Clifford Gouldson Lawyers

Is this the final twist in the tale of Dallas Buyers Club v iiNet?

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18/12/2015

As you may be aware, Dallas Buyers Club LLC (“DBC”) and Voltage Pictures LLC (the companies that own the rights to the Matthew McConaughey film Dallas Buyers Club) have spent the better part of 2015 duking it out in the Federal Court of Australia with iiNet and a posse of other internet service providers (“the ISPs”).
 
Background
 
Chiefly, DBC wanted to gain access to the personal information of thousands of internet users who illegally downloaded Dallas Buyers Club through the BitTorrent network. Despite resistance from the ISPs, Justice Perram of the Federal Court originally ordered that DBC be given access to users’ personal information, on the condition that any letters of demand be approved by him first. You can read our legal alert on the original order here.
 
Since that decision in April, Justice Perram has given DBC a scathing rebuke for the content of its draft letters, to the point that the order was stayed in August. In order to lift the stay, Justice Perram asked that DBC agree to only seek the retail price of purchasing a copy of Dallas Buyers Club, and a proportional amount of DBC’s costs for obtaining the account holder’s details.
 
The latest development
 
In September, DBC went back to court to ask that they instead be allowed to demand an amount equal to the amount DBC would have earned if they had agreed to a non-exclusive distribution licence arrangement with each individual infringer who had uploaded part or all of the film through the BitTorrent network (a central feature of the torrenting model). This would likely constitute an amount vastly larger than the retail price of the film. They also (in addition to other renewed arguments) wished to claim damages from certain infringers, in order to dissuade further piracy.
 
This appears to have been a considerable overreach by DBC, with Justice Perram rejecting the propositions, even going so far as to label the basis of the “distribution licence” argument as “surreal” and “wholly unrealistic”. Importantly, his Honour dismissed the application and stated that "some finality must now be brought to these proceedings" in his decision handed down this week, citing the public interest in the case. He leaves DBC with the option of initiating a lengthy and costly appeals process should they wish to continue pursuing their argument.
 
What does this mean for movie rights holders?
 
Justice Perram's decision, should it stand, suggests that rights holders in Australia can pursue illegal downloaders, but only for the amount they would have reasonably paid for a film (and a portion of the costs incurred in pursuing the infringer).
 
On the question of additional damages for deterrence, his Honour left the door open for future litigants who can determine a reasonable method for calculating amounts for individual infringers, but did not unpack this point much further.

He was critical of DBC's broad methodology, and made particular reference to the lack of data available due to the quality of software used to detect infringers. At best, DBC could only prove that individual infringers had uploaded a "sliver" of the film. This provides a clue for future litigants, who would be well advised to compile more detailed data about infringers' uploading habits.
 
What does this mean for downloaders?
 
Downloading films on the BitTorrent network remains entirely illegal. This decision does not change this fact, and does not protect illegal downloaders from actions by rights holders. What it does do is provide a narrower method by which downloaders can be pursued, and sets Australia apart from other jurisdictions in which the courts have allowed more aggressive enforcement of copyright.

But, the story is not necessarily over yet. Time will tell whether Justice Perram's decision will stand as the case that established the principles of reasonable and modest recovery actions by rights holders, or if it will be looked back on as an early stumbling block in the effort to punish illegal downloaders through litigation.


*The full judgement of Justice Perram can be read here.

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