Insights into litigation, sports law, media and legal culture

For confused Dallas Buyers Club downloaders, New Zealand might show the way

If you downloaded Dallas Buyers Club in 2014 then you might have been left feeling frustrated and confused by the many contradictory media reports floating around last week.

If you have the time the judgment of Perram J can be found here (the decision will not be appealed). Or for an excellent overview of the case, see a CNET article here. And for a hilarious and random quote from the judge, see here:

The audiences for Cinderella and American Sniper would have few common members (hopefully).” Perram J, Dallas Buyers Club LLC v iiNet Limited [2015] FCA 317 (7 April 2015): #shitjudgessay

Ultimately, how much downloaders will have to pay if they are taken to court is the million, thousand, couple of hundred, or twenty dollar question. The good news is that, in Australia at least, you are unlikely to have to take a night job at Coles to pay the legal bills just yet.

Speculative invoicing

Last year hundreds of United States consumers received a letter from their Internet Service Provider threatening them with damages that ran in the tens of thousands of dollars.

Dubbed “pay up or else” letters the studios encouraged account holders to settle by suggesting they would have to pay $150,000 in damages if the matter ever went to court. According to reports the defendants usually settled for about $5000.

Concerns that Dallas Buyers Club would deploy this practice, often called “speculative invoicing”, if it obtained account holder information from iiNet, led to iiNet’s decision to defend the discovery demand. iiNet’s reasoning is set out in a blog post on its website.

The good news is Justice Perram had reservations about whether the practice would be legal under Australian Consumer Law;

Representing to a consumer that they have liabilities which they do not is likely to be misleading and deceptive conduct under s 18 of the Australian Consumer Law and it would be equally misleading to represent to someone that their potential liability is much higher than it could ever realistically be.”

Lawyers for Dallas Buyers Club tried to allay such concerns by promising that the aggressive “pay up or else” letters would not be used in Australia. Despite such promises, Justice Perram suspected that DBC would in fact “act as aggressively as legally permitted”; which is why he required that any letters of demand be first submitted to him for approval.

New Singapore strategy

Yet another approach was reported this week when Dallas Buyers Club LLC sent letters to 77 customers of Singaporean internet service provider M1 (said to be a source of unauthorised downloading of the movie) asking them to “name their price”.

Rather than asking customers to pay the price of a three Michelin star restaurant meal, this new approach appears more aligned with a visit to Lentil as Anything after a three day Bush Doof. It is fair to say that “pay what you feel like” is pitched more to the budget conscious end of the market.

The letters also gave the alleged pirates just three days to respond with a written offer of monetary compensation, and demanded they delete and stop using any unlicensed versions of the film still in their possession.

Why the New Zealand approach is more satisfactory

It is possible to learn from the New Zealand position.

Before looking at it, Justice Perram did offer guidance about the likely approach in Australia.

The good news is that his Honour acknowledged that in single instances the damages are likely to be modest and would possibly be limited to the price of the licence fee that would have been paid had the film been lawfully downloaded.

The value of the Dallas Buyers Club film is currently $11.99.

The bad news is that the Copyright Act allows for aggravated damages that would allow the court to take deterrence into consideration when deciding damages. This makes sense and would likely apply to repeat offenders. After all, if the fine for getting caught without a Myki were just the cost of a tram ticket, it does not take a genius to figure out how many passengers would happily risk getting caught rather than buy a ticket.

In Justice Perram’s own words “It is not beyond the realm of possibility 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.”

Unfortunately, his Honour refused to speculate on what sort of damages might constitute a “sufficient size”. Suffice to say they will probably be more than the $11.99 it would have cost to buy the film on iTunes. But how much more?

This question has already been answered in New Zealand. Following the introduction of the Copyright (Infringement File Sharing) Amendment Act in New Zealand in September 2011, several thousand infringement notices were issued. New Zealand’s graduated response system, whereby users are given three warnings before enforcement notices are sent, is similar to the “three strikes” model currently being suggested by industry groups in Australia.

So how well did it work in New Zealand? The first enforcement notices were issued from April 2012. However, none proceeded to hearing. The Recording Industry Association of New Zealand (RIANZ) did not elect to have the matter heard within the twenty-eight day time frame and no public explanation was given.

In September 2012, a handful of cases did proceed to hearings before the copyright tribunal. The first result was a victory for RIANZ: the account holder was found guilty and ordered to pay $616.57. The amount consisted of:

  • $250 to reimburse RIANZ for making its claim;
  • $360 for deterrence (calculated at $120 per infringement); and
  • $6.57 being the amount that the three songs would have cost if bought legitimately on iTunes.

RIANZ had claimed upwards of $1500 in each case however the awards all ranged from the $250 to $800 mark.

The excuses offered by account holders for file sharing are worth noting. All claimed to be unaware. In one case, the account holder blamed it on a flat mate, in another two cases it was the account holders’ children.

None of the cases involved high-end pirates. All were typical consumers. The awards given were therefore for education and general deterrence rather than punishment.

The Share-house Defence

How can I get around the need to pay any money, you might ask?

For any claim there is almost always a defence (although its strength is a different story).

Here, Dallas Buyers Club LLC must prove the identity of the wrong doer.

This is where the (loosely described) “share-house defence” comes in.

The court was ready to accept that the factual situation was – for the purposes of discovery at least – analogous with a parking ticket whereby a registered vehicle owner would be expected to know or at least provide some assistance as to the identity of the person who was driving their car at the time of the offence.

In other words, even if the account holder did not know what a BitTorrent was there were good reasons to think that the recipient of a letter from Dallas Buyers Club LLC might be able to help work out who in the household did.

Justice Perram acknowledged that in some cases determining who downloaded the film would be more straightforward than others. While he recognised the account holder and the downloader might not be the same person he thought that it would not be too difficult for the account holder to work out who the downloader was. His Honour even went so far as to suggest that the film title could give clues as to the identity of the downloader.

Many can therefore look forward to share-house meetings to try and determine who downloaded The Sisterhood of the Travelling Pants

Importantly, Justice Perram did not suggest one could infer the identity of the downloader from the account holder information.

It was held that the account holder information could assist the copyright holders to discover the identity of the downloader.

Whether this information would be sufficient to bring a successful infringement action remains to be seen.

It does not take too much imagination to picture a scenario in which infringement would be difficult to prove; such as the revolving door share-house situation or a café that offers free Wifi. Looking into the future, movie studios would probably like to see this problem avoided by the introduction of deeming provisions whereby account holders would be made automatically responsible for any illegal activity.

For example, under domestic animals legislation, and in the event of a dog attack, an ‘owner’ is deemed not just to be the registered owner of the dog, but simply the person who has the dog in his or her care.

The End of an Era

So after years of downloading with impunity is the Golden Age of Piracy finally over? Though the film studios do not like to admit it, dedicated pirates will likely have little problem side-stepping these measures. According to research this month by Essential Media the use of Virtual Private Networks is on the rise with 16% of Australians saying they have used VPN or anonymous routing systems like Tor.

The recent arrival in Australia of reasonably priced streaming services such as Netflix and Stan also suggests the solution is likely to be market based rather than regulatory.

Screen Shot 2015-04-17 at 12.44.28 pm

Gram Morris is a freelance writer and about to be a lawyer. He graduated from La Trobe University Law School in 2014. He is interested in copyright, privacy amongst other things. In his spare time he is a part time Essendon supporter and soft rock enthusiast.

5 Responses to “For confused Dallas Buyers Club downloaders, New Zealand might show the way”

  1. Jenny Gearing

    It will be interesting to see how they tackle the framing of the demand!

    • grammorris

      Absolutely. Will they quote an amount for damages? I dont think so. I think the uncertainty suits the movie studios and this is more about using the court as a public scare campaign rather than actually taking each downloader to court… but it will be interesting to see what happens if a downloader is ever taken before a magistrate. Personally I think they would need to reform the statute if such tactics are going to be worthwhile for them. Interesting to see how it unfolds anyway.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Basic HTML is allowed. Your email address will not be published.

Subscribe to this comment feed via RSS

%d bloggers like this: