14 August 2015

Perram J has refused to allow Dallas Buyers Club LLC to send out its proposed letters of demand to the account holders identified through its preliminary discovery application.

Under pressure from the judge, Dallas Buyers Club LLC was forced to disclose that it would be seeking to claim compensation under 4 heads:

1. the lost licence fee on the copy downloaded by the (alleged) infringer;
2. a licence fee for each copy shared (uploaded) by the (alleged) infringer;
3. an amount for additional damages;
4. compensation for the costs incurred in detecting the (alleged) infringer’s involvement and the preliminary discovery application.

Perram J considered that (1) and, perhaps more surprisingly, (4) were legitimate. (2) and (3), however, were not.

Perram J also indicated his Honour would be prepared to lift the stay on sending the letters out if limited to (1) and (2). Bearing in mind that Dallas Buyers Club LLC is not in the jurisdiction, however, his Honour would require Dallas Buyers Club LLC to post a bond of $600,000 as surety for its compliance with his Honour’s orders about the use of the information.

His Honour did get informed what sum Dallas Buyers Club LLC actually had in mind demanding if some (alleged) infringer did contact it in response to the proposed letter. Other than disclosing that it was “substantial”, his Honour did not spill those beans to the public.

At [7] and [8], his Honour further indicated the Court’s considerable unwillingness to embark on the type of supervisory role over the use of the discovered information that the English and Canadian courts have been willing to undertake. Perram J thought those courts might be more willing to engage in such supervision as a result of the human rights protections for privacy in those jurisdictions. Perram J accepted that the discretionary nature of the preliminary discovery remedy permitted privacy issues to be taken into account. Rather than embark in close, ongoing supervision, however, it would appear that an Australian court will not afford the rights holder too many chances to satisfy the Court that it would use the discovered information appropriately

Dallas Buyers Club LLC v iiNet Limited (No 4) [2015] FCA 838

lid dip @mslods