Internet Pirates Sink Dallas Buyers Club Rights Holder's Application for Damages

Increased ease and accessibility to the internet content coupled with rising costs of cinema tickets have made the issue of streaming and downloading movie materials a growing problem for film producers and studios alike.  A recent decision by the Australian Federal Court preventing the rights holders of the Dallas Buyers Club ("DBC") movie from pursuing those that downloaded the movie is unlikely to change the status quo.

We previously reported on the earlier case of DBC v iiNET, in which the Court prevented attempts by DBC to pursue the alleged 4,726 individual downloaders of the 2013 movie to extract payment (as compensation) until DBC submitted "…to me [the judge] a draft of any letter they propose to send to account holders associated with the IP addresses which have been identified".

This result initially signalled a success for the DBC rights holders as they were able to force Internet Service Providers ("ISP") to disclose the IP addresses of the individuals who had downloaded the movie, on the basis that the information would be provided for purpose of:

seeking to identify end users using BitTorrent to download the film;
suing end users for infringement; and
negotiating with end users regarding their liability for infringement.

A win for the Pirates

In the aftermath of April's ruling, and following a series of negotiated dialogue with DBC, the Court and lawyers for the ISP's, DBC produced its intended correspondence to the alleged pirates in which they sought the following:

(a)    a claim for the cost of purchasing a single copy of the movie;

(b)    a claim for an amount relating to each infringers' uploading activities.

(c)    a claim for punitive damages; and

(d)    a claim for damages arising from the amount of money expended by DBC to identify each infringer

Whilst the total sum DBC sought from each alleged infringer was not disclosed and remained confidential, it was held that "the [Court's] power [pursuant to r 7.22 of the Federal Court Rules 2011 (Cth)] does not extend to facilitating court cases or negotiating positions lacking legal substance. Claims (b) and (c) are untenable claims and are outside the proper ambit of the power."  In other words, DBC could only charge for the copy of the film and their associated legal fees, but not for the damages relating to the position regarding downloads and uploads.

In addition to this, Perram J held that the stay would only be lifted if DBC undertakes to only pursue the downloaders in relation to claims "a" and "d".  By virtue of DBC not having a presence in Australia, and consequently, not being able to be punished by the Court for contempt if the terms of the undertaking were breached, Perram J ordered that the undertaking be secured by a bond. This bond, in the words of Perram J who "Having had access to what it is that DBC proposes to demand under (b) and (c) and the potential revenue it might make if it breached its undertaking to the Court not to demand such sums, it seems to me that I should set the bond at a level which will ensure that it will not be profitable for it to do so. I will set the bond at $600,000 which, if the undertaking is given, is to be lodged by bank guarantee with the Registrar."