Sunday, February 10, 2013

Distributel Shows & Tells How an Indie ISP can Defend its Customers' Privacy Rights Against Alleged “Copyright Trolling”: Teksavvy Take Note

It’s good to see that competition is alive and well at least amongst the indies in the Canadian ISP market.  An indie ISP by the name of Disbtributel is stepping up to the plate and doing something that one of its indie competitors is apparently unwilling to do – which is to actively and effectively actually oppose a copyright mass litigation disclosure motion. Distributel believes this to be an inadequately supported motion that does not demonstrate good faith and which is being brought for an improper purpose. Indeed, Distributel explicitly alleges that the plaintiff NGN is engaged in “copyright trolling” and provides a copy of a letter seeking to “settle” for $1,500 and “misrepresenting and exaggerating” the possible potential upper end of any statutory damages award and implying that the award could reach a total of $25,000. According to Distributel, “This is a misrepresentation of the law”.  

It may be noted that the upper end of statutory damages is now $5,000 for any non-commercial infringement covered by the law that was proclaimed in force on November 7, 2012 - as any lawyer should know. No lawyer should ever suggest otherwise.  

Here is Distributel’s Motion record which shows a clear and concerted intent to resist the NGN motion. Distributel has filed two affidavits of its own from two of its employees (apparently, no expensive third party experts were considered necessary). These affidavits potentially seriously undermine the reliability of the affidavit evidence provided by Barry Logan of Canpire, who is also the deponent in the Voltage/Teksavvy matter.

Distributel had earlier chosen to “rely on the Court” to protect the privacy rights of individuals. It claims to have changed its position based upon becoming aware of NGN’s representation to a customer of a potential liability of up to $20,000 and a lack of key evidence to support NGN’s claims. Even if belatedly, Distributel is now stepping smartly, competently and confidently up to the plate to do what Teksavvy has controversially failed to do to date.

Teksavvy’s position on why it “does not oppose” the Voltage disclosure motion has been unconvincing. Yet, it claims to have somehow spent at last report at least $190,000 to not oppose and to seek two adjournments with the apparent goal of buying time to let a law school clinic try to get what could be at best limited status as an intervener. Teksavvy would of course have had full rights to bring evidence of its own, as did Distributel, and to cross examine Barry Logan of Canpire, if it chose to do so.  Ironically, it might have been much less expensive for Teksavvy to have simply engaged decisively at the outset than to have persisted in its apparent strategy to vigorously “not oppose” Voltage’s motion.  Teksavvy is not exactly impecunious. It is understood that it has between one and two hundred thousand subscribers. If its average revenue per subscribers is $50 per month, that’s cash flow of between $5 and $10 million per month. Teksavvy doesn’t need to rely, however indirectly, upon a law school clinic to take care of its customers, its business model and the public interest.

While I don’t often disagree with my friend Michael Geist, I respectfully cannot agree with his characterization that “TekSavvy has fought for the right to notify its customers and to allow CIPPIC to intervene in a case involving thousands of subscriber names”. First of all, Teksavvy always had the “right to notify its customers”. There was nothing to fight for here, except perhaps a brief delay – which would have inevitably taken place in any event and would have likely been far from brief if Teksavvy had only actually opposed the motion, and especially if it had filed evidence and/or cross-examined on  Voltage’s evidence. In any event, what exactly were Teksavvy’s customers supposed to do with this information? If they knew that they had downloaded some of Voltages’ films listed in the publicly available documentation, they might have guessed that their alleged IP address might have been on the Voltage’s hit list. What were they to do if their alleged IP address was alleged to be implicated? Hire a lawyer? Hardly.

The economics of troll litigation and the requirements of the Federal Court Rules make it completely unfeasible for an individual to retain counsel when the upper limit of what’s at stake is realistically only $5,000 per individual – however disproportionate an award of that magnitude might be. That’s why the economics of mass litigation threats attract copyright trolls and why ISPs need to be vigilant and diligent to defend their customer’s privacy.

It is an ISP’s role – and arguably its legal responsibility – to positively defend its customers’ privacy in the face of a motion for a court order that is arguably inadequate or fails to meet the “bona fide” test. This need not be an expensive exercise. Distributel is relying on evidence from its own employees. It is using only one law firm and not several sources of counsel.  After BMG, this is all well known territory with detailed maps, guidelines and guideposts. Nothing about the new legislation or subsequent case law has made anything more complicated in any material respect.  For whatever reason, Teksavvy may end up spending far more money not opposing the disclosure motion rather than actually opposing it, which reliable news reports indicate is indeed the wish of the Court.

As for CIPPIC’s role, CIPPIC itself says that it “represents consumer and other public interests in such areas as intellectual property, consumer protection in e-commerce, domain name governance, personal information protection and privacy”. It’s job is not to step in for business organizations that can hire their own law firms.  That puts CIPPIC in a very difficult position because its mandate is not be a law firm engaging in litigation that can and should be handled by the directly involved parties and their law firms.  CIPPIC relies on generous public and charitable funding from such benefactors as the Samuelson-Glushko Foundation. CIPPIC was never intended to substitute for commercial law firms or to directly or indirectly provide legal services to parties that can well afford such law firms.

CIPPIC has already done more than its duty in serving the public interest with respect to the mass litigation issue – with its first and best known victory to date, namely as an intervener  in the BMG litigation in 2004 -2005. I had the honour of being CIPPIC’s lead counsel in that case aided by the indispensable and very able help of Alex Cameron who handled the privacy issues with the clarity that proved to be so useful to the Court. There were very many important uncharted de novo public interest points to be made at that time and it was essential that CIPPIC be there to make them. As a result of CIPPIC’s intervention and the extremely competent opposition by Shaw and Telus, Canada has been immune from mass and troll litigation up until now.  With the excellent decisions of the Federal Court and the Federal Court of Appeal, the whole matter of disclosure motions in mass copyright litigation is now well understood and well-travelled ground and the map can be followed by anyone. That is exactly what Distributel seems to be doing and what Teksavvy won’t do, for whatever reason.

It is not apparent at this point when the hearing on the NGN/Distributel motion will take place and what may happen in the interim. Nor is it clear how Distributel’s strong opposition may impact the apparently similar situation in the Voltage matter, in which Canpire is also crucially involved. 

So – Distributel has now decided to fight to win for its customers' privacy rights.  It is doing what an ISP should do in these circumstances – which is to defend its customers’ privacy in the face of a disclosure motion that it believes is seriously inadequate. Several comments on Michael Geist’ blog suggest that this is not only the right thing to do but the smart thing to do from a business standpoint, since some readers are openly musing about switching from Teksavvy to Distributel.  Maybe Bell and Rogers will stand up and fight to win if and when their time comes around again and material is inadequate, as Shaw and Telus did earlier in 2004 and 2005. That is how the system should work and now seems, at last, to be working.


PS - Here is a copy of Judge Mandamin's Reasons for Order dated January 31, 2013 in the Voltage/Teksavvy confirming that "The Court is better served in coming to a proper decision having heard from differing sides." The other statements from the Court are also very important.


  1. Hi,

    Per Distributel:

    Unfortunately the process is rather anti-climactic. NGN and Riding's counsel notified our counsel that they wish an indeterminate adjournment while they wait to see what happens in the CIPPIC Intervenor motion in the Voltage TS motion. We are not in a position to oppose an adjournment as it is their motion.

    For the armchair lawyers out there.. we could try and oppose but we would have a tough time trying to show how our customer's privacy would be harmed by NGN retreating from the table.
    /end quote


    The court date *was* set for Monday (tomorrow), but that isn't going to be happening now, which in a way is too bad. I would have liked to have seen the outcome of both.

  2. Note to Readers:

    I cannot confirm that the foregoing comment is actually from anyone at Distributel. Persons speaking on behalf of Distributel should ideally post in their own name. I’m reluctant to let this go forward but I’m doing so because it is timely and on the assumption that it is indeed bona fide. Anyway, here’s the latest Court “docket” which shows the official state of play, which seems not inconsistent with the comment purporting to speak on behalf of Distributel:

    Assuming that this is from Distributel, I must say that I too am just an “armchair lawyer” - though a real lawyer - so to speak in this matter since nobody has retained me in this case. However, I believe that Distributel has filed very good material and has very competent counsel and I’m surprised it is not pressing forward right now. I don’t know why it would rely on or wait for Teksavvy or CIPPIC at this stage since Distributel seems to be far ahead of both of them in terms of the clarity of its position, its status to assert that position and what is now clearly on the record.



  3. I dropped your blog post URL to him in the forum post I pasted up above. If/when he see's it maybe he will post here and clarify any questions pertaining to this update and/or identity.

  4. Sorry for the delay, have been very busy today. I am the same D Pucket in DSL Reports and the same Daniel Puckett in the affidavit and written submission. Although it is easy to miss in the docket, NGN and Riding filed for adjournment. As soon as NGN and Riding reschedule the hearing, Distributel will be ready to proceed.

    From the docket: Adjournment letter dated 08-FEB-2013 received on 08-FEB-2013 from Plaintiff concerning Motion Doc. No. 10 currently scheduled to be heard at General Sitting on 11-FEB-2013 now adjourned sine die placed on file.