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ISPs fight for compliance costs, procedural costs in piracy site-blocking case

While ISPs and music studios agreed that DNS blocking is the best way to go, they are still duking it out over who should bear the costs of blocking access to foreign piracy websites.
Written by Corinne Reichert, Contributor

The ongoing Australian Federal Court case between music studios and internet service providers (ISPs) has seen Telstra, Optus, TPG, and Foxtel argue that they should be reimbursed for the costs associated with blocking access to KickAss Torrents and its related proxy sites that infringe or facilitate the infringement of copyright.

During the hearing in Sydney on Tuesday morning, counsel representing the four music studios -- Universal Music Australia, Sony Music Entertainment Australia, Warner Music Australia, and J Albert & Son -- said this case differs from the piracy site-blocking case between Foxtel/Roadshow and ISPs that is also currently facing Federal Court judgment in two important respects: The nature of the blocking, or specifically whether it should be domain name server (DNS) or internet protocol (IP) blocking; and "the way of dealing with future infringements".

In regards to the latter, the music studios said that while the applicants in the Foxtel/Roadshow case are seeking rolling injunctions, the music studios have simply argued in favour of filing an affidavit for each new website affiliated with KickAss Torrents that pops up.

Counsel for the music studios explained that the regime, if KickAss Torrents were to use new domain names, would be to file an affidavit establishing that fact; seek to extend the blocking order; and provide ISPs with 10 business days to object. It would then be a matter for the court to decide whether it wishes to hear from the parties, and whether to add a further domain name to the blocking order.

In response to Justice Burley asking whether it would be "relatively easy" to determine if it was a connected domain name, or whether this would be a disputed fact, counsel for the music studios responded that if it were complicated, the court would have to be persuaded during a hearing.

The music studios also want to give ISPs 15 business days to take reasonable steps to disable access to piracy websites, but with protection for respondents for failing to disable access when there are circumstances beyond their control.

Contrary to the Foxtel/Roadshow case, all parties in this case agreed that DNS blocking is the most effective and cost-efficient way of blocking piracy websites.

In regards to the cost of proceedings, counsel representing the music studios said they have entered into good faith negotiations with the ISPs, wherein each party will bear their own costs. The music studios added that in future, ISPs will not have to appear as respondents in court every time, which will lower their legal costs.

However, Telstra, Optus, TPG, and Foxtel all argued in favour of their legal costs being reimbursed.

On the costs of compliance, all four ISPs will not seek reimbursement of the capex cost of establishing the blocking system, but will be seeking the cost for configuring the established blocking system to then apply to each target domain name. Optus named this cost as being a AU$12,500 lump sum, while TPG said it would cost AU$50 per domain name plus GST.

Telstra also flagged that it wants to debate whether the landing page will be discretionary or mandatory, with Justice Nicholas' decisions on those matters in the Foxtel/Roadshow case to be binding on the music studios' case.

The court is adjourned until Tuesday afternoon.

The case began in April, when the music studios filed a joint Federal Court application against ISPs in a bid to get them to block Kickass Torrents and its related proxy sites. The full list of respondents subject to the action involves TPG, Telstra, Optus, Foxtel, Virgin Mobile Australia, Vividwireless, Pacnet, Alphawest, and Uecomm.

In July, Burley J said the case would turn on whether Kickass Torrents is shut down for good following the arrest of the man allegedly running Kickass Torrents by the US Department of Justice (DoJ) earlier that month, and on the precedent set in the Foxtel/Roadshow case.

In the Foxtel/Roadshow case, ISPs Telstra, Optus, M2, and TPG argued in June that they should not have to bear the costs of compliance in implementing website blocks against torrenting sites The Pirate Bay, Torrentz, isoHunt, and TorrentHound and streaming site Solarmovie.

Costs were not determined prior to the passage of the Copyright Amendment (Online Infringement) Act 2015, which passed both houses of parliament in mid-2015 and allows rights holders to obtain a court order to block websites hosted overseas that are deemed to exist for the primary purpose of infringing or facilitating infringement of copyright under Section 115A.

The Foxtel/Roadshow case is still awaiting judgment.

The fate of KickAss Torrents is also still in the balance, after the arrest of alleged owner Artem Vaulin and the seizure of seven domain names associated with Kickass Torrents by the US federal court.

Earlier this month, Vaulin's lawyers filed a motion to dismiss the case against him in the US, arguing that secondary criminal copyright infringement does not exist.

"This case arises out of an erroneous theory of criminal copyright law that attempts to hold defendant Artem Vaulin criminally liable for the alleged infringing acts of the users of KickAss Torrents," the motion said.

Vaulin's lawyers argued that KickAss Torrents is "nothing more than a search engine", similar to Google.

"Computerised operations at torrent sites acquire store, and distribute uncopyrighted 'torrent files' or 'torrents'. A torrent file 'contains instructions for identifying the internet addresses of other BitTorrent users'," the motion said.

"Such files contain textual information assembled by automated processes and do not contain copyrighted content."

In order to download torrents, users must also download third-party software, Vaulin's lawyers pointed out. The text containing torrent file instructions and addresses are therefore not covered by copyright protection, they added.

"The fundamental flaw in the government's untenable theory of prosecution is that there is no copyright protection for such torrent file instructions and addresses. Therefore, given the lack of direct wilful copyright infringement, torrent sites do not violate criminal copyright laws," the filing said.

"The government's erroneous theory of the case that hosting torrent files or running a search engine for torrent files is a wilful direct criminal copyright infringement fails as a matter of law. Any theory that a torrent search engine could be held responsible for the offsite infringing acts of its users would be a theory of civil secondary copyright infringement. Such a civil theory is not an offence against the United States and fails as a matter of law."

Vaulin remains in Poland, awaiting extradition to the US.

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