Will ille­gal down­load­ers be forced to pay their dues and join the Club?

In Brief

On 7 April 2015, the Fed­er­al Court of Aus­tralia hand­ed down a land­mark rul­ing involv­ing pira­cy and pri­va­cy, and inter­net account hold­ers with the Inter­net Ser­vice Providers (ISPs) involved may be feel­ing nervous. 

Dal­las Buy­ers Club LLC v iiNet Lim­it­ed [2015] FCA 317

Dal­las Buy­ers Club LLC, the enti­ty claim­ing own­er­ship of the copy­right in the 2012 Jean-Marc Vallee film, Dal­las Buy­ers Club, and Volt­age Pic­tures LLC (Volt­age), sought pre­lim­i­nary dis­cov­ery in the Fed­er­al Court to enable them to iden­ti­fy poten­tial copy­right infringers of the Dal­las Buy­ers Club film. They iden­ti­fied 4,726 unique IP address­es of users that had shared the film online using peer-to-peer file shar­ing net­works and alleged that this was done with­out their per­mis­sion. While the appli­cants did not say that the account hold­ers and the peo­ple infring­ing were nec­es­sar­i­ly the same peo­ple, they argued that a Court order requir­ing the ISPs to release the per­son­al details of the account hold­ers con­nect­ed with the IP address­es would assist them to iden­ti­fy the infring­ing parties.

The ISPs, includ­ing iiNet Lim­it­ed, Dodo Ser­vices Pty Ltd and Intern­ode Pty Ltd, defend­ed the appli­ca­tion on numer­ous tech­ni­cal grounds, argu­ing amongst oth­er rea­sons that there was insuf­fi­cient evi­dence to iden­ti­fy the infring­ing IP address­es. There were sub­mis­sions in respect of the extent to which the infringers could actu­al­ly be iden­ti­fied giv­en the dynam­ic IP address­ing employed by ISPs. How­ev­er, the Court was sat­is­fied that this could be achieved using time and date stamping.

The ISPs also claimed that even if the require­ments for mak­ing an order of pre­lim­i­nary dis­cov­ery had been demon­strat­ed and by the appli­cant, the Court should exer­cise its dis­cre­tion not to make that order for a num­ber of rea­sons includ­ing on grounds of pro­tect­ing indi­vid­u­als’ pri­va­cy and to guard against spec­u­la­tive invoic­ing by the appli­cants in respect of the alleged infringe­ments. With regard to pri­va­cy, the ISPs made the argu­ment that sub­stan­tial Fed­er­al leg­isla­tive pri­va­cy pro­tec­tions exist­ed which would pre­clude them from releas­ing the per­son­al infor­ma­tion to the appli­cants. While the impor­tance of these pri­va­cy pro­tec­tions were acknowl­edged by the Court, the impor­tance of pro­tect­ing the val­ue of the rights of copy­right hold­ers was also acknowl­edged and although the Court accept­ed that such statu­to­ry oblig­a­tions of pri­va­cy, as claimed, should not be cast aside by the Court light­ly, the Court con­clud­ed that these rights ought to be bal­anced against those of copy­right owners.

ISPs claimed that the release of account hold­er details could result in spec­u­la­tive invoic­ing’ – a process where­by the copy­right hold­er would write to a poten­tial infring­ing par­ty threat­en­ing legal action for large mon­e­tary dam­ages unless set­tle­ment fees are paid. It was accept­ed by the Court that Volt­age has pre­vi­ous­ly engaged in that prac­tice in the Unit­ed States. Although evi­dence was sub­mit­ted by the Appli­cants that it would not be their inten­tion to engage in that prac­tice in Aus­tralia, Jus­tice Per­ram sug­gest­ed he would impose mea­sures to pro­tect against that prac­tice in this case.

Jus­tice Per­ram indi­cat­ed that he would make orders allow­ing for the pre­lim­i­nary dis­cov­ery, requir­ing the ISPs to release the per­son­al infor­ma­tion con­nect­ed with the 4,726 IP address­es iden­ti­fied. His Hon­our indi­cat­ed that he would make addi­tion­al orders so as to bal­ance the con­cerns of the ISPs in respect of pri­va­cy and spec­u­la­tive invoic­ing by impos­ing pri­va­cy oblig­a­tions on the mate­r­i­al to be pro­duced by the ISPs and by requir­ing the appli­cants to sub­mit to the Court any draft let­ter they intend to issue to account hold­ers in respect of the alleged infringe­ments. The mat­ter will return before his Hon­our on 21 April 2015 for fur­ther direc­tions to deter­mine the form of the orders.

This Fed­er­al Court deci­sion paves the way for intel­lec­tu­al prop­er­ty rights hold­ers to iden­ti­fy online infringers and will assist those wish­ing to enforce their rights. The Swaab Com­mer­cial and Intel­lec­tu­al Prop­er­ty team can assist you with ques­tions about pro­tect­ing and enforc­ing your intel­lec­tu­al prop­er­ty rights.