Loss for iiNet in Dallas Buyers Club court battle

iiNet, along with Dodo, Wideband Networks, Amnet and iiNet's wholly owned subsidiaries Adam Internet and Internode, has lost an attempt to block a motion for preliminary discovery brought by the rights holders of 2013 movie Dallas Buyers Club.

The ruling means that Dallas Buyers Club LLC will be able to obtain the personal details of ISP customers alleged to have illicitly downloaded the movie.

However, presiding judge Justice Nye Perram attached conditions to his ruling. The parties will return to court on 21 April to discuss a draft of the letter that will be sent on behalf of DBC LLC to ISP customers alleged to have downloaded the film via BitTorrent.

There are 4726 IP addresses DBC LLC is seeking details on.

In his ruling the judge said the court should prevent any "speculative invoicing" and “should ensure that ... the privacy of the account holders [is] adequately protected.”

Speculative invoicing refers to a practice that iiNet alleges Voltage Pictures, which owns DBC LLC, has engaged in in other jurisdictions.

In the US, lawyers acting on behalf of the company have sent letters (described in court as “nasty”) indicating that for a fee it will grant the receiver immunity from any legal action related to piracy of the film.

iiNet has strenuously objected to the practice.

“I will order the ISPs to divulge the names and physical addresses of the customers associated in their records with each of the 4,726 IP addresses,” Perram said in his ruling

“I will impose upon the applicants a condition that this information only be used for the purposes of recovering compensation for the infringements and is not otherwise to be disclosed without the leave of this Court. I will also impose a condition on the applicants that they are to submit to me a draft of any letter they propose to send to account holders associated with the IP addresses which have been identified."

DBC LLC will pay the costs of the proceedings and the costs incurred by the ISPs during preliminary discovery.

Michael Bradley, managing partner for Marque Lawyers, which represented DBC LLC, described the ruling as a "good outcome" for his clients.

"This is just the first step in the process, we have to come back to the court to settle the form of the preliminary discovery orders and then go through process of obtaining the identifying information of IP address holders," he told journalists outside court.

He said he didn't want to "pre-empt" the content of any letter sent to ISP customers.

DBC LLC took court action because of “wholesale” infringement of its copyright, he said.

Lawyers representing iiNet and the other ISPs had argued during proceedings that the impending introduction of an industry copyright code, the draft of which includes a mechanism for expedited preliminary discovery, rendered the whole court process moot.

The draft code sets out a series of warning letters that will be sent to ISP customers accused of violating copyright.

If an ISP customer receives three notices within the space of 12 months, "ISPs will, on the request of a Rights Holder, facilitate an expedited preliminary discovery process" — clearing the path for potential civil court action — the draft states.

The judge rejected iiNet's argument, ruling that the “the draft code provides no reason to decline relief.”

“The submission the ISPs made to this Court was that the possibility that the code would come into existence was a reason for me not to order preliminary discovery because alternative avenues existed to deal with the problem,” his ruling stated.

Moreover, there is “no sensible chance of it coming into force in the next few months,” the ruling stated.

iiNet was previously embroiled in a copyright-related court case brought against it by a number of movie studios. The lengthy court process, which began in 2009 and concluded in 2012, resulted in a High Court victory for the ISP.

Reversing the outcome of that trial has been an explicit goal of Attorney-General George Brandis.

The latest move in the government's copyright crackdown has been proposing legislation that would enable rights holders to apply for court orders to force ISPs to block pirate websites.

iiNet has been approached for comment on today's ruling.