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The price of a download: The Dallas Buyers Club litigation and quantifying copyright damages

by James d'Apice
23 September 2015
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There was a moment earlier this year when it felt like you couldn't check your social networks or your email inbox without bumping into someone sharing their views about the Dallas Buyer Club litigation. Should copyright owners be able to force internet service providers (ISPs) to surrender their customers' details?

The excitement was not misdirected. The outcome of this litigation may contribute to the future shape of the law of copyright in this country.

For now, the talk has died down, but the legal proceedings remain on foot.

The proceedings

The owners of the copyrights arising from Dallas Buyers Club (DBC), a 2013 film starring Matthew McConaughey, seek damages for infringement of their copyrights. They complain that their copyrights are being infringed by internet users downloading and then sharing their work via torrent websites without paying for the privilege. However, crucially, DBC do not know who these infringing users are.

So they have sought the assistance of the law.

DBC came before the Federal Court of Australia  and raised rule 7.22 of the Federal Court Rules 2011. That rule - somewhat over-simplified - allows the court to make an order requiring one person to deliver up documents that identify some other person or people who are potential defendants in future court proceedings. Because DBC does not know the identity of the alleged infringers they need rule 7.22 and the access it may provide to the ISPs' records to identify them.

In May 2015, in a previous step in these proceedings, the Court was satisfied that DBC was entitled to rely upon rule 7.22 to learn the identity of the prospective defendants, each of whom would be sent a letter.

The Court required DBC to provide the proposed letter for its approval; to make sure it would contain only appropriate terms "and not," as the judge said in a moment of levity, "something else, such as a dead cat…"

Justice Perram considered DBC's draft demand in Dallas Buyers Club LLC v iiNet Limited (No 4) [2015] FCA 838 (14 August 2015). The outcome could have implications for those who use ISPs, and particularly those with a penchant for unlicensed downloading.

DBC's demand

DBC's draft letter demanded from the potential defendants:

a) The purchase price of a single copy of the film;

b) A "licence fee" for each person found to have uploaded the film to a torrent website. The amount of the license fee was kept confidential but his Honour said it was "substantial";

c) Damages based on copyright works other than Dallas Buyers Club that the infringer might have downloaded; and

d) Damages on account of money spent by DBC to obtain the infringer's name.

The court's finding

The court found that rule 7.22 can be used to garner information about unidentified prospective defendants in order to sue them or negotiate with them, so long as the contemplated court proceedings or negotiating positions have legal substance.

The court found limbs (a) and (d) of DBC's claim did have legal substance and could properly form part of DBC's draft letter, but that (b) and (c) – the "substantial" licence fee, and the claim for damages based on downloads of other films – did not.

The judge said that in future when a copyright owner brings an ISP before the court hoping for the contact details of a large number of prospective defendants, it will be an essential step in that process that the copyright owner satisfy rule 7.22. This includes providing the court with a draft of the demand they intend to make.

Implications

The spectre raised by this litigation, the one that so ignited the public imagination, was the idea that a copyright owner might compel a court to order an ISP to give up its users' contact details without the users' consent. 

Almost every one of us is an ISP user. So almost every one of us could be affected by further developments in this area of copyright law.

James d'Apice

Associate | Makinson d'Apice Lawyers

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