In Dallas Buyers Club LLC v iiNet Limited (No 4) [2015] FCA 838, the Federal Court of Australia has refused an application by the makers of the film ‘Dallas Buyers Club’ (DBC) to compel internet service providers to provide details of customers who had illegally downloaded the film.

In an earlier judgment, the Court allowed preliminary discovery of identification of 4,726 people suspected of downloading DBC.  The Court made orders that reflected the fact that whilst the court was satisfied in principle that DBC was entitled to preliminary discovery, the court ‘was not going to open the sluice gates until it saw the proposed correspondence and until DBC satisfied the Court that it was that approved correspondence, and not something else, such as a dead cat, that DBC was going to send to account holders‘ (at [10]).

In essence,  Perram J expressed a concern at the potential for speculative invoicing in Australia. The practice of speculative invoicing, where copyright holders engage in mass-distribution of pro forma letters of demand on suspected infringers across multiple jurisdictions, has given rise to significant problems in the US and UK. Bullish demands have been issued which greatly exceed the licence fee that would have been incurred for a lawful download.

The decision handed down on 14 August 2015 reflects Perram J’s discontent with the notion of speculative invoicing. He noted he had rejected ‘several versions’ of correspondence, which had included:

1. A claim for the cost of an actual purchase of a single copy of the Film for each copy of the Film downloaded. This is quite a bit more than the cost of renting a copy of the Film on a 48 hour basis from a platform such as iTunes. Here DBC’s argument was quite clear: the copy that has ended up on the infringers’ hard drives is not a 48 hour rental copy but a permanent one;
2. A claim for an amount relating to each infringers’ uploading activities. Here DBC suggested that the number of uploads was potentially very large given the way BitTorrent operates, with each user sharing the Film with other users by means of transfers of slivers across the network. DBC submitted that it was entitled to obtain a one-off licence fee from each uploader on the basis that each was engaged in the widespread distribution of the film. It is not trespassing on DBC’s legitimate confidentiality concerns to say that the sum sought by DBC in relation to this head of damages was substantial;
3. A claim for additional damages under s 115(4) (i.e. punitive damages) depending on how many copies of other copyrighted works had been downloaded by each infringer; and
4. A claim for damages arising from the amount of money it has cost DBC to obtain each infringer’s name.

While Perram J accepted the justification for (1) and (4) as ‘plausible’, (2) and (3) were not matters for which the power in Rule 7.22 of the Federal Court Rules 2011 (Cth) could properly be used.

In the circumstances, Perram J declined to lift the stay on the proceedings, however indicated that he would do so if the Court received a written undertaking, along with a $600,000 bond in consideration of that undertaking, that they would only use the information obtained under the preliminary discovery orders for the purposed described in (1) and (4).