Warner Music Australia and other record companies are suing the ISP for copyright infringement for allegedly hosting and maintaining two Internet computer servers (referred to as "Torrent Webpages") and a Web site called Archie's Hub which deploys the BitTorrent application.

The case is the first to test legislation passed to enact the Australian-United States Free Trade Agreement (AUSFTA). The agreement was implemented in January 1, 2005.

Under the AUSFTA, limitations on liability for service providers apply "only where the service provider does not initiate the chain of transmission of the material and does not select the material or its recipients; that they do not control, initiate, or direct, and that take place through systems or networks controlled or operated by them or on their behalf".

The service provider shall be exempted from liability for any resulting claims if it removes or disables access to infringing material and if it takes reasonable steps promptly to notify the person making the copyright infringing material available on its system or network that it has done so.

The magistrate overseeing the case, Rolf Driver, said although there was no precedent for application of the new laws under the AUSFTA in Australia, some guidance may be provided in the near future after decisions are released from the ongoing Kazaa case being heard by Justice Murray Wilcox and a case against ISP ComCen, under Justice Brian Tamblin.

Driver told the court today he was not persuaded that the case should be transferred to the Federal Court but added that the circumstances might change in the future.

The applicants -- the record companies -- have 28 days to go through the materials seized during the raid last week in order to determine whether further respondents should be included in the case.

Driver ordered that, after 28 days, the applicants return the materials to the solicitors of the respondents with instruction for it not to be reproduced.

Solicitors for the respondents also asked that People Telecom -- of which Swiftel Communications and Swiftel Broadband are wholly-owned subsidiaries -- be relieved from the case. Driver rejected the request but added that he will not rule out future decisions to relieve the company.

Driver also ordered the respondents not to destroy or remove items which are relevant materials to the case and to keep the "offending sites" disabled and inaccessible by the public. Driver said Swiftel Communications should "not knowingly host any site which employs BitTorrent technology and to disable any such Web site".

The parties are due back in court on April 7.