AFACT v iiNet: 'Reasonable belief' defence may be incorrect

The ISP's chief executive did not receive legal advice on Telecommunications Act provisions for failing to act on AFACT evidence, court hears

It has been revealed that iiNet’s defence of 'reasonable belief' against acting on evidence of copyright infringement was potentially based on a misinterpretation of relevant legislation.

A barrister for iiNet’s legal team, Richard Lancaster, iterated sections of the Telecommunications Act and Copyright Act in which the service provider would have been prevented from acting on evidence of copyright infringement of its users supplied by the Australian Federation Against Copyright Theft (AFACT) during 2007 and 2008. Lancaster argued that iiNet believed “in good faith” that acting on such evidence would be unlawful.

Earlier in the appeal case, iiNet legal representative, Richard Cobden, argued to the panel of three judges at the Federal Court that undertaking investigation of potential copyright infringement in the same way as collated by DtecNet would be unlawful due to the extensive data matching required, and the necessary disclosure of customer information.

However, when asked by Justice Nicholas whether iiNet chief executive, Michael Malone, had ever received sound legal advice when deciding whether to act on AFACT’s evidence or not, Lancaster said there was no explicit advice given.

“Erroneous legal advice doesn’t ordinarily help you - why should it here?” Justice Nicholas asked.

Lancaster countered that it would be a factor of consideration if Malone had a mistaken view of the legislative acts in play, but that it wasn’t necessary to the service provider’s case.

“Honestly, holding the belief is at least one step forward from never having considered it,” he said.

As the fourth day of the appeal case opened, Justice Nicholas asked iiNet’s Cobden to clarify whether the license of communication would be a factor in AFACT’s evidence of the alleged copyright infringement of iiNet user, RC-08. Cobden argued that while iiNet had authorised the communications of its users, the company that had collated the piracy information for AFACT, DtecNet, was the maker of the communication in transferring the infringing material. As the agent and company itself is based outside of Australia, Cobden said it wasn’t an issue.

DtecNet has offices in Los Angeles, Copenhagen, Paris and Vilnius in Lithuania.

The service provider’s legal counsel also argued that iiNet could not be held responsible for the makers of communications held within the BitTorrent swarm that didn’t pertain to the service provider’s customers.

Lancaster took the stand toward the end of the third day, continuing to provide evidence that the service provider had implemented a policy to counter those repeatedly infringing copyright, despite counterclaims by AFACT.

Both Cobden and Lancaster confirmed that iiNet’s policy was to terminate users only under issue of court order, court decision or an admission by the user itself to the service provider or authorities. The policy has continued to come into question, with fears termination of accounts could still fall foul of disclosure of customer information.