The Hollywood company was seeking thousands of dollars in damages based on a complicated formula calculated on how many times people had downloaded the film and whether it had been shared with others.

In the US, lawyers sent letters demanding around $US7000 ($A9500) from alleged copyright infringers, or threatened to take them to court in a practice known as speculative invoicing.

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 Australian IP addresses.

In early April, the Federal Court ordered the internet providers, iiNet, Internode, Adam Internet, Dodo, Wideband and Amnet Broadband, to hand over the personal details of customers who allegedly downloaded the film.

But Justice Perram said he wanted to approve the letter lawyers proposed sending to downloaders before he would hand over customers' details and the demands were sent.

In his decision handed down on Friday morning, he said that Dallas Buyers Club had sought amounts far in excess of what was a "permissible demand".

"This brought forth the first draft letter," Justice Perram wrote. "There is no need to set it out. It was quite long and, on the whole, negative about people copying the film, which is hardly surprising. 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 judge had gone back to the company and asked them to set a quantified sum of money.

On Friday he ruled that those demands went too far, but added "I will not publish the actual figures that DBC proposes to demand for confidentiality reasons."

Justice Perram said said the company cannot claim "an amount relating to each infringers' uploading activities" or "additional damages ... depending on how many copies of other copyrighted works had been downloaded by each infringer".

The judge ruled he will allow the letters to be sent if the company pays a $600,000 bond and agrees to only demand "a claim for the cost of an actual purchase of a single copy of the film" and "a claim for damages arising from the amount of money it has cost DBC to obtain each infringer's name."