It would be in iiNet's economic interest to stop people using BitTorrent, because it is such a bandwidth hog, the court heard on the final day of the High Court hearing between iiNet and the consortium of film and television studios known as the Australian Federation Against Copyright Theft (AFACT).
The final day of the copyright infringement-authorisation case was shorter than the previous two days, running for just over two hours. Most of the time was dedicated to AFACT counsel Tony Bannon making the case that when iiNet allows a customer to keep sharing a copyright-protected film through BitTorrent, the internet service provider (ISP) is authorising that infringement. While iiNet has argued in the hearing that acting on infringement notices would incur a cost for the ISP that would be unreasonable to bear alone, Bannon said that it is in iiNet's "commercial interest" to get customers to stop using BitTorrent, because it uses so much bandwidth.
"The pursuit of steps to rid their system of infringers would produce on the basis of that argument a net economic benefit," he said. "That is one factor which would have had to have been weighed in to the equation if anyone had stepped into the witness box to address this issue. Another factor is ... that Freezone is something that they sought to make commercial value out of by selling, inter alia, authorised copies of films by Apple's iTunes. So that, again, on the basis of that, one might expect or infer that the ridding, the encouragement of their users to not use authorised films but to take up Freezone for it, is again part of the equation as to what the net cost was."
He said that the fact that iiNet never addressed this in evidence means that the ISP doesn't believe that it would have a favourable outcome.
iiNet and the Communications Alliance both argued strongly on the second day that an ISP has no control over whether a customer uses a BitTorrent client to download a film, and thereby infringe on copyright. On Friday, Bannon told the High Court that an ISP gains control over the customer once the first infringement notice has been received. Any further infringement is then authorised by the ISP, he argued.
"Although they are not a determiner of the content, once they know the content and they are an actor directly in making the infringing act happen, and they have the element of relationship and control, then they are caught, unless there is a reasonable step to be taken," he said.
The previous day, iiNet counsel Richard Cobden had argued that iiNet would need to monitor its customers' internet activities in order to proactively prevent copyright infringement, and that this is not possible, due to the privacy provisions in the Telecommunications Act. Bannon yesterday told the judges that if iiNet had implemented a warning system to pass on infringement notices, similar to Westnet before iiNet acquired it, then it would not need to "snoop" on its customers.
"They did not have to be proactive to monitor its service, or to seek facts to indicate infringing activity, but that is in the context of that section which requires a repeat infringer policy and, namely, the whole scheme envisages that they would have to act on notice they received. In other words, they did not have to be Sherlock Holmes themselves, but if they were armed with knowledge, then they were caught," he said.
Chief Justice Robert French reserved the High Court's ruling, and the judgment is expected to be handed down in early 2012.