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Don't panic: A hitchhiker's guide to iiNet-Dallas Buyers Club ruling

It will likely be a while yet before Australians who allegedly downloaded Dallas Buyers Club over peer-to-peer services will get a letter in the mail, and even longer before any potential damages will be paid.
Written by Josh Taylor, Contributor on

The ruling by the Australian Federal Court that iiNet and other internet service providers (ISPs) must hand over the names and physical addresses of 4,726 customers is only the beginning of a lengthy process that will likely take a long time before customers will start getting letters or will even need to think about paying the "fines" the letters may demand.

The judgment from Justice Nye Perram in court on Tuesday sets out that at Dallas Buyers Club LLC's expense, iiNet, Internode, Amnet, Dodo, Adam, and Wideband must hand over the names and physical addresses of customers alleged to have infringed.

The company determined these infringers by using software called "Maverick Monitor", which found peer-to-peer torrents of the Academy Award-winning film Dallas Buyers Club online and downloaded just enough to track the IP addresses and verify that they were sharing that film online.

This means that anyone sharing the film, even leechers who shared mere kilobytes of the film with the tracker, could potentially have been caught by the software.

"I am comfortably satisfied that the downloading of a sliver of the film from a single IP address provides strong circumstantial evidence that the end user was infringing the copyright in the film," Perram said.

The IP addresses were then tracked down to the relevant ISPs, and now the ISPs must go through their records -- assuming they still have a record of them -- and determine which account was assigned that IP address at the exact time of the alleged infringement between April and May last year.

Voltage -- the parent company of Dallas Buyers Club LLC -- has been restricted in sending out "speculative invoices" similar to the way it has in the US, demanding that customers pay thousands of dollars in compensation or risk court action.

The Federal Court will be required to approve a draft of any letter sent out to account holders, meaning the language will likely be very different, and the demands for compensation will likely be much lower than what has been seen in the US. Perram said that "speculative invoicing" might not be illegal in Australia, but because of the "potential vulnerability of what may appear to be abusive practices", he ruled out the possibility of speculative invoices.

Perram did not, however, rule out the possibility that Dallas Buyers Club LLC might be able to get a big payout over the infringement to send a message to infringers to stop downloading.

"It is not beyond the realm of possibilities that damages of a sufficient size might be awarded under this provision in an appropriately serious case in a bid to deter people from the file sharing of films. There is no need to speculate on what those damages might be," he said in his judgment.

Voltage's vice president Michael Wickstrom told ABC Radio National's Breakfast that piracy in Australia is "far beyond" other Western countries, and that something needed to be done. He said the company had lost "millions" in revenue in Australia

"We would estimate tens of millions, because we see a lower home video revenue, a lower pay-per-view revenue," he said.

He denied that there would be "speculative invoices", but said that it would be up to the company's Australian lawyers to determine whether the letters would seek damages.

"I want an Australian solution for an Australian problem ... we're going to defer to our Australian attorneys, who will decide on the format of the letters to be sent out to people," he said.

Communications Alliance CEO John Stanton told ABC's 7.30 program on Tuesday that he believes the costs may be lower in Australia.

"Certainly, the costs or the damages that happen in Australia tend to be compensatory rather than punitive, which would suggest that if it's a AU$15 movie where the revenue has been avoided, that the demand for payment, if there is one, ought to reflect that. So how the numbers stack up is something that only, I guess, Dallas Buyers Club will know at the end of the day -- if they choose to run this process," he said.

Voltage will also be required to pay the costs for ISPs to retrieve this information; an additional hurdle in recouping any lost revenue from Australians torrenting the film.

Voltage has targeted infringers in various countries for a number of films, including TheHurt Locker. A similar ruling was made in Canada in Feburary 2014 over court oversight of the letters sent, and that case is ongoing in appeals, without letters being sent. iiNet can still appeal the judgment over the next few weeks, but it has not stated whether it will go ahead with any appeal.

If Voltage is allowed to send letters, Wickstrom told the court that it would be selective about who would be targeted. He said potential targets that would not be a good look for the company -- like pensioners, or schools, or those in defence -- would likely be avoided.

It is unclear how the company plans to identify those candidates on the basis of a name and mailing address alone.

Most importantly, alleged infringers will be able to challenge the claims made by Voltage in the letters it does send. The court did investigate the Maverick Monitor software, but not to the degree where individual IP addresses were validated. There is the small possibility that an IP logged by the software might not match the actual account holder at the time of the infringement.

There is also the question of whether the account holder knew who infringed on the content. Perram indicated that this would be made more obvious by the film downloaded.

"Of course, it was possible that the account holders might have some insight into who the end user using BitTorrent might have been. In some cases, this might be straightforward, such as in homes with only two occupants having access to the internet connection. In other cases, it might not be too difficult for the account holder to work out who the downloader was. In many homes, the identity of the film may itself provide some insight into the identity of the file sharer," he said,

"The audiences for Cinderella and American Sniper would have few common members (hopefully)."

In handing over the details, Perram will assist Voltage in helping potentially discover who exactly in Australia infringed on the film, but it is no guarantee that all 4,726 customers will be "fined" for allegedly downloading the film.

Given the restrictive access to customer details in the judgment, and the incoming piracy code, it seems unlikely that Australia will now be flooded with similar claims from rights holders wanting to track down alleged infringers. Any users alleged to have infringed more than three times in one year may have their details handed over through a similar court action, but a similar scheme in New Zealand showed that very few users ever reach the final notice stage.

Plus, Dallas Buyers Club is widely available on streaming video services Netflix, Stan, and Presto.

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