Yesterday the Federal Court saw the return of two old rivals, the Australian Federation Against Copyright Theft and ISP iiNet. The pair were there to fight the appeal of the decision handed down several months ago by Judge Cowdroy and today, on day two of the hearing, iiNet lawyer Richard Cobden began setting down the ISP's case.

After successfully defending legal action brought by Hollywood anti-piracy group AFACT back in February, iiNet is back in court today for day two of the appeal. AFACT, representing the Village Roadshow and many Hollywood studios, would like the panel of three judges in the Federal Court to hold iiNet accountable for copyright infringements carried out by its customers. iiNet maintains it is not responsible.

As detailed yesterday, AFACT – which has chosen not to go after primary infringers (iiNet customers using BitTorrent) – says that by doing nothing to stop infringements, iiNet effectively ‘authorized’ their illegal activity which renders the ISP liable for their actions.

In the original hearing AFACT said that iiNet had full knowledge that its customers had been pirating AFACT members’ copyright works because the ISP had been given evidence to prove that. AFACT also stressed that the ISP had enough power to do something about those infringements, either by taking technical measures such as throttling, or terminating accounts.

As reported by ARN today, there are four steps to identify authorization:

A person provides the means of infringement, a person makes copyright material available, a person provides the means of infringement and whether reasonable steps were taken to prevent copyright, that is, the power to prevent.

In the original hearing it was decided that since iiNet did not provide the means to infringe as indicated in the opening guideline (as BitTorrent was out of its control) the other steps were irrelevant. AFACT is now arguing that the steps in the guideline do not have to be read in strict order.

A veteran from the earlier hearing, Richard Cobden representing iiNet insists that the guidelines be handled sequentially, as they were originally.

When it was AFACT lawyer David Catterns’ turn to speak, he returned to the topic he initiated yesterday, that iiNet had plenty of power to do something about BitTorrent infringements.

In the original hearing iiNet chief Michael Malone said privacy laws prevented the company from identifying customers, but Catterns pointed to the procedures employed by the ISP to deal with customers who send out spam. These, he said, lead to account suspension and ultimately termination.

For iiNet, Cobden said no matter which steps were taken, be they letters or throttling, AFACT would not be happy unless the measures ultimately ended in account termination. He said that this most final of sanctions would not be a reasonable action to take on the basis of notices generated by AFACT. In the original hearing, Justice Cowdroy agreed with this assertion.

According to iTNews, Catterns also referred to a press release that iiNet had sent out earlier about its legal battle with AFACT. The fact that the ISP chose to use BitTorrent (it ran its own installation of RivetTracker) to distribute the announcement, argued Catterns, sent a message that it the ISP had no intention of doing anything about infringements.

The hearing continues.