The iiNet case
In the civil case Roadshow Films Pty Ltd v iiNet Ltd  HCA 16 (20 April 2012), copyright holders in certain films and television programmes sought relief to prevent an Internet service provider from permitting its subscribers to use peer-to-peer systems to infringe. The plaintiffs had contemplated that on receipt of a notice of infringement from them, the ISP would send warning notices to individual customers containing threats to suspend or terminate those customers’ accounts – in other words, a graduated response approach. However, the High Court found that the ISP had not failed to take reasonable steps to prevent infringement, a key factor under section 101(1A), Copyright Act in deciding whether the defendant had authorised infringing conduct by its subscribers. In dismissing the claim, the High Court stated: “This final conclusion shows that the concept and the principles of the statutory tort of authorisation of copyright infringement are not readily suited to enforcing the rights of copyright owners in respect of widespread infringements occasioned by peer-to-peer file sharing, as occurs with the BitTorrent system. The difficulties of enforcement which such infringements pose for copyright owners have been addressed elsewhere, in constitutional settings different from our own, by specially targeted legislative schemes, some of which incorporate co-operative industry protocols, some of which require judicial involvement in the termination of internet accounts, and some of which provide for the sharing of enforcement costs between ISPs and copyright owners” (para. 79).
The ISPs’ voluntary scheme proposal: “notice and discovery”
Following the dismissal of the right holders’ first appeal in February 2011, the Internet Industry Association indicated that it wished to develop a voluntary inter-industry scheme to address infringing file-sharing. On 25 November 2011, five ISPs, including iiNet, published a proposal for a voluntary scheme under which infringement notices would be sent to subscribers. After 4 such notices within a year, the right holder would be at liberty to seek the identity of the account holder by court order. However, those discussions came to nothing, with iiNet withdrawing in December 2012.
The Graduated Response revived
In September 2013, a new Government came to power under Liberal Prime MInister Tony Abbott. In a speech to the Australian Digital Alliance in February 2014, Attorney-General George Brandis indicated that a Graduated Response scheme might be considered as a mechanism for reducing piracy. He confirmed in May 2014, under questioning from the Senate Legal and Constitutional Affairs Legislation Committee, that a graduated response scheme was under consideration by officials. On 30 July 2014 the Government launched a consultation on online copyright infringement, with a closing date of 1 September 2014. The consultation paper does not explicitly propose a Graduated Response system, but seeks to strengthen the incentive for ISPs to enter into such a scheme by enhancing their potential liability for authorising infringement. The Communications Alliance immediately welcomed the consultation, but expressed doubt about the proposed extension of authorisation liability.
On 10 December 2014, the Minister for Communications wrote to ISPs and right holders asking them to develop an industry code on user infringement with a view to its registration by the Australian Communications and Media Authority (ACMA) under Part 6 of the Telecommunications Act 1997. The addressees of the letter were given until 8 April 2015 to agree a code. If they failed to do so, the Government would impose its own.
On 20 February 2015, the Communications Alliance and right holders published a draft industry code, “Copyright Notice Scheme“, for public consultation (closing on 23 March 2015), with a view to its registration under the 1997 Act. The Code was to be administered by a cross-industry Copyright Information Panel, which would include consumer representation. On 8 April 2015 the final version of the scheme was published and submitted to the ACMA.
The scheme, which was rather similar to that envisaged in the UK, provided for the sending of three notices to subscribers, escalating in tone. The receipt of a third notice would put a subscriber at risk of having his account notified to right holders on request, with a view to their making an application for “preliminary discovery” against the ISP for disclosure of the subscriber’s name and address (see rule 7.22, Federal Court Rules 2011). The scheme provided for a “challenge” by the subscriber following a third notice, to be decided by an “adjudication panel”. Originally a refundable fee of $25 was to be payable, but this was deleted as a result of the consultation, with the option to introduce such a fee if an excessive number of appeals are filed. The allocation of the costs of operating the scheme remained to be agreed.
The scheme, however, still had no been launched by the start of 2016. On 18 February 2016, CNET reported (http://www.cnet.com/au/news/three-strikes-out-manual-anti-piracy-scheme-shelved-over-prohibitive-costs/) remarks made on behalf of film distributor Village Roadshow that the two sides had agreed not to move forward with the scheme, on grounds of cost. However, it was believed that an automated system of evidence-gathering would be developed which would permit the graduated response to operate at viable expense.