iiNet High Court Appeal (iiNet to win), Carrier Bravery
The High Court is set to hear the iiNet appeal at the end of this week. Stan Beer at iTWire reports that the foreign studios pushing the appeal are likely to go down 80-20, and that this is because the foreign studios didn’t offer to pay iiNet to investigate the infringements.
I think that the foreign studios are likely to lose and it’s probably 80% (maybe a little less – as a rule of thumb, if you are entirely certain of the strength of a case, you would rate its success rate at around 70% – there are no 100% cases). However, it’s not because the foreign movie studios did anything wrong in setting up the initial action (offering to pay for iiNet to investigate infringements would not change whether or not iiNet was authorizing as the purported infringement predates the investigation).
Rather, it’s because their authorization argument is simply a poor argument. A calm reading of the authorities finds it without support. The Full Court decision and cases like Jain and Metro on George are flawed basically because they have focussed overly on whether the alleged authorizer had power to control. However, it is well established in the cases that the power to control is not sufficient for authorization. That control is only relevant in the context of the relationship between the alleged authorizer and the primary infringer – the primary infringer must be able to draw some inference from the failure to exercise control. In the iiNet case, the primary infringer is not able to draw any conclusion from the absence of action by iiNet. It is not possible for iiNet’s inaction to play any causal role in the infringer’s actions/decision making. For this reason iiNet cannot possibly be authorizing them. Cowdroy’s decision at first instance is basically right. [See here and here and my as yet unpublished paper on the topic]
It is for this reason that the recent announcement by the Comms Alliance (see SMH report here) seems to be brave. The announcement proposes that ISPs will give notices to their users over a 12 month period warning them of infringements. So why is this an extremely courageous thing to do? (And why should people like FoxTel be overjoyed, rather than annoyed as in the SMH report?). Simple. At the moment, an infringing user cannot form any opinion one way or another about their carrier’s inaction when the user infringes copyright. What happens when a carrier establishes a practice of sending out notices? Well, there are now grounds to argue that inaction is “sanction, approval or countenance”. They will say the user, since they didn’t get any notice when they should have, believed that the carrier thought it was all right for them to infringe. Hey presto authorization! Establishing a practice of taking any action against users alleged to be infringing completes the foreign media companies’ bootstrap argument for them. While the proposal does not include sanctions by the carrier, authorization by inaction will become a possible argument and it will be a slippery slope from there.
Notable is the absence of stories in the paper claiming how many industries have been eliminated by copyright infringement. These always mysteriously come out immediately before notable court events related to copyright infringement. There are still a few days left though I suppose.