A group of 34 applicants representing the major motion picture studios both in Australia and the United States have failed in their action against iiNet claiming that it committed an offence as an internet service provider by authorising the infringement of copyright of its users or subscribers when they downloaded cinematograph films in a manner which infringes copyright.
In Roadshow Films Pty Ltd v iiNet Limited (No. 3)  FCA 24 Judge Cowdroy decided that :
1. certain iiNet users infringed copyright on a major scale
2. while iiNet had knowledge of infringements occurring, and did not act to stop them, iiNet did not authorise the infringements of copyright of the iiNet users. He reached that conclusion because iiNet’s granting internet access was not the same as giving the means of infringement by its users.
The evidence established that iiNet has done no more than to provide an internet service to its users. The judge contrasted this with the respondents in the Cooper and Kazaa proceedings, in which the respondents intended copyright infringements to occur, and in circumstances where the website and software respectively were deliberately structured to achieve this result.
He found that iiNet did have a repeat infringer policy which was reasonably implemented and that iiNet would therefore have been entitled to take advantage of the safe harbour provisions in Division 2AA of Part V of the Copyright Act if it needed to do so.
In summary the judge decided iiNet did not authorise copyright infringement “first because the copyright infringements occurred directly as a result of the use of the BitTorrent system, not the use of the internet, and the respondent did not create and does not control the BitTorrent system; second because the respondent did not have a relevant power to prevent those infringements occurring; and third because the respondent did not sanction, approve or countenance copyright infringement. ”
UPDATE 25 February 2010: Australian Federation Against Copyright Theft says it has lodged an appeal.