It appears that the long-running case involving an Australian site linking to free unlawful copy mp3′s is over.

ZDnet reports that judgment has been given in favour of the record companies. (Online reasons for judgment not available yet).

A good summary of the site owner’s argument is set out here.

Copyfight asks "what does this mean for search engines?"

UPDATE: Here are the reasons for judgment.: Universal Music Australia Pty Ltd v Cooper [2005] FCA 972

But does it mean that hyperlinking can infringe copyright?

Not necessarily.

While Cooper (the website owner) had copies of unauthorised mp3′s on his own hard drive, the judge refused to find that Cooper had communicated the recordings from his website:

"63 I am not satisfied that the Cooper website has "made available" the music
sound recordings within the meaning of that expression.  It is the remote
websites which make available the sound recordings and from which the digital
music files are downloaded as a result of a request transmitted to the remote
website.

64 As discussed above, the evidence indicates that no music sound recordings
are actually stored on the Cooper website.  The music sound recordings have
initially been made available to the public by being placed on the remote
websites.  The evidence given by Mr Beckett was to the effect that the digital
music files to which links were provided on the Cooper website were also
available to users through the internet generally.  That is, internet users can
access the music sound recordings via an alternative route by directly accessing
the remote websites, either by typing that website’s URL address into the
address bar on the user’s internet browser or by using a search engine
such as Google or Yahoo, rather than by visiting the Cooper website...

65 The Cooper website contains hyperlinks to thousands of sound recordings
which are located on remote websites and are downloaded directly from those
websites to the computer of the internet user.  When a visitor to the Cooper
website clicked on a link on the website to an MP3 file hosted on another
server, this caused the user’s browser to send a "GET" request to that
server, resulting in the MP3 file being transmitted directly across the internet
from the host server to the user’s computer.  The MP3 file does not pass
through or via or across the Cooper website.  The Cooper website facilitates the
easier location and selection of digital music files and specification to the
remote website, from which the user can then download the files by clicking on
the hyperlink on the Cooper website.  However, the downloaded subject matter is
not transmitted or made available from the Cooper website and nor does
the downloading take place through the Cooper website.  While the request that
triggers the downloading is made from the Cooper website, it is the remote
website which makes the music file available and not the Cooper website.

66 The applicants also submitted that Cooper, by establishing and operating
the website, has "electronically transmitted" the sound recordings. I am
of the view that Cooper cannot be said to have transmitted the sound recordings.
In my view, the actual transmission of the music sound recording begins with the
commencement of the downloading of the recording from the remote website on
which the recording is located to the end user.  I accept that the electronic
transmission of the sound recording to a user who triggers the hyperlink on the
Cooper website is a communication to a member of the public from the remote
website, however, it is not a transmission from the Cooper website.

67 Accordingly, for these reasons, I do not consider that Cooper has
"communicated" the sound recording to the public.  That is, Cooper has not made
the sound recording available to the public or electronically transmitted it to
the public. 

68 I do consider, however, that the remote websites have made available
online and electronically transmitted the music sound recordings to the
public."

However the Judge found Cooper "permitted or approved, and thereby
authorized, the copyright infringement by internet users who access his website
and also by the owners or operators of the remote websites from which the
infringing recordings were downloaded."

84 The Cooper website is carefully structured and highly organised and many
of its pages contain numerous references to linking and downloading.  The
website also provides the hyperlinks that enable the user to directly access the
files on, and activate the downloading from, the remote websites.  The
website is clearly designed to, and does, facilitate and enable this
infringing downloading.  I am of the view that there is a reasonable inference
available that Cooper, who sought advice as to the establishment and operation
of his website, knowingly permitted or approved the use of his website in this
manner and designed and organised it to achieve this result.

The claim that Cooper was exposing or offering for sale the sound
recordings was rejected as there was no sale or trade between Cooper and the user or the owners
or operators of the remote websites.

UPDATE 2: Kim Weatherall’s comments