The US studio behind the film Dallas Buyers Club will have to pay a $600,000 bond before it can send invoices demanding damages to the thousands of Australians who allegedly downloaded the film illegally.

In a landmark piracy and copyright case, the federal court has rejected a number of the movie studio’s reasons for seeking compensation for illegal downloads in a move that will significantly limit the amount it can charge illegal downloaders.

The court will allow the studio to send invoices to downloaders if it only charges downloaders for the cost of a legitimate copy of the film, and if it pays the bond.

But Justice Nye Perram said Dallas Buyers Club LLC could not claim for damages based on the uploads and downloads of the file on torrent sites because the idea was “so surreal as to not be taken seriously” and the number of copyright infringements would be “astronomical”.

The decision has been celebrated online as putting a stop to the practice of “speculative invoicing” – where letters are sent to alleged illegal downloaders demanding payment to avoid the prospect of being sued for copyright infringement.

Dallas Buyers Club LLC focused on more than 4,700 Australian internet users who allegedly downloaded the film over a one-month period in 2013.

The company won the right in April to obtain the names and addresses of the users from six Australian telcos – iiNet, Internode, Dodo, Amnet, Adam Internet and Wideband Networks – but the court prevented it from enforcing that right until it could see grounds for its demands.