FILM/TV INDUSTRY FILES COPYRIGHT CASE AGAINST

C O N F I D E N T I A L CANBERRA 001197 SIPDIS STATE PLEASE PASS USTR E.O. 12958: DECL: 12/01/2018 TAGS: KIPR ECPS ECON ETRD AS SUBJECT: FILM/TV INDUSTRY FILES COPYRIGHT CASE AGAINST AUSSIE ISP REF: CANBERRA 1173 (NOTAL) Classified By: AMBASSADOR ROBERT D. MCCALLUM JR, REASON 1.4 (B, D) ¶1. (C) Summary: On November 20 several media companies filed legal action against Australia's #3 internet service provider (ISP) iiNet, seeking a ruling that iiNet has infringed copyright by not taking reasonable steps to prevent unauthorized use of films and TV programs by its customers. This is the first such case filed in Australia. The case was filed by the Australian Federation Against Copyright Theft (AFACT) on behalf of the Motion Picture Association of America (MPAA) and its international affiliate, the Motion Picture Association (MPA),but does not want that fact to be broadcasted. Initial reactions support MPAA's claim that it has a strong legal case. End Summary. A NEW LEGAL CHALLENGE AGAINST PIRACY AIMS AT ISP ¶2. (U) On November 20 the Australian Federation Against Copyright Theft (AFACT) announced that several media firms had filed a case in the Federal Court of Australia against iiNet, Australia's third largest ISP, for "failing to take reasonable steps, including enforcing its own terms and conditions, to prevent known unauthorised use of copies of the companies' films and TV programs by iiNet's customers via its network." The action was filed by Village Roadshow (an Australian company that produces and distributes movies and DVDs, among other activities),Universal Pictures, Warner Brothers Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corp., Disney Enterprises, and the Seven Network (one of Australia's three major over-the-air television networks and a licensee of some of the infringed works). Proceedings will be back before the court on December 17; a ruling is unlikely before the end of ¶2009. ¶3. (U) This is the first such case to be filed in Australian courts. iiNet claims that it is protected by the "safe harbor" provisions of the Copyright Act - i.e., ISPs are merely common carriers of traffic, so the dispute is between copyright owners and violators. iiNet said in its media release response that it routinely turns over to the police evidence of piracy on its network. THE REST OF THE STORY ¶4. (C) Despite the lead role of AFACT and the inclusion of Australian companies Village Roadshow and the Seven Network, this is an MPAA/American studios production. Mike Ellis, the Singapore-based President for Asia Pacific of the Motion Picture Association, briefed Ambassador on the filing on November 26. Ellis confirmed that MPAA was the mover behind AFACT's case (AFACT is essentially MPAA's Australian subcontractor; MPAA/MPA have no independent, formal presence here),acting on behalf of the six American studios involved. MPAA prefers that its leading role not be made public. AFACT and MPAA worked hard to get Village Roadshow and the Seven Network to agree to be the public Australian faces on the case to make it clear there are Australian equities at stake, and this isn't just Hollywood "bullying some poor little Australian ISP." ¶5. (C) Why iiNet? Ellis said they were the right target on several levels. First, they are big enough to be important - iiNet is the third largest ISP in Australia. (Telstra, owners of top Australian ISP BigPond which has about half of the market, are the "big guns", Ellis admitted. It was clear Ellis did not want to begin by tangling with Telstra, Australia's former telecom monopoly and still-dominant player in telephony and internet, and a company with the financial resources and demonstrated willingness to fight hard and dirty, in court and out.) Ellis also said iiNet users had a particularly high copyright violation rate, and that its management has been consistently unhelpful on copyright infringements. ¶6. (C) Ellis described the case as "very strong." He said AFACT delivered to iiNet every week for five weeks a "telephone directory"-sized list of violations complete with a DVD with "gigabytes" of data on infringers using iiNet's network. Ellis said iiNet did nothing against any of its users after being presented with this and other evidence. AFACT/MPAA have hired Australia's top copyright lawyer, Michael Williams of Gilbert & Tobin, to represent them in this case. Williams, well-known to the Mission and highly respected in the Australian legal community, was the lawyer behind the successful Cooper and Kazaa IPR cases in Australia. ¶7. (C) Ellis said he had told Communications Minister Stephen Conroy a few months ago that absent action by the ISPs or GOA, the industry "would have to do something" rather than let movies and TV "go the way of music" on the internet. He said Conroy had been clear that he "had other priorities" (i.e., rolling out the National Broadband Network, reftel). Ellis said MPAA did not see any role for Embassy at this time, but wanted to keep us informed. REACTION MIXED ¶8. (SBU) Media reaction to the case has been mixed. It includes some predictable criticisms of AFACT's resort to legal challenges as doomed to be ineffective, and exhortations that the best way to combat piracy is for the movie and TV industries to adapt to the digital age and make their products more readily available for download at reasonable prices and conditions. A couple of legal analysts writing on copyright and media-oriented Australian websites have concluded that iiNet's position is very weak, in particular its reliance on "safe harbor" provisions. They noted that AFACT had given iiNet five thick logbooks and DVDs full of data about iiNet users infringing movie and TV program copyrights. However, they also recognize that this is the first case filed under the relevant portions of the Copyright Act since it was amended in 2007 - so there is no legal precedent. ¶9. (C) Comment: Ellis and MPAA see this as a major test case, and not necessarily their final legal move in Australia, which does have very high rates of illegal movie and television show downloads, in part because of the sometimes long gaps between their release in the US and their arrival in Australian theaters or on local television. Ellis said it could be followed up by similar filings in other Commonwealth countries. We will monitor this case as it unfolds, for its IPR implications and also to see whether or not the "AFACT vs. the local ISP" featured attraction spawns a "giant American bullies vs. little Aussie battlers" sequel. Qa "giant American bullies vs. little Aussie battlers" sequel. End comment. MCCALLUM