How much will Australia's Dallas Buyers Club pirates have to pay?

Nearly 5,000 Australians are expected to receive letters in the near future asking them some pointed questions about their online downloading habits, specifically relating to the film Dallas Buyers Club.

What might these letters contain? Will they make threatening advances in the hope for a large settlement, as has happened in the United States? Or will they take a softer line, seeking smaller sums?

We don’t yet know what the letters might contain, but by looking at recent events in digital piracy, and how various copyright holders have responded, we might pick up a few clues.

Flashpoint

The recent legal battle between Dallas Buyers Club LLC and multiple Australian ISPs – iiNet, Internode, Amnet Broadband, Dodo, Adam Internet and Wideband Networks, although excluding Telstra, Optus and TPG – has raised numerous questions.

How will this decision impact Australian piracy levels? What will be the repercussions for those who have allegedly illegally shared the film? And how could this impact changes to Australian copyright law more broadly?

The decision made in regards to Dallas Buyers Club will see the ISPs provide the identities of 4,726 Australians to the film’s production company. The first respondent in the case, iiNet, has confirmed it will not appeal.

This was a case that iiNet has admitted it would have not won, but noting it “spent good money to make sure [Dallas Buyers Club LLC] weren’t allowed to use the information for what we considered purposes not in our customers' interest”.

The legalities of downloading content without paying are continually being debated, even after the verdict was handed down. Arguably, this is just the starting point, with so many factors to be considered in conjunction with a changing Australian media lanscape in 2015.

Approaches abroad

So how much should someone pay if they’re found guilty of illegally downloading a copyrighted movie?

Dallas Buyers Club LLC has already tried a variety of approaches to get pirates to pay in different countries. In the US it sent letters to those who allegedly downloaded the film attempting to glean around US$7,000 (A$9,000) from them. This technique is known as speculative invoicing, and is viewed by many to be a “bullying tactic”.

The use of speculative invoicing was a concern for iiNet during the Dallas Buyers Club case. Chief Regulatory Officer Steve Dalby stated late last year that:

[…] we have serious concerns about Dallas Buyers Club’s intentions. We are concerned that our customers will be unfairly targeted to settle any claims out of court using a practice called ‘speculative invoicing’.

An Australian who moved to Colorado, has claimed that he was sued by the Dallas Buyers Club LLC, in 2013 while living in the US. In the letter sent directly from his ISP, he was informed that “he had been sued and subpoenaed by Dallas Buyers Club LLC”. He was requested to pay representation and settlement costs totalling well over US$5,000 (A$6,430). After numerous discussions it is claimed the case was settled out of court for US$500 (A$643).

Dallas Buyers Club LLC took a somewhat different tack in Singapore – a country with the highest rates of peer-to-peer infringement of English language TV shows per capita. The company recently sent letters that “ask for a written offer of damages and costs within three days of receipt”. The letters were sent to 77 M1 subscribers, with further letters to be sent to Singtel and StarHub customers.

In New Zealand, the process for notification of internet piracy is a “graduated response scheme”. The process requires the copyright holder to notify the ISP, who then forwards the information to the account holder. After the third notification the rights holder can seek compensation for up to NZ$15,000.

What might Australians pay?

So what could happen in Australia? Dallas Buyers Club LLC is targeting nearly five times as many potential copyright violators here than in the US.

Michael Wickstrom, the Vice President of Royalties at Dallas Buyers Club‘s parent company, Voltage Pictures, has said that “we are working with our Australian attorneys to come up to an Australian solution to an Australian problem. What works in the US may not work […] in Australia. But we are developing a system that becomes a deterrent”. What that will be is yet to been seen.

The first point that needs to be made in regards to the Dallas Buyers Club case in Australia, is that the Federal Court will review all letters prior to them being sent. This will minimise the possibility of harsh speculative invoicing, which was one of iiNet’s reservations.

According to the reports and expert views, Dallas Buyers Club LLC will likely ask for lower amounts from Australians than in the US. Mark Vincent, an IP Lawyer, argues that what we are likely to see is “order damages” for the cost of legally obtaining the film – which would be about A$20.

However, Tom Godfrey from CHOICE believes that what Dallas Buyers Club LLC and consumers see as a fair costs could vary considerably. In addition to the cost for obtaining the film, Dallas Buyers Club LLC may also argue that “it should include the costs of their application for preliminary discovery, and the costs associated with sending the letter”.

Waiting game

It will now be a waiting game for those Australians who may receive one of these letters from Dallas Buyers Club LLC. What is clear is the amount requested is likely to be far less than the US$5,000 requested in the US.

While there has also been confirmation of replies and acceptance of offers in the more recent Singaporean case, the figures have not been disclosed. Therefore a comparison can not be applied.

This raises another issue when it comes to piracy. In the discussion that is likely to take place between rights holders and the government, one key stakeholder is not being included: the consumers.

Suing “mums and dads and students” should not be the path rights holders undertake. We have seen this year in a Australia a change in the access and cost of media content, specially film and television, thanks to new video-on-demand services.

Once established, these new services will give a clear indication whether the reasons given by Australians for illegally downloading content, access and costs, were in fact correct.

Marc C-Scott is a board member of C31 Melbourne (Community Television Station).