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