The phones must be running hot in Attorney-General Nicola Roxon’s and Communication Minister Stephen Conroy’s offices this afternoon. Internet service provider iiNet just won its long-running legal battle against the massed forces of Hollywood, but there’s some gotchas buried in the High Court decision.

The #iiTrial, officially Roadshow Films & others v iiNet Limited, kicked off in the Federal Court in 2009 when 34 Australian and US film and TV copyright-holders alleged that iiNet was “authorising” (in the technical legal sense) the copyright-infringing actions of its customers by failing to act on the complaints they’d filed. The case was informally called AFACT v iiNet after the industry lobby, the Australian Federation Against Copyright Theft.

iiNet enjoyed a comprehensive win in February 2010, and won the Full Federal Court appeal (kinda) in February 2011.

This High Court appeal being unanimously dismissed makes it a three-nil win for the ISP, as the summary of the judgement explains.

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“The court observed that iiNet had no direct technical power to prevent its customers from using the BitTorrent system to infringe copyright in the appellants’ films. Rather, the extent of iiNet’s power to prevent its customers from infringing the appellants’ copyright was limited to an indirect power to terminate its contractual relationship with its customers. Further, the court held that the information contained in the AFACT notices, as and when they were served, did not provide iiNet with a reasonable basis for sending warning notices to individual customers containing threats to suspend or terminate those customers’ accounts.”

But as the court’s full decision makes clear in paragraph five, the key question in this appeal, whether iiNet authorised its customers’ copyright-infringing acts, “depends upon all the facts of the case”. That is, things might have turned out differently had AFACT or iiNet handled things differently. We’ll never know.

The court also provides some less-than-subtle hints that the government might wish to have a look at this.

When first enacted in 1968, the Copyright Act ran for around 100 pages. But by 2007 it was more than five times the size, what with changes needed for the US Free Trade Agreement as well as massive technological changes. In paragraph 120:

“The history of the Act since 1968 shows that the Parliament is more responsive to pressures for change to accommodate new circumstances than in the past. Those pressures are best resolved by legislative processes rather than by any extreme exercise in statutory interpretation by judicial decisions.”

It’s easy to imagine the government listening with sympathy once more to the poor, struggling copyright industries. Only today the PM announced a $12.8 million bribe, sorry, gift to the producers of The Wolverine. That certainly “sends a message”, as the phrase goes, no?

More ominously, from the internet industry’s point of view, is this from paragraph 79:

“The difficulties of enforcement which such infringements pose for copyright owners have been addressed elsewhere, in constitutional settings different from our own, by specially targeted legislative schemes, some of which incorporate co-operative industry protocols, some of which require judicial involvement in the termination of internet accounts, and some of which provide for the sharing of enforcement costs between ISPs and copyright owners.”

We’re talking the so-called “graduated response” and “three-strikes” laws such as those already enacted very close to home in New Zealand.

A handful of countries have said such laws are unconstitutional. Internet access is now such a fundamental part of society that access is a human right. Cutting off a household to punish one transgressor is unreasonable. But of course that freedom to communicate human right thing ain’t so strongly legislated here in Australia.

As deadline approaches the legal experts are still perusing the decision and discussing it — via Twitter, of course.

“Well, on a first reading, the #iitrial judgment looks like a genuine win, and, as @rgibli predicted, a retreat from the FFC’s [Full Federal Court’s] views,” tweeted Kimberlee Weatherall, associate professor at the University of Sydney’s law school.

“The finding that the power to terminate subscribers was indirect only is a retreat from FFC’s view that termination could be reasonable,” she added.

Peter Black, who teaches internet law at the Queensland University of Technology, agreed. “It does indeed — it is most encouraging. But it also just means that the battle shifts squarely to law reform and the development of an industry protocol,” he tweeted.

As the High Court said in paragraph 77:

“The appellants’ submission … assumes obligations on the part of an ISP which the Copyright Act does not impose.”

So let’s just change the Copyright Act, right? Stand by.