A still from Dallas Buyer's Club, which was illegally downloaded by thousands of Australians. Source: Dallas Buyers Club LLC.
The Federal Court has handed down a crushing ruling to iiNet and several other Australian internet service providers, forcing them to hand over details of customers who have allegedly downloaded the Dallas Buyers Club film illegally via BitTorrent.
In a landmark day for piracy in Australia Federal Court Justice Nye Perram today ordered several providers, including iiNet, to disclose the identities of users which Dallas Buyers Club LLC says downloaded and then shared the film online.
The watershed ruling, handed down this afternoon in Sydney’s Federal Court, is expected to leave the way clear for other firms to take similar action and sue thousands of people for copyright breaches.
iiNet is not the only ISP affected by the ruling. Australian ISPs Dodo, Internode, Amnet Broadband, Adam Internet and Wideband Networks will also be required to hand over customer details.
“I will order the ISPs to divulge the names and physical addresses of the customers associated in their records with each of the 4,726 IP addresses,” Justice Perram said in court in Sydney today.
“I will impose upon the applicants a condition that this information only be used for the purposes of recovering compensation for the infringements and is not otherwise to be disclosed without the leave of this Court.
“I will also impose a condition on the applicants that they are to submit to me a draft of any letter they propose to send to account holders associated with the IP addresses which have been identified.”
Dallas Buyers Club LLC had argued against the need to gain prior court approval of its letters.
Today's ruling means about 4700 Australian internet account holders, who have each been deemed to have 'shared' the film and therefore infringed copyright, will likely soon receive legal letters from Dallas Buyers Club LLC, threatening legal action unless compensation is paid.
iiNet had attempted to challenge the request arguing that if successful it would leave to speculative invoicing, in which anyone alleged to have infringed on copyright are sent letters of demand before any copyright has actually been proven.
"We are concerned that our customers will be unfairly targeted to settle any claims out of court using [this] practice," iiNet said in blog post last year.
Justice Perram said in his judgement that speculative invoicing was not necessarily legal in Australia.
"Whether speculative invoicing is a lawful practice in Australia is not necessarily an easy matter to assess," Perram said.
"Representing to a consumer that they have a liability which they do not may well be misleading and deceptive conduct within the meaning of s 18 of the Australian Consumer Law and it may be equally misleading to represent to someone that their potential liability is much higher than it could ever realistically be. There may also be something to be said for the idea that speculative invoicing might be a species of unconscionable conduct within one or other of s 21 of the Australian Consumer Law or s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth).
"In the former, however, it would be necessary to identify a supply of goods or services which may be difficult. In the latter, it would be necessary to identify a financial service which may also not be without difficulty."
iiNet has also been ordered to pay the cost of the applications.
The BitTorrent protocol allows users to share files over the internet in a process of communal uploads and downloads of many small parts of a larger file. The system means no one individual is responsible for uploading and downloading illegally pirated content.
Acting on behalf of Dallas Buyers Club, Ian Pike SC had previously said it was “the first case of its kind in Australia”, but that the case was “not dealing with an isolated matter”.
Pointing to a growing amount of case law in the US pursuing BitTorrent pirates, Mr Pike said the issue would affect “every other motion picture to be released”.
DBC used German-based company Maverikeye UG to identify the IP addresses it claims have been illegally downloading the film since mid-2013 - even before its release at the cinema.
Intellectual Property expert and associate professor at the ANU College of Law Matthew Rimmer said Dallas Buyers Club LLC had deliberately chosen to pursue iiNet rather than bigger players like Telstra and Optus, though the exact reason behind this was unclear.
"There's a lot of speculation around the choice of defendants," he told Technology Spectator.
"Dallas Buyers Club has been shown on Foxtel, and there are some connections between Foxtel and Telstra, for example. So Telstra has always been a bit different from other ISPs, but I'm not so sure about Optus. iiNet has been targeted for some time now, including against Village Roadshow, and there's some debate around whether iiNet will be such a hardy defender of its customers in the future, given the debate around its future ownership.
"To me iiNet have been a lot more quiet of late, when previously they've been very vocal. There's interesting choices there, if you're just concerned about going after the ISPs with the most money you'd go to Telstra and Optus, but it seems they've focused on some of their rivals.
"Telstra in particular has ties to copyright owners in a number of ways. It's hard to tell what's really going on, but it's indeed striking that iiNet has been targeted again."
Associate Professor Rimmer also said the case was part of a global litigation strategy at play from copyright holders; the film's distributor Voltage Pictures has also chased copyright infringers in the United States and Europe. He also expected there to be concerns now around whether letters will be sent to people who obviously hadn't downloaded the film.
"Just how accurate is the dragnet?," he said.
"We don't really know at this stage. Historically, in the United States the record industry really faltered when it chased online downloaders, there were some egregious misidentification cases where people were wrongly targeted. It may be the same here."
The decision today comes one day before internet service providers, through the Communications Alliance, are due to submit a draft copyright infringement code to the Australian Communications and Media Authority for approval.
Communications minister Malcolm Turnbull also introduced a bill last month that would allow copyright holders to apply for court orders forcing ISPs to block torrent websites like the Pirate Bay.
As Technology Spectator reported last month the bill would allow rights holders to seek a Federal Court order requiring ISPs to block overseas piracy websites by taking "reasonable steps to disable access,” effectively making them inaccessible to Australian users.
For the order to be successful the court must determine the site or "online location" must be outside Australia, it must be seen that it "infringes, or facilitates an infringement of, the copyright" and that must be the "primary purpose" of the site.
Communications Minister Malcolm Turnbull introduced the bill, revealing it would cost telcos an estimated $130,825 a year to implement.
“Existing copyright law is not adequate to deter a specific type of infringing activity, which is the facilitation of the online infringement of copyright owners’ content ... by online operators,” Mr Turnbull said in the lower house.
“There are a number of foreign-based online locations that disseminate large amounts of infringing content to Australian internet users.”
Read the full judgement here.
http://www.theaustralian.com.au/business/latest/iinet-loses-dallas-buyers-club-landmark-piracy-case/story-e6frg90f-1227294508657