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C O N F I D E N T I A L CANBERRA 001197 
 
 
SIPDIS 
 
STATE PLEASE PASS USTR 
 
E.O. 12958: DECL: 12/01/2018 
TAGS: KIPR ECPS ECON ETRD AS
SUBJECT: FILM/TV INDUSTRY FILES COPYRIGHT CASE AGAINST 
AUSSIE ISP 
 
REF: CANBERRA 1173 (NOTAL) 
 
Classified By: AMBASSADOR ROBERT D. MCCALLUM JR, REASON 1.4 (B, D) 
 
¶1. (C) Summary:  On November 20 several media companies filed 
legal action against Australia's #3 internet service provider 
(ISP) iiNet, seeking a ruling that iiNet has infringed 
copyright by not taking reasonable steps to prevent 
unauthorized use of films and TV programs by its customers. 
This is the first such case filed in Australia.  The case was 
filed by the Australian Federation Against Copyright Theft 
(AFACT) on behalf of the Motion Picture Association of 
America (MPAA) and its international affiliate, the Motion 
Picture Association (MPA), but does not want that fact to be 
broadcasted.  Initial reactions support MPAA's claim that it 
has a strong legal case.  End Summary. 
 
A NEW LEGAL CHALLENGE AGAINST PIRACY AIMS AT ISP 
 
¶2. (U) On November 20 the Australian Federation Against 
Copyright Theft (AFACT) announced that several media firms 
had filed a case in the Federal Court of Australia against 
iiNet, Australia's third largest ISP, for "failing to take 
reasonable steps, including enforcing its own terms and 
conditions, to prevent known unauthorised use of copies of 
the companies' films and TV programs by iiNet's customers via 
its network."  The action was filed by Village Roadshow (an 
Australian company that produces and distributes movies and 
DVDs, among other activities), Universal Pictures, Warner 
Brothers Entertainment, Paramount Pictures, Sony Pictures 
Entertainment, Twentieth Century Fox Film Corp., Disney 
Enterprises, and the Seven Network (one of Australia's three 
major over-the-air television networks and a licensee of some 
of the infringed works).  Proceedings will be back before the 
court on December 17; a ruling is unlikely before the end of 
¶2009. 
 
¶3. (U) This is the first such case to be filed in Australian 
courts.  iiNet claims that it is protected by the "safe 
harbor" provisions of the Copyright Act - i.e., ISPs are 
merely common carriers of traffic, so the dispute is between 
copyright owners and violators.  iiNet said in its media 
release response that it routinely turns over to the police 
evidence of piracy on its network. 
 
THE REST OF THE STORY 
 
¶4. (C) Despite the lead role of AFACT and the inclusion of 
Australian companies Village Roadshow and the Seven Network, 
this is an MPAA/American studios production.  Mike Ellis, the 
Singapore-based President for Asia Pacific of the Motion 
Picture Association, briefed Ambassador on the filing on 
November 26.  Ellis confirmed that MPAA was the mover behind 
AFACT's case (AFACT is essentially MPAA's Australian 
subcontractor; MPAA/MPA have no independent, formal presence 
here), acting on behalf of the six American studios involved. 
MPAA prefers that its leading role not be made public. 
AFACT and MPAA worked hard to get Village Roadshow and the 
Seven Network to agree to be the public Australian faces on 
the case to make it clear there are Australian equities at 
stake, and this isn't just Hollywood "bullying some poor 
little Australian ISP." 
 
¶5. (C) Why iiNet?  Ellis said they were the right target on 
several levels.  First, they are big enough to be important - 
iiNet is the third largest ISP in Australia.  (Telstra, 
owners of top Australian ISP BigPond which has about half of 
the market, are the "big guns", Ellis admitted.  It was clear 
Ellis did not want to begin by tangling with Telstra, 
Australia's former telecom monopoly and still-dominant player 
in telephony and internet, and a company with the financial 
resources and demonstrated willingness to fight hard and 
dirty, in court and out.)  Ellis also said iiNet users had a 
particularly high copyright violation rate, and that its 
management has been consistently unhelpful on copyright 
infringements. 
 
¶6. (C) Ellis described the case as "very strong."  He said 
AFACT delivered to iiNet every week for five weeks a 
"telephone directory"-sized list of violations complete with 
a DVD with "gigabytes" of data on infringers using iiNet's 
network.  Ellis said iiNet did nothing against any of its 
users after being presented with this and other evidence. 
AFACT/MPAA have hired Australia's top copyright lawyer, 
Michael Williams of Gilbert & Tobin, to represent them in 
this case.  Williams, well-known to the Mission and highly 
respected in the Australian legal community, was the lawyer 
behind the successful Cooper and Kazaa IPR cases in 
Australia. 
 
¶7. (C) Ellis said he had told Communications Minister Stephen 
Conroy a few months ago that absent action by the ISPs or 
GOA, the industry "would have to do something" rather than 
let movies and TV "go the way of music" on the internet.  He 
said Conroy had been clear that he "had other priorities" 
(i.e., rolling out the National Broadband Network, reftel). 
Ellis said MPAA did not see any role for Embassy at this 
time, but wanted to keep us informed. 
 
REACTION MIXED 
 
¶8. (SBU) Media reaction to the case has been mixed.  It 
includes some predictable criticisms of AFACT's resort to 
legal challenges as doomed to be ineffective, and 
exhortations that the best way to combat piracy is for the 
movie and TV industries to adapt to the digital age and make 
their products more readily available for download at 
reasonable prices and conditions.  A couple of legal analysts 
writing on copyright and media-oriented Australian websites 
have concluded that iiNet's position is very weak, in 
particular its reliance on "safe harbor" provisions.  They 
noted that AFACT had given iiNet five thick logbooks and DVDs 
full of data about iiNet users infringing movie and TV 
program copyrights.  However, they also recognize that this 
is the first case filed under the relevant portions of the 
Copyright Act since it was amended in 2007 - so there is no 
legal precedent. 
 
¶9. (C) Comment:  Ellis and MPAA see this as a major test 
case, and not necessarily their final legal move in 
Australia, which does have very high rates of illegal movie 
and television show downloads, in part because of the 
sometimes long gaps between their release in the US and their 
arrival in Australian theaters or on local television.  Ellis 
said it could be followed up by similar filings in other 
Commonwealth countries.  We will monitor this case as it 
unfolds, for its IPR implications and also to see whether or 
not the "AFACT vs. the local ISP" featured attraction spawns 
a "giant American bullies vs. little Aussie battlers" sequel. 
Qa "giant American bullies vs. little Aussie battlers" sequel. 
 End comment. 
 
MCCALLUM