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Federal Court decision: Siemens Industry Software Inc v Telstra Corporation Limited [2020] FCA 901 (26 June 2020)

Last week a software copyright owner obtained an order from the Court requiring an Internet service provider to disclose documents relating to the identities of 20 of its customers who are suspected of using unauthorised copies of some expensive and sophisticated CAD software.

Remember the Dallas Buyers Club case? That was back in 2015, in which the owner of copyright in the movie controversially sought an order in the Federal Court that Internet service providers disclose information leading to the identity of those who they suspected had downloaded and pirated the movie. In the end, the case wasn’t pressed, after the Court imposed certain conditions on proceeding that related to limiting the demands the copyright owner would make on downloaders.

Last week’s case is a contrast showing how to get it right, although the different scope and scale changed the characteristics of the case markedly in favour of the copyright owner.

The software owner is a subsidiary of Siemens, and the software is called “NX” and “Solid Edge”, complex CAD software. According to the judgment, its licence cost is in the tens of thousands of dollars, so it is likely to be used commercially rather than by consumers. Further, Siemens also undertook to the Court that is will not take action against those who have not used its software commercially. Contrast that to the cost of buying or renting a single movie as a consumer, which is low, and likely to be outweighed by the cost of taking any legal action against individuals.

The NX and Solid Edge software apparently has a built-in feature that discloses the IP address of the user back, which is how Siemens knew which IP addresses were not using licensed versions. Contrast that to the difficulty Dallas Buyers Club had with establishing whether the whole or a part of its movie had been downloaded using BitTorrent, and by whom.

The scale of the number of IP addresses sought is relatively few – only 20 potential infringing users who are customers the ISP in this case. The alleged infringements were detected over the second half of 2019. Contrast this to over 4,000 potential downloads in the Dallas Buyers Club case, raising the issue of how Dallas Buyers Club intended to use the personal information of so many people.

And perhaps most importantly, Siemens disclosed what it intended to do with the information about any individuals revealed. It revealed the content of the letter of demand it intends to send, which will invite recipients to a conference to discuss settlement terms. That conference will include a discussion of compensation, but the letter does not demand any particular amount. Contrast this to the Dallas Buyers Club, which at one stage wanted to seek additional (punitive) damages for copyright infringement. The most controversial aspect of the Dallas Buyers Club case was the concern of “speculative invoicing”, a “sharp” practice by which a large sum is demanded for copyright infringement damages, but an offer is made to settle for a smaller, but nonetheless considerable amount that might well be still in excess of the damages the Court would actually assess.

This decision makes no finding about the actual ownership and infringement of the software, so all issues can still be ventilated if any recipients want to challenge any allegations made against them.

The copyright owner in this case appears to have studiously avoided the problems faced by Dallas Buyers Club, and it may even provide something of a template for the next copyright owner who finds itself in similar territory. Assuming the documents disclose enough information, it appears that there will be 20 people who may expect to be on the receiving end of a demand soon.

Key takeaways:

  • This reconfirms that copyright owners have the legal ability to identify those who may have installed or used infringing copies (in the right circumstances)
  • This also reconfirms that there are software owners which will actively seek redress against those who do
  • Don’t assume that the Dallas Buyers Club outcome means that others won’t succeed, particularly where the circumstances may be more favourable (in this case, particularly scale and scope), and a more reasonable approach has been taken to the demands that will be made.
  • Obviously, don’t use pirated or unauthorised copies of software or other copyright material. Doing so poses the risk of demands for copyright infringement damages, particularly in commercial settings.

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