It’s happened in Australia. Could a copyright owner force an ISP to give up alleged copyright infringers’ names in New Zealand?

POSTED BY Rachael Cederwall
Rick Shera
11 April 2015

posted in l@w.geek.nz | Intellectual Property | Copyright | Discovery | ISP

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The Federal Court of Australia has decided that Australian ISPs must provide users’ details to Voltage Pictures, the owner of the copyright in the film Dallas Buyers Club.

Voltage identified 4,700 or so IP addresses at which it alleged the film was illegally shared using BitTorrent, a peer-to-peer file sharing protocol. However, an IP address of itself does not identify the user. That information is generally only held by the ISP who supplies connectivity to the user via an IP address that is within the ISP’s delegated range. ISP ranges are public information so that is how Voltage knew which ISPs to sue.

Voltage therefore sued those ISPs seeking a preliminary discovery order against them under rule 7.22 of the Federal Court Rules 2011 (Cth), to identify the 4,700 alleged infringers. The Court concluded that it was appropriate for Voltage to be given preliminary discovery of all the user names.

While such actions have become commonplace in the US, this decision creates a precedent in Australian law allowing rights holders who can trace alleged infringement to an IP address to use the preliminary discovery process to find out who is associated with that IP address.

One of the big concerns is that this may lead to what is called “speculative invoicing” or “copyright trolling”, where the copyright owner sends letters to individual users threatening issue of proceedings and large damages, which it then says it is prepared to forgo if the user makes a payment (reported to be around US$5,000). Voltage is alleged to have engaged in these practices in the US so, despite the fact that neither Australia nor New Zealand yet have large statutory damages regimes, the Judge in this case has ordered that the letters Voltage proposes to send must be submitted for his approval first.

But, could this happen in New Zealand? Is there scope for a New Zealand court to make a similar order under New Zealand’s pre-trial discovery rules?

The answer is “Yes”, but in a different way. New Zealand High Court Rule 8.20 allows the Court to order a person (who need not be the intended defendant) to make a document available to an intending plaintiff where it appears to the Judge that the intending plaintiff cannot formulate a claim without reference to that document. However, HCR 8.20(3) says that an application for such an order must be served on the intended defendant, so that doesn't work. The identity of the intended defendant is the very information that is missing so it's not possible to serve the application on them. This was not an issue in the Dallas Buyers Club case in Australia because they have the New Zealand rule but they also have an additional rule that specifically allows an order to be made against a third party to divulge the identity of an intended defendant. Nothing needs to be served on the intended defendant until after they are identified.

However, the same result could be achieved in New Zealand by issuing proceedings against an unnamed defendant or defendants - so called "John Doe" proceedings. Such proceedings are not common but they have been used. South Pacific Pictures Limited issued a John Doe proceeding for infringement of its film, Sione's Wedding, before it knew who had been involved in the theft of the master and subsequent sales of DVD copies.

At the same time as issuing the John Doe proceeding, the plaintiff could apply for what is called a Norwich Pharmacal order (named after a UK case in which this type of order was first granted), against a named third party such as an ISP, for information which would enable it to identify the intended defendant(s). Once identify is established, each defendant can then be joined to the proceeding.

It might be thought that there is no need for this in New Zealand given that we already have a means by which copyright owners can take action with respect to alleged infringement using peer-to-peer networks. That is the #3strikesNZ “Skynet” infringing file sharing regime, introduced a few years ago as new sections 122A-122U of the Copyright Act 1994. We’ve posted a detailed diagram of that regime previously. The reason why it has not been used nearly as much as was anticipated is that the copyright owners object to paying the $25 per notice fee (the same argument is taking place in Australia in the context of the proposed Communications Alliance code, but that is another story). That $25 cost pales into insignificance beside the cost of the above processes, but, if the applicant considers it will get its money back and more, then maybe we will see a pre-trial discovery application like this in New Zealand. There is certainly nothing which forces a copyright owner to use the infringing file sharing regime as opposed to going to Court. Let’s therefore hope New Zealand ISPs and Courts are as alive to the dangers as their Australian counterparts.

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