Thousands of Australians who illegally downloaded the Hollywood film Dallas Buyers Club will have their details handed to its creator, after Perth internet provider iiNet today lost its Federal Court battle to prevent the action.
In a landmark piracy case in the NSW Federal Court which opens the door for other Hollywood producers to follow suit, Justice Nye Perram ruled in favour of Dallas Buyers Club LLC's application to ISPs, such as iiNet, to disclose the identities of people it says illegally downloaded the movie online.
The ruling means the 4726 Australians identified of pirating the film from sites such as BitTorrent from May 2013 could receive letters from lawyers threatening legal action unless large sums of money are paid for a copyright breach.
It is a practice called "speculative invoicing" which has not yet occurred in Australia.
The Perth internet provider, along with service provider Dodo, and a number of other internet providers owned by iiNet, took the matter to court in October, arguing its customers could be unfairly targeted through "speculative invoicing" to settle claims rather than have their day in court.
In its defence iiNet said in some instances the letters have demanded settlement amounts of up to $US7000 ($9085).
In his ruling from the case which was heard over three days in February, Justice Perram gave no indication on whether there would be a cap on the proposed settlement amount.
However he indicated that speculative invoicing was not necessarily legal in Australia.
No Australian has ever been charged for downloading pirated content.
"Whether speculative invoicing is a lawful practice in Australia is not necessarily an easy matter to assess," Perram said.
He said the information handed on would only be used for the purposes of recovering compensation for the infringements - which was one of the concerns identified by iiNet.
"I will impose upon the applicants that this information and is not otherwise to be disclosed without the leave of this court," he said.
"I will also impose a condition upon the applicants that they are to submit to me a draft of any letter they propose to send to account holders associated with the IP addresses which have been identified. The applicants will pay the costs of the proceedings."
iiNet has been contacted for comment on the decision, and it is currently unclear whether it will appeal within the 28-day deadline.
The decision comes a day ahead of a Federal Government deadline for the Communications Alliance - the national internet service provider and telecommunications representative body - to unveil its draft industry code for combating online copyright infringement.
ISPs want to create a copyright information panel (CIP) which would be created to oversee the scheme.
The scheme would focus more on public education than sanctions.
But the scheme recommended that once a final notice has been issued a rights holder - such as a Hollywood producer - will be provided with "assistance" to sue infringers, possibly through speculative invoicing.