October 2005

IP & IT Law Update: the fight against spam and music copyright

Over the last few months there have been a number of decisions that breathe hope into the fight against spam and that encourage the resolve of the music industry to stamp out unauthorized file sharing and copying of their work. The following is a summary of some of those more interesting decisions.

Spam Cases

Federal Court issues interim injunctions under Spam Act

On 20 July 2005, the Federal Court in Perth issued interim injunctions under the Spam Act 2003 ('Spam Act') against Clarity1 Pty Ltd of Perth and its managing director Mr Wayne Mansfield.

The case involves an allegation by the Australian Communications and Media Authority that Clarity1, under the direction of Mr Mansfield, sent up to 56 million commercial emails within 12 months following the commencement of the Spam Act.

The interim injunctions mean that Clarity1 must not send commercial electronic messages with an Australian link to any electronic address except where it has the prior consent, in accordance with the Spam Act, of the recipient or is otherwise permitted by the Spam Act.

Microsoft wins another anti-spam case

Hot on the heels of the Clarity1 interim injunctions comes another coup in the ongoing fight against spam ? this time in the USA. On 10 August 2005, it was reported that Microsoft won a US$7 million settlement from Scott Richter and his company, OptInRealBig.com.

Scott Richter was regarded as one of the world's most prolific spammers. Microsoft claims that his business sent an estimated 38 million spam messages a year.

In the settlement statement, Richter and his company agreed to comply with US federal and state laws and pledged not to send spam to anyone who had not agreed to receive it.

Mircosoft has indicated that it would use the money to boost its efforts to fight spam and other computer misuse. Microsoft claims it has filed more than 135 anti-spam lawsuits worldwide in recent years, about 100 of them in the USA, and that it has won US$838 million in judgments against spammers.

The Clarity1 decision and the Microsoft victory, show that some inroads are being made in the fight against spam and to improve the efficiency of internet communication.

Tips

Given the resolve of the AMCA to take action against "spammers" and the penalties at stake, businesses should:

  • review the type of electronic messages sent by it; and

  • make sure that it complies with the Spam Act.

Copyright case: ISP infringement by inaction and indifference

On 14 July 2005, the Federal Court of Australia delivered its decision in Universal Music Australia v Cooper. This is the first case to consider the legality of hyperlinking under Australian copyright law and the liability of internet service providers (ISPs) for the activities of their customers.

The court found that Stephen Cooper, the owner and operator of the website known as mp3s4fress.net (Website), had authorised breaches of copyright by users of the Website. It was alleged that the Website provided a database of infringing music files that could be accessed by clicking on hyperlinks on the Website.

The court found that although merely providing a link to copyrighted material was not an infringement:

  • the warnings and disclaimers appearing on the Website did not "amount to reasonable steps to prevent or avoid" the infringements; and

  • Mr Cooper had sufficient control over the Website and could have prevented the infringements by removing, or overseeing the insertion of, the hyperlinks.

The ISP hosting the Website was also found to have infringed copyright, for the first time under Australian copyright law. The court found that the ISP hosting the Website could have taken the Website down after learning of the copyright infringements.

The ISP hosting the Website unsuccessfully claimed protection under the "ISP safe harbour" defence introduced by the Australia-US Free Trade Agreement. This defence shields an ISP against claims for monetary relief for copyright infringement subject to certain conditions - that the ISP:

  • must adopt and implement a policy of terminating the accounts of repeat infringers

  • if it has the right and ability to control the infringing activity, must not receive a financial benefit from that activity

  • must act expeditiously to remove access to material once it has been notified, or has become aware of circumstances from which it is apparent, that material is likely to be infringing.

Tips

  • Businesses with a website presence should review any disclaimers appearing on their website and the use of hyperlinks to external sites or copyright materials.

  • Prudent ISPs should ensure that their procedures and policies do not preclude them from relying on a safe harbour defence ? which may provide handy protection if they ever become involved in copyright litigation.