Hollywood’s own drama continues: its customers appreciate the “making movies” bit of the business model, but not the “distributing copies of the movie in exchange for money” bit. Altogether too many punters skip the payment process entirely and download what they want to watch, when they want to watch it.

Dallas Buyers Club ruling: ISP must hand over names of downloaders Read more

What makes the drama worse is the nagging distaste both consumers and brands have for businesses that sue their customers. Customer loyalty and brand value are tricky things to understand, with millions spent and made trying to conquer marketing, but it’s strongly suggested that dragging your fan base into court and cross-examining them does terrible things to your customer feedback surveys and net promoter score.

With the lack of an Australian law criminalising the downloading of movies, and the awkwardness around making your fans take the stand, how’s a multi-billion dollar industry to turn a buck?

A landmark case was decided on Tuesday in Australia on this issue. Dallas Buyers Club LLC was successful in requiring internet service provider iiNet to fork over the details of 4,726 customers who were allegedly pirating movies and the like.

To do so, they used software called Maverik Monitor, which mimics the offering of a movie online without actually providing it, instead recording the details of who’s keen before dumping the connection and then presumably emitting an evil cackling noise.

iiNet are traditionally known as customer advocates more than much of their competition and fought hard to keep the details of their customers secret. They weren’t successful.

The witness who operated the Maverik Monitor software was a part-time employee, someone else wrote his affidavit for him and he wasn’t completely across how it worked, only how he used it. iiNet were interested in the tool’s reliability – perhaps trying to draw links to previous international cases of grandmothers, dead people and printers being identified – but weren’t able to establish much doubt about it.

Justice Nye Perram found for the rights holders. He was of the view that the “attacks” on the credit of the witness had no substance, considering the cross-examination to be “largely of entertainment, as opposed to forensic, value”.

The Dallas Buyers case is a variation on copyright settlement shakedowns called “speculative invoicing”, one method the industry has been using abroad to avoid televised tears on the courthouse steps (and the corresponding brand damage).

Under this model rights holders get on a popular but unauthorised file sharing medium and make their product available, recording information such as the IP address of who tries to download it. But IP addresses aren’t one-to-one mappings for customers any more than caller ID tells you for 100% certain who’s calling you; rights holders need the ISP to either volunteer or be compelled to connect the dots for them, and turn over the names and addresses of their customers that had those IP addresses at those times.

Once those are received, the rights holder knows to whom they should send a nasty form letter describing just how many thousands the downloader could be sued for, but offering for it to all go away (for now) if they pay a “settlement fee” of a few hundred to a few thousand dollars.

The operation has become quite slick. You jump online in your lunch break, enter the reference number from your allegation letter, then choose if you’d like to pay the sum up front or if you’d like to go on an payment plan. Think of it as a “buying the new couch on interest-free” model, but instead of a couch you’re getting extorted.

The Dallas Buyers case doesn’t necessarily mean the shakedown show is coming down under. Perram is familiar with how this plays out overseas, and wrote in the published judgement:



Whether speculative invoicing is a lawful practice in Australia is not necessarily an easy matter to assess. Representing to a consumer that they have a liability which they do not may well be misleading and deceptive conduct within the meaning of s 18 of the Australian Consumer Law and it may be equally misleading to represent to someone that their potential liability is much higher than it could ever realistically be.

Copyright trolls may not be subject to the Australian Consumer Law, and some sections of it which would seem to apply to speculative invoicing would require that movie downloaders be a certain sort of customer of movie studios, or be buying a certain sort of product or service, which isn’t really the case.

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But the requirement that any correspondence be submitted to the court before it’s sent out, combined with the recognition in the judgment for the grubby business model that’s in place elsewhere (even specifically by Dallas Buyers Club copyright owner Voltage), admits that a legal right has been violated. it doesn’t, however, give the green light to threatening tactics.

What the studios are permitted to do with a list of 4,726 people who they think ripped them off remains to be seen. This, together with upcoming legislation directing ISPs to block piracy websites and the local launch of Netflix (albeit a diet, localised version of it), may mean that piracy declines. Of course, it could also just mean that a $2 a month service launches next week to hide Internet users from the next Dallas Buyers Club LLC.