iiNet wins landmark copyright case

ISP wins closely watched case against the Hollywood heavyweights

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published April 20, 2012 12:10 pm AEST

What: iiNet Limited (ASX: IIN) has won a landmark legal case against 34 International and Australian companies, including Village Roadshow, Universal Pictures, Warner Bros, Sony Pictures, Disney and the Seven Network. The High Court of Australia dismissed their claims that iiNet authorised its users to download thousands of illegal film, TV and music files through the BitTorrent peer-to-peer file sharing system.

The High Court also observed that iiNet had no direct technical power to prevent its customers from using the BitTorrent system to infringe copyright. iiNet's power to prevent its customers from infringing the appellant's copyright was limited to an indirect power to terminate its relationship with its customers.

So What: This result sets a precedent for other Australian Internet Service Providers (ISPs), such as TPG Telecom Ltd (ASX: TPM), Telstra Limited (ASX: TLS), Optus, a subsidiary of Singapore Telecommunications (ASX: SGT) and iPrimus – now owned by M2 Telecommunications Limited (ASX: MTU). They can all now breathe a sigh of relief that they cannot be held liable for their users' infringement of copyright, will no longer be exposed to damages claims that could have run into the millions, and not be liable to enforce restrictions on illegal downloads.

Now What: If the share prices of the above-mentioned ISPs were held back over concerns around the results of the case, they have been set free. Although in early lunchtime trading shares were mixed, with iiNet shares up 5 cents to $3.08, SingTel up 1 cent, M2 down 3 cents while Telstra and TPG were flat.

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Motley Fool contributor Mike King doesn't own shares in any of the companies mentioned. The Motley Fool's purpose is to educate, amuse and enrich investors. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Click here to be enlightened by The Motley Fool's disclosure policy.

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