Dallas Buyers Club Case: Torrenters No Longer Anonymous

Wednesday 8 April 2015 @ 11.34 a.m. | IP & Media | Judiciary, Legal Profession & Procedure | Trade & Commerce

In Dallas Buyers Club LLC v iiNet Limited [2015] FCA 317, handed down yesterday (7 April 2014), Justice Perram of the Federal Court of Australia has ordered a number of Australian internet service providers (ISPs) to hand over to the film studio who made the movie "Dallas Buyers Club" the identities of thousands of account holders (some 4,726 users) whose internet connections were allegedly used to share the movie without authorisation - in other words downloads using "Bit-Torrents" or similar "peer to peer" file sharing.

The case has been described as a "landmark judgment" and the "first of its kind in Australia" and would appear to be a turning point in the protection of copyright by content creators, if only for allowing some means of breaking down the protection currently provided by a users total anonymity online.

The Case

This case was an application for "preliminary discovery" brought by Dallas Buyers Club LLC, a US entity and owner of the copyright in the 2012 Jean-Marc Vallée film, Dallas Buyers Club and its parent company (the applicants). The respondents were six Australian ISPs (iiNet being one), providers of various forms of internet access to members of the public and businesses.

The applicants sought preliminary discovery because it is the procedure which enables a party who is not able to identify the person(s) who it wishes to sue to seek the assistance of the Court in identifying that person.

In this case, the applicants claimed that it had identified 4,726 unique IP addresses which had shared their film online using ". . . Bit-Torrent, a peer-to-peer file sharing network", and that this occurred without their permission. The claim was that the people who did this infringed Dallas Buyers Club copyright contrary to the provisions of the Copyright Act 1968 (Cth) (the Copyright Act).

The applicants did not know the identity of the 4,726 individuals involved but the applicants did, however, have evidence that each of the IP addresses from which the sharing occurred was provided by the respondent ISPs and the applicants believed that the ISPs could identify the relevant account holder associated with each IP address. The applicants did not argue that the account holders and the persons infringing their copyright using Bit-Torrent were necessarily the same people but they did argue that some of them might be and, even if they were not, the account holders may well be able to help them in identifying the actual infringers.

The respondent ISPs resisted the application on the following grounds:

  • the evidence which the applicants put forward to identify the infringing IP addresses was not sufficient to do so;
  • the claim against any putative respondent was speculative; and
  • the pre-conditions which must exist before the Court was permitted to order preliminary discovery were not satisfied.

The respondent ISPs also denied that the applicants had proven that either of them was the owner of the copyright in the film and argued that even if all of their arguments were rejected the Court should not, as a matter of discretion, order them to divulge their customers’ personal and private information.

Based on the privacy point the respondent ISPs argued:

  • the monetary claims which the applicants had against each infringer were so small that it was plain that no such case could or would be maintained by the applicants;
  • there was no point in ordering the ISPs to divulge their customers’ details because there was never going to be a court case against the customers ". . . which made any commercial sense"; and
  • they were subject to statutory obligations of privacy which, given what they said was the weakness of the case against the customers, were ". . . not lightly to be cast aside by Court orders".

The respondent ISPs also argued that if the Court were against all of the above submissions and were to order the ISPs to divulge the personal details of the 4,726 account holders, the respondent ISPs argued that the Court should impose two sets of constraints upon the applicants:

  • First, they should not be permitted to send what were referred to at the hearing as "speculative invoices" to the account holders; and
  • Secondly, the Court should ensure that, whatever else happened, the privacy of the account holders was adequately protected.

The Result and Reaction

In granting "preliminary discovery," Justice Perram also attached conditions and constraints and these are as important to consider in understanding the overall extent of the decision's effects as the decision itself.

At para [93] Justice Perram says:

"I will make orders in due course which:

(a) provide for the preliminary discovery sought;

(b) impose privacy obligations on the material produced;

(c) require the applicants to submit to this Court for its approval a draft of the letter they propose to write to account holders;

(d) require the applicants to pay the ISPs’ costs of these proceedings as taxed or agreed; and

(e) require the applicants to pay the ISPs’ costs of giving preliminary discovery as taxed or agreed."

Interviewing Michael Bradley from Marque Lawyers (Sydney), who represented the applicants in the case, ABC's PM program quotes him as saying that the case is important because:

"It establishes the entitlement to obtain the information that we were seeking, and that is a precedent that will be available to any other copyright owner".

The report goes on to say reflecting on Justice Perram's proposed orders:

"But the case is not a huge win for the Dallas Buyers Club. The rights owners will have to pay for the costs of the application of the discovery order, and the costs of the ISPs who fought against it. . . . The other reason it's not a slam-dunk for the Dallas Buyers Club is because there are some strict conditions attached. . . . One is to protect customer privacy, the other is for the court to approve any letter that may be sent from Dallas Buyers Club to those 4,726 people".

These conditions are seen as disincentives at a practical level to the applicants actually taking the matter much further. For example, the requirement for the court to approve a draft of any letter to be sent to individuals to protect privacy - and also to protect against the practice known as "speculative invoicing".

As the ABC PM program points out:

"The letter approval process is something the Dallas Buyers Club didn't want to have to worry about. Its lawyers argued against such a condition during the trial."

Speculative Invoicing

This is a practice said to be used in other jurisdictions which it is feared may start to happen in Australia. It involves rights holders sending letters to people accused of copyright infringement, demanding large upfront payments, or threats to sue with a view to making money upfront from alleged copyright infringers who prefer to pay, rather than go through to the damages case and court proceedings. Apparently a ploy that works well in the Adult Movie industry where the view is ". . . that most people would rather settle out of court than be sued for downloading pornography".

Ahead for Online Copyright Infringement

While the case does provide an affirmation of the rights of copyright owners, more extensive and possibly even more prescriptive measures may lie ahead in the form of legislation, namely, the Copyright Amendment (Online Infringement) Bill 2015 (currently before the Senate) intended to tackle the same kinds of issues. Essentially, this proposed law provides that:

". . . copyright owners would be able to apply directly to the Federal Court for an injunction to disable access to an infringing online location, without having to first establish the Carriage Service Providers (CSP’s) liability for copyright infringement or authorisation of copyright infringement. This judicial process would be more efficient and avoid implicating CSPs unnecessarily".

For more on the Bill see our article: Copyright Amendment (Online Infringement) Bill 2015: Piracy In The Spotlight Again

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