As reported in our previous blog post, in April this year, the Federal Court ordered several internet service providers to hand over the identities and residential addresses of individuals who allegedly impermissibly downloaded Dallas Buyers Club. 

As a result of this hearing, Dallas Buyers Club LLC (DBC) was initially granted provisional access to the details of 4,724 iiNet account holders. However, in Dallas Buyers Club LLC v iiNet Limited (No 3) [2015] FCA 422 (May judgment), Justice Perram put a stay on the release of customer information, which would only be lifted where the proposed communication (in this case a letter and a telephone script) to account holders was drafted in a manner which satisfied him that DBC would not engage in conduct such as 'speculative invoicing'. 

In Dalls Buyers Club LLC v iiNet Limited (No 4) [2015] FCA 838 (August judgment), an application to lift the stay order by DBC was dismissed. Whilst DBC's proposed letter was rejected by the Court, Perram J gave clear indication that he would be willing to lift the stay if DBC redrafted the letter to demand no more than:

  1. the retail price of a single purchased copy of Dallas Buyers Club; and
  2. a proportion of DBC's recoverable costs associated with obtaining the account holder's details.

A security deposit of $600,000 was also required to be lodged with the Court to secure DBC's obedience to its undertaking. This was particularly so because DBC was domiciled outside of Australia and Perram J remained unconvinced of DBC's motives. 

DBC again made another application to lift the stay order in September, but it was still not willing to front the $600,000 security deposit originally requested by Perram J. In its application, DBC sought further permission from the Court to demand additional damages (after they had already been rejected by Justice Perram in his August judgment) from account holders, being:

  1. a sum representing the fair and reasonable licence fee that DBC would charge for granting a non-exclusive worldwide licence to distribute Dallas Buyers Club; and
  2. additional (ie. punitive) damages under s 115(4) of the Copyright Act 1968(Cth) (the Act).

DBC also sought permission to lodge a reduced security deposit of only $60,000 on the basis that it would only be provided with the contact details of 10% of the alleged infringers, which was rejected. 

This epic copyright saga has kept us guessing at every turn, and, on 16 December 2015, Perram J laid the framework for the proceedings to be dismissed in their entirety. 

Licence fee 

In the August judgment, Perram J dismissed DBC's argument that damages could be quantified using a notional licence lee on the basis that the licence fee approach gave rise to a factual debate. The factual scenario poised by DBC, that individual infringers would have sought to enter into a worldwide licensing arrangement with DBC, was deemed by Perram J to not only be 'wholly unrealistic', but 'surreal'. This was again repeated by Perram J in the most recent judgement. 

In particular, on the issue of whether a worldwide license fee would be considered damages that could be appropriately claimed by DBC, DBC sought to argue that the decision of Winnebago Industries Inc v Knott Investments Pty Ltd (No 4) [2015] FCA 1327 delivered on 2 December 2015 meant that Justice Perram's conclusion that a factual inquiry was required to establish that the infringers would have, in fact, entered into such an arrangement, was wrong as a matter of law. In Winnebago, Justice Yates concluded that, in a claim for damages as a result of conduct constituting passing off by the defendant, a plaintiff did not need to prove that the infringer would have entered into a licensing arrangement to legitimately engage in the infringing conduct. Damages would instead be assessed on the basis that the infringing party should pay for what it had taken and that the value of something taken without licence should be the licence fee that would have been paid or payable for such a licence. 

However, Perram J relied on Full Court authority (see Aristocrat Technologies Australia Pty Ltd v DAP Services (Kempsey) Pty Ltd (in liq) (2007) 157 FCR 564) that this principle does not apply in copyright cases (such as the present). Winnebago was a 'passing off' case and therefore distinguished from this and other copyright cases. 

As such, Perram J dismissed DBC's contention that each infringer would have paid a sum representing the fair and reasonable licence fee that DBC would charge for granting a non-exclusive worldwide licence to distribute Dallas Buyers Club via BitTorrent. 

Additional (ie. punitive) damages under s 115(4) of the Act 

In August, DBC relied upon s 115(4) of the Act but did not articulate any particular amount it wished to demand. However, Perram J in his August judgment made it clear that a claim for damages under s 115(4) of the Act was impermissible to the extent it would not survive summary judgment if pleaded in a substantive proceeding for copyright infringement (see here for a concise summary). 

This time, DBC's pleadings identified a series of factors (found in section 115(4)) which it said would be relevant to the assessment of such a claim. DBC also advanced actual figures relating to its s 115(4) claim which it had not done in any of the previous hearings. 

However, in rejecting DBC's application Perram J stated that:

'the legal standard I had applied in the August Judgment to determine whether I would permit a specified demand for damages to be made was to ask whether, if DBC had sued an account holder for the sum proposed to be demanded, that suit would survive a summary dismissal application……bearing that test in mind, DBC is quite unable to particularise any claim against an accountholder for s 115(4) damages because there is nothing which presently points to any account holder having done anything to which s 115(4) is directed'.

Unless DBC takes steps towards finalising the proceedings by complying with Perram J's previous judgements before 11 February 2016, the proceeding will be dismissed in its entirety.