The leading film studios and Channel 7 have taken legal action against iiNet claiming the ISP is complicit in the infringement of their copyrighted material.

The action was filed in the Federal Court today.

According to a statement of claim, “the ISP knows that there are a large number of customers who are engaging in continuing infringements of copyright by using BitTorrent file sharing technology”.

The plaintiffs — Village Roadshow, Universal Pictures, Warner Bros Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, Disney Enterprises, and the Seven Network — claim that iiNet is aware of the problem but has chosen not 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.

“iiNet refused to address this illegal behaviour and did nothing to prevent the continuation of the infringements by the same customers,” said executive director of the Australian Federation Against Copyright Theft (AFACT), Adrianne Pecotic, speaking on behalf of its film industry members.

“iiNet has an obligation under the law to take steps to prevent further known copyright infringement via its network,” she said.

iiNet CEO Michael Malone disputed AFACT’s claim that it refused to address the issue.

“We have been replying to them each time as well,” he replied. “We have been passing on all those complaints directly on to the state police – who are in our building. The police have reams of this stuff from AFACT,” he said.

I think they genuinely believe that ISPs have a secret magic wand that we are hiding and if we bring it out we can make piracy disappear just by waving it

iiNet CEO Michael Malone

According to Malone, AFACT is expecting iiNet to do the impossible.

“They send us a list of IP addresses and say ‘this IP address was involved in a breach on this date’. We look at that say ‘well what do you want us to do with this? We can't release the person’s details to you on the basis of an allegation and we can't go and kick the customer off on the basis of an allegation from someone else’. So we say ‘you are alleging the person has broken the law; we’re passing it to the police. Let them deal with it’.”

He said another problem with this traffic is that is not on its network. “It is transiting our network along with the billions of other things passing across the network which are perfectly legal. We are not traffic cops. We can't stand in the middle of it and stop the individual items that might be against the law. These guys are asking us to be judge, jury and executioner," Malone said.

"I think they genuinely believe that ISPs have a secret magic wand that we are hiding and if we bring it out we can make piracy disappear just by waving it. And it doesn’t exist."

According to AFACT, some of the titles infringed by the iiNet network include I Am Legend, Happy Feet, American Gangster and episodes from TV series such as Heroes, Family Guy, The Simpsons, and Prison Break.

The film companies are seeking unspecified damages.

The proceedings will be back before the court on 17 December.