Australia: iiNet in new copyright infringement battle over customers pirating Dallas Buyers Club film

HG IP & ICT Alert: 19 December 2014

Dallas Buyers Club LLC (DBC), the owner of rights in Australia in the 2013 Oscar-winning film, Dallas Buyers Club, recently filed an application in the Federal Court for a number of internet service providers (ISPs), including iiNet, to release details of customers that DBC suspects of copyright infringement by illegally sharing the film.

If DBC is successful, iiNet and other ISPs may be forced to hand over its customers' details to DBC. iiNet, which rose to fame from its starring role in the 2012 High Court decision Roadshow Films Pty Ltd & Ors v iiNet Limited, is opposing the application, meaning we may be set to see another blockbuster case played out.

In this Alert, Partner Hayden Delaney and Solicitor Sheree O'Dwyer provide a summary of the Dallas Buyers Club, LLC v iiNet Limited & Ors case so far and discuss the potential impact this case may have on the future of copyright infringement in Australia.

Background

In October this year, DBC filed an application in the Federal Court naming iiNet Limited and several other ISPs, (Adam Internet Pty Ltd, Amnet Broadband Pty Ltd, Dodo Services Pty Ltd, Internode Pty Ltd and Wideband Networks Pty Ltd) as prospective respondents.

The proceedings involve an application for preliminary discovery - a practice that can be used to identify the person or company that an applicant wants to take legal action against. Under Federal Court Rule 7.22, a prospective applicant may apply to the Court for an Order for Discovery to try to ascertain the description of a prospective respondent if there is another person that is likely to know, or has control of, a document that would help ascertain the prospective respondent's description.

In the present case, DBC are applying for iiNet and the other ISPs to provide details of customers whom DBC claim to have been involved in copyright infringement. DBC suspects that certain IP addresses of iiNet customers are linked to instances of where people illegally downloaded copies of the film for use in Australia using peer-to-peer file sharing websites.

In a blog post released on its website shortly after the application was filed, iiNet announced that it will be opposing the application, citing their serious concerns as to how DBC will use the information as reasoning. In particular, iiNet is claiming that DBC may try to settle claims out of court using a practice known as "speculative invoicing", raising a number of concerns including:

  • the possibility that users may be subject to intimidation by excessive claims for damages and letters demanding thousands of dollars to settle out of court, which it has been reported has been done by the Dallas Buyers Club rights holders in the United States;
  • the allegations of copyright infringement are linked to IP addresses, the alleged infringer could be incorrectly identified if details of the account holder were revealed. For example, in a shared household, a school or internet café; and
  • Australian courts have not tested these cases, and as such, any threat by rights holders, premised on the outcome of a successful copyright infringement action, would be speculative.

Proceedings so far

In an interlocutory hearing on 17 November 2014, Justice Perram refused four third party applications from the press and other interested parties for access to restricted documents on the Court file. Of particular interest, is the mechanism by which DBC identified and collected the IP addresses of the downloaders.

DBC will be seeking to show that it identified IP addresses of persons who shared the film through a peer-to-peer site without its permission. The IP addresses identify the ISP that the infringing accounts belong to however does not identify the customers themselves. DBC will be seeking that information from the ISPs.

In a directions hearing on 2 December 2014, it was revealed that DBC proposes to read the affidavit of a technical analyst employed by the forensic investigation firm, Maverickeye UG. This company has monitored BitTorrent file distribution networks and collected evidence of the IP address and ISP linked to the account used to effect sharing of the Dallas Buyers Club film. iiNet were successful in obtaining an order for cross-examination of the analyst, whose evidence in relation to the processes and software used to obtain the IP addresses is likely to be integral in the case. In permitting the cross-examination, Justice Perram commented in his judgment that, "should it turn out the IP addresses are not the addresses of account holders of the respondents, then this would arguably provide quite a good reason to refuse the application for preliminary discovery."

What next?

The next step will be for the Federal Court to decide whether iiNet and the other ISPs will have to hand over customer details. The hearing for the discovery application has been set down for 17 and 18 February 2015.

There are some interesting aspects that have already been raised in this case which are likely to play a part in whether DBC reaches the point where it pursues alleged infringers in Australia.

Any release of customer details will involve disclosure of an individual's personal information; considerations under the recently amended Privacy Act 1988 (Cth) will come into play.

Another consideration is the application of section 276 of the Telecommunications Act 1997 (Cth) which prohibits carriage service providers, such as iiNet, from disclosure or use of any information or document that relates to the contents or substance of a communication that has been carried by the provider, in this case iiNet. That said, section 280 of the Telecommunications Act provides an exception to this if the disclosure or use is required or authorised by or under law.

In the aftermath of iiNet's 2012 High Court case, the Government has been looking at addressing the effect of this decision. Earlier this year the Government released its Online Copyright Discussion Paper which proposes a number of changes to the Copyright Act 1968 (Cth) in a bid to reduce piracy and online copyright infringement. Public consultation closed 1 September 2014, and the Government is in the process of considering submissions.

If DBC is successful with obtaining the customer details, one would assume DBC will take action against those people either with letters of demand as it has been reported to do so overseas, or by commencing legal proceedings for copyright infringement.

iiNet's last showing raised such a furore and is such a seminal case in Australia's online copyright infringement legal landscape that the decision for the iiNet sequel may prove to be an equally important test case affecting copyright owners, ISPs and consumers.

© HopgoodGanim Lawyers

Award-winning law firm HopgoodGanim offers commercially-focused advice, coupled with reliable and responsive service, to clients throughout Australia and across international borders.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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