iiNet to fight 'speculative invoicing' discovery claim

ISP iiNet could find itself back in court fighting another dispute surrounding alleged copyright infringement by its users.

The copyright holders of the movie Dallas Buyers Club have applied to the Australian Federal Court to have iiNet and other ISPs provide details of their customers suspected of illegally downloading the film. This is often the first stage of legal action against unknown defendants.

But in a blog post, iiNet Chief Regulatory Officer Steve Dalby said the company has decided to oppose the discovery request.

He said iiNet has serious concerns that the copyright owners are involved in a practice known as speculative invoicing.

“Speculative invoicing, as practised overseas, commonly involves sending intimidating letters of demand to subscribers seeking significant sums for an alleged infringement. These letters often threaten court action and point to high monetary penalties if sums are not paid,” he said.

The company is concerned that speculative invoicing could be used to subject its customers to intimidation via excessive claims for damages and lead to invoices being sent to the wrong individuals or organisations - such as schools or internet cafes.

Dalby pointed out that the copyright holders have already sent letters to US residents threatening fines of up to US$150,000 ($170,000) unless the defendants settle for what is typically US$5000 - still substantially less than the usual cost of defending a suit. This has been compared to extortion by some commentators.

If Dallas Buyers Club prevails with its discovery request, “iiNet is concerned that such a development would open the floodgates to further claims by other rights-holders, leading to more Australians being intimidated to pay exorbitant amounts in an attempt to avoid improbable litigation,” Dalby said.

iiNet has already fought and won a landmark court case filed by major movie studios centred around whether Australian ISPs should be considered liable for copyright infringement conducted by their users.

Image courtesy of bloomsberries under CC