FILM studios and record companies will have to come up with a new way to combat online piracy after a Federal Court ruling found that internet service providers are not required to police copyright infringement on their networks.
The music industry says it may have no choice but to sue individuals for illegal file-sharing unless the federal government intervenes with a solution to its piracy woes.
All the major film studios sued iiNet in an effort to force the ISP to warn and even disconnect customers who repeatedly download movies illegally. The case was the first of its kind in the world and the first time an Australian trial had been covered on Twitter.
In a landmark judgment handed down yesterday, Justice Dennis Cowdroy rejected the Australian Federation Against Copyright Theft's claim that iiNet ''authorised'' its customers' copyright infringement by failing to act on thousands of infringement notices sent to it by the federation.
Justice Cowdroy found iiNet had done no more than provide an internet service to its customers. He said iiNet did not have control over its customers' use of the BitTorrentfile-sharing software, which they used to infringe the studios' copyright.
''iiNet is not responsible if an iiNet user uses that system to bring about copyright infringement,'' he said. ''The law recognises no positive obligation on any person to protect the copyright of another.''
Tony Joyner, a partner in the technology and IT group at the law firm Freehills, said he would be particularly interested in the government's response because the piracy issues raised during the trial remained a ''very big and real problem''.
The music industry was hoping for a precedent that it could use to force ISPs to co-operate on reducing online piracy. ''Today's Federal Court decision suggests that copyright owners broadly may have no choice but to sue individuals for illegal file-sharing. This would be a most unfortunate outcome,'' said Sabiene Heindl, general manager of the industry's anti-piracy arm, Music Industry Piracy Investigations.
The executive director of AFACT, Neil Gane, said the federation was deciding whether to appeal.
The studios would ramp up lobbying of the government to change the law to make ISPs liable for the downloading habits of customers, Mr Gane said.
Mr Joyner said: ''I think the only way there won't be a legislative response is if there's some comfort that an appeal will occur and has some chance of succeeding relatively quickly.''
The Communications Minister, Stephen Conroy, said last July that he was awaiting the outcome of the case before deciding whether there was a need for legislative change.
Yesterday a spokeswoman for the minister said the government would examine the court's decision before making any further comment.
Senator Conroy had appeared to be on the side of the studios, saying last April that iiNet's defence in the case ''belongs in a Yes Minister episode''.
