Online Piracy and the Law

Online Piracy and the Law  

Extended Research Response         

Before the 21st century, only an eighth of Australian households has access to the internet. Since then, online expansion has led to that proportion quadrupling to over 72% and the number of live websites increasing from 5 million to over 350 million. In just a few short years, the internet has transformed entire industries, including the music, software, media, and news and retailing industry to name a few. However along with these revolutions, the internet has also posed particular challenges for those industries that rely on the distribution and sale of copyright material. The rise of internet-based peer-to-peer (P2P) file sharing technologies, which enable music, movies, TV shows, software and other digital content to be rapidly and efficiently distributed across the internet, has been blamed for billions of dollars in lost revenue. In an attempt to combat this issue the Federal government has introduced amendments to the Australian Copyright Act 1968, which applies as national law throughout Australia, protecting the value of creative work. Under the act, it is an offence to knowingly import, possess, sell, distribute or commercially deal with an infringing copyrighted piece of material. It also provides for fines of up to to $250 000 and possible imprisonment terms of up to five years. The increased advancement of these technologies over the last 15 years has created nightmares for the Australian government, leaving the legality of ‘pirating’ in a constant state of limbo. Two different cases in the last 5 years against the small Internet Service Provider (ISP) iinet has resulted in conflicting precedents, leaving confusion amongst the public as to where the law stands in regards to this controversial practice. It is obvious current Australian copyright laws are not only inconsistent, but an inadequate solution to a problem that is potentially costing the Australian entertainment industry millions every year. It is the government’s duty to ensure a clear and consistent system is implemented, that effectively prohibits and regulates pirating in Australia.

Before 2010, piracy suits against ISP’s  in Australia proceeding to trial was basically unheard of, so when iiNet was brought to court under accusations made by 34 of the biggest entertainment studios in Hollywood, the case immediately attracted widespread international attention. However Justice Cowdroy of the Federal Court found that the 34 applicants did not provide enough evidence that iiNet had authorised copyright infringement by virtue of its subscribers having engaged in activities that infringed the studio’s copyright. Cowdroy found that even though iiNet knew that infringements were occurring and did not act to stop them, it did not authorise copy-right infringement by its users. There were three reasons for this. First, iiNet did not provide the “means” of copyright infringement. Second, the application of the factors in s101 (1A) of the Copyright Act 1968 (Cth) lead to the conclusion that iiNet had no power to prevent the infringements from occurring. Finally, iiNet did not sanction, approve, and countenance copyright infringement. This case set precedent that protected pirates, by putting the ISP’s in between them and the right holder’s, making them virtually out of reach. However this controversial precedent was challenged only 4 years later.

In the spring of last year, Dallas Buyers Club LLC (DBC) took iiNet and four other internet service providers to court in a bid to identify individuals suspected of pirating the film of the same name. In a landmark ruling this April, the defending ISPs were ordered to hand over customer names and email addresses matching the IP addresses, opening the door for DBC to sue individuals for copyright infringement. However, in handing down his judgement that preliminary discovery should be granted, Perram J said "there should be orders maintaining the privacy of the [customer] information provided." In addition, Perram stipulated that the content and form of any letter sent to iiNet customers alleged to have infringed copyright on the film must "first be submitted...for approval." It is believed that this decision is a precaution against the alleged "scare tactics" used by Dallas Buyers Club LLC in dealing with piracy.  This is very significant decision because it’s purpose was to avoid ‘speculative invoicing’, a process that is believed to have occurred when DBC brought an almost identical case to the U.S district court last year, where the judge gave the right holders free rule over the settlement proposal letters they sent out to pirates. Many believe the company sent threatening letters requesting large amounts of money from the pirates, instead of taking the matter to court. This tactic seemed to have worked with most of the several thousand cases ending up being settled for approximately $5,000, with one pirate even being charged over $15,000. This decision made by Perram disintegrates any chance of such scare tactics, ensuring the settlement offers being nowhere near the amount in the U.S. The exact price of these offers will be set by the judge and will no doubt dampen the overall amount of money DBC gets from the exercise.

Taking this into consideration, it is hard to see what Voltage Pictures, the owners of the film, would have gained by this entire process. If the fines are insubstantial, they will not serve as any form of deterrent for future torrents and in any event, many people question Voltage Pictures’ valiant attempts to pioneer such mass piracy suits for such little rewards. It is because Voltage knew that the case had the possibility of setting precedent. In a country harbouring some of the biggest internet pirates in the cyber sphere, they could use the precedent as a dangerous building block for more fruitful cases in the future. Before this case, the legality of the act was not an issue that Australians spent much time considering (refer to public opinion poll) due to the previous precedent discussed above. However this case not only delivers new precedent, but signals the turn of the tide for internet piracy in Australia. At this current time, this precedent takes the role of being the overriding law regarding anything related to piracy, and it has received mixed reactions from stakeholders on both sides of this legal debate.

The stakeholder with the biggest cause for concern are the pirates themselves yet it appears that the majority of these internet users appear unsympathetic to giant corporations, such as Voltage, and their efforts to retain their dominance and control over the entertainment industry. The pirates argue that this precedent has overturned the decision made in 2010, which in their eyes, was the correct one. They believe that the failure of both legal and technological mechanisms to curtail the downloading of copyrighted material is due to entertainment companies and their inability to prevent users from such activities. Many users also argue that even though torrenting copyrighted information has ethical and moral repercussions, such blatant theft does not harm the industry. This argument is backed by the lack of plausible proof from entertainment companies that torrenting files online in fact replaces the user actually purchasing legal copies. They go even further by pointing out the results of a study conducted in the U.S that showed the annual sales of recorded music at 67 colleges that had banned all major torrenting sites, fell by 7% from 2013, the year before.  Many users argue the sharing and downloading capabilities of pirating benefit both the producers and consumers of copyrighted files. They say pirating allows consumers to sample the producer’s work, a process that plays a huge role in the promotion of their products. They say that if the consumer finds this pirated ‘sample’ satisfactory, the experience encourages them to buy a proper legal copy and patronize the products of a particular artist, actor or producer, in the forms of events, tours and concerts.