The Australian Federation Against Copyright Theft's (AFACT) legal action over iiNet's alleged breach of copyright is squaring up to be a battle over the ISP's privacy obligations under the Telecommunications Act.
Today's directions hearing at the Federal Court in Sydney saw iiNet air its argument that AFACT's request for it to act on notices of alleged infringement would have required it to breach its obligations under the Section 276 Telecommunications Act, which deals with privacy provisions for customers of carriers.
In a statement iiNet issued today, it said: "Under the Act, it is illegal for iiNet to use customers' personal information in the manner demanded by AFACT without a court order or warrant. Breaches of the privacy provisions of the Act can attract a two-year gaol sentence."
The ISP's managing director Michael Malone earlier this week gave ZDNet.com.au his position on the possible "three strikes" legislation for copyright-infringing customers: "To examine customer communications on the basis of a third party's allegations would be a criminal act for us to engage in."
"Our starting position on this would be there is good public policy reasons for why Australia Post should not be opening your letters. And good reasons for why carriers should not be listening to your phone calls or looking at what you download," Malone said. "Our view is that would constitute a criminal offence."
iiNet has insisted previously that it would require a court order or warrant to act up such a claim.
Should iiNet's argument be upheld, it could be a major blow for AFACT's case. Its legal counsel, Christian Dimitriadis, responded to iiNet's invocation of the Telecommunications Act as "very novel". "It's not one that we are aware has been raised before by an ISP," he said.
Dimitriadis said that the Act does not apply to information external to iiNet's systems, such as the IP addresses that it had supplied iiNet and asked it to act upon. "It only applies to the information that is confidential," he said.
iiNet is expected by Friday to deliver details of 20 customer accounts based on a range of IP addresses AFACT claims illegal file sharing had occurred; however, the identities of those customers won't be revealed as per an agreement the two had struck at the last hearing.
"Our case is that there will be an obvious matching up between those, providing further corroboration between the occurrence of the primary infringement acts on iiNet's systems," Dimitriades said.
AFACT also looks set to argue there were three other obvious exceptions to the Telecommunications Act, including where an ISP is accessing the information in the course of conducting its own business.
AFACT director Adrianne Pecotic said in a statement today, "We are of the view that preventing illegal acts from occurring on their networks is in the normal course of an ISP's business and therefore perfectly legal."
Other examples include where it is authorised by law, which was said to be relevant to iiNet's claim under the Copyright Act to safe harbour provisions. "The Safe Harbour provision on which our friends seek to rely on under the Copyright Act are going to be relevant," Dimitriades said.
The final argument for an exception under the Telecommunications Act was that iiNet's customers had given their consent in signing the ISP's terms and conditions.
A further directions hearing is expected on 8 September, with the hearing set for 6 October.