Dallas Buyers Club saga draws to a close

Speculative invoicing dead in the water

A long-running legal action launched by the rights holders of the movie Dallas Buyers Club today draws to a close.

The saga began in October 2014, with Dallas Buyers Club LLC and movie studio Voltage Pictures launching an action in the Federal Court that sought to uncover the details of thousands of ISP customers.

The studio sought the contact details of customers linked to IP addresses it alleged had participated in downloading Dallas Buyers Club via BitTorrent.

Targeted were the customers of a number of ISPs: iiNet and its subsidiaries Adam Internet and Internode, as well as Amnet Broadband, Dodo and Wideband Networks Pty Ltd. (The action was launched before TPG’s takeover of iiNet.)

Voltage was seeking to contact alleged pirates in order to come to a financial settlement; in return the company would commit to not suing individuals for violating its copyright.

The ISPs indicated they were wary of the practice of so-called ‘speculative invoicing’, whereby with the threat of costly legal action hanging over their heads downloaders are charged a fee far in excess of the true value of a piece of content.

In April last year the presiding judge in the case, Justice Nye Perram, ruled that he would allow the details of ISP customers to be handed over. In order to prevent speculative invoicing, however, he attached strict conditions.

Chief among those conditions were that the court supervise the contents of a letter that would be sent to ISP account holders and that a security be lodged with the court to ensure that Voltage did not stray from the approved form of contact.

What appeared to be a qualified victory for Voltage came unstuck in an August 2015 ruling, when Justice Perram rejected key elements of a formula that Voltage intended to use to calculate proposed settlements.

Voltage persisted, however, requesting Justice Perram to reconsider elements of his ruling and asking to be allowed to contact only a percentage of the customers linked to the more than 4700 IP addresses it had gathered and consequently lodge a reduced security.

What has turned out to be the final Dallas Buyers Club ruling was made in December, with Justice Perram again rejecting Voltage’s arguments.

Key to Justice Perram’s rulings were that Voltage would be permitted to seek from individual downloaders only its legal costs (divided by the expected number of downloaders the studio expected to engage in the process) and a cost of the copy of the film.

Voltage had pushed for a far more lucrative figure that also included a hefty licence fee for distributing the film (linked to the uploading activities of pirates) and a fee linked to the number of other films a pirate had downloaded illicitly.

Perram’s judgement as it stands means that speculative invoicing as a business model is effectively dead in the water in Australia.

“The outcomes of the Dallas Buyers Club case have been significant, balanced and encouraging,” said John Stanton, the CEO of telecommunications industry body Communications Alliance.

“The case demonstrated that Australian courts support legitimate protection of copyright, but are also mindful that pursuit of copyright protection should not be used as means of unreasonably threatening or intimidating consumers and that any potential penalties for copyright infringement must be proportionate to the extent of the breach and to any material loss to rights holders,” Stanton said.

Comment was sought from Voltage Pictures and iiNet’s parent company, TPG.

Read more: Google slams Australian copyright laws

Justice Perram’s December ruling included a self-executing order that, at noon today, will dismiss in its entirety the legal proceedings brought by Dallas Buyers Club LLC and Voltage.

Lawyers for DBC LLC and Voltage have indicated they do not intend to continue with further legal action in Australia.

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