The Federal Court has dismissed the latest attempt by the makers of the film Dallas Buyers Club to pursue copyright infringement claims against internet subscribers.

Initially, in Dallas Buyers Club LLC v iiNET Limited [2015] FCA 317, the Court made a preliminary discovery order requiring various Australian Internet Service Providers (ISPs) to turn over details of individuals or Internet Protocol (IP) address holders to Dallas Buyers Club LLC (DBC).  DBC claimed these account holders had infringed its copyright by sharing copies of the acclaimed movie online using a peer-to-peer file sharing network.

However, Justice Nye Perram stayed the order pending approval of any letters of demand DBC intended to send to the infringers amid concerns DBC would engage in the practice of speculative invoicing.

In August, the case returned to Court to consider what DBC was entitled to demand from the infringers.  DCB sought:

  • from each down loader, the cost of purchasing a single copy of the film for each copy of the film downloaded;
  • a one-off licence fee from each uploader on the basis each was engaged in widespread distribution of the film;
  • additional damages under s.115(4) of the Copyright Act 1968 (Cth) calculated on the basis of how many copies of other copyright works (not necessarily owned by DBC) had been downloaded by each infringer; and
  • damages arising from the cost to DBC to obtain each infringer’s name.

Perram J found that DBC was over-reaching in its claim for additional damages and for an individual licence fee.  He labelled the idea that individuals who shared the film via a peer to peer network would approach DBC to negotiate distribution rights in return for a licence fee “so surreal as not to be taken seriously”.  Perram J declined to lift the stay in the August proceeding but was willing to do so, if DBC undertook to demand from the infringers only:

  • the retail price of a purchased copy of the film; and
  • a proportion of DBC’s unrecoverable costs associated with obtaining account holders’ details.

In December, the parties returned to Court. with DBC seeking to revisit its claim that it was entitled to also demand the following from the account holders:

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

iiNet Limited, the first respondent and one of a number of ISPs involved in the proceedings, argued that DBC had lost the argument to have the stay lifted on these issues in August.  It submitted the public interest in the finality of litigation meant DBC should not be allowed to ventilate these issues again.

The application to have the stay lifted was dismissed.  In his decision, Perram J noted that the orders were interlocutory and therefore, permanently exposed to the risk of alteration or even revocation.  However, the concept of abuse of process placed limits on a party’s ability to “re-litigate interlocutory issues after they have been thoroughly determined”.

Perram J was not prepared to allow DBC to revisit the issues raised “unless I am satisfied that there has either been a material change in circumstances or new material has been discovered which could not reasonably have been put before the Court on the previous occasion.”  Alternatively, DBC had to establish that the Court had failed to deal with some aspect of DBC’s case which could have a material impact on the outcome of the proceeding.

In relation to the claim for a licence fee, DBC submitted that Perram J’s approach in August to the fee calculation was wrong.  It argued that the recent judgement on 2 December 2015 in Winnebago Industries Inc v Knott Investments Pty Lt d(No 4) [2015] FCA 1327 had laid down a different approach.  InWinnebago, the Court concluded that a plaintiff did not have to prove the infringer would have entered into a licence in a damages claim for passing off.  Instead, the Court held that damages were to be assessed on the basis the infringer should pay for what it had taken.  It found that the value of something taken without licence should be the licence fee that would have been paid.

Perram J declined to accept that the case had caused any material change to DBC’s circumstances since August.  He found it was open to DBC to argue in August, on the basis of the decision in Artistocrat Technologies Australia Pty Ltd v DAP Services (Kempsey) Pty Ltd (in liq) [2007] FCAFC40  (2007) 157 FCR 564,  that it was not necessary to prove that the infringer would have sought a hypothetical licence in order to claim damages.  In any event, even if such argument was made, DBC had failed to provide any evidence as to what would constitute a reasonable licence fee.

During the hearing, DBC sought an adjournment to allow it to put on evidence of this matter but Perram J refused, pointing to the complexity of such an inquiry and noting that “it needs to be kept in mind that what is before the Court is a preliminary discovery application, not Ben-Hur.  The interests of justice are not served in comparatively modest procedural litigation … by permitting no stone to go unturned.”

On the issue of additional damages, DBC submitted that Perram J had not fully dealt with its August submissions on s.115(4) of the Copyright Act (1968) and provided further specific sums that it should be permitted to demand from infringers.  However, Perram J accepted iiNet’s submissions that the issue had been dealt with and should not be revisited.

In August, Perram J had stated the test to determine whether a specific demand for damages should be made was whether if DBC had sued an account holder for the sum proposed to be demanded, the account holder would be entitled to have that suit summarily dismissed.  As in December DBC had failed to give any details of how its demand for additional damages against a particular account holder would be calculated, a case baded on such a demand would be summarily dismissed. DBC sought to provide figures in the December proceedings, however as it could have done so in August, Perram J did not allow a ‘second go’.

In his closing remarks, Perram J expressed the need to bring some finality to the proceedings.  Unless DBC makes a further application to have the stay lifted before noon on 11 February 2015, the proceeding will be dismissed.  We will need to wait and see if DBC will make one last stand.