ON the eve of last week’s landmark Federal Court copyright decision, iiNet CEO Michael Malone was clearly nervous about the outcome.
ON the eve of last week’s landmark Federal Court copyright decision, iiNet CEO Michael Malone was clearly nervous about the outcome.
Despite the significance of the case brought against his company by a group of more than 30 film producers, on the evening before the judgement was to be handed down in Sydney, Mr Malone kept an appointment in Perth as the keynote speaker at the launch of the eGroup Association of internet entrepreneurs.
He chose to fly out that night to be in court at 9.30am eastern standard time.
It’s hard to call Mr Malone relaxed at the best of times, but his demeanour during the evening presentation and subsequent questions from the floor suggested he wanted the case completed.
At stake was more than $10 million in legal costs, the potential for much greater damages, and repercussions for the way iiNet dealt with customers who illegally used its service to download movies and other copyright material.
The case was considered to be of international importance and Mr Malone was clearly more comfortable the next day in front of the cameras after victory had been secured.
The plaintiffs, headed by Village Roadshow and including News Corp’s Twentieth Century Fox and Kerry Stokes’ Seven Network, have yet to appeal.
After the judgement, Mr Malone told WA Business News he was hopeful the studios might be looking at alternative avenues to thwart those who sought to download movies without paying for the privilege.
While Mr Malone has argued that it is illegal for his company to monitor what its clients were downloading and wrong to demand iiNet disconnect those doing the wrong thing, he believes there are potential systems which will allow copyright owners to warn those acting illegally that they face prosecution.
The iiNet boss believes his company was singled out because it had a high level of broadband customers with high average download levels, suggesting illegal movie downloading was prevalent.
He also believes efforts by the music industry to sue customers directly in the US had resulted in negative publicity for the industry.
“I can only assume they didn’t want the brand damage,” Mr Malone said.
Another possible reason for iiNet initially being the centre of this legal issue is its previous control of a patent for what is known as peer-to-peer caching. That technology would have allowed the ISP to store downloaded material so that subsequent users did not have to download it from outside iiNet’s network.
This would have reduced the traffic on iiNet’s network, lowering its costs and therefore suggesting that the company was profiting from illegal copying activity.
However, iiNet never used this technology and let the patent lapse in 2002.
Mr Malone believes the industry needs to shift to allow people to legally copy movies, at a price appropriate to the timing of the release.
“Most people don’t want to steal,” he said.