An Australian court has told the rights holder of Hollywood blockbuster Dallas Buyers Club that it must cap penalties for those who illegally downloaded the movie and will require a $442,000 bond before details of the alleged pirates are released.

In April this year, Dallas Buyers Club LLC (DBC) was granted the right to be able to contact almost 5000 iiNet ISP users targeted under the action and seek damages for copyright infringement.

Justice Nye Perram ruled that DBC must hand over drafts of the proposed letters and telephone script it intended to use to obtain damages in relation to the illegal downloads. The letter contained questions such as "how much do you earn and how many movies have you torrented?" but did not specify any monetary amounts the company was seeking.

"Critically, however, it did not make any demand for a sum of money. Instead, it encouraged recipients to make a telephone call to discuss the matter or to engage in email correspondence with an unidentified representative of DBC," Perram said, according to court documents.

In clarifying its monetary demands, DBC said it was seeking four heads of damages: A claim for the cost of purchasing the movie; damages relating to how often it had been uploaded by the user; punitive damages relating to how many other copyrighted works had been downloaded; and damages covering the cost it took for DBC to obtain that infringer's details.

While Judge Perram allowed the first and last of these damages, he said the other two were "untenable". He added that the court would only allow the letters to be sent if DBC gave written confirmation that it would only seek damages related to the cost of purchasing the movie and the costs of obtaining the infringer's details. The judge then ordered the company to pay a $442,000 bond to ensure they adhered to the agreement.

The Australian ruling is in contrast to recent cases in the United States, Britain, Germany and Canada, where content holders have been allowed to contact suspected downloaders and demand payment with the threat of court action. The practice is known as speculative invoicing, or "pay up or else" schemes.

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