Dallas Buyers Club rights holders won’t wait for copyright code

Confusion reigns over who the rights holders are at day two of a hearing into an attempt to force ISPs to hand over customer details

Lawyers representing Dallas Buyers Club LLC today again affirmed that their client has no intention of waiting to see if the impending industry code of practice for Internet service providers will offer them a chance to take aim at movie pirates.

However the representative of DBC who gave evidence today — Michael Wickstrom, the vice-president of royalties at Voltage Pictures — claimed in court that the company’s legal action "is truly not about the money here — it’s about stopping illegal piracy".

DBC’s application for preliminary discovery heard yesterday and today in the Federal Court in Sydney is an attempt to unearth the identities of ISP account holders.

The company has a list of IP addresses, captured by a German firm called Maverick Eye, that it says are associated with unauthorised downloads of the film Dallas Buyers Club.

Whether DBC LLC was in fact entitled to take action to potentially recover damages from the sharing via BitTorrent of Dallas Buyers Club occupied a significant portion of today’s hearing before Justice Perram.

Voltage Pictures creates a limited liability company for each movie it’s involved in the production of and it is at the centre of an interlocking network of business entities.

Wickstrom told the court that Voltage was “absolutely” the copyright holder of Dallas Buyers Club

Today it briefly appeared that this would upend the application for preliminary discovery, until barrister Ian Pike SC, representing DBC LLC, moved to add Voltage Pictures as a prospective applicant.

The move, granted by Justice Perram, was opposed strenuously by counsel representing iiNet and the other ISPs in the case, Richard Lancaster SC, who argued that if the ISPs had been aware that Voltage would be a party it would have affected their preparations for the case.

Lancaster said that during discovery the lawyers representing the ISPs would have pushed for access to a “60 page document” mentioned during Wickstrom’s evidence that contained instructions from Voltage to attorneys in the US responsible for sending letters to alleged pirates in that country, as well as a range of other corporate documents.

Lancaster asked for an adjournment in light of the decision to add Voltage as a party but Justice Perram declined to grant one.

Those letters from US attorneys were at the centre of tense exchanges in the morning between Wickstrom and Lancaster, and before the legal proceedings reached the courtroom had been cited as a reason by iiNet for opposing DBC’s court action.

iiNet has described the letters as a form of “speculative invoicing”.

Read more: Dallas Buyers Club copyright stoush returns to court

The letters tell the recipient that the IP address associated with their Internet service has been monitored engaging in the illicit downloading of Dallas Buyers Club. They mention the substantial damages that rights holders can potentially seek under US copyright law and then say that in exchange for a fee Voltage will not take any legal action.

Wickstrom rejected the description of “speculative invoicing” and the suggestion that the letters contained threats.

Yesterday DBC’s lawyers indicated the company accepted that an ISP account holder was not in all cases the person who had downloaded the movie.

The letters don’t contain an “accusation” Wickstrom said — they merely state that the IP address has been identified with copyright infringement.

“You cannot maintain your evidence that the letters ... did not threaten proceedings against the account holder,” Lancaster said, citing examples tendered by the ISPs as evidence.

“It's stating there's an investigation and it's stating the seriousness of the offence... [and] as a good faith effort we will settle,” Wickstrom responded.

Read more: iiNet appoints new CFO

“I want to be sure that whoever is paying this letter is the actual infringer,” Wickstrom said during his evidence.

“It's not my intent to send out thousands of letters... [for speculative invoicing].”

Lancaster asked if the letters that would potentially be sent to ISP customers in Australia would be along the same lines as the US letters.

“I defer to my local attorneys to come up with something that works locally... I always defer to our local attorneys,” Wickstrom said.

He said he believes local lawyers representing DBC are working on drafting letters but holding off on the process for now.

He said that the company does not seek damages from all downloaders — pursuing autistic children or members of the military would generate negative publicity that “would ruin us”.

Read more: iiDallas: Has the ISP copyright code failed before it has begun?

Similarly in the case of IP addresses organisations’ networks or open-access networks Voltage declines to pursue action against downloaders.

Voltage’s approach in the US works, Wickstrom said. Piracy goes “way down”, he said.

As part of its crackdown on online copyright infringement the government has pushed for telcos and rights holders to develop a code of practice that will allow a system of warning notices to be issued to downloaders and a method for discovering the identities of copyright violators.

The deadline for the process is late April.

Between the ongoing development of the code and its registration through the Australian Communications and Media Authority “there's still a fair way to go even if there's a consensual process,” Pike said.

The government has indicated that if ISPs fail to agree to a code it will move to implement one.

Compliance with a code will be voluntary “until ACMA tells you to comply", Pike said, and it is unclear how the eventual code will impact on DBC’s position and whether it will be retrospective — and therefore allow Voltage to take action against the collection of IP addresses Maverick Eye has identified as downloading Dallas Buyers Club.

Lancaster is yet to finish his closing submission on behalf of iiNet and the other ISPs. A hearing is scheduled for 25 February.

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