In federal court today the film studios backed down from an aspect of their piracy court case against iiNet, leading the judge to award iiNet compensation.
The studios alleged that iiNet users had not only infringed the copyright of its members' films by making them available, electronically transmitting them and making copies of them, but also that "conversion" (interfering with the right of possession) had been committed.
Conversion is when goods are dealt with in a manner which is inconsistent with the rights of the owner — in this case the claim was that iiNet had by transmitting packets of data and operating its telecommunications system intentionally interfered with the studios' title over the films.
At court today, the film studios dropped the claim of conversion from their case. This meant that the damages which were sought alongside this claim were also withdrawn. The rest of its case still stands.
Justice Cowdroy had already at the last hearing asked for evidence that conversion had occurred, as he did not believe the studios' statement of claim was adequate. Because iiNet would have wasted its money considering the conversion claim since then, he ruled today that the studios pay iiNet's court costs for that part of the claim from the date of the last hearing.
iiNet's managing director, Michael Malone, welcomed the withdrawal of what he called a "key element" of the case, but expressed frustration that it had taken almost six months for the film studios' claim to be finalised.
A spokesperson for the Australian Federation against Copyright Theft (AFACT), which is representing the studios, said that the conversion claim had only ever been secondary to the infringement claim. The spokesperson said that the studios had decided to drop that aspect when it became obvious that iiNet was going to use it to delay the court case. The court has now set in extra time to hear the court case, so that it will be completely heard before Christmas, the spokesperson said.
iiNet's Malone said that the company had also been trying to meet with AFACT, to discuss its concerns about the issues raised by the proceeding but had so far failed to arrange a meeting.
"We will keep trying to meet with AFACT as we think that a frank discussion of the issues raised by this proceeding is in everyone's best interest," Malone said.
A spokesperson for AFACT said that the Federation was willing to meet with iiNet if the company meant what it said. "The door is always open if they have a genuine desire to resolve the film industry's concerns. We are yet to see any evidence of that."
AFACT alleges that iiNet allowed its users to download and make available pirated films via its network. It alleges that despite receiving infringement notices, the internet services provider did nothing to stop the infringement occurring.
iiNet said that it would continue to defend the allegations vigorously.
"The law currently provides a process for the applicants to pursue individuals who they think are breaching copyright laws when accessing the internet.If the film and television studios are serious about copyright infringement they can, and should use, this process," Malone said.