The Federal Court has refused an application from the makers of the movie Dallas Buyers Club which would have forced internet service providers (ISPs) to hand over the details of customers who illegally downloaded the film.

The decision is a huge win for a group of ISPs — iiNet, Internode, Adam Internet, Dodo, Wideband and Amnet Broadband — which fought the application against the owners of the Oscar award-winning film, Dallas Buyers Club LLC.

Dallas Buyers Club LLC's parent company, Voltage Pictures, used German-based firm Maverick Eye UG to hunt down those sharing the film using software such as BitTorrent, and uncovered the total of 4,726 IP addresses.

The Federal Court in April ordered ISPs to hand over customers' personal details linked to the IP addresses, and downloaders were told to expect letters requesting payment.

Internet Piracy Fact Box 71 per cent adult web pirates would stop if given letter by ISP for illegal downloading

71 per cent adult web pirates would stop if given letter by ISP for illegal downloading 29 per cent of people aged 18-64 have illegally downloaded movies and TV shows

29 per cent of people aged 18-64 have illegally downloaded movies and TV shows 26 per cent of people aged 12-17 were illegally downloading movies and shows once a week

26 per cent of people aged 12-17 were illegally downloading movies and shows once a week 54 per cent of people aged 18-24 were illegally downloading regularly

54 per cent of people aged 18-24 were illegally downloading regularly 18-24-year-olds believed it was OK because there were no measures to stop it

18-24-year-olds believed it was OK because there were no measures to stop it 25-35-year-olds the most frequent users of illegal downloading IP Awareness Foundation Research June 2013-2014

But due to concerns about speculative invoicing — where people receive demands for large payments with the threat being sued — the film's owners were ordered to show the court a copy of the letter before it was sent to downloaders.

The letter was to ask for details including the person's salary and how many other films they had downloaded.

"It was quite long and, on the whole, negative about people copying the film, which is hardly surprising," Justice Nye Perram wrote.

"Critically, however, it did not make any demand for a sum of money. Instead, it encouraged recipients to make a telephone call to discuss the matter or to engage in email correspondence with an unidentified representative of DBC."

The Court said Dallas Buyers Club's letter was asking for four main forms of payment.

The cost of the purchase of a single copy of the film, for each copy of the film downloaded

The cost of the purchase of a single copy of the film, for each copy of the film downloaded A "licence fee" for each person found to have also uploaded the film

A "licence fee" for each person found to have also uploaded the film Extra damages depending on how many copies of other copyrighted works had been downloaded by each infringer

Extra damages depending on how many copies of other copyrighted works had been downloaded by each infringer Court costs for expenses in retrieving each downloader's name

The Court said that while it had no problem with the first and the fourth request, the second and the third were too much.

Justice Perram wrote: "It is not trespassing on DBC's legitimate confidentiality concerns to say that the sum sought by DBC in relation to [the second request] of damages was substantial."

But he said he may still give Dallas Buyers Club access and force the ISPs to hand over customer details if the company agrees to certain conditions, including only asking people for the cost of buying the film, and a share in the court costs in getting the customer details.

The court also wants a $600,000 bond so the company will not just get the customer details and send out demands anyway.

The decision means significantly less money than what Dallas Buyers Club was asking for.

iiNet lawyers welcome 'pleasant outcome'

Lawyers representing iiNet against Dallas Buyer's Club welcomed Justice Perram's ruling, describing it as a "really pleasant outcome".

"I think that the mood had been moving in this direction," Graham Phillips SC from Thomson Geer Lawyers said.

He said he believed the ruling effectively "kills the speculative invoicing model" being proposed by the Dallas Buyer's Club consortium.

"The prospect of there being large claims akin to speculative invoicing I think has been defeated," he said.

"It doesn't, on the flip side, just enable Australians to just infringe copyright.

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"There still is the prospect of there being cases brought for infringement.

"So I don't think it gives [Australian internet users] the carte blanche ability to download, but it certainly has defeated the prospect of there being claims that are unrealistic."

Mr Phillips said he was not convinced the ruling would necessarily cause the DBC consortium to give up on their case.

The ABC has approached lawyers representing Dallas Buyer's Club for further comment.

In May, the Federal Court ordered the group of ISPs to pay 75 per cent of the costs of the copyright case.

Some lawyers were concerned the ruling would mean ISPs may be reluctant to fight similar copyright cases in the future.

It had been thought the original ruling might have set the scene for copyright owners to chase hundreds of thousands of illegal downloaders.

There were also concerns the case's effects could extend to website-blocking laws.