Australia's First Copyright Troll?


An organisation named Movie Rights Group is pursuing illegal downloading of the film ‘Kill the Irishman’ in Australia.

According to Movie Rights Group’s website they use "advanced tracking systems to identify your copyrighted content being illegally traded online. Our lawyers then step in to match anonymous infringers with real people".

It seems American distributor Lightning Entertainment has engaged the organisation to do just that.

News of all this first broke on Exetel CEO John Linton’s blog on 1 October. Movie Rights Group is seeking the identities from Exetel, an internet service provider, of alleged copyright infringers whose IP addresses the group had obtained. About 9000 IP addresses had been obtained in total, of which 150 were Exetel subscribers.

The Movie Rights Group directors are New Zealand-born brothers Matthew Wade Clapham and Richard Dean Clapham. They and Lightning Entertainment are apparently connected to a "vast international web of pornographic websites".

In Australia neither the record industry nor the film and television industry has elected to sue individual infringers. This is understood to be due to the negative publicity the Record Industry Association of America (RIAA) attracted in the US when it went on a rampage against music piracy by individual downloaders, after success against Napster and Grokster failed to significantly curb illegal downloading activity. The relevant Australian industries are also possibly loathe to alienate government support in their campaign to pressure ISPs to act against copyright infringement of films and music.

The RIAA announced in 2008 that it would cease suing individuals despite continuing its existing claims. One case against Boston University student Joel Tenenbaum resulted in an award of a total of $675,000-$22,500 per song. These sorts of damages might be thought to be a powerful deterrent to would-be infringers. But they are so excessive in response to globally prevalent behaviour that they result in political pressure on governments to limit these awards to something more proportionate.

The modus operandi of Movie Rights Group bears striking resemblance to the US Copyright Group who, from 2010, filed over 100,000 lawsuits in the US for alleged uploading of ‘The Hurt Locker’ and ‘Far Cry’.

Like Movie Rights Group, the US Copyright Group does not represent the interest of the major film studios or television networks, instead acting for smaller film studios and pornography makers. Once it has trawled the internet for the IP addresses of potential infringers, US Copyright Group applies to the US courts to seek orders compelling the various ISPs to reveal the customer details behind the IP addresses.

Essential to this process is an application to have all the claims against the thousands of IP addressees (referred to as John and Jane Does) joined into one action. If they are not joined as one action it would be prohibitively expensive to commence each action individually. The filing fees alone would amount to millions of dollars.

Where the application is unopposed or otherwise successful the US Copyright Group then issues letters to each and every identified subscriber offering settlement of the claims. In the case of ‘The Hurt Locker’ and ‘Far Cry’ settlement offers were for $1500. This offer is far less than the costs of defending an action.

In many instances in the US the customer was entirely innocent — the "infringers" included several single mothers whose children did the downloading; a dead person; a 13-year-old girl — or infringements were the result of hacking into insecure modems. But the costs of defending are unaffordable and it is cheaper to pay up.

The effectiveness of these so called "copyright troll" actions is assisted in the US by its Copyright statutory damages. A copyright owner under US Law can elect to claim statutory damages instead of proving actual loss or damage. Statutory damages are not less than $750 or more than $30,000 for each work infringed, and go up to $150,000 if it can be proved that infringement was committed wilfully.

Here, filling fees in the Federal Magistrate’s Court stand at $848 per action. For the Movie Rights Group to commence 9,000 separate actions the filing fees would be $7,632,000. So the first battle line, if the ISPs do not hand over the names, will be to file an application to seek to have one joined case in order to enable the Plaintiff to have the subpoenas issued under the one action.

Australian law is not that different from US Law on joinder of actions. Generally speaking under both US and Australian law the rules say two or more persons may be joined as plaintiffs or defendants if separate proceedings by or against each of them would give rise to a common question of fact or law and all rights of relief claimed are in respect of, or arise out of, the same transaction or series of transactions.

In the US some courts have been happy to grant these orders but others have not. In April 2011 US District Court Judge Harold A Baker found that many users downloading the same file was not necessarily the same transaction. Baker commented that "The bare fact that a Doe clicked on a command to participate in the Bit Torrent Protocol does not mean that they were part of the downloading by unknown hundreds or thousands of individuals across the country or across the world."

The Australian Magistrates courts may well be guided by this reasoning as it will likely be the first time such an issue has been brought to their attention.

In any event, under the Federal Magistrate’s Regulations, there is a limit to the number of subpoenas the court may issue. Unless the Court directs otherwise, a party must not request the issue of more than five subpoenas in a proceeding. This mechanism presumably is there because the Federal Magistrate’s Court does not have the resources, staff and facilitates of say the Federal Court. If proceedings were commenced in the Federal Court to avoid this restriction then the Federal Court may refuse to allow proceedings where individual damages claims are less than $1500.

On 26 October 2011 John Linton blogged his concern that the action of Movie Rights Group has placed Exetel in the invidious position of choosing whether to defend the privacy of its customers, who may be infringing copyright, or expose its customers to what may be the actions of Australia’s first copyright troll. For John Linton it is a difficult and potentially expensive decision: to choose between Exetel’s dislike of copyright law being used to extract settlements en masse versus helping the infringer. Linton says that Exetel will most likely to take steps to protect its customers’ identities.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.