Full citation: Dallas Buyers Club LLC v iiNet Ltd (2015) FCA 317 (7 April 2015)

Court: Federal Court of Australia (single judge)

Judge: Perram J (Justice Nye Perram)

Parties: Dallas Buyers Club LLC and Voltage Pictures LLC (applicants); iiNet Ltd, Internode Pty Ltd, Amnet Broadband Pty Ltd, Dodo Services Pty Ltd, Adam Internet Pty Ltd and Wideband Networks Pty Ltd (respondents)

Outcome: Further orders to be made on 21 April 2015 granting preliminary discovery to the applicants with regard to the personal details of approximately 5,000 persons whose Internet connections were allegedly used to download the film Dallas Buyers Club

Dallas Buyers Club LLC (‘DBC’) is a United States limited liability company claiming ownership of the copyright to the 2012 film Dallas Buyers Club. Its parent company is the second applicant, Voltage Pictures LLC (‘Voltage’). The respondents are all Australian Internet service providers (‘ISPs’).

This was an application for preliminary discovery: ‘a procedure which enables a party who is unable to identify the person who it wishes to sue to seek the assistance of the Court in identifying that person.’ The applicants ‘identified 4,726 unique IP addresses from which their film was shared on-line using BitTorrent’ and sought the identities of the account holders associated with those IP addresses. Although acknowledging that not every account holder is necessarily an infringer, the applicants did ‘say that some of them may be and, even if they are not, the account holders may … be able to help … identify … the actual infringers.’

The respondent ISPs ‘resist[ed] the application on many bases’ including that the evidence is insufficient to identify infringing IP addresses and that claims against the alleged infringers are ‘speculative’. Of note, the respondents ‘deny’ that either DBC or Voltage has proven they are the owners of the film’s copyright. The ISPs also submitted that the Court should not ‘order them to divulge their customers’ personal and private information.’

Perram J ‘will order the ISPs to divulge the names and physical addresses of the customers associated in their records with each of the 4,726 IP addresses [on the] condition that this information only be used for the purposes of recovering compensation for the infringements and is not otherwise to be disclosed without the leave of this Court.’ Drafts of the letters DBC and Voltage propose to send to alleged infringers must be submitted to Perram J. The applicants were ordered to pay costs.

Expert evidence

Due to the technical nature of the case, the application involved cross-examination of witnesses and the consideration of expert statements. The applicants filed separate statements from two German expert witnesses: a report from Dr Simone Richter and an affidavit from Daniel Macek. These related to the method of identifying infringing IP addresses. Perram J draws an important distinction at [7] and [11]:

These addressed entirely different matters but at the heart of both was a piece of software called Maverik Monitor … . Maverick Monitor is said by the applicants to be able to identify IP addresses which are sharing a given file using BitTorrent … .

Mr Macek’s report was not … described as an expert report and he did not suggest that he had read Practice Note CM7. This is because he was not an expert, was not being called to give expert evidence about Maverik Monitor’s reliability … .

Practice Note CM7 concerns the duties of expert witnesses to the Court.

Perram J gives criticism at [13] of the approach taken by the ISPs, who requested only Mr Macek be required to attend Court for the purposes of cross-examination: ‘By not requesting Dr Richter to attend … the ISPs were … depriving themselves of the opportunity to criticise her evidence.’ This meant that the ISPs did not effectively challenge Dr Richter’s assertions regarding the reliability of of Maverik Monitor in terms of generating time stamps and dealing with dynamic IP addresses. At [17]: ‘Dr Richter’s evidence stands unchallenged and uncontradicted.’

It was demonstrated during cross-examination that Macek was merely a user of Maverik Monitor and had no in-depth knowledge of its technical operation. At [15]–[16]: ‘The cross-examination of Mr Macek established that he did not understand the mechanics of how Maverik Monitor did what it did … Under cross-examination, Mr Macek was unable to throw any light on what ‘.pcap’ files were, or to explain how Maverik Monitor generated its timestamps.’ This was in line with his ‘non-expert’ testimony. In his affidavit, Macek stated (extracted at [10]):

My role at Maverick is to conduct investigations into the unauthorised downloading and distribution of copyrighted works including the monitoring of the BitTorrent file distribution network for the presence of copyrighted works, and using Maverick’s software to identify the Internet Protocol addresses (IP Address) of users that are being used to make available and distribute these copyrighted works without permission.

For the sake of brevity it is enough to provide the essence of Perram J’s criticism of the ISPs’ conduct of the case, at [23]:

I have spent some time explaining the status of Mr Macek’s evidence because the press coverage it attracted was quite negative. However … that criticism was ill-informed: it was true that Mr Macek was unable to answer the ISPs’ questions about Maverik Monitor when the only real question … was why the ISPs were asking Mr Macek about these matters and not the expert witness, Dr Richter … . [G]iven the imposing nature of Dr Richter’s evidence it was plain that asking her questions was not likely to end well for the ISPs. In the circumstances, attempting to undermine Mr Macek’s credit was the most plausible tactic. Be that as it may, it has not succeeded. Mr Macek is entitled to have that recorded.

BitTorrent and Maverik Monitor

A summary of Dr Richter’s findings is extracted at [25]. Maverik Monitor appears, from Dr Richter’s evidence, to be reasonably accurate: it is capable of monitoring BitTorrent traffic, accurately identifies IP addresses and times of transfer, and implements mechanisms that ‘ensure’ no erroneous IP addresses are collected. Dynamic IP addresses do not affect the accuracy, and if an IP address is changed ‘during capture of data transfer’ it does not save any data. The technical method is described at [25]:

The System establishes connections with remote computers and receives and stores pieces of data from those computers which make content available across the BitTorrent network.

The received pieces of data are compared to a control copy using hash value comparison. If the hash value of the piece of data downloaded from the source is the same as the control copy, then the received pieces of data and the control copy are considered to be identical.

An explanation of how BitTorrent works from a technical perspective is provided at [27].

Perram J was satisfied that the technical operation of BitTorrent was consistent with the ISPs’ submission that ‘a film is distributed by an individual computer downloading slivers of a film from other multiple computers’ (at [28]). His Honour rejected the ISPs argument that there was insufficient evidence of infringement because no ‘substantial’ copying occurred — this was not, his Honour confirmed, the question. The question was whether the end-user has ‘made the film available on the internet.’

Perram J considered at [29] that, under section 10 and section 86 of the Copyright Act 1968 (Cth), ‘sharing a sliver of a film’ would likely constitute ‘making the film “available online”’ and thus be in breach of the Act. His Honour was ‘comfortably satisfied that the downloading of a sliver of the film from a single IP address provides strong circumstantial evidence that the end-user was infringing the copyright in the film’ and stated at [30] that it ‘certainly provides enough evidence on a preliminary discovery application.’

If Perram J's statements are accurate (and they appear to be), even sharing an insignificant part of copyrighted material could be considered an act that makes the content 'available online' and thus fall foul of section 86. This case does not give a conclusion on this matter, but implied is an acknowledgment that this question will be considered if any of the alleged infringers are sued. Individual file-sharers have not been the target of much litigation in Australia to date.

The affidavit evidence of Michael Wickstrom, Vice President of Royalties and Music Administration at Voltage Pictures LLC, states that for every film Voltage produces it creates a subsidiary LLC to which it assigns the rights to that particular film. As a result of this evidence, Perram J allowed DBC to join Voltage as a second applicant.

Interestingly, his Honour rejected a certificate presented by Wickstrom showing that DBC was the owner of the copyright to Dallas Buyers Club on 1 November 2013: ‘All the certificate says is that [DBC] claims to be the copyright owner’ and was not ‘a certificate which “states that a person was the owner of copyright in the work” within the meaning of s 126B(3) of the Copyright Act’ (at [36]).

The ISPs alleged that if DBC originally owned the copyright, it had been assigned to Picture Perfect Corporation (‘Picture Perfect’) under a Distribution Licence Agreement in 2012. Voltage claimed this was not an assignment, but an exclusive licence. Perram J disregarded this as irrelevant at [41], because the terms of the Agreement gave Voltage the right to proceed against copyright infringers. ‘Voltage could, pursuant to its contractual rights, commence proceedings on behalf of Picture Perfect (whether as copyright owner or exclusive licensee).’

Although the ISPs argued that Voltage could not commence proceedings as an agent of Picture Perfect under section 115 and section 119 of the Copyright Act 1968, this was rejected by Perram J. His Honour stated clearly that the common law rule qui facit per alium facit per se ('what a person may do he may authorise another to do') applies because the Copyright Act does not exhibit 'an intention … that the rights … must be exercised personally', at [41] citing Christie v Permewan, Wright & Co Ltd (1904) 1 CLR 693, 700–701.

There was no evidence either, that copyright had been assigned to other alleged contenders Content Media Corporation International Limited (‘CMCIL’) or Pinnacle Films. At [44] and [48]:

In order to displace the evidence which shows that Dallas Buyers Club LLC owned the copyright in the film upon its first release, the ISPs would need to prove how that copyright moved to [CMCIL], a burden which has not been discharged. … Consequently, Voltage can certainly sue for infringement. Further, it is reasonably arguable that the Distribution Licence Agreement of 18 October 2012 is what it appears to be, namely, a licence rather than an assignment. It is reasonably arguable, therefore, that Dallas Buyers Club LLC owns the copyright and may also have a right to sue for infringement. Both applicants are therefore authorised to seek preliminary discovery.

The requirements for preliminary discovery

At [49] Perram J extracts rule 7.22 of the Federal Court Rules 2011 (Cth) which relates to preliminary discovery of information held by a third party relating to the identity of a potential respondent. The elements allowing a prospective applicant to apply to the court are that they may have a right to obtain relief against a prospective respondent and that they cannot ascertain the description (including, per the Federal Court Rules Dictionary, the name and address) of the prospective respondent without the assistance of a third party.

These speak for themselves for the most part. The Court must be satisfied that the applicant may have a right to obtain relief against an unidentified person (including corporate entities). The applicant must actually and reasonably believe they may have such a right. The respondent ISPs submitted that ‘there was no evidence which the Court would accept that [DBC] believed that it might have such a right’ (at [52]).

This issue was complicated by the fact that Wickstrom had stated firstly in his affidavit that DBC was the owner of the copyright. His subsequent evidence indicated that Voltage owned the copyright: ‘this opened a lacuna in the applicants’ evidence [because] there was then no express evidence that Voltage believed it might have a right to sue for infringement’ (at [53]).

However, this was largely immaterial: his Honour called it a ‘trivial inference’ that Wickstrom believed someone within the Voltage group believed there was a right to a legal remedy and thus have a claim. Both are capable of reasonably believing they have a claim, and both ‘are therefore eligible applicants’ (at [53]).

The issue of who actually owns the copyright and who is entitled to bring action for infringement of that copyright would need to be settled if either DBC or Voltage attempted to bring action for infringement against the alleged downloaders. His Honour does state at [53], however, that from his earlier conclusions 'Voltage can sue for infringement and it is reasonably arguable that [DBC] may be able to do so too.'

The ISPs submitted three arguments against preliminary discovery, none of which appeared convincing, as explained at [54]–[57]:

… it was submitted that all that Mr Macek’s evidence showed was that each IP address had uploaded a single sliver and this could not be an infringement of the copyright. I have already given my reasons for rejecting this argument above.

… it was faintly suggested that the applicants’ personnel could monitor internet chat rooms and identify the infringers from discussions taking place therein. The chat rooms were not identified, nor any reasons why people discussing bootleg copies of movies in them would do so using their own names. All in all, I regard this possibility as distinctly unlikely.

… the ISPs submitted that it was not shown that they would have documents ‘that would help ascertain’ the prospective respondents’ descriptions. This was because, at best, the ISPs could only identify the account holders and there was no guarantee that the account holders were the persons that had shared the film using BitTorrent.

Of course, it was possible that the account holders might have some insight into who the end-user using BitTorrent might have been. … In many homes the identity of the film may itself provide some insight into the identity of the file sharer. The audiences for Cinderella and American Sniper would have few common members (hopefully). Of course, there will be difficult situations such as those where the account holder has been providing wireless internet access in a public space like a café or airport lounge.

Perram J considered the authorities submitted by the applicants: Roads and Traffic Authority (NSW) v Australian National Car Parks Pty Ltd (2007) 47 MVR 502 (CA) and Roads and Traffic Authority of New South Wales v Care Park Pty Ltd [2012] NSWCA 35 (9 March 2012).

RTA v Australian National Car Parks (2007) and RTA v Care Park (2012) involved car park operators at which parking required the purchase and display of a ticket. If a ticket was not purchased or had expired, the conditions of entry imposed agreed charges of $88. The car park owners knew the registration plates of cars in breach, and sought preliminary discovery from the RTA.

The New South Wales Court of Appeal, rejecting the RTA's contentions, stated in RTA v Australian National Car Parks that 'discovery of the owner and registered operator would enable the applicant to know details of the person with day to day control. For many households, the person who owns or manages the vehicle garaged at that address will be its only driver. For practically all households, the owner will know who was the driver on a particular day' (at [26]). Further, in RTA v Care Park the Court of Appeal reiterated: 'Identification of the owner would, however, tend to assist in identifying whether it was the owner who had parked the vehicle and, if not, who had' (at [120]).

Despite contentions by the ISPs that the applicable rule in those cases — rule 5.2(b) of the Uniform Civil Procedure Rules 2005 (NSW) — is less strict than rule 7.22(1) of the Federal Court Rules 2011, Perram J stated at [71]: 'the suggested textual basis for distinguishing the two Court of Appeal decisions is unpersuasive. I propose, indeed, I am probably bound, to follow them.' His Honour explains the legislative history and interpretation of both sets of rules at [66]–[70], the most important part of which is:

the legislative history of FCR 7.22(1) shows that its present wording was not intended by the makers of the Federal Court Rules 2011 (Cth), that is to say the judges of this Court, to have any different meaning to the words which appear in the [NSW] rule.
To summarise his Honour's explanation: Federal Court rule 7.22 replaced what had been O 15A rule 3(1) of the Federal Court Rules 1979 (Cth), and did not substantially alter the existing practice. The original rule was 'worded in essentially the same terms' as the equivalent NSW rule. Section 15AC of the Acts Interpretation Act 1901 (Cth) states clearly that if 'a later Act appears to have expressed the same idea in a different form of words for the purpose of using a clearer style the ideas shall not be taken to be different merely because different forms of words were used.' Section 15AC is applied to the Federal Court Rules via section 59(4) of the Federal Court of Australia Act 1976 (Cth).

As a consequence, Perram J concluded at [72] ‘that the pre-conditions to the operation of FCR 7.22 have been met. The Court’s power to order the ISPs to give preliminary discovery is enlivened.’

The exercise of the discretion

At [73]–[74]:

The ISPs advanced 8 reasons why the Court ought to decline to order preliminary discovery even if the power to do so under FCR 7.22 were enlivened. … I do not accept that these matters, either individually or cumulatively, would justify me in withholding relief to the applicants, although I do accept that some of them impact on the terms upon which discovery should be granted.

The first argument — that the amount of material shared from a single IP address was not substantial — was already dismissed by Perram J, as explained above. The second argument — that the trivial nature of the infringements and the value of the content (estimated to be less than $10) made it unlikely any ‘real case’ would be brought — was insufficient grounds to deny preliminary discovery. The application for preliminary discovery ‘is not a procedure for working out how good … claims are, other than in the sense of eliminating plainly frivolous exercises’ (at [76]).

Perram J indicated at [76] that damages might be ‘modest’ and ‘quite possibly’ limited to the value of the content, although there may be some interesting considerations ‘where the film had been shared because it was not available in the Australian market at all.’ His Honour goes on to say at [77]–[78] that he was not persuaded that such suits would be economically pointless, and suggests that punitive damages as a deterrent measure is a possibility, however:

For present purposes, it is enough only to observe that the ISPs’ submission that what the rights owners have in mind is frivolous or de minimis is a submission which does not afford sufficient weight to the genuine rights which here exist, and which are expressly recognised by statute.

The third argument — that injunctive relief against the infringers was unlikely to be granted — was not convincing as a substantive nor procedural argument: Perram J did not think it was unlikely, but also did not consider the application to be ‘an appropriate occasion to consider such a submission’ (at [79]). The fourth argument — ‘the failure of the applicants to identify and pursue only persons involved in acts of multiple downloading’ — was ‘besides the point’ due to the conclusion that a single act of uploading even a small amount would likely constitute a breach of the statutory prohibition on communicating a work to the public (at [80]).

Speculative invoicing

The fifth argument demands a heading all of its own given the controversial nature of ‘speculative invoicing’ in the context of international jurisprudence. The respondents submitted (stated at [73]) that

there was evidence which suggested that the applicants were going to engage in the practice of speculative invoicing if they were given the information which they sought. What was meant by this was that the applicants would write to the account holders demanding a large sum of money and offering to settle for a smaller sum which was still very much in excess of what might actually be recovered in any actual suit. This was said, in effect, to be sharp practice;

Perram J considers this at [81]–[83], and at [81] provides the context:

there is no doubt that Voltage has done this in the past. 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.

Despite Wickstrom’s evidence that this approach would not be taken in Australia, Perram J’s ‘impression was that Mr Wickstrom would act as aggressively as he was legal permitted.’ Counsel for the applicants did not dissent on this point.

There is no firm precedent in Australia as to whether speculative invoicing is lawful practice, but Perram J considers that 'Representing to a consumer that they have a liability which they do not may well be misleading and deceptive conduct' under section 18 of the Australian Consumer Law, and this applies to representing that a person's liability is higher than it could ever realistically be.

Section 18(1) of the Australian Consumer Law states: 'A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.' A crucial question, in my view, would be whether or not speculative invoicing would be considered conduct 'in trade or commerce' even if it is undoubtedly misleading or deceptive.

Alternatively, it might be unconscionable conduct under section 21 of the Australian Consumer Law or s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth) ('In the former, however, it would be necessary to identify a supply of goods or services which may be difficult. In the latter, it would be necessary to identify a financial service which may also not be without difficulty').

As a consequence of the potential vulnerability of the targets of these abusive practises, Perram J will impose, when his Honour gives orders on 21 April 2015, conditions on the applicants to prevent speculative invoicing. His Honour refers to international jurisprudence.

The English High Court of Justice granted preliminary discovery in Golden Eye (International) Ltd v Telefonica UK Ltd [2012] EWHC 723 (Ch) against an ISP, but required the applicant copyright owner to submit to the Court for approval a draft of the letter to be sent to identified account holders. The subsequent appeal, Golden Eye (International) Ltd v Telefonica UK Ltd [2012] EWCA Civ 1740, expanded the number of claimants to be granted discovery 'but certainly no doubt was cost on the decision to permit preliminary discovery': Dallas Buyers Club v iiNet at [83]. This approach was taken in another case involving Voltage, this time in the Federal Court of Canada in Voltage Pictures LLC v John Doe [2014] FC 161 at [133]–[139].

Perram J stated at [83]:

Mr Pike [counsel for the applicants] submitted that Golden Eye might be distinguished on the basis that it involved pornography and hence that there were potential blackmail concerns. I do not think that this was the basis of the decision. I read Golden Eye as being concerned with the consequences to persons who are untutored about litigation receiving menacing correspondence apparently resulting from Court orders. That concern is the same regardless of the genre of cinematographic work involved.

This case sets a precedent for judicial oversight of approaches similar to, but distinct from, speculative invoicing and along the lines of current British and Canadian practice. Perram J has indicated that preliminary discovery may be granted, but the use of that information to alert account holders of detected copyright infringement will be subject to judicial controls ensuring the use is not abusive. This will likely include words that are not threatening.

In the Canadian case, the Prothonotary Aalto stated at [138] that 'The letter should contain a statement that no Court has yet found any recipient of the letter liable for infringement and that recipients should seek legal assistance' and made the following relevant orders:

1. This action shall continue as a specially managed proceeding and be referred to the Office of the Chief Justice for the appointment of a Case Management Judge. …

5. The Plaintiff shall include a copy of this Order in any correspondence that is sent to any of the Subscribers identified by TekSavvy pursuant to this Order. …

7. Any separate actions commenced by the Plaintiff against any of the Subscribers shall be case managed in connection with this case.

8. Any correspondence sent by Voltage to any Subscriber shall clearly state in bold type that no Court has yet made a determination that such Subscriber has infringed or is liable in any way for payment of damages.

9. A draft of the proposed letter to be sent to Subscribers shall be provided to the parties to this motion and to the Court and be the subject of a case conference with the Case Management Judge to review and approve the contents of the letter before being sent to any Subscriber.

Speculative invoicing was greatly criticised in the UK and the practice has waned as a resulted. In Golden Eye [2012] EWHC Arnold J considered at [35]–[55] the controversial speculative invoicing practices of ACS:Law and Media Cat. Based on this, Arnold J stated at [123]:

Although it is not normally the role of the courts to supervise pre-action correspondence, the draft order requires the letter of claim to be in the form set out in Schedule 2 and which I have reproduced above. In my view the ACS:Law/Media CAT episode shows very clearly why that this is an appropriate course to take, and why a court being asked to make a Norwich Pharmacal order [essentially an order for preliminary discovery: see Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133] in circumstances such as these needs carefully to consider the terms of the draft letter of claim.

The specific 'objectionable' aspects of the draft letter identified by Arnold J at [124]--[130] were that:

  1. the reference to the Code of Practice for Pre-Action Conduct in Intellectual Property Disputes was inappropriate given it was not designed for letters to ordinary consumers,
  2. it did not make it clear that an order for disclosure does not mean that the court has considered the merits of the infringement allegations,
  3. it was not sufficiently explicit in the draft letter that the subscriber may not be the targeted infringer,
  4. it placed too much emphasis on the consequences to the defendant of a successful claim while not addressing the consequences to an unsuccessful claimant,
  5. references to 'other intellectual property' are unjustified given there was no evidence that other intellectual property rights had been infringed,
  6. a two-week period for responses was too short (and 28 days would be reasonable), and
  7. threats to make applications to ISPs requesting throttling or termination of an Internet connection is unjustified — even if framed as a mere request.

The demanded sum — £700 — was 'unsupportable' on the basis that although the percentage is unknown, some of the intended defendants were not infringers and therefore not liable (at [133]). The claimants could not, Arnold J continued at [134], have any idea about the scale of the infringements committed by each infringer: 'I appreciate that it may not be cost-effective for disclosure to be pursued if the Intended Defendant is unwilling to cooperate, but I do not consider that that justifies demanding an arbitrary figure from all the Intended Defendants in the letter of claim.' His Honour declined to assume that additional damages would be necessarily awarded. 'The settlement sum should be individually negotiated with each Intended Defendant' (at [138]).

This lengthy discussion serves to demonstrate the value that international jurisprudence has in regard to the newly developing precedents in Australia. Although the Federal Court, or indeed the High Court, is not bound to follow either the British or Canadian precedents, they are compelling and may be persuasive in framing the orders. It remains to be seen what orders Perram J will make, but it is clear that his Honour has contemplated taking a similar approach.

Privacy concerns

Federal law protects the privacy of individuals’ telecommunications activity: Perram J refers to part 13 division 2 of the Telecommunications Act 1997 (Cth) at [84], but makes note that section 280 allows disclosure as required or authorised by law. As such, nothing in part 13 division 2 prevents the disclosure of the information sought. Were it not for section 280, section 276(1)(a)(iv) would ordinarily prevent the disclosure or ‘use of any information or document that … relates to … the affairs or personal particulars … of another person.’ Additional reference is made to Australian Privacy Principle 6.1 contained in schedule 1 of the Privacy Act 1988 (Cth), and Perram J notes at [85]–[87] that

Together, these provisions demonstrate that the privacy of account holders of ISPs is regard by the Parliament has having significant value. Of course, the Parliament has also accorded significant value to the owners of copyright by enacting the Copyright Act and by giving them the right to sue for infringement.

In situations where different rights clash it is usual for courts to try and accommodate both rights as best they can. Here that can be done by requiring the information to be provided but by imposing, by way of conditions, safeguards to ensure that the private information remains private, which parallels the approach to the same issue adopted in Golden Eye.

Further, I propose to constrain the use to which the information may be put to purposes relating only to the recovery of compensation for infringement. Those purposes would seem to be limited to three situations:

(a) seeking to identify end-users using BitTorrent to download the film;

(b) suing end-users for infringement; and

(c) negotiating with end-users regarding their liability for infringement.

Consequently, this argument was not successful.

Graduated response

This was perhaps the most convincing argument (though the bar was low): that the Federal Government had already directed the telecommunications industry to develop an industry code implementing a graduated response system under which subscribers whose accounts were detected as being used to infringe copyright would be sent notices of varying severity. The proposed industry code has been submitted for registration with the Australian Communications and Media Authority (‘ACMA’). Perram J provides background at [89]:

In December 2014 the Minister indicated he would exercise this power and require ACMA to formulate an industry standard dealing with ISPs and illegal downloading. The Minister indicated that if the ISPs did not formulate their own code by April 2015, he would direct ACMA to determine a standard for them. On 20 February 2015, in the middle of the present hearing, the Communications Alliance released a draft industry code dealing with internet piracy. It called for public comment by 23 March 2015.

However, his Honour rejected the argument that ‘the possibility that the code would come into existence was a reason … not to order preliminary discovery’ (at [90]) on the basis that the proposed code is only an incomplete draft that may or may not be approved by ACMA and will most likely not come into force in the next few months. As a result, there was no basis for denying preliminary discovery. Of note, Perram J did not create a precedent on this issue: his Honour (sensibly) declined to decide whether ‘non-binding soft law such as the proposed code’ should or shouldn’t be a basis for declining discovery as a general rule. As a result, this may proceed on a case-by-case basis.

Investigation or identification?

Perram J firmly states at [91]: ‘As to … preliminary discovery being used as a tool of investigation rather than identification … : I reject this argument. There is, in a case such as the present, an element of investigation involved in identification, as the two RTA cases show.’

Relief

Under the Federal Court Rules 2011 (Cth), the Court is not authorised to order the production of email addresses (at [92]). In Voltage Pictures LCC v John Doe [2014] (see above), the Federal Court of Canada recognised at [134] this should generally be avoided. Perram J did not make orders for relief in this case: orders will be given later in April. However, his Honour indicated at [93] that the orders will permit preliminary discovery and impose privacy obligations on the material produced.

Further, as a consequence of the British and Canadian jurisprudence regarding speculative invoicing, Perram J will require the applicant copyright holders to submit the draft letter the propose to send to account holders to the court for approval (at [93]). The applicants will be ordered to pay the ISPs’ costs for both the proceedings and the costs of giving preliminary discovery, but costs may be agreed between them. Perram J will consider whether security ought to be provided for the ISPs’ costs (at [94]).

Interlocutory rulings

Paragraphs [95]–[109] are more of procedural rather than substantive interest, so I have omitted them from this summary.

Orders

Perram J declined to make specific orders (as explained above). Instead, his Honour stated at [110]: ‘The only order I will make is that the matter be listed on 21 April 2015 for the making of orders.’ I will hopefully publish a more timely summary of the later decision shortly after it is available. The matter is currently listed for 9:30 am on 22 April.