provider may not be directly remunerated by recipients of the service is not decisive.". What remains key here is the ancillary nature of the free WiFi, and this writer agrees, since even if they WiFi is not the focal point of the business, it drives foot traffic and adds value to the provision of the main service, creating a service of economic nature (which is important, since nature does not necessarily mean direct economic benefit)

He then turned to the matter of the meaning of 'providing' access to a network, determining that it means "...that the activity in question enables the public to have access to a network and takes place in an economic context". The intent of projected role of the provider is not relevant, but merely the provision of the service in the above economic context.

The Advocate General then concluded that: "...Articles 2(a) and (b) and 12(1) of [the] Directive... must be interpreted as applying to a person who, as an adjunct to his principal economic activity, operates a Wi-Fi network with an Internet connection that is accessible to the public free of charge".

Interpretation of Article 12

Questions 4-9 concerned the specific interpretation of Article 12, and will be dealt with in more brevity below, although discussed quite extensively by the Advocate General. The questions are, specifically, whether a national court could penalize an intermediary service provider, in the event of infringement through their service, awarding damages, costs or an injunction as the form of the penalty (questions 4-5). Additionally, if this would not be generally possible, whether it would be possible to limit the extent of Article 12 (question 6), or through other unwritten requirements (questions 7-8). Finally, the last question asks for the limits of any injunctions that may be awarded against an intermediary service provider (question 9).

In answering question 4 and 5 the Advocate General saw that the limitations of liability for intermediary service provides would extend to damages and pecuniary claims, such as for costs. In his view this is precluded by Article 12(1), and would have an impact on the development of the service provider's business, irrespective of it being damages or punitive costs. He did, however, accepted the possibility of injunctive relief, and any ancillary penalties thereto. In summary to questions 4 and 5, he stated that "Article 12... precludes the making of any order against a provider of mere conduit services that entails a finding of civil liability against that service provider... [it] therefore precludes the making of orders against intermediary service providers not only for the payment of damages, but also for the payment of the costs of giving formal notice or other costs relating to copyright infringements committed by third parties as a result of the information transmitted. It does not preclude the granting of an injunction, non-compliance with which is punishable by a fine".

In relation to questions 6,7 and 8 (seeking to clarify the possible exclusion of actions taken against intermediary service providers), the Advocate General sought to strike a balance per recital 41 of the Directive. In his opinion, the Advocate General saw that there should be no limitations imposed on actions that can be taken against providers, though taking into account their actions when the infringement is brought to their attention. He also observed that the conditions under Article 12(1) are non-exhaustive, and could be added to with additional unwritten requirements.

Finally, he turned to the final 9th question, which asks whether national courts could impose injunctions on service providers against future infringement on their network. He saw that this was indeed possible, but this injunction could not impose a future obligation of monitoring the network or breach any other EU or national legislation (including the basic human rights afforded in the European Convention on Human Rights). He summarized that the injunction can only issued if the provider cannot, or will not, address the infringement in one of three measures: the termination of the internet connection (of the infringer); password-protection of the connection; or the monitoring the connection, but only to ensure the future infringement of rights using the same connection (observing time limitations on said monitoring).

The ultimate decision of the CJEU is pending, and will potentially impact the provision of free WiFi in the EU should they not follow the AG's opinion in this matter. This writer expects them to follow the opinion, as it clearly shows a practical and functional approach to a complex, and sensitive question. Should they not do so, the provision of free WiFi could be severely hindered, or even ended by some providers, which would be a big problem for those who cannot necessarily afford their own connections. Either way, this writer is anticipating the CJEU's decision with great interest.

Source: IPKat

Pirates Uncovered - Dallas Buyers Club's Landmark Case in Australia

Piracy is considered by many in the entertainment industry to be the plight of the 21st century creative minds and pockets (and the pockets' of many shareholders, one would think). What ever your thoughts on copyright piracy, the topic remains a hot-button issue, and the courts have been, and will undoubtedly continue to, battle with for years to come. With this in mind, the enforcement of rights online has proven difficult, especially when a user, either downloading or sharing said infringing content, is effectively hidden behind a single Internet Protocol (IP) number, which does not accurately identify the given user (as discussed here in some manner relating to the US). The battle between Internet Service Providers (ISPs) and copyright holders has been an active one regarding this, and a recent decision in Australia seems to have opened the door to potentially combating this issue on the copyright holders' end, at least for now.

The case in question was Dallas Buyers Club LLC v iiNet Limited, which dealt with the very successful movie Dallas Buyers Club that was, among other things, nominated for 6 Oscars in its year of release. Due to the movie's immense success, it was promptly shared online, and in an action for preliminary discovery, the movies' rights holder Dallas Buyers Club LLC sought to identify the individuals behind all 4726 unique IP addresses associated with sharing the movie online through the 6 respondent ISPs in the action. The ISPs contested this application on several grounds, but the first instance decision lay with the Federal Court of Australia.

Although the respondents actively contested the ownership of the copyright in the work (decided as being held by Dallas Buyers Club LLC, with very little resistance from the Court), and other matters underpinning the case at hand, the meat of the discussion lay in the possible allowance of discovery in relation to the aforementioned IP addresses.

The secret life of a copyright infriger (Source: Bizarro Comics)

Under the Australian Federal Court Rules 2011 a party can seek for the identification of an unknown party should they have a cause of action against that person under certain requirements: "(a) there may be a right for the prospective applicant to obtain relief against a prospective respondent; and (b) the prospective applicant is unable to ascertain the description of the prospective respondent; and (c) another person (the other person): (i) knows or is likely to know the prospective respondent’s description; or (ii) has, or is likely to have, or has had, or is likely to have had, control of a document that would help ascertain the prospective respondent’s description." Clearly, as the individuals sharing the movie are behind an IP address, and therefore hard to identify without information from the ISP as to who is behind said IP address, Dallas Buyers Club, at least prima facie, had a case to find out who these people are under the Act.

Regardless of the ISPs' rejection of Dallas Buyers Club's assertions under the three requirements of the Act, the Court saw that they had fulfilled the requirements and were therefore entitled to disclosure as to the users' identities. They had a right to seek relief as to a potential breach of their copyright; they could not identify the individuals committing that infringement; and the ISPs knew or were likely to know who they were, or at least would be in possession of their subscriber details based on fixed IP addresses.

Even though Justice Perram allowed the disclosure of the users' information to Dallas Buyers Club, he did however set certain restrictions on it, which will be set by the parties later in the process. Dallas Buyers Club have indicated that they want the details disclosed by May 6th, but the letter that will be sent out will be determined on a later note as well.

Although the case is an important landmark in the fight against piracy, the disclosure of individuals' details in relation to copyright infringement is nothing wholly new. In Canada, under the Federal Court Rules, the disclosure of such information is very similar to the Australian provision; and Voltage LLC, the parent company of Dallas Buyers Club, has successfully used the provision to gain such information in Canada in the case of Voltage Pictures LLC v John Doe. Similarly, in the UK, a Norwich order (the equivalent of the Australian provision's application) was issued for copyright infringement through which subscribers' details were disclosed to the copyright holder in Golden Eye (International) Ltd & Anor v Telefonica UK Ltd. Both cases also discuss the restrictions needed in the event of such disclosure, such as: "[p]utting safeguards in place so that alleged infringers receiving any “demand” letter from a party obtaining an order under Rule 238 or a Norwich Order not be intimidated into making a payment without the benefit of understanding their legal rights and obligations... [s]pecific warnings regarding the obtaining of legal advice or the like should be included in any correspondence to individuals who are identified by the Norwich Order... [l]imiting the information provided by the third party by releasing only the name and residential address but not telephone numbers and e-mail addresses... [and] [r]equiring the party obtaining the order to provide a copy of any proposed “demand” letter to all parties on the motion and to the Court prior to such letter being sent to the alleged infringers". These, among others, will undoubtedly be considered by the Australian courts in their application of such orders in the future, and in this case specifically.

As one could imagine, the case has spawned a huge amount of discussion, especially relating to Voltage Pictures' previous strong-arm tactics in their letters to infringers. Nevertheless, the cold application of the law, at least to this writer, seems to be quite accurate, and individuals who engage in such activities need to understand the risks associated with illegal copying of media online. The Dallas Buyers Club case clearly sets the stage for more direct, stronger enforcement of copyright within Australia, and it remains to be seen how the provision will be utilized in the future, and what restrictions the courts ultimately put on the disclosure of subscribers' details and the usage thereof.

Source: Sydney Morning Herald

Fake Goods and the Internet - ISPs Face Trademarks

Counterfeit products are big business. Some estimates have put the sale of counterfeit items at a billion dollars in 2013, and anyone who has traveled around mainland Europe has probably seen people sell "authentic" designer bags off pieces of carpet on the street (and who doesn't like purchasing their luxury goods in the great outdoors). The only issue with selling blatantly on the street is the sheer visibility of your transactions, with the added issue of a very limited quantity of items for sale. The more genius members of the business have since moved onto the World Wide Web, pushing their goods to the willing masses on the great waves of the Internet. The law hasn't fully adapted to this change, with a clear difference in the protection of so-called intangible counterfeit goods (piracy etc.) and more physical objects and their intangible attributes such as trademarks. Amidst this uncertainty the protectability of trademarks in this space was brought up in the English courts, and has since been taken on by the UK Court of Appeal.

The case in question was Cartier International AG v British Sky Broadcasting Ltd, which dealt with the company Richemont, which owns several luxury brands such as Cartier and IWC. As Richemont's goods are highly sought after and quite valuable, six websites were started, aimed at selling and advertising goods using Richemont's trademarks in doing so. The website's donned such fantastic domains as www.cartierloveonline.com and www.iwcwatchtop.com, clearly aimed to confuse and befuddle those who are less savvy on the information super highway. As such Richemont wanted to halt the websites' operations, and approached the courts to impose an injunction to block the websites.

What remains the bigger question in this case is whether such a block is possible under the current law, or as was framed by Justice Arnold: "First, does this Court have jurisdiction to make an order of the kind sought? Secondly, if the Court has jurisdiction, what are the threshold conditions, if any, which must be satisfied if the Court is to make an order? Thirdly, are those conditions satisfied in the present case? Fourthly, if those conditions are satisfied, what are the principles to be applied in deciding whether or not to make such an order? Fifthly, applying those principles, should such orders be made in the present case?"

Under section 97A of the Copyright, Designs and Patents Act 1988 the courts can impose an injunction against an Internet service provider; however the issue presented to the court is that under section 97A the courts can impose an injunction only "...where that service provider has actual knowledge of another person using their service to infringe copyright". As such there was no issue of copyright infringement in the case, as only Richemont's trademarks had been potentially infringed, and no provision allowing for injunctions in the event of trademarks being infringed exists in the UK.

The Court of Appeal's message to trademark infringers

This lead to some extreme juggling of current laws and whether such an injunction was possible bar an express mention of such a power, although this was meant to have been implemented by the UK under the Information Society Directive. Justice Arnold was faced to examine whether this omission was supplemented under section 37 of the Senior Courts Act 1981, through which "[t]he High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the court to be just and convenient to do so". Agreeing with precedent, Justice Arnold saw that an injunction under section 37 of the 1981 Act would not contravene the Supreme Court Act 1981, allowing for the High Court to afford the injunction as a final decision should it do so.

Justice Arnold discussed the conditions which have to be fulfilled before a court may award the aforementioned injunction: "First, the ISPs must be intermediaries within the meaning of the third sentence of Article 11 [of the IPR Enforcement Directive]. Secondly, either the users and/or the operators of the website must be infringing the claimant's trade marks. Thirdly, the users and/or the operators of the website must use the ISPs' services to do that. Fourthly, the ISPs must have actual knowledge of this. Each of the first three conditions follows from the wording of Article 11 itself.".

Applying the conditions to the case Justice Arnold quickly saw that all of the requirements had been fulfilled. First, British Sky and the other ISPs acting as defendants can be said to be intermediaries within the meaning of the Directive without much question. Second, as Richemont owns the rights to several infringed trademarks in the case, such as Cartier, IWC and Montblanc, used in in the six websites dealt with in the case, the websites clearly infringed on those rights. Third, due to the ISPs role as intermediaries, although are not prima facie used for the infringement directly, because of their integral role in the conveyance of the infringement to Internet uses they are used for the infringement, irrespective of a contractual relation between the infringer and the ISPs. Finally, through evidence it was easy for Richemont to establish that the ISPs did indeed have actual knowledge of this infringement and chose not to act on it. Because of this the requirements are fulfilled, and Justice Arnold could award the injunction.

The case can be said to be very important in a UK perspective, and potentially as an international precedent. Through the decision rights holders have a remedy to address the infringement of their rights outside of just copyrights online, potentially allowing the curbing of counterfeit sales online (although this writer will admit it seems like a long-shot it would be ever fully eradicated). Nevertheless, this remedy can be argued to have been needed, and in the absence of intervention by the legislature, should stand as an avenue for trademark enforcement on the Web.

Source: World Trademark Review

Retrospective - Stop your downloading! The liability of ISPs in Australia

The advent of fast Internet connections and the abundance of copyrighted material on offer through various channels and consumer's taking full advantage of both in getting their media fix. Content is available through legitimate means, for example iTunes or other online distributors, or through streaming services such as Netflix. However the flip-side of the coin is thought to be darker; downloading of music illegally, the streaming of movies and TV, all presenting an issue in themselves. The question often raised by both rights holders and the legislature is; "who is responsible for all of this?!" At the core of it, the choice to illegally download material is one which the consumer (yes, you) makes, and supervision is purely on the legislature to ensure it stays on top of the alleged infringements. But what if responsibility is passed on, not to the person infringing, but the entity providing them the service? To understand the relationship between an infringer and an ISP (Internet Service Provider) when it comes to copyright, let me give you an analogy. Should the entity providing the roads where we drive on be responsible for the misuses of those roads (owned by a company in this example)? The roads would presumable be intended for all who follow the laws and rules related to driving on the road, yet there still are people who drive over the speed limit or under the influence of substances. Should the company providing the roads be liable for the drivers’ potential infringement of those rules? The issue of responsibility came up in the High Court of Australia in the Roadshow Films Pty Ltd & Others v iiNet Ltd case back in 2012.

"Can't see any infringements here, Dave"

Under the Copyright Act 1968 in Australia, section 101 sets out that an entity 'authorizing' an infringement of copyright would be liable in their own right, depending on a number of variables. The degree of control they have over the user in preventing their act; the nature of their relationship; and whether they took any action to stop or avoid the infringement by the user. Purely looking at the legislation you could imagine ISPs being in hot water. Due to ISPs controlling an individual's access to the Internet, you could imagine shutting down their illegal use of that service would be simple? Not so much. The sheer amount of subscribers makes monitoring the network usage a massive endeavor, and from the get-go, should ISPs even control what we do on the Internet? After all, that could be an infringement of their freedom of speech. No laws state any liability for ISPs currently, making their responsibility for our actions farfetched at best. Also with a lack of any guidelines adopted by all ISPs, the user could simply switch to another provider without any ramifications, avoiding his ban on his illegal use.

The High Court quickly dismissed iiNet's liability, due to the nature of their relationship with their subscribers. An ISP hardly can control the decisions its subscribers make, nor can they change or control the software which they use to attain or upload any infringing material. The Court also agreed with my earlier notion of the amount of subscribers, as overseeing thousands of users on a daily basis would be near impossible. One judge however did not see it the way the majority did (Justice Jagot) and stated in her opinion that iiNet's effectively approved the infringements of their users through their indifference. I for one cannot understand how her Honor could equate the relationship between an ISP and a single user of its network from thousands to effectively that of a parent ignoring its child's bad behavior. The High Court subsequently dismissed Roadshow Films' appeal.

Post-iiNet reaction from a network administrator

When wondering how the dynamic of an ISP and a user would have changed, if the High Court would have seen things much like Justice Jagot, the nature of the Internet could have been completely changed in Australia. Presuming ISPs would need to monitor and control all of their users’ traffic and web activities would have turned the Internet from a bastion of freedom of sharing, expression and connectivity, to an ultra-controlled authoritarian network, much like that in China where information is filtered and fully controlled. The freedom of the Internet is built on the ability to utilize it as one sees fit, and pay for any consequences that might come from their use. There have been talks about imposing further liability, yet with the European Union stepping back from such legislation, the Internet should remain the same, at least for now.