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Australia – Online TMT News.

22 April, 2015


Legal News & Analysis – Asia Pacific – Australia – TMT


ISPs To Give Customer Details To Dallas Buyers Club LLC

On 7 April 2015, Perram J of the Federal Court delivered a decision in favour of Dallas Buyers Club LLC (DBC), which brought an application for preliminary discovery against six ISPs including iiNET, Internode, Amnet Broadband, Dodo Services, Adam Internet and Wideband Networks. DBC is a United States entity that claims to be the owner of the copyright in the 2012 Academy Award nominated motion picture, Dallas Buyers Club starring Matthew McConaughey.

DBC had commenced proceedings in mid-October 2014 in the Federal Court and had filed evidence showing identification of 4,726 unique IP addresses from which its film was shared online using a peer to peer file sharing network, BitTorrent. The ISPs resisted the application on the basis that the evidence was not sufficient to identify infringing IP addresses, the claim against any putative respondent was speculative and the pre-conditions for preliminary discovery had not been satisfied. The ISPs also argued that the claims against the infringers were so small that DBC’s case against them would not make any commercial sense. The ISPs further argued that particularly in light of this fact, the ISPs should not be ordered to divulge their customers’ personal information against their statutory obligations.

The Court ordered the ISPs to reveal the names and physical addresses of the customers associated with the IP addresses. The order was given on the condition that the information only be used to recover compensation for the infringements and not otherwise be disclosed without the leave of the Court. The Court further ordered that it be submitted a draft of any letter proposed to be sent to the account holders of the IP addresses identified. This was probably a condition to address the concerns of the ISPs that DBC would engage in “speculative invoicing”, ie, sending letters of demand asking for disproportionate compensation for the infringements.


ACMA To Consider Industry Code To Prevent Internet Piracy

The Communications Alliance, a communications industry group, submitted a proposed Copyright Notice Scheme Industry Code to the Australian Communications and Media Authority (ACMA), Australia’s communications regulator, on 8 April 2015. The proposed Code aims to reduce the incidence of online copyright infringement and increase awareness of lawful ways to access content. The Code was developed after consultations with consumer representatives, ISPs and owners of copyright works from various industries such as television and film. The Code provides for a Copyright Notice Scheme under which ISPs will receive reports from rights holders identifying IP addresses alleged to have been used for online piracy. The ISPs will send the relevant account holders notices informing them of the alleged copyright infringement as well as educational material to encourage them to change their behaviour and avoid future similar infringements. If three notices are sent in a 12-month period, then ISPs would be required to facilitate an expedited discovery process to assist the rights holder to enforce its copyright. The account holder may also request a review conducted by an independent adjudication panel.


Late Fees Not Penalties – ANZ Wins Federal Court Appeal

The Full Federal Court has held that certain bank fees charged by ANZ are not penalties in Paciocco v ANZ [2015] FCAFC 50. This is a high profile class action brought by bank customers in which they sought to set aside certain bank fees on a number of grounds, including that they were penalties. The decision is relevant to the enforceability of liquidated damages clauses in IT contracts.

The Full Court overturned the trial decision that credit card late payment fees were penalties. The Full Court confirmed that the relevant test for determining whether a payment obligation is a penalty is whether the payment is imposed to secure the performance of a contractual requirement, and if so, whether the amount is extravagant and exorbitant having regard to the charging party’s legitimate interest in the performance of the contract, which is to be assessed by reference to the greatest conceivable loss that might follow from the failure to comply.

The Full Court held that the primary judge erred in focusing on the actual costs incurred by ANZ as a result of Mr Paciocco’s late payments. Instead, the question of extravagance should be assessed on a forward looking basis at the time of the contract. The Full Court also held that a broader category of costs and losses could be considered in assessing the “legitimate interest” to be protected. Applying this forward looking approach, the Full Court allowed consideration of ANZ’s provisioning costs, regulatory capital costs and collection costs associated with the prospect of late payments, and found that these costs would probably increase the loss to a level at or above the late fees charged.
The Full Court dismissed the appeal by Paciocco that other exception fees were not penalties. These other fees included honour and dishonour fees and overlimit fees. The Full Court agreed with the primary judge that these were not penalties because they were fees charged for an additional service.


ARPANSA And ACMA Memorandum Of Understanding

The Australian Radiation Protection and Nuclear Safety Agency (ARPANSA) and Australian Communications and Media Authority (ACMA) have signed a Memorandum of Understanding to enhance public understanding of the regulation of Radiofrequency electromagnetic energy. The formal commitment between the two agencies has a term of three years and is an extension of their existing collaboration and information-sharing. The purpose of the MOU is to establish a framework to facilitate the exchange of information between APRANSA and ACMA. The agencies agree to use their best endeavours to comply with the terms of the MOU, but the MOU does not create any enforceable rights or impose legal obligations. The agencies agree to work together to ensure clear public messaging, share documents, information or assistance at request and meet on a biannual basis to discuss issues of mutual interest.



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