The U.S. studio behind the movie Dallas Buyers Club (DBC) has been handed a devastating blow in Australia. The company wanted to 'fine' downloaders many thousands of dollars each but the Federal Court has seen through the scheme and has refused to hand over alleged pirates' identities unless DBC pays a AUS$600,000 bond.

Back in April the company behind the movie Dallas Buyers Club (DBC) won the right to obtain the personal details of 4,726 individuals said to have downloaded and shared the movie without permission.

As six Australian ISPs – iiNet, Internode, Dodo, Amnet, Adam Internet and Wideband Networks – stood by ready to furnish the information, the Federal Court told DBC it wanted to see copies of the letters the company would be sending to alleged pirates before releasing the data.

In June it became evident that DBC were seeking to interrogate Internet account holders over the phone, even going as far as to demand details of their salaries. DBC still did not reveal how much money they intended to demand from alleged infringers but in a ruling handed down this morning from the Federal Court, Justice Nye Perram details what happened next.

Early July, DBC provided a written submission to the court detailing four claims it intended to make against alleged pirates.

(a) A claim for the cost of an actual purchase of the movie Dallas Buyers Club.

(b) A claim relating to each alleged infringer’s uploading activities. DBC said it would seek to recover a one-off license fee from each individual that had uploaded parts of the movie to other BitTorrent users.

“It is not trespassing on DBC’s legitimate confidentiality concerns to say that the sum sought by DBC in relation to this head of damages was substantial,” Justice Perram writes.

(c) A claim for damages depending on how many copies of OTHER copyrighted works had been downloaded by each alleged infringer.

(d) A claim for damages based on the amount of money it has cost DBC to obtain the personal details of each alleged infringer.

Unsurprisingly, Justice Perram finds the claim set out in (a) to be both reasonable and with “certain biblical charm”. Equally, the judge feels that since DBC has spent considerable amounts tracking alleged infringers down and bringing legal proceedings, the amounts set out in (d) are also fair.

However, when it comes to the claims outlined in (b), Justice Perram has much less sympathy with the movie studio.

“The idea that any court would assess DBC’s damages on the basis that BitTorrent users who were going to share the Film over the BitTorrent network would have avoided infringement by approaching DBC to negotiate a distribution arrangement in return for a license fee is so surreal as not to be taken seriously,” the judge writes.

“If such a claim were made in a proceeding for copyright infringement in this Court I am satisfied that it would be dismissed summarily without trial….as a case having no reasonable prospects of success.”

In respect of (c) – trying to calculate damages based on OTHER infringements – the judge dismisses that too.

Essentially the judge found that DBC can claim for the price of the film and claim for a proportion of the amount spent on tracking down an alleged infringer, but if he is to allow the release of subscriber information, DBC are not allowed to ask for anything more.

However, that in itself raises a problem. Since DBC has no presence in Australia, the Court has no ability to punish the company for contempt if it fails to follow Justice Perram’s instructions. So, in order to make it financially unviable for DBC to go rogue, the Judge now requires DBC to pay a AUS$600,000 bond before any subscriber information is released.

While today’s ruling doesn’t preclude DBC from going ahead with ‘deterrent’ letters to alleged pirates with a small fee attached to cover their costs, it does turn their juicy cash cow into a giant pig. Few outside the company will be disappointed by that.