Online copyright infringement is back in the spotlight again – this time under scrutiny from the bright lights of Hollywood. In this post, we provide a brief synopsis and commentary on theDallas Buyers Club v iiNet Ltd proceeding, ahead of its highly-anticipated premiere (ie hearing) in the Federal Court on 17 February 2015. 

Synopsis

The plot goes a little like this: Dallas Buyers Club, LLC is a company that owns the rights to the film of the same name, which earned an Oscar for actor Matthew McConaughey (surprisingly, he had not previously been nominated for performances in other classic cinematic masterpieces such as Magic Mike and The Wedding Planner). The film's success, which can no doubt be attributed to the effect of the 'McConaissance', has meant that the film has been ripe for illegal downloading via peer-to-peer file sharing websites.

Act I

In mid-October, Dallas Buyers Club, LLC initiated proceedings in the Federal Court. The company filed evidence seeking to show that it has identified the IP addresses of persons who have illegally shared the film, and applied for preliminary discovery of documents belonging to various internet service providers including iiNet (together, the ISPs), for the purpose of obtaining information contained in those documents about the identity of the ISPs' customers. 

Act II

On 17 November, Justice Perram of the Federal Court refused four applications by various interested parties in the media for access to the restricted evidence filed to date. The basis for this refusal was that the interests of the parties would be at risk of being adversely affected by the release of 'filed but as-yet-unused evidence', as the material had not been made available in open court yet,  and may be subject to confidentiality regimes or objections down the track.  The crux of Dallas Buyers Club, LLC's case was succinctly summarised by Justice Perram in his judgment:

'the thesis of this case, one assumes, is that the downloaders are infringing Dallas Buyers Club LLC's copyright by downloading the film through peer-to-peer sites without its permission; that it has a right to sue those downloaders for infringing its copyright; and that the internet service providers can complete the picture for it by connecting the IP addresses it already has to the names of identifiable customers. Presumably armed with the customers' names it then proposes to sue the actual infringers.'

iiNet has opposed the application and has made clear its intention to publicly defend its customers' private information, thus appearing to thwart Dallas Buyers Club's attempt to gather information. But like any good thriller, a couple of juicy plot twists are lurking just around the corner…

Plot Twist #1 – ISPs: anti-hero or opportunist?

iiNet has stated that they will not release any customer information to third parties unless ordered to do so by a court. In addition to privacy and contractual obligations, section 276 of the Telecommunications Act 1997 (Cth) operates to prohibit iiNet from disclosure or use of any information or document relating to the contents or substance of a communication that has been carried by a carriage service provider. This would include information about the customer which is linked to an IP address carried by a carriage service provider such as iiNet. An exception to this is provided under s280, which allows such disclosure or use when it is required by law.  However, iiNet certainly won't be complaining about being cast as a vigorous defender of their customers' privacy. It may be that iiNet has taken the opportunity to cast itself in a good light in front of its customers, particularly following the High Court's decision in Roadshow Films Pty  Ltd v iiNet Pty Ltd, which held that ISPs are not liable for copyright infringement in failing to take reasonable steps to prevent its customers from infringing. It is interesting that iiNet now asserts that it will staunchly protect its customers, when the arguments put forward by iiNet in the High Court were that iiNet did not intend to interfere with copyright owners' pursuit of end users for infringement.

Plot Twist #2 – to sue or to settle?

Justice Perram presumed that the primary reason for involving the ISPs was to get them to 'complete the picture' of infringement, so that the IP addresses identified by Dallas Buyers Club, LLC could be linked to the names of identifiable customers and those customers could then be sued for infringement.  Supporters of the ISPs' opposition to the discovery application claim that Dallas Buyers Club, LLC has merely engaged in a preliminary tactic in 'speculative invoicing'. Speculative invoicing (also known as 'copyright trolling') is a practice where letters of demand are issued on behalf of copyright owners to individuals which demand payment from them for copyright infringement. Usually the payment demanded is in far excess of, or totally unrelated to, the quantifiable cost (if any) of the infringing act. However, there has been no evidence before Justice Perram at this point on whether this is the case. 

Plot Twist #3 – IP addresses: what will they reveal?

As IP addresses are linked to the location of the infringing conduct and not the identity of the person engaging in that conduct, there is an additional question of whether the customer is the same person as the downloader, and where liability for infringement should fall. This could potentially have serious implications for privacy, contributory infringement and calculation of damages, and it will be interesting to see whether these issues get proper airtime during the hearing.

Rating: A must-watch!

This is a fascinating dispute with lots of issues across privacy, copyright and telecommunications law, with the potential to seriously affect the online behaviour of Australian customers. No doubt the publicity surrounding this case will have reputational implications for both parties, so it will be interesting to see what happens in the lead up to the hearing in February 2015. We will be following this case closely, so remember to tune in to the sequel!