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Federal Court iiNet decision will impact on online video piracy

14 April 2015

#Technology, Media & Telecommunications

Dan Pearce

Published by Dan Pearce, Emily Booth

Federal Court iiNet decision will impact on online video piracy

The Federal Court will order various ISPs, including members of the iiNet Group and Dodo, to provide to Dallas Buyers Club LLC (or parent company Voltage Pictures LLC) the names and addresses of customers who are alleged to have used BitTorrent to share the film Dallas Buyers Club.

In a judgment delivered on 7 April 2015, Justice Perram of the Federal Court pointed out that applications for preliminary discovery such as this ought not to involve such complexity. The purpose was not to determine whether persons who used BitTorrent to share the movie in fact infringed copyright. However, Justice Perram did make many interesting observations in his judgment and imposed some important conditions on the rights owners.

Was there an infringement of copyright?

Whilst there was no decision as to whether copyright had been infringed (as this is not the purpose of preliminary hearings), the court did ‘not regard as fanciful the proposition that end-users sharing movies on-line using BitTorrent are infringing the copyright in those movies’.

What would be the likely penalty?

The ISPs claimed in opposing the discovery that naming individual users would be economically pointless, as the compensation for the infringement would be in the order of $15.00. Representatives of Voltage have reportedly said that bringing proceedings against alleged infringers has value beyond the compensation recovered. Further, in the case of multiple down-loaders, the court said it must be considered at least plausible that a copyright owner may be able to obtain aggravated damages under s115(4) of the Copyright Act. The ability to obtain aggravated damages exists partly because of the need to provide deterrence. Additionally, rights holders could potentially claim their reasonable costs to pursue the claim and those would exceed $15.00.

Speculative invoicing

The court said there was ‘no doubt’ that Voltage had sent speculative invoices in the past. Voltage gave evidence that this would not be happening in Australia but Justice Perram still imposed a condition that the letters Voltage sent to the subscribers be first approved by the court. Justice Perram was concerned that Voltage would otherwise send the most aggressive letter they could under Australian law, and felt it was not an easy assessment to determine if this practice was lawful in Australia. There could be, for instance, potential liability under the Australian Consumer Law for misleading and deceptive conduct or unconscionable conduct for representing the liability of the end-user as much higher than it could ever realistically be.

Privacy

In another important component of the decision, the court will impose a condition on the discovery of the names and addresses to protect the privacy of the individuals. The purposes to which the information could be used is likely to be limited in the relevant order to:

  • seeking to identify the relevant end-users;
  • suing those identified for infringement; and/or
  • negotiation with end-users regarding their liability for infringement.

Costs

Of most comfort to the ISPs may be the fact that the court intends to make orders on 21 April 2015 which require Dallas and/or Voltage to pay the ISP’s costs of these proceedings (even though the ISP’s opposition was unsuccessful) and the costs of the ISPs providing preliminary discovery. The costs of providing discovery, and any liability the ISPs may incur in doing so, have long been an issue between the two groups.

A better way?

We reported on 10 March 2015 (here) that the rights holders, ISPs and consumer groups had together devised a Copyright Infringement Code which has now been submitted to the ACMA for registration. The ISPs argued that this should be taken into consideration in determining whether preliminary discovery was appropriate in this instance. However the court did not pay that argument any weight, concluding the code is an incomplete draft and was not likely to come into play for at least several months. Further, the judge labelled the code ‘non-binding soft law’ in reference to the fact that industry codes have no effect until registered with the ACMA and the ACMA determines a code has been breached and directs compliance. However, various stakeholders are still hopeful that the code, together with other mechanisms flagged for introduction and the increased availability of non-infringing sources of content, will help ease the current levels of online copyright infringement in Australia.

Update: 

For the latest developments in this matter, please read our update here...

Authors: Dan Pearce & Emily Booth


Contact Details

Melbourne
Dan Pearce, Partner
T: +61 3 9321 9840
E: dan.pearce@holdingredlich.com

Brisbane

Trent Taylor, Partner
T: +61 7 3135 0668
E: trent.taylor@holdingredlich.com

Disclaimer

The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future. 

Dan Pearce

Published by Dan Pearce, Emily Booth

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