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Australian Court Rules Against Hollywood Studios In Landmark Copyright Case: Shares Of Internet Service Provider iiNet Soar As A Result

HOLLYWOOD

An Australian Federal Court has ruled against many of the major Hollywood studios in their lawsuit against internet service provider iiNet. Universal Pictures, Warner Bros, Paramount Pictures, Sony Pictures Entertainment, 20th Century Fox and Disney banded together to sue the company, claiming that it should be held responsible for customers who illegally download movies online. Judge Dennis Cowdry said in his ruling:

While I find that iiNet had knowledge of infringements occurring, and did not act to stop them, such findings do not necessitate a finding of authorization.

Following the decision, iiNet CEO Michael Malone said in a statement:

What this is showing is the way we’ve been conducting our business is lawful, what we have been doing is not wrong.

iiNet shares have soared since the ruling was announced. The decision represents another stumbling block in the studios misguided effort to curb online piracy. It reached an absurd height last May when Fox News film critic Roger Friedman was fired after reviewing a leaked “work in progress” copy of Wolverine. In his review he said:

Right now, my ‘cousins’ at 20th Century Fox are probably having apoplexy. I doubt anyone else has seen this film. But everyone can relax. I am, in fact, amazed about how great “Wolverine” turned out. It exceeds expectations at every turn. I was completely riveted to my desk chair in front of my computer.

Despite Friedman’s positive review, the manufactured controversy that followed, resulted in his being let go from his position as a columnist. He may have misjudged the consequences of publishing the review, but he was right about the studios panicked reaction. Even though box office numbers for 2009 reached record numbers, their desperation to increase dwindling DVD profits has resulted in one lawsuit after another toward feared targets like the Coinstar-owned Redbox kiosks.

It’s the same playbook that the music industry used to combat declining album sales and, so far, it hasn’t worked in either case. It’s also resulted in millions of dollars spent on litigation, as opposed to coming up with an innovative solution. For the music industry, it wasn’t until Apple introduced Itunes that a new business model based on digital download sales emerged as a viable alternative. Hollywood studios, similarly haven’t been able to think outside the box and the longer they wait to come up with a solution the more costly the war against downloading will become.

[Reuters]

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