Landmark ruling forces ISPs to identify thousands of Australian customers to US film companies

In a landmark copyright ruling yesterday several local internet service providers (ISPs) were ordered by the Australian Federal Court to hand over details of thousands of customers who allegedly pirated the film Dallas Buyers Club to its rights holders.

The case centred on United States companies Dallas Buyers Club LLC and Voltage Pictures LLC’s application for preliminary discovery, a procedure that enables a party to seek the assistance of a Court in identifying persons who it wishes to sue.

In a win for the rights holders, Justice Nye Perram ruled that iiNet, Internode, Amnet Broadband, Dodo, Adam Internet and Wideband Networks must divulge the names and addresses of customers linked to 4,726 IP addresses that are claimed to have been involved in illegally sharing the film online.

Michael Bradley, a lawyer representing Dallas Buyers Club LLC was pleased with the results.

"It’s a good outcome," said Bradley, "we got the result we were seeking."

In coming to a decision the Justice Perram weighed the privacy obligations of the ISPs in respect to their customers with the value of the owners of copyright.

"In situations where different rights clash it is usual for courts to try and accommodate both rights as best they can," noted Justice Perram. "Here that can be done by requiring the information to be provided but by imposing, by way of conditions, safeguards to ensure that the private information remains private."

The ruling opens the door for the copyright holders to threaten legal action against infringers. During the case the ISPs suggested that if successful in obtaining customer identities, the rights holders may engage in "speculative invoicing". Speculative invoicing is a practice outlined in the ruling whereby "the applicants would write to the account holders demanding a large sum of money and offering to settle for a smaller sum which was still very much in excess of what might actually be recovered in any actual suit".

In the United States, lawyers representing Dallas Buyers Club LLC have previously issued letters to copyright infringers claiming the right to seek damages of up to $US150,000, with a release of all legal claims offered if the defendant chose to settle by paying up to $US7000.

iiNet has previously expressed concern that if Dallas Buyers Club were to win the case, it would "open the floodgates to further claims by other rights-holders, leading to more Australians being intimidated to pay exorbitant amounts in an attempt to avoid improbable litigation". 

The practice of speculative invoicing was alluded to in the ruling by Justice Perram where he noted that "there is no doubt that Voltage has done this in the past".

"Whether speculative invoicing is a lawful practice in Australia is not necessarily an easy matter to assess," said Justice Perram. "Representing to a consumer that they have a liability which they do not may well be misleading and deceptive conduct [under Australian Consumer law]."

In order to address these issues the ruling contained the conditions that the rights holders must first submit to the Judge a draft of any letter they propose to send to the account holders in question and that they must not disclose customer details without the leave of the Court.

iiNet and the other ISPs now have 27 days to appeal the decision.

The full ruling can be read here

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