Malone to AFACT: You lose, you pay

Malone to AFACT: You lose, you pay

Summary: iiNet managing director Michael Malone said today that the Australian Federation Against Copyright Theft (AFACT) shouldn't be able to get out of paying for its failed attempt to sue the provider over copyright breach.


iiNet managing director Michael Malone said today that the Australian Federation Against Copyright Theft (AFACT) shouldn't be able to get out of paying for its failed attempt to sue the provider over copyright breach.

iiNet chief Michael Malone (Credit: iiNet)

"We didn't ask to be sued. They came to us and sued us and they lost, so I don't see why we should be paying any of their legal expenses," Malone told today.

The company reported in its half-year earnings that it had forked out $5.7 million in legal costs defending the case. While iiNet's insurance reduced its exposure to $3.7 million, AFACT and the 34 applicants that took part in the litigation may be left with the full bill, including its own costs to date.

AFACT intends this Thursday to try and trim its legal bills, arguing to the Federal Court that it should not face costs incurred for portions of the hearing that were not decided in iiNet's favour — for example, the legal costs incurred while iiNet was still denying that its customers had breached copyright while using its service.

Malone is also waiting for AFACT's decision on whether it will appeal Justice Cowdroy's decision, due this Thursday. He believed the costs for an appeal were unlikely to be as high as the initial proceeding.

"You might assume costs go up with each new level of court, but there are no new witnesses and no new evidence can be presented in an appeal. So really you're down to the lawyers arguing matters of law. [AFACT] can't go back and reintroduce new stuff," said Malone.

Malone said he had "speculated" on what grounds AFACT may appeal that Cowdroy was "equivocal in his conclusions".

"There wasn't a lot of grey in there," he said. "If there were grey areas where you could say [Justice Cowdroy] had a bet each way, and honed in on this one issue, you'd immediately hone in on that and say that was where they would focus their appeal. Right now we've no idea where an appeal would be focused."

Malone labelled AFACT's legal action against it as a "pointless exercise". "The legal action over the past one-and-a-half years has not done anything to curb piracy in Australia, whereas things like Hulu [a US-only online service owned by the NBC TV network] and iTunes have done considerable amounts," he said.

"I look at the amount of money we have spent on litigation, and no doubt there would have been a lot more [spent] by the studios. Think of what that could have been spent on if it was applied to online content instead."

iiNet is gearing up for the launch of its own IPTV service expected by the end of March this year, according to Malone. The set-top box product will enable customers to receive free-to-air TV channels and other content that it has yet to lock in deals for.

Malone said the product would be comparable to Foxtel rather than Apple iTunes movie download service, and iiNet was in negotiations with movie studios to distribute content via the product. "There's certainly an intent to get video deals on there," he said.

Topics: Telcos, Government AU, Legal

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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  • And rightfully so

    Agree 110% with Malone.

    AFACT shoudl have to pay full legal bills, as they were unsuccessful. Enough said.
  • I agree.

    Make AFACT pay.
  • Go Mike

    AMYTH (AFACT) should have to pay all costs and be disbanded. Somebody needs to reign these thieves in.
  • Live By The Sword

    PAY UP you mewling bitches !!!
  • AFACT = A Sleaze

    Yeah lie, cheat and scheme to force your market monopoly upon everyone - and when it blows up in your face - run away crying, "Oh it's not fair - we shouldn't have to pay".

    Weasels..... kick them out the front door - all the way to the gutter where they belong.
  • So

    Does that mean the rest of us can refuse to pay if we sue someone and lose?
  • Michael Malone is a Communist

    When will people realise that the reason we have a judiciary is to protect the profits of foreign entertainment companies?
  • Re: So

    Only the parts that make us look bad.
  • Image goes from bad to worse

    Many people see the film and TV industry as being run by greedy people with limited vision... This action is strongly reinforcing that idea.

    Could they think of any better way to take their image from bad to worse? Maybe they could try just suing every person over 18 in Australia.
  • AFACT lose

    I'm waiting for AFACT's next argument that if they pay iiNet's legal bills, the terrorists win.

    Piracy funds terrorists. It's on all their DVDs' non skippable pre-menu so it must be true.
  • Greedy bastards

    The studio execs and law firms don't care about image, only profit, so calling them the greedy bastards they are will have no effect.

    Their insurance companies will now raise their premiums, as the studios have just cost them millions for a futile action.

    As film-making technology filters down to smaller film makers, the big studios are becoming increasingly marginalised, apart from the odd Avatar or two. They have a one-off opportunity to develop a fair revenue model for delivering their product, and Video Ezy's boss has just exposed their draconian treatment of potential partners.

    Hulu and CASPA will be a couple of the names to watch Down Under in the next year, and the studios must decide whether they want any of this goldmine to come their way, as early adopting Aussies' broadband limits get bigger and cheaper.
  • wankers

    pay up seriously! you came you saw you played the game and you lost now deal with it like a big boy.
  • Of course Conroy will support AFACT

    No doubt Conroy will speak out in favour of AFACT.

    He's got an agenda to push through and if he doesn't, both he and Labor stand to loose all the donations from the Lobby groups. No doubt, the Liberals will welcome the money as well
  • Same old story

    These corruption groups do the same in the US. Sue but lose and then ask to not need to pay any legal costs or at least have it heavily reduced. Sometimes the defendant is lucky to have some of their defence costs paid for.
    Us ordinary citizens can't defend our selves against corruption because of high legal costs to do so and yet these thieves think they shouldn't need to pay for frivolous law suits. What kind of world will that lead to? Oh wait, it's already here, unjust.
  • AFACT (A "fat" cats) choice of lawyer ...

    Obviously AFACT mistakenly picked the wrong lawyer when they picked at random in the Yellow Pages.

    They must have thought they picked one of those "only pay if you win" types.
    Obvioulsy they were sooo sure that they were going to win, and only when they LOST (suffer) did they even start to think of where the money would come from.
  • aaarrrghhh..Pirate ISP's

    ahooy ther me harties...we ISP's MUST stick together!!

    Conjob are you there? Oh he must be downloading!
  • How so?

    Please explain how defending oneself makes one a communist?

    Copyright was NEVER about protecting the creator of the work: its purpose has always been protecting the profit of the "publisher/ distributor".

    AMYTH (nice one!) has to come to grips with the FACT that their business model is failing under the onslaught of "Generation mY". The "hole" they seek to plug with legislation will have grown to "black" proportions before there's any workable legislation in place.
  • This is where we need to separate "intent"

    A download cannot possibly be contributing to "terrorism"--in most cases it's a sale the distributor would never have made in the first place, so it cannot be called "lost" revenue because it never existed in the first place.

    The REAL criminals are selling a fake product that looks like the original to unsuspecting public by the truckload. These are the people they should be targetting.
  • Donations

    You have to be careful with loose donations or you might lose them.
  • Sorry but....

    Sorry but it really does sound to me that AFACT isnt at all interested in the whole judicial process. Where citizens are innocent until proven guilty by a court.