The first big issue was over hyperlinking, and was viewed by many people as a determination that 'hyperlinking is piracy'. Actually, the judge considered many different hyperlinks, and the ones that got Stephen Cooper in trouble were the ones that initiated a copyright-infringing file download or led to a webpage from which all the user could do was download such a file. The judge found that this did not count as "making available" or "communicating" copyright infringing files, but did count as "authorising" because Cooper could have removed the links, or prevented them being put up in the first place.
Irene Zeitler, a partner at the law firm of Freehills, e-mailed me some more commentary on the judgement. "Mr Cooper's website was very carefully structured and highly organised with numerous references to linking and downloading and hyperlinks. The judge thought he could reasonably infer that Mr Cooper, who sought advice on his website, knowingly permitted the use of his website in a manner which facilitated infringing downloading. The fact that Mr Cooper didn't give evidence and therefore a reasonable explanation, gave the judge confidence that the inference could be safely and confidently drawn. Of course, it was also important that Mr Cooper had the power to prevent the infringements and the unchallenged evidence of Professor Stirling about the website operator being able to control the hyperlinks on his or her website, was critical."
Stephen Cooper was clearly promoting music piracy which is inherently illegal, and the judge wasn't about to say "well, you've found some loophole in the copyright laws", but nor was he going to effectively outlaw hyperlinking altogether... a problem similar to that faced by the judges in the Grokster trial. The judgement makes it illegal to link directly to copyright infringing activity, but doesn't make a person creating a webpage liable for everything that happens at the site that is linked to. If you link to a website you don't have to worry that another part of the site infringes copyright.
The other respondents to the suit were the ISP hosting the website, ComCen, its director Liam Bal and employee Chris Takoushis. Judge Brian Tamberlin found that these parties were liable because they had known copyright infringing activity was occuring and did nothing to stop it, such as taking down the site. There were reports -- disputed by ComCen but accepted by the judge -- that another director had indicated the ISP knew about the problems with the site and had told Cooper to take it down.
The judgement hinged on the fact that Stephen Cooper had contacted ComCen (through Chris Takoushis who the judge thought would have definitely talked to Liam Bal) about displaying an ad for ComCen on his site in exchange for free hosting. ComCen agreed. The judge found it was unlikely this would have happened without ComCen first checking the site -- and pointed out that the URL mp3s4free.com should have initiated a check for illegal activity (although it was not an indicator of illegal activity, see below).
Irene Zeitler wrote: "The special relationship between Mr Cooper and ComCen was influential but not the only factor. The key comment is in my view on page 37 where His Honour stated that where a host is on notice of an irregularity and deliberately elects not to investigate the operation and contents of a site and turns a blind eye to such indications, then, there are additional factors called into play beyond mere hosting. In my view, ISPs need to ensure that their policies provide for prompt action upon notice of an irregularity and certainly if they enter into special arrangements with hosted websites, they would be well advised to conduct a due diligence to determine that the website is not a conduit for infringing activities."
Judge Brian Tamberlin also found that it would have made little difference if the Free Trade Agreement Implementation Act (to comply with the recently signed and much maligned Australia-US free trade agreement) had been in force, because for ISPs to use the 'safe harbour' defence they have to demonstrate an active policy to terminate the accounts of repeat infringers...which ComCen didn't have.
Finally, the record labels claimed that the URL (mp3s4free.com) "conveys representations that are misleading or deceptive or likely to mislead or deceive", but Judge Tamberlin rejected this. "I am not persuaded that the domain name or the title of the website or the reference to mp3s4free is, of itself, sufficient to constitute a representation that whatever is downloaded from the website is in accordance with law and does not breach the rights of the copyright holder. The domain name merely represents that the download of copies of music recordings is free and does not make any representation regarding the legality of this downloading."
Freehills has published commentary on the case, here.