iiNet ordered to hand over customer details to Dallas Buyers Club

iiNet has been ordered to hand over the customer details of almost 5000 people the owners of the film Dallas Buyers Club claim have shared the movie online without authorisation.

In Sydney's federal court today, Justice Nye Perram ruled that so-called preliminary discovery should be granted to the rights holder, with certain conditions.

To protect customer privacy, DBC LLC will be restricted from disclosing the names and addresses of any alleged infringers iiNet hands over.

The rights holder will only be able to use the information to seek to identify people using BitTorrent to share the film; to sue end-users for infringement; or to negotiate with end-users over liability for infringement.

Perram also ordered that any letter sent to an iiNet customer alleged to have infringed copyright be sent to himself first for approval.

DBC LLC has been ordered to pay the cost of the proceedings, and also the ISP's costs for handing over the customer details.

The company will now be able to access the names and residential addresses of around 4700 alleged copyright infringers. However, Perram said he did not authorise the court to order the production of email addresses.

One of iiNet's arguments against the granting of preliminary discovery had been around the potential for threatening letters to be sent to its customers, an approach DBC LLC has taken in the US.

"There is no doubt that [DBC owner] Voltage has [engaged in speculative invoicing] in the past," Perram wrote in his judgment.

"There were a number of instances put before me of Voltage having written, in the United States, very aggressive letters indicating to the identified account holder a liability for substantial damages and offering to settle for a smaller (but still large) sum.

"[Royalties vice president at Voltage, Michael Wickstrom] gave evidence that this would not be happening in Australia.

"My impression was that Mr Wickstrom would act as aggressively as he was legally permitted, a proposition from which counsel for the applicants, Mr Pike SC, did not dissent."

Perram said the conditions he had imposed on DBC LLC around privacy and the wording of the letters would avoid account holders' potential vulnerability to "what may appear to be abusive practices".

He said the damages for single instances of infringement were likely to be modest and potentially equal to the license fee the customer would have paid had they bought the film.

Perram's decision comes just one day before the ISP industry is due to to hand its draft copyright infringement code to the Australian Communications and Media Authority (ACMA) for approval.

The code has formed a large part of the hearings - iiNet had unsuccessfully argued that Perram should hold the judgment over until the code is introduced.

"Industry codes have no effect until registered," Perram wrote today.

During the case, iiNet also sought to discredit the software used by DBC to locate those downloading its film without payment.

The ISP repeatedly argued that the way the Maverickeye software timestamps downloader IP addresses is flawed, meaning activities could be matched to the wrong account holder.

Justice Perram ultimately indicated the evidence did not indicate incorrect associations had taken place, and said it would be "a coincidence of galactic proportions" if all IP addresses identified so far were wrong.

Perram also suggested iiNet counsel had mis-stepped by cross-examining Maverickeye technical analyst Daniel Macek, who had not been able to answer a number of questions in relation to how the system works..

The parties will appear in court again on April 21 as part of a directional hearing to flesh out Perram's orders regarding privacy, costs and the drafting of the letters.

iiNet said today's ruling was a "positive" one that meant significant safeguards would be put in place to protect Australian customers.

“The result is pleasingly what we expected. By going through the process we’ve been able to ensure that our customers will be treated fairly and won’t be subjected to the bullying that we have seen happen elsewhere,” iiNet CEO David Buckingham said in a statement.

“We’re very happy with Justice Perram’s judgment and his balanced approach to both the studio’s and consumers’ rights.”

Buckingham said the ruling for judicial oversight of the letters would put a "major dent in the process and business case behind speculative invoicing, since the financial returns could be outweighed by the costs of legal action".