Online piracy: Dallas Buyers Club throws in the towel but the fight continues

Dallas Buyers Club (DBC) has allowed its application to gain access to account holders details to lapse after Justice Perram continued to refuse to give access on terms sought by DBC.

In brief

However, rights holders have not given up the fight against online infringement with Foxtel, Roadshow Films and six other Hollywood studios taking action in the Federal Court last week under the new sections of the Copyright Act that allow access to overseas websites to be blocked.

Background on Dallas Buyers Club

We have reported on the previous decisions¹ in the DBC case here and here. In his first judgment in November 2014, Justice Perram indicated a willingness to give DBC access to the details of the account holders whose IP addresses were alleged by DBC to have been used to share copies of the movie online. However, in a subsequent judgment in August 2015, his Honour was not prepared to give that access until DBC gave an undertaking to the Court that it would only seek an amount from the alleged infringers in pre-litigation correspondence that it could reasonably expect to be awarded in an action for copyright infringement. His Honour considered that the appropriate amount would be the cost of purchasing the movie legally as well as a proportion of DBC’s costs of obtaining preliminary discovery. His Honour also required DBC to provide a surety of $600,000 to ensure its compliance with the undertakings.

Latest judgment

In September 2015, DBC sought access to the account holder details again, but this time it sought only a subset of the contact information in exchange for modified undertakings and a reduced surety of $60,000.

His Honour rejected DBC’s proposal in a judgment delivered on 16 December 2015,² saying that he was not prepared to ‘do anything beyond what [he] indicated in the August judgment’.

In particular DBC had sought to re-litigate an argument (that his Honour had earlier rejected) that it was entitled to seek a distribution licence fee from alleged infringers. DBC submitted that the recent decision in Winnebago³ had changed the law on this issue. His Honour found that the reasoning in Winnebago did not apply and, in any event, DBC had failed to lead any evidence of what a reasonable licence fee might be.

DBC also sought damages calculated on the basis of  ‘commercial infringement’,⁴ a basis it had not originally sought but which Justice Perram had raised with the parties. His Honour was not satisfied that it was appropriate to revisit this issue either.

In light of DBC’s failure to convince his Honour to change his approach he indicated that some ‘finality must now be brought to these proceedings’. His Honour made a self-executing order that the proceedings be terminated on 11 February 2016 unless DBC took some steps in the proceeding before then.

On 11 February 2016, the BBC reported Michael Bradley of Marque Lawyers as indicating that DBC were not planning to take any further steps or to appeal Justice Perram’s decisions.⁵

Where now for pursuing online infringement?

The High Court ruled in 2012⁶ that rights holders could not pursue ISPs for the infringing activities of their users and now the Federal Court has raised hurdles to pursuing individual infringers. Limiting damages awards to the cost that the user would have had to pay to purchase the movie legitimately makes litigation against individual users look like a very expensive option, even for locally based rights holders who might not be required to provide the court with a surety.

Now, it appears that rights holders are looking to the new section 115A of the Copyright Act, which was introduced in June 2015 (see our report on its introduction). The new section allows rights holders to seek ‘blocking injunctions’ requiring Australian ISPs to cut off access to overseas websites where the rights holder shows that the ‘primary purpose’ of the website is to engage in or facilitate copyright infringement.

The first two actions under the new legislation were launched on 18 February 2016.

Roadshow Films, along with six Hollywood studios, has sought an order requiring ISPs including iiNet, Optus, Telstra (Bigpond), TPG, Virgin Mobile, Pacnet and Vividwireless to block access to the ‘Solarmovie’. The complaint alleges that Solarmovie offers access to streams of movies belonging to the studios without their permission.

Foxtel has sought orders requiring more than 50 companies, including all the major Australia ISPs, to block access to various sites associated with (including mirror sites) ‘The Pirate Bay’, ‘Torrentz’, ‘TorrentHound’ and ‘IsoHunt’. These are all sites said to be associated with BitTorrent file sharing of television programs belonging to Foxtel without its permission.

Both matters are listed for case management hearings before Justice Nicholas in early March 2016.

It remains to be seen what evidence the Court will require before it is prepared to grant the injunctions, particularly with respect to establishing the ‘primary purpose’ of the target websites, and whether the ISPs will object to the making, or the form, of the orders sought.

This article was written by Rebekah Gay, Partner, Sydney and Peter FitzPatrick, Solicitor Sydney.

Endnotes

1. Dallas Buyers Club LLC v iiNet Limited (No 1) [2014] FCA 1232; Dallas Buyers Club LLC v iiNet Limited (No 4) [2015] FCA 838.
2. Dallas Buyers Club LLC v iiNet Limited (No 5) [2015] FCA 1437.
3. Winnebago Industries Inc v Knott Investments Pty Ltd (No 4) [2015] FCA 1327.
4. Pursuant to ss 115(5)-(8) of the Copyright Act 1968 (Cth).
5. Dallas Buyers Club drops Australia piracy case.
6. Roadshow Films Pty Ltd v iiNet Ltd (2012) 248 CLR 42.