SYDNEY • An Australian court has forced the makers of the film Dallas Buyers Club to cap penalties for illegal downloaders, a ruling welcomed by Internet companies as a "knockout blow" to the controversial tactic of threatening pirates into paying fines.
The court ruling puts Australia at odds with the United States, Britain, Canada and Germany, where content owners have been allowed to send letters to suspected illegal downloaders demanding thousands of dollars to drop legal action, a measure known as "speculative invoicing".
The practice of speculative invoicing has stirred up controversy in Singapore as well, where a number of local Internet users accused of downloading the same film illegally received letters demanding that they pay US$5,000 (S$7,000) to the studio that produced it.
In a lawsuit seen as a test of whether the practice will be allowed in Australia, where a third of adults admit to stealing online, the studio behind the triple Oscar winner, Voltage Pictures, wanted iiNet and five smaller Internet companies to hand over the addresses of 4,276 suspected offenders.
But in an unexpected setback, the Federal Court refused their request, saying it would make the Internet companies hand over the customer details only if the producers promised to charge only the cost of buying a copy of the film.
The judge also ordered the Hollywood producers to pay a A$600,000 (S$617,400) bond to ensure they keep the promise.
"It is probably a knockout blow for anyone who thinks they can successfully get into the speculative invoicing business in Australia," said Mr John Stanton, chief executive officer of Internet industry group Communications Alliance.
"It is hard to see how that type of activity can be viable in Australia if rights holders are confined to seeking damages equivalent to the purchase of the item in question and a contribution to legal costs."
The court ruling bans Dallas Buyers Club producers from charging the Internet customers damages for the number of times each illegal downloader let someone else download the film from them, and for other content that downloaders might have stolen.
The court's ruling on the extent of the penalty allowed in such cases of digital piracy echoes the views of the Intellectual Property Office of Singapore, which has also recommended the price of a DVD of the movie in question as a possible settlement sum in such cases.
The Intellectual Property Office of Singapore had also advised Internet users to question the accuracy of the investigations carried out by copyright owners, and to ask for more evidence if they feel they had been wrongly accused.