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ISPs Victorious Against Dallas Buyers Club Owner – what does this mean for illegal downloading?

2017-02-17T17:08:53+00:00April 14th, 2016|

As of the 11th of February 2016 the infamous proceedings between Dallas Buyers Club LLC (DBC) and iiNet (as well as five other Australian Internet Service Providers) came to an end, when DBC failed to lodge an appeal to the December iteration of Justice Perram’s judgment.

The first decision of the Federal Court on this case, handed down in April 2015, granted DBC access to the details of the 4,726 customers whose IP addresses they had linked to the illegal download of their film on peer-sharing torrent websites. Curiously, the access to this information was not unqualified and has since been denied completely. This decision and the safeguards imposed by Justice Perram reflect some important aspects of copyright law in Australia as compared to the US, where DBC has been more successful.

A central consideration of this decision was to prevent the practice of speculative invoicing, whereby rights holders induce fear in copyright infringers by threatening them with expensive law suits unless they pay an exorbitant fee. The parent company of DBC, Voltage Pictures, is well-known for this practice in the US, where the risk of going to Court is much greater as the damages which can be sought against individuals are not linked to any ‘actual harm’ suffered and can reach up to $150,000.

In order to prevent this practice in Australia, the Court imposed two restrictions on DBC. Firstly, the preliminary discovery was stayed until the Court could approve the correspondence which DBC would have with the account holders. The Court specifically wanted to know how much compensation would be sought by DBC, requiring that the amount be proportional to the harm suffered. The Court categorically dismissed the notion that DBC was entitled to a ‘licence fee’ from each person who shared the film online and further rejected other unusual requests for information from individuals such as questions about how much they earn and how many other films they have illegally downloaded.

From the judgment a reasonable request would have encapsulated the price that an individual would have to pay to buy the film and a reasonable proportion of DBC’s legal fees. Justice Perram therefore rejected DBC’s proposed correspondence and decided in August that the Court would only lift the stay if a $600,000 bond was paid by DBC and the bond would be forfeited if DBC were to misuse the personal information of the account holders once they were granted access. This restriction effectively made it prohibitively costly for DBC to proceed.

DBC appealed the decision and sought access to the contact details of only 472 alleged copyright infringers with a $60,000 bond plus the right to seek further compensation. Justice Perram rejected the request in December, ordering the case to be dismissed if no appeal was lodged by 11 February 2016.

In this case, the rights and interests of individuals have been strongly protected. The practice of speculative invoicing has been made virtually impossible by the Court, which has solidified its supervisory role in overseeing the amount of compensation that can be legally demanded from individuals and the level of access to personal information. The reasonable and proportionate limitations imposed on damages may also cause content owners to pause before pursuing litigation.

Having said that, illegal downloaders are by no means out of reach of the law. The scope of this case was limited to preliminary discovery and the restrictions imposed on DBC appeared to be more stringent because it is a US-based company. It will be interesting to see what happens when a domestic company brings an action or a named-individual is targeted by a suit.

If you need help with to make or defend a claim for copyright infringement or to protect your personal information, our experts can help you. Contact us to get advice from our experienced intellectual property and privacy lawyers.