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In the ongoing copyright battle between Dallas Buyers Club LLC and iiNet Limited, an end is now in sight. In May 2015, the Federal Court of Australia handed down a judgment, setting out the parameters for copyright owners to bring an action against illegal downloaders.

Pirates Ahoy

Dallas Buyers Club (DBC), the copyright owners, were granted preliminary discovery of 4762 ISP account holders who had allegedly infringed copyright by illegally downloading the film using BitTorrent. DBC employed Maverickeye UG as “pirate hunters” to identify which IP addresses used the file-sharing technology BitTorrent – users, take note to clear your browser history!

Despite making a finding for preliminary discovery, Justice Perram stayed proceedings until DBC provided details of how they were going to contact and enforce their right against infringers. The stay of proceedings was mainly to avoid any occurrences of speculative invoicing – a technique commonly employed by larger companies to bully someone into paying funds. For example, DBC could not request an unreasonable sum of money, and then threaten legal action in the event the infringer failed to pay. Attached to this stay was a conditional bond for $60,000 to attain personal information from ISPs.

In August 2015, Dallas Buyers Club responded and stated by way of letter that they would seek damages for the following:

  • The cost of a single copy of the film, had it been purchased;
  • A claim for a license fee for the infringers distribution of the film;
  • A claim for additional damages under s 115(4) of the Act, depending on how many copies of other copyrighted works the infringer had downloaded; and
  • A claim for a contribution towards the cost of obtaining user details.

The draft letters provided to Justice Perram avoided any mention of the amounts owing – DBC said they would discuss this with the infringer via telephone conversation. The letter would only notify them of their infringement.

This tactic implicitly reveals speculative invoicing, going directly against Justice Perrams’s previous orders relating to the stay of proceedings. Furthermore, Justice Perram found the claim for the license fee impermissible on merit as it doesn’t recognise the plethora of ways a person may see the film legitimately, be that one may rent, buy or go to the cinemas. His Honour also found the claim for additional damages to be an imprudent claim because you cannot permit recourse to other acts of copyright infringement.

Justice Perram, unimpressed with the potential misuse of personal information, rejected both claims for damages and increased the bond to $600,000. This is a groundbreaking response because it allows a court to supervise the use of information made available in preliminary discovery.

In another attempt, DBC returned stating they would only seek payment of the original license fee and damages for its court costs. Unsurprisingly, Perram held the request was too onerous.

End In Sight?

Justice Perram following DBC’s continuous attempts to prolong the court process, stated that unless DBC finalises the most recent proceedings by 11 February 2016, the proceedings will be dismissed entirely.

Future of Copyright Infringement

DBC has demonstrated that when attempting to tackle online infringement, a range of measures are needed. After all, are all ISP account holders necessarily the people that infringed copyright?

Two days after the DBC hearing in April, the Communications Alliance published the Copyright Notice Scheme (the Scheme) for public comment. The Scheme, instituted as a type of “soft law” in order to dissuade infringers from engaging in copyright infringement also sets out how ISPs will accept notices from Rights Holders and endeavour to notify ISP Account Holders (in a prescribed form). 

The Scheme is considered a means for complimenting the website blocking injunctions provided for by the Copyright Amendment (Online Infringement) Bill 2015. And so arises another uncertainty – website blocking injunctions. They have been likened to whack-a-moles, as one is blocked another pops up using a different domain name.

The Scheme’s effectiveness is questionable. However, it entreats ISPs and rights holders to develop a voluntary code under Pt 6 of the Telecommunications Act and attempts to ensure ISPs take reasonable steps to deter infringement.

We’ve also seen the emergence of cheaper streaming services into the online marketplace. Where sites like Netflix attempt to reduce the rates of online infringement by providing users with competitive pricing and immediate access to the content, perhaps DBC ought to consider a business, rather than a legal solution.

***

What do you think? Tag us on Twitter @legalvision_au and let us know or ask our IT lawyers.

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