February 4, 2010.
ELEANOR HALL: We begin today with a decision by an Australian court that could give a green light to internet pirates.
In a test case the Federal Court has ruled that an Australian internet service provider was not responsible for the illegal actions of its customers.
A group of more than 30 film and television companies brought the court action against the internet service provider iiNet alleging that it had infringed copyright by failing to stop users downloading content illegally.
A short time ago Justice Dennis Cowdroy ruled that the internet provider was not liable.
But the Australian Federation Against Copyright Theft says it hasn't ruled out an appeal, as Bronwyn Herbert reports.
BRONWYN HERBERT: The Australian film and television industry and Hollywood studios took to the courts to argue that Australia's third largest internet service provider iiNet was legally responsible when its customers pirated movies and television shows.
A 14 month long battle concluded in the Federal Court today.
Justice Dennis Cowdroy ruled that Perth-based company iiNet had simply provided an internet service to its users and it wasn't liable for the downloading activities of its customers.
DENNIS COWDROY (voiceover): It is impossible to conclude that iiNet has authorised copyright infringement. It did not have relevant power to prevent infringements occurring.
BRONWYN HERBERT: iiNet's chief executive officer Michael Malone says the company is obviously delighted with the outcome.
MICHAEL MALONE: Particularly that we were found not to have authorised, so that I guess was the most important point. We've always said all the way along that we didn't condone copyright in any way. Copyright violations don't benefit iiNet at all.
So I guess we'd much prefer to be working with the studios now to try and find some way to be able to make this material legitimately available to customers. And so we think that's the best way to be able to tackle piracy on the internet.
BRONWYN HERBERT: He said the decisions shows iiNet's business structure is lawful.
MICHAEL MALONE: It does come back to I think we've probably wasted a year here now when we and the internet industry and the rights holders could have been working together to find better models.
We've seen in the US that as material has been making it available, legitimately available online that's led to a reduction in illegitimate material being exchanged.
So I think that's where Australia needs to go now. We need to say well let's put that case behind us and make sure that we can get this material available out there. Customers want it so now we just need to find a model that makes it available.
BRONWYN HERBERT: The trial has been watched closely by both the Federal Government and overseas observers.
The film industry, headed by Village Roadshow, argued that iiNet should have taken reasonable steps to act on infringement notices that contained internet addresses of computers that shared illegal movies and music on peer-to-peer file networks.
Neil Gane is the spokesman for the Australian Federation Against Copyright Theft.
NEIL GANE: Tens of thousands of infringements were found to be occurring across the iiNet website. Evidence was provided to iiNet; evidence that the CEO Michael Malone of iiNet described as compelling evidence.
We were hopeful that iiNet would comply with our terms and conditions which clearly stipulate that their users cannot use their accounts for illegal means.
BRONWYN HERBERT: He says the industry can't compete with illegal downloads.
NEIL GANE: It's very difficult for the movie industries to compete with a free alternative which is perpetrated by theft.
The movie and TV industries are already responding to the demand for online entertainment content. There are a number of websites already available.
But it's difficult for the film industries to invest heavily in that medium when the internet environment is not secure.
BRONWYN HERBERT: Neil Gane says there needs to be sector-wide reform and government legislation could be part of the solution.
NEIL GANE: We are confident that the Government will certainly not support a policy outcome which allows for copyright infringement to continue unabated on the internet.
BRONWYN HERBERT: The Australian Federation Against Copyright Theft says it's still reviewing the judgement but hasn't ruled out appealing against the decision.
ELEANOR HALL: Bronwyn Herbert with that report.