GUEST BLOG : Could it happen in NZ?

This guest blog is from a posting originally on the website of Lowndes Jordan, and authored by Rachael Cederwall and Rick Shera (TUANZ member). (Original post here)

“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 a fairly clear “Yes”. 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. In this scenario, the ISP would be the person against which the order would be made and the information held by the ISP which matches the IP address to its user would be a “document”.

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 couple of 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 a pre-trial discovery application to Court, 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.”