A few thoughts on iiNet FFC decision

March 17, 2011

On 24 February the iiNet decision generated significant buzz in the media, academy and anyone with an interest in cyber-regulation or copyright. Kimberlee Weatherall first posted the article below on her blog LawFont, and we are reposting it here to provide our audience with her expert exposition. As mentioned in Kimberlee’s article, Fortnightly Review author David Brennan also wrote a piece for The Age, and hopefully the conversation between these analyses will generate some excellent discussion and commentary within our community of readers and authors.

A few thoughts on iiNet FFC decision

By Kimberlee Weatherall

By now, all the copyright nerds in the world know the headlines: the Full Federal Court has handed down its decision in the iiNet case; that the appeal was dismissed in a 2:1 decision (Emmett and Nicholas JJ; Jagot J dissenting). Most people also will know that the reasoning is very, very different from the Trial Judge’s decision, and certainly contemplates, in a way that the Trial Judge didn’t, that in different factual circumstances an ISP could be liable for authorising infringement by its BitTorrenting users. The various major law firms have issued their summaries, I refer you there for an overview. Assoc Prof David Brennan from Melbourne Uni has expressed his succinct, and compelling view.

The decision is really long: it half looks like all three judges wrote as if theirs was to be the main decision (with others concurring or dissenting more briefly). A close reading reveals why. Although it is fair to say that the majority judges reach broadly the same conclusion on broadly similar grounds (namely, that the AFACT notices did not contain enough information to require action on the part of iiNet), they conceptualise the facts quite differently, and demonstrate important differences of approach. My early thoughts are below the fold. This one’s for people generally familiar with the case and Australian copyright law though – beginners need to start, at least, with the law firm case notes.

Conceptualising the facts

Emmett J’s judgment reads like a borderline one to me: it’s almost like he came within a hair trigger of finding authorisation. He emphasises iiNet’s ‘contumelious disregard’ for the rights of the copyright owners, suggests that iiNet ‘tacitly approved’ of the infringements, and highlights the facts that appear to have come quite close to constituting authorisation. Ultimately, Emmett J is not satisfied that sufficient information was provided by AFACT to trigger authorisation. Emmett J also seems concerned that iiNet ought not be required to bear the whole cost of any system.

Nicholas J seems to view iiNet’s behaviour as far less egregious: it is Nicholas J, for example, who emphasises that iiNet’s apparent ‘indifference’ could not simply be characterised as wrongful, based as it apparently was on a belief that iiNet was not legally obliged to act. One has the sense, however, that insofar as Nicholas J was concerned that iiNet not be held liable for taking a position on the law that was not entirely judicially unsupported, his Honour would be less sympathetic in a future case, where an ISP would no longer be able to take that attitude in light of the decisions in iiNet. It is Nicholas J who seems most concerned with the possibility that ISPs will be incentivized to suspend or terminate users all too readily to avoid future litigation.

Jagot J, the dissenting judge, roundly condemns iiNet’s attitude. Her Honour emphasises iiNet’s refusals to cooperate, in effect holding iiNet responsible for any results of its failure to cooperate – including the fact that it had insufficient information to be, perhaps, fully confident that infringement was occurring. ‘Be it on iiNet’s head’, as Jagot J would have it.

Authorisation: Reaffirming the existing case law

The three judges affirm a more traditional conception of authorisation in copyright than that we saw in the Trial Judgment. They confirm that Moorhouse’s phrase, stating that to authorise is to ‘sanction, countenance or approve’ infringement is to be read disjunctively – one is sufficient. The Judges also reject the apparent attempt by the Trial Judge to revive the Justice Jacob reasoning in Moorhouse from the first instance decision: rejecting the idea that there needed to be some ‘sense of official approval or favour’ in order to show authorisation.

On the meaning of authorisation, Emmett J’s judgment is the most wide-ranging, in that it adopts, perhaps affirms, much of the language from cases like Cooper in a series of phrases drawn from earlier cases. I really wish judges would not repeat a series of phrases about the law in this decontextualised way. It seems practically designed to give comfort to the prospective plaintiff in an authorisation case: you can always find a phrase that suits.

On the meaning of authorisation, I recommend the judgment of Justice Nicholas, which is I think, the easier judgment to read and understand, having ‘synthesised’ the precedent more.

‘Means of Infringement’
The three judges – implicitly or explicitly – reject Justice Cowdroy’s threshold test. Under Justice Cowdroy’s approach at trial, iiNet did not provide the ‘means of infringement, in the relevant sense used in Moorhouse, in that it did not extend an invitation to the iiNet users to use its facilities to do acts comprised in the copyright of the Copyright Owners’ and consequently did not authorise infringement. In other words, this question of whether the party provided the ‘means of infringement’ operates as a threshold test, without which authorisation will not be found.

Justice Emmett almost seems determined to politely pass over this approach by the Trial Judge like a polite host ignoring the uncouth table manners of an ill-assorted guest. Emmett J notes the reasoning of the Trial Judge, using the mild epithet of ‘unconventional’ to describe the structure of the reasons. But once Emmett J has described the primary judge’s approach, this phrase never appears again in the judgment. Both Justice Nicholas and Justice Jagot more explicitly reject the Trial Judge’s approach: Jagot J more fulsomely.

The crux of the case: knowledge
Both Emmett J and Nicholas J were dissatisfied with the information provided in AFACT’s notices: this finding lies at the heart of their rejection of AFACT’s case on authorisation. More or less, the notices provided by AFACT gave rise to ‘reason to suspect’ infringements on the part of iiNet’s users, but not knowledge of specific acts of infringement sufficient to warrant iiNet acting to suspend or terminate internet accounts.

Emmett J thought that AFACT’s notices would have to have included:

  1. Information in writing of particulars of specific primary acts of infringement of copyright of the Copyright Owners, by use of particular IP Addresses of iiNet customers; and
  2. Unequivocal and cogent evidence of the alleged primary acts of infringement by use of the iiNet service in question; at least information as to the way in which the material supporting the allegations was derived, that was adequate to enable iiNet to verify the accuracy of the allegations.

Justice Jagot takes a very different view here: stating that the AFACT notices ‘contained prima facie credible evidence of widespread and repeated infringements of the appellant’s copyright by iiNet customers and users’, rising above the level of ‘mere unsubstantiated or unreliable allegations’. What is more, if iiNet did not have sufficient information to judge the accuracy of the notices, that was iiNet’s own fault: having refused to engage with AFACT, it could not then plead its own ignorance.

Did iiNet have the ‘power to prevent’ the infringements?
All three judges consider that iiNet had the technical and contractual power to terminate or suspend its services to subscribers on the basis of copyright infringement; this was relevant, albeit not determinative (cf the Trial Judge who seemed to say that a power to suspend or terminate could not be reasonable and so wasn’t really relevant). On this question, again I think Justice Nicholas’ judgment is the more interesting one: his Honour talks about the difference between ‘direct’ powers to prevent infringement (ie, to stop that particular act) and indirect powers (like taking away internet access so they can’t do anything, let alone infringe, online).

The judges also talk about another statutory factor, the ‘relationship with the infringer’, but it’s not that interesting. I never really know what to make of this factor anyway. There was a contractual relationship – so? Really, most of the action is in the next of the statutory factors in authorisation: whether iiNet took reasonable steps to prevent the infringement.

Reasonable steps

All three judges accept that sending warnings to users ought to be considered a reasonable step. None of the judges was wiling to accept that people when notified of copyright infringement would simply ignore the notice: not all would be aware that such activities infringe copyright; not all would be aware they can be detected.

Worryingly for many, I suspect, is the fact that all three judges also contemplate that suspension or termination of internet service is also a reasonable step. In this respect, a really important consideration that the various judges point to is the Safe Harbours: specifically, the provision that requires parties wanting to take advantage of the Safe Harbours to have, and reasonably implement, a policy for the termination of the accounts of repeat infringers in appropriate circumstances. This is evidence, to the judges, that termination is contemplated as a reasonable step.

iiNet’s protestations concerning the expense, difficulty, and complication of having a system for sending warnings and following up with suspension or termination fell on deaf ears of two judges. Justice Emmett, of the three judges, seems the most ready to count this as an issue, noting the ‘difficult judgments’ involved, the number of notices received, the many, many issues of design choice in such a system (see paragraphs 206-207). Perhaps for this reason, Justice Emmett is the most explicit in practically setting out his own version of a graduated response system. The key paragraph here is paragraph 210. It’s kind of too long to quote here, but go have a look. In summary, it says that ‘before it would be reasonable for iiNet to take steps to suspend or terminate a customer’s account’, AFACT would need to send notices providing ‘unequivocal and cogent evidence’, and undertake to reimburse iiNet for its reasonable costs. But most extraordinary is the way that the Judges say that AFACT’s notices should set out a series of specific steps that it requests. According to the Judge, AFACT should request the following steps:

  1. iiNet should inform its customer of the particulars of the allegations of primary infringement involving the use of that customer’s iiNet account
  2. iiNet should invite the customer to indicate whether the service has been used for acts of infringement as alleged;
  3. iiNet should request the customer either to refute the allegations or to give appropriate assurances that there will be no repetition of the acts of infringement;
  4. iiNet should warn the customer that, if no satisfactory response is received within a reasonable time, perhaps 7 days, the iiNet service will be suspended until such time as a reasonable response is received;
  5. iiNet should warn the customer that if there are continued acts of infringement by use of the service, the service will be terminated;
  6. iiNet should terminate the service in the event of further infringements.

OK, strictly, Justice Emmett is not saying that iiNet would have to follow this procedure: it’s what AFACT should request. But the suggestion is strong that this is what Emmett J thinks a reasonable set of steps looks like.

Um, judicial legislation anyone?

It’s kind of extraordinary that his Honour would set out a system in such detail. These weren’t, after all, the facts before the court. It’s also kind of extraordinary that this is his version of reasonable steps, when this set of conditions doesn’t look anything like what has been legislated in other countries, like France, the UK, South Korea, or New Zealand. Justice Emmett’s ‘reasonable steps’, if that is what these are (and as I said, it’s not entirely clear) have none of the procedural protections found in other places – and specifically contemplate termination of Internet service – something the UK wouldn’t even do without a further order from Parliament and which requires independent decision-makers in France, South Korea, and New Zealand. So, like, wow.

Justice Nicholas, on the other hand, is only prepared to say that ‘an ISP should be given considerable latitude when working out the detail of such a system. It is always possible to argue that a system for the issue of warnings and termination could be tougher than it is. But it would be difficult to criticise an ISP on that account if it acted in good faith to devise and implement a system that involved taking such steps against subscribers who the ISP was satisfied had used (or permitted others to use) its facilities for the purpose of committing flagrant acts of copyright infringement’ (at para 750).

Other interesting stuff

There’s so much more, but this post is already too long. Look out for:

  1. The various judges’ views on whether iiNet ‘encouraged’ infringement, and Justice Nicholas’ discussion of iiNet’s alleged ‘indifference’;
  2. The discussion of the Safe Harbours (no judge thought iiNet could use it);
  3. The judges’ struggles to give s 112E some meaning;
  4. The issue of who bears the cost. Emmett J is explicit: AFACT should offer to reimburse. Justice Jagot thinks that this could have been part of a conversation that should have occurred. I didn’t really see much from Nicholas J on this question (but the judgment is long, maybe I’ve missed something).

Oh, and here’s something interesting. You will look in vain for references to much overseas case law or any of the mound of academic writing on the issues involved. If anything, this suggests to me the continuing isolation of the Australian law of authorisation from the law in other jurisdictions. Too close an examination of overseas case law might reveal the differences too starkly? Of course, it would also have made the judgment even longer than it already is. I suppose we should be grateful for small mercies.

Where to from here?

Interesting question. We’ll have to see if there’s going to be an appeal to the High Court (or rather, application for special leave). Failing that, it’s back to the negotiations. Questions of cost (who bears it) are unresolved. It’s not clear to me whether there is enough guidance here to lead to a ready deal, despite Emmett J’s attempts to write a Code of Conduct for the industry. Termination of service is something I can’t imagine the internet industry is all that keen on, but AFACT’s hand to demand more than the mere passing on of warnings may have been strengthened by the frequent references to the reasonableness of termination as a response. So, much to think about. I suppose I should be pleased…

Kimberlee Weatherall is a senior lecturer at the University of Queensland

This article was cross-posted here at LawFont

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Weapons in the Piracy Wars: COICA and Domain Name Seizures

March 17, 2011

By Jake Goldenfein

You may have encountered this image if you recently tried to stream a sporting event online. Domain name seizures in the US occur under civil forfeiture and seizure provisions in the Crimes and Criminal Procedure title of the United States Code. Being territorially restricted, those provisions allow the US Immigration and Customs Enforcement agency (ICE) to distrain websites with a .com, .net or .org suffix.

Recent seizures of websites linking streamed sporting events (conveniently 10 days before the Super Bowl) were the directive of phase 3 of ICE’s Operation ‘In Our Sites,’ which began in June 2010. The mandate of ‘In Our Sites’ goes beyond sporting events however, and has targeted websites connected to counterfeit goods, child pornography and first-run movies. Although the process and propriety of those seizures have been questioned, presently working its way through the US political system is the Combating Online Infringement and Counterfeits Act (COICA) that will provide an expedited process to block domains and extend ICE’s reach to content hosted outside the US.

COICA (S. 3804) would authorise the Attorney General to obtain injunctions in rem against websites ‘dedicated to infringing activities.’ Sites are defined as dedicated to infringing activities if ‘primarily designed’, have ‘no demonstrable commercially significant purpose or use other than,’ or are ‘marketed by its operator,’ as offering copyright infringing goods.

Effectively, COICA creates an internet blacklist with ‘offending’ websites added by Court order. Originally there was a second blacklist controlled by the Attorney General without judicial oversight, however that was jettisoned in the bill’s latest iteration. By obtaining a Federal Court injunction, the Attorney General orders U.S. domain name registrars to stop resolving blacklisted domains, leading users instead to an error message.

For infringing domains outside of the U.S, the bill demands internet service providers block offending foreign addresses. This does not prevent access outside of U.S territory, but rather is aimed at preventing the importation into the US (censoring) of goods and services offered by websites deemed ‘dedicated’ to infringing activities.

Introduced by Democratic Senator Patrick Leahy in September, the bill received unanimous approval by the Senate Judiciary Committee in November 2010 under Leahy’s chair. Not surprisingly three of Leahy’s top five campaign contributors are large media organisations. Yet substantial opposition from various groups including Internet Engineers, Human Rights Groups, the Net Coalition, some Senators, and law professors has been successful in preventing the bill passing a full vote on the Senate floor, leading to another Judiciary Committee hearing on 16 February, which led to discussion of substantial modification, and likely a follow-up hearing.

Arguments against the bill include:

  • Blacklisting of websites by Justice Department officials without sufficient judicial oversight offends due process and threatens legitimate political speech.
  • Definitions within the bill, including ‘facilitating infringement’ and ‘dedicated to infringing activities’ are very broad.
  • Blacklisting for copyright infringement purposes may undermine U.S. secondary liability law as well as existing copyright exceptions, limitations and defences.
  • The censorship process causes entire domains to vanish, not just infringing pages or files.
  • The bill creates precedent for internet censorship, and congress should consider the effect for countries less protective of citizens’ rights of free expression.
  • The extraterritorial reach of the court prevents a full and fair trial with all interested parties present.
  • The bill may affect legitimate digital services such as cyberlockers if the Department of Justice decides that piracy is ‘central’ to their businesses.
  • Blacklisting may apply to sites that discuss and advocate for P2P technology or piracy because they sometimes link tools and information intended for file sharing, despite the otherwise political nature of their speech.
  • Censorship may undermine the stability of the internet by encouraging the use of circumvention measures and rerouting internet traffic away from the U.S.

But perhaps the most compelling arguments are found in the joint letter from 49 legal academics in the U.S. Citing jurisprudence, they contend ‘the bill amounts to a constitutional abridgment of freedom of speech because it directs courts to impose “prior restraints” on speech, which are the most serious and least tolerable infringement of First Amendment rights.’ They argue such cases ‘require a court, before the material is completely removed from circulation to make a final determination that material is unlawful after an adversary hearing.’

Contrary to that requirement, the professors claim ‘the Act permits the issuance of speech-suppressing injunctions without any meaningful opportunity for any party to contest the Attorney General’s allegations of unlawful content’ because of inadequate notice provisions and the capacity to enter injunctions ex parte. Requiring the shut down of entire domains rather than blocking specific content is described in the letter as ‘burning down the house to roast the pig.’

More profound however, is the academics’ claim that the bill’s ‘egregious Constitutional infirmities… will not survive judicial scrutiny’ suggesting its significance ‘is entirely symbolic.’ This would be the first time the US would require internet service providers to block speech because of its content. Enjoining ISPs to police users’ activities is an issue of growing judicial significance, not simply in circumstances like the iiNet case in Australia, but also for a range of future measures, including filtering, censorship and levying, that may require ISP cooperation.

Content industries have sought this law for years, and view the new capabilities as a magic bullet for copyright enforcement, with the MPAA and RIAA extensively lobbying for its passage. Lauding the legislation, the bill’s proponents emphasize the derisory economic consequences affected by infringing rogue sites. Previous MPAA interim boss Bob Pisano defended the bill, claiming targeted sites ‘exist for one purpose only – to make a profit using the internet to distribute the stolen and counterfeited goods and ideas of others,’ and that the ‘economic impact of these activities – millions of lost jobs and dollars – is profound.’ Pisano argues the First Amendment was not intended as a shield for those who steal, irrespective of the means. ‘Theft is theft, whether it occurs in a dark alley or in the ether, and to attempt to distinguish the two is to undermine the most basic tenets of our criminal laws.’

Clearly rhetoric laden, such speech reverts back to the questionable conflation of tangible and intellectual goods, and co-opts morality for its justification without acknowledging the concomitant censorship issues. However, other Hollywood groups have claimed that concerns of unlawful censorship are an ‘absurd misrepresentation of civic rights’.

For organisations like MPAA and RIAA who maintain a controversial program of prosecuting online copyright infringement, the new law would amount to another weapon in the arsenal of content protection. But beyond copyright, the bill highlights emerging issues in digital censorship and jurisdiction by entrenching in U.S law filtering of international content that offends local laws – a dangerous precedent that may expand to other types of speech. Passage of this bill would mark a substantial shift in lawmakers’ willingness to regulate cyberspace and a fortiori against the principle of the Single Global Internet.

Jake Goldenfein is a PhD candidate at the Melbourne Law School

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Internet Censorship in Australia

April 9, 2010

By Elisabeth Cooke

When I think about censorship, I instantly recall the image of my mum jumping up off the couch to change the channel when a ‘grown up’ show came on too close to bedtime. Or seeing pictures in the newspaper with big black bars blocking out all the bits I was not meant to see. The censorship of radio, tv and print media now seems much simpler than the internet censorship issues we are faced with today. The concerns are predominately the same: protecting children, preventing criminal acts etc. However, the risk to our civil liberty seems substantially greater.

Last month, newly declared ‘Villain of the Internet’ Communications Minister Stephen Conroy announced a mandatory censorship proposal, grabbing headlines around the world, as the proposal joined Australia to the ranks of Iran, Saudi Arabia, North Korean, Burma and Vietnam. Legislation to implement the mandatory ISP blocking of blacklisted websites is expected within the coming weeks. While the proposal is cause for concern, it is worth discussing the current model before critiquing the proposal.

The current model of internship censorship in Australia is complaints driven. The Australian Communications and Media Authority (ACMA) receives complaints about internet content and reviews it according to the Internet Industry Association Codes. Based on their assessment, the ACMA has the right to issue notices and direct Internet Service Providers (ISP’s) to comply with industry standards. However, the ISP’s are not always responsible for the content unless they are themselves the hosts of the content in question. Of course, the ISP’s require government licenses to operate and it does not take a stretch of the imagination to fathom instances where ISP’s may censor content on governmental request. The ACMA can require hosts to comply with the law in Australia, but hosts outside of Australia are beyond the reach of the ACMA’s jurisdiction. It is worth noting that personal communications are not with the scope of the ACMA. The content of emails and attachments are not regulated under this model of censorship.

There are a number of concerns regarding the current model. The fact that the model is complaints driven begs the question ‘who is complaining’? Are specific interest groups able to lobby the ACMA to remove ‘questionable’ content? There is also no formal and open appeals process to review decisions. Notably, the members of the AMCA are not elected, they are appointed from varying backgrounds.

Understandably, the ACMA does not have an easy task. They sift through shocking content for the benefit of our society and a critique of the current model is by no way intended to diminish the vital role they play. However, the proposed model is of much greater concern.

The Proposed ISP Filtering Plan

The proposed model, Australia’s ISP Filtering Plan, would initiate mandatory ISP-level filtering on all Refused Classification content. The Refused Classification content is defined as:

– Child sexual abuse imagery

– Bestiality

– Sexual violence

– Crime instruction

– Drug use

– Terrorist act advocacy

The list has been compiled by the ACMA based on public complaints and assessed against National Classification scheme criteria. There is an appeal process – to an industry body, the Internet Industry Association. At first glance, the list seems reasonable- it certainly isn’t the type of content my mother would have wanted me to be exposed to. But the list of content is quite broad and would apply to the strictest threshold at state level to determine Australia’s threshold on each of the areas of refused classification. For example, Queensland’s abortion laws are stricter than any other state or territory. Therefore a mandatory ban would sit at the Queensland threshold for the entire country.

Of further concern is the broad scope of the topics. There is growing concern that topics such as euthanasia, abortion, safe injections sites, graffiti art, gay and lesbian content and social/political forums fall into the Refused Classification topics. Adding sites to a blacklist with such a broad scope increases the risk that legitimate sites were also block, never mind the negative impact on internet speed. Of further concern is the idea that even if sites are blocked, there is an important element in indexing sites so that at least you know what material is unavailable. Otherwise we are ignorant to the existence of broad scope of information.

Mandatory censorship provides a false sense of security. The technology used to block sites is not 100% accurate. Changes in domain names or search words would result in a never ending cat and mouse game, trying to chase illegal or legitimately blacklisted content out of Australian. The likelihood of being able to successfully block ‘bad’ content comes at an extraordinary risk to our civil liberties.

The balance of protecting Australian society and the welfare of children with freedom of information and free speech is delicate to say the least. A proposed solution to cope with this balance is to educate the public about the internet and to provide tools for peoples homes in order to allow them greater and direct control over what their families can assess. Interestingly, the Australian Government is implementing mandatory censorship after taking away the initiative providing free home control packages to families, claiming the software was not being used. There can be no doubting the abhorrent content of some internet sites and need to censor material according to our laws. But we must consider what we are willing to gamble to attain even the false sense of security provided by the proposed mandatory internet censorship.


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