Dallas Buyers Club LLC v iiNet Limited (No 4) [2015] FCA 838 [1]

The owners of copyright in the film Dallas Buyers Club have been setback in their quest to obtain relief against 4,726 subscribers of six Australian ISPs who it alleges have infringed copyright in their film through the BitTorrent protocol. In this chapter of the saga, Justice Perram declined to lift the stay on orders made on 6 May 2015 that the ISPs hand over the subscriber’s details to Dallas Buyers Club. [2]

The court noted that the discretion to allow for preliminary discovery in providing the subscriber’s details to Dallas Buyers Club involved an examination of Dallas Buyers Club’s intended use of the details. This examination focussed on Dallas Buyers Club’s proposed demands.  Justice Perram was critical of the time taken for Dallas Buyers Club to present its precise monetary demands to the court.

Ultimately, Dallas Buyers Club presented four claims:

  1. the cost of an actual purchase of the film
  2. the subscriber’s uploading activities
  3. additional damages for other infringements; and
  4. costs.

The court separated the permissible demands from the impermissible demands. The court found that claims (a) and (d) were permissible demands.

Impermissible Demands

With regard to a claim for the subscriber’s uploading activities, the court noted the difficulty in applying the foregone licence fee approach to calculating damages. The court did not entertain the suggestion that the subscribers would have sought a licence from Dallas Buyers Club to share the film on BitTorrent, describing the notion as “surreal”.

In relation to the claim for additional damages (where Dallas Buyers Club sought damages for other infringements the quantum of which would rise in unison with the volume of infringements), the court found this to be an impermissible demand. The court found that the evidence submitted did not support the conclusion that an award of additional damages under section 115(5)-(8) would be a reasonable prospect. The court suggesting that the text of the section 115(5)-(8) contemplates infringements of the whole of a work, whereas the BitTorrent protocol shares small slivers. In any event, the court transcended that “swamp” by returning to first principles: the application before the court was concerned with what Dallas Buyers Club could demand of potential infringers. Dallas Buyers Club had not set out what it proposed to demand with any precision and the court found this claim of additional damages “untenable”.

Nature of the orders

The court declined to lift the stay on the orders of 6 May 2015 until Dallas Buyers Club provided a written undertaking that it would only use the subscribers’ details for the purposes of obtaining damages under paragraphs (a) and (d). The court also set a bond of $600,000 as Dallas Buyers Club has no physical presence in Australia and the court would be unable to punish it for contempt if it fails to honour the undertaking. Further, if Dallas Buyers Club was to instigate any proceedings as a result of the information provided by the ISPs, those proceedings are to commence in the Federal Court before Justice Perram.

Going forward

The court stated that in future cases where a prospective applicant seeks preliminary discovery against ISPs with a view to contacting a large number of potential respondents, it will be an essential step for the prospective applicant to set out at the hearing of the application:

  • it seeks preliminary discovery for a purpose countenanced under the rule providing for preliminary discovery; and
  • the nature of the demands or claims it intends to make.

With regard to court oversight of communications with potential respondents, the court observed that in future, all that may be required is that a court is satisfied that the content of the communications is for a purpose outlined in the rule providing for preliminary discovery.

Comment

Dallas Buyers Club’s primary issue at this stage was that it could not formulate its proposed demands with any precision and in a manner that satisfied the court. The decision at this stage of the proceedings is perhaps not surprising given this is the first time this kind of litigation has been conducted in Australia on this scale. That said, the case continues to be an example of effective judicial discretion.

On the nature of this discretion in relation to communications with consumers, the court made some interesting comments on the supervisory role of the court in similar cases in the United Kingdom and Canada. The court distinguished those cases from the present one, noting those jurisdictions are influenced by human rights instruments which are not part of Australian law. As we have remarked before, a nation's legal framework is key to the operation of domestic copyright laws.

The court’s suggestions for how future cases might be conducted is significant given that facilitated preliminary discovery is an outcome of the anticipated Copyright Notice Scheme.

 

[1] https://jade.barnet.com.au/Jade.html#article=404445

[2] https://jade.barnet.com.au/Jade.html#article=392165