The ongoing design duty in Universal Music Australia Pty Ltd v Sharman License Holdings Ltd Casting the scope of copyright infringement even wider

The Australian Federal Court case of Universal Music AustraliaPty Ltd v Sharman License Holdings Ltd (‘Sharman’)¹is the latest in a series of peer-to-peer (P2P) filesharingcases from various jurisdictions that has found the softwaredistributor/technology provider liable for copyright infringement.² Sharman followed a few months after the groundbreaking US SupremeCourt case of MGM Studios v Grokster Ltd ³ (‘Grokster’)that had acknowledged the Sony safe harbour for technology providersbut also introduced an inducement of infringement doctrine todeal with reprehensible conduct of infringers. While both cases involved similar technology and shared a numberof similarities on the facts and legal principles⁴, a closerexamination of Sharman shows that the net of copyright infringementin P2P filesharing is cast wider than that in Grokster. The effect of Sharman is an increased burden on the technologyprovider and the potentially tremendous consequences on innovationdue to the lack of a clear safe harbour as well as the wideningof the design obligation.