Another chapter in the iiNet versus the movie industry saga (colloquially known as “AFACT versus iiNet", after the Australian Federation Against Copyright Theft, the industry’s mouthpiece) is closed, with the Federal Court dismissing the industry’s appeal against the ISP.

The plaintiffs (Roadshow Films and a number of other content companies) had appealed against the original trial result, in which iiNet successfully defended itself against accusations that it was complicit in its customers’ breach of copyright using technologies such as BitTorrent.

The plaintiffs had claimed that iiNet’s response to its customers’ activities was inadequate, and on that basis, the ISP – now Australia’s second largest – should lose the “safe harbour” protections it would otherwise hold under Australia’s Copyright Act.

Last year, the original trial judge handed iiNet a win. Justice Dennis Cowdrey of the Federal Court demolished most of the arguments put by the plaintiffs, emphasizing that nobody – individual or company – is placed under an active obligation to prevent copyright infringement by third parties.

Without such an obligation, iiNet’s alleged failure to act did not equate to the ISP “authorizing” its users’ use of BitTorrent.

In a majority verdict, the judges presiding over the case have dismissed the appeal. The case is likely to move on to Australia’s High Court. The Register will report further when the judgement is published.

Continued: The entire judgment is enormous, making analysis difficult in a short time, however some passages must be particularly painful for the copyright owners.

The majority judgment criticizes the technical approach taken to measuring copyright infringement, stating that the appellants’ analysis of IP addresses “vastly overstated” the number of “separate acts of infringement” committed by BitTorrent users on iiNet’s network.

Perhaps most importantly, the appeal majority judges found that since iiNet did not “authorize” the copyright infringement, it has the right “safe harbour” protection from this action. Merely offering a network, the judges said, doesn’t count:

“If I had been satisfied that the respondent had approved, sanctioned or countenanced the acts of copyright infringement which have been found to have occurred, then I would have found the respondent liable for authorization”, the judgment notes.

The appeal majority judgment also observes that AFACT’s tactic of sending large numbers of notices to iiNet didn’t give the ISP sufficient reason to act against alleged infringers. “In my opinion”, the judgment states, “the AFACT notices were not sufficient to provide the respondent with knowledge that its network was being utilized by users of particular accounts to infringe the appellants’ copyright in the identified films.”

The industry has 28 days to decide whether it wishes to appeal to the High Court.®