After Hollywood: iiNet "Pleased" But Warn "Issue Not Gone"
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A small Perth based telco is celebrating a major victory against Hollywood big guns that will have implications globally. But the issue has not gone away, iiNet boss warns.

Image: Fairfax Media

Michael Malone, iiNet’s boss, is breathing a major sign of relief this afternoon, after fighting off a case made by 34 Hollywood movie giants including Warner Bros, Universal and Sony Pictures, who accused it of authorising its customers to download illegal movies. 

In a press conference held after the decision earlier today, Malone along with chief regulatory officer Steve Dalby said the judgment vindicated iiNet’s argument and proved Hollywood’s claims were unfounded.

34 Hollywood movie houses, including Warner Bros, Universal, Sony Pictures and Village Roadshow, sued iiNet under the AFACT (Australian Federation Against Copyright Theft) claiming the Perth-based telco authorised the infringement of 86 movie titles.

“We’re very pleased with the result announced in the High Court this morning. This very strong decision is important, not just because the appeal has been dismissed but also the clarity it provides to the industry.

“The online infringement issue hasn’t gone away; this decision hasn’t changed that. But it does change the ground rules,” Irish native Malone said at the press call today, according to reports.

All five Australian High Court judges unanimously dismissed the AFACT appeal today, claiming iiNet “had no direct technical power” in preventing its customers from illegally downloading movies via BitTorrent clients.

The High Court ruled iiNet could not prevent its customers from downloading the pirated movies as it “was limited to an indirect power to terminate its contractual relationship with its customers.”

The case sets a global precedent defining the responsibilities of the ISP and the individual liability of copyright infringement and means telcos are not liable for what customers download or fileshare.

“iiNet has never supported or encouraged unauthorised sharing or file downloading,” Malone said, although admitted “there are customers out there making illegal downloads available.”


“We don’t agree with people making content available illegally; the first step to dealing with that is for content to be made available legally.”

Today’s High Court ruling confirms that iiNet is not liable for ‘authorising’ the conduct of its customers who engaged in online copyright infringement.

The ruling marks the end of more than three years of legal battle, costing iiNet $9 million millions in legal costs.

Malone also called on the industry to do deals with providers to make content available legally, citing “strong evidence” that  partnerships and agreements between ISPs, and copyright holders had done more to reduce ‘piracy’ than “this unproductive legal battle.”

“Increasing the availability of licensed digital content is the best, most practical approach to meet consumer demand and protect copyright,”

“We have consistently said we are eager to work with the studios to make their very desirable material legitimately available to a waiting customer base – and that offer remains the same today.”

The High Court dismissed the appeal case and has awarded iiNet costs, which totalled $9 million but Malone reckons they’ll get around two thirds of this back.

Malone also remarked at the landmark nature of the case, globally:

“This is a world’s first case; no case has gone to judgement in the highest court in the land elsewhere. I’ve had text messages and meals from people all over the world this morning. The wording of this case will be important in how this plays in their countries.”

Telstra, who was said to have helped fund iiNet legal costs, said it is “still considering the full implications of this important decision” but welcomed the “legal clarity provided by today’s ruling,” in a statement today.

“Telstra promotes the use of its services in a manner that respects the lawful rights of others (including intellectual property rights like copyright).

“However, we have long been of the view that legal action of this kind is not the most efficient or effective way of achieving this outcome.


And AFACT bruised at today’s outcome appeared to blame the governemtn for the decision:

“Today’s decision by the High Court exposes the failure of copyright law to keep pace with the online environment” and spoke of the “the need for Government to act, leading film and television industry companies.”