All of us at some point know someone that has told us about illegally downloading a movie via an internet site. It seems unfair for those of us who pay full price through iTunes but most of us just figure that the younger generation are smarter than us.

A new Federal Court case sheds some light on the rights of the movie makers as owners of the copyright and those pesky downloaders. What happens when they get caught and how do they get caught?

It seems from the evidence in the Dallas Buyers Club Movie (DBC) and a group of Internet Service Providers (ISP), including IINet, Internode and Dodo, that the fight continues. On 14 August the Federal Court gave an indication of the compensation copyright owners can expect to claim in future copyright breach matters and how the illegal downloaders might expect to receive a bill.

What happened here was a digital investigator found 4,726 IP Addresses from which the DBC movie was illegally downloaded and shared on “Bit Torrent”. The owner sought a Court Order requiring the relevant ISP to provide details of the owners of the IP Addresses.

To get an Order like this they had to demonstrate a right to obtain relief against potential Defendants, namely the ISP account holders. The judge ordered the ISP to provide this information but DBC had to provide the letter of demand to the account holders. The concern here was an unreasonable demand for the level of damages suffered from the copyright infringement.

In terms of the amount of money the owner of the copyright intended to claim, the letters set out four things:-

1. A claim for the cost of downloading a film;
2. A claim relating to the uploading or sharing of the film on Bit Torrent;
3. A claim relating to additional damages because of repeat infringing;
4. A claim for part of the costs of proceedings.

The general principle is that damages must put the party who has had their rights breached, in the same position it would have been in, had the infringement never occurred.

The judge found that a claim relating to the cost of downloading the film and a claim for a proportionate part of the cost of proceedings was permissible. However the Court found that a claim relating to the uploading or sharing of the film on Bit Torrent and additional damages due to potential repeat infringements was not.

I learnt that a user downloads slivers of a movie file from many other uses, and the slivers are then put together to form the full movie. By doing this Bit Torrent automatically shares and uploads the slivers of the file to each of the other downloaders. It must be a Gen Y thing!

The owners of the copyright claim that each sliver shared was actionable. This meant they would have been charged for sharing the film on the internet at full price for each sliver. The Court found this was not permissible even though it was clearly designed to act as a deterrent to the illegal downloading.

The Court also found additional damages could be claimed when taking into account all the other relevant matters including downloaders history on Bit Torrent so that the more they downloaded, the higher the additional damages should be. The Court found that this approach by the copyright owner was not reasonable and it came back to the cost of hiring the film by download and a proportionate part of the cost of the proceedings.

The Court said they would only allow access to the identities of the downloaders if DBC undertook to make a claim for the cost of download of the movie and proportionate part of the proceedings only. The Court required the foreign based owner of the copyright to pay a bond of $600,000.00 to the Court which would be lost if they failed to follow the undertakings. Heavy stuff!

So the general principles to be derived are:-

1. Illegal downloaders can be pursued by virtue of the ISP; and
2. Reasonable damages will be awarded as well as a proportionate part of the cost of the action of the breach, but no more.

The tricky situation for an owner of a copyright is, will the costs of proceedings and pursuing the illegal downloaders and recovering small amount of damages be cost effective and enough of a deterrent. It certainly makes you think very carefully about how technology is disrupting the traditional framework of access to material, rights to exercise over the cost of sharing copyright material and whether any potential claims are adequate deterrent from doing it.

Owners of copyright of should think very carefully about how it is shared by the internet. Call us if you would like to discuss your copyright issues.