Australian Court Rejects Dallas Buyers Club Studio's Attempt at Speculative Invoicing

Says Internet users who download the film illegally can only be asked to pay the cost of a legal download.


Dallas Buyers Club

In the struggle between copyright holders and content pirates, "speculative invoicing" is when copyright holders or their agents find people alleged to be downloading their copyrighted content without permission and telling them to pay massive fines in order to avoid legal action. 

That practice may have been stopped in its tracks in Australia, where a federal court ruled the studio behind Dallas Buyers Club could send speculative invoices only if they limited their charges to the cost of downloading the film legally.  

Reuters reports

In a lawsuit seen as a test of whether the practice will be allowed in Australia, where a third of adults admit to stealing online, the studio behind the triple Oscar winner, Voltage Pictures, wanted iiNet and five smaller Internet companies to hand over the addresses of 4,276 suspected offenders. 

But in an unexpected setback, the Federal Court refused their request, saying it would only make the Internet companies hand over customer details if the producers promised to charge only the cost of buying a copy of the film. 

The judge also ordered the Hollywood producers pay a A$600,000 bond to ensure they keep the promise. 

"It's probably a knockout blow for anyone who thinks they can successfully get into the speculative invoicing business in Australia," said John Stanton, chief executive officer of the Internet industry group the Communications Alliance. 

Several years ago, Internet Service Providers in the U.S. started sending warning letters to customers who were downloading pirated content. The warning letters could lead to escalating but minor reprimands, including throttling the Internet connection of repeat offenders. 

Speculative invoicing certainly packs more of a punch, but the amount of government power needed to enforce copyright privileges, coupled with the minor effect piracy appears to have on creating an environment hostile to creators and traditional copyright owners suggests the solution to "illegal" downloading is to define downward what exactly is illegal—meaning copyright reform not new laws and new rules and powers to enforce them. 

h/t Greg S.