The technology used by copyright litigant Dallas Buyers Club LLC to determine that iiNet's customers were illicitly downloading copies of the Oscar-winning film Dallas Buyers Club will be under the microscope in the Australian Federal Court.
Dallas Buyers Club LLC, seeking to obtain customer details for IP addresses that were tracked by the organisation on torrents for the film. In the first directions hearing in the Federal Court in Sydney on Monday, Justice Nye Perram heard that as early as May 2013, the firm had been sending out letters to iiNet seeking to obtain this information, but had faced resistance from iiNet and the other ISPs. The film was not released until late 2013, so it is unclear what the early letters were about.
Last month, iiNet's chief regulator officer Steve Dalby said that iiNet has concerns about what Dallas Buyers Club intends to do with the customer details, including sending out "speculative invoices" that ask customers to pay thousands of dollars in compensation to the company, or risk being dragged into court.
"It might seem reasonable for a movie studio to ask us for the identity of those they suspect are infringing their copyright. Yet, this would only make sense if the movie studio intended to use this information fairly, including to allow the alleged infringer their day in court, in order to argue their case," he said at the time.
"In this case, we have serious concerns about Dallas Buyers Club's intentions. We are concerned that our customers will be unfairly targeted to settle any claims out of court using a practice called 'speculative invoicing'.
"iiNet is concerned that such a development would open the floodgates to further claims by other rights holders, leading to more Australians being intimidated to pay exorbitant amounts in an attempt to avoid improbable litigation."
Barrister Richard Lancaster, SC representing iiNet, told Perram in court on Monday that iiNet is seeking to understand the system that Dallas Buyers Club LLC used to track the IP addresses, which is detailed in the expert report the company filed as part of the case. Lancaster indicated that iiNet is not familiar with the system, and that it is different to the system used by the organisationsagainst iiNet in the High Court in 2012.
The system that Dallas Buyers Club LLC is believed to have used is from a German company known as Maverickeye UG. According to the company's website, the organisation uses "highly sophisticated software" and "robust hardware infrastructure" to obtain data that has "quality, consistency, and relevance" for the legal system.
"Maverickeye UG work very closely with several law firms focused on the protection of intellectual property and specialised in filing legal claims against people who infringe on your intellectual property," the company states on its site.
Dallas Buyers Club LLC barrister Ian Pike, SC, said that iiNet had been "on notice for some time" about the company's intentions to seek access to customer details, and indicated that the case would rely on some of the evidence that iiNet gave during the course of the High Court case about intentions to comply if a rights holder seeks access to customer data through court.
Further directions hearings for security and costs has been set for November 17 and early December, ahead of a hearing of the case over two days on February 5 and 6, 2015.
"I should disclose: I have seen the film," Perram said at the end of Monday's hearing.
It comes as the federal government has introduced legislation that would require internet service providers like iiNet to retain the sort of customer data, including allocated IP addresses, that Dallas Buyers Club LLC is seeking to obtain.
Dallas Buyers Club LLC seeking to obtain data back to May 2013 may be an issue if, as the government has suggested, ISPs such as iiNet are no longer retaining this data for that length of time.
Communications Minister Malcolm Turnbullthat although the is only meant to provide access to criminal law-enforcement agencies for the purposes of investigating serious crime, copyright holders could also follow in Dallas Buyers Club LLC's footsteps and take ISPs to court to obtain the data.