Voltage Pictures Mass Litigation: What is Teksavvy's Task?

Richard Westall's Sword of Damocles, 1812

In the current Voltage Pictures litigation pending in the Federal Court, it’s remarkable but understandable that the focus has shifted from Voltage to Teksavvy.  It’s a fair question as to why Teksavvy won’t oppose the Voltage motion for disclosure en masse of the names and addresses of 1 or 2 thousand of their customers. Shaw and Telus successfully stood up for their customers in 2004.

And why am I concerned about all of this now? It’s because we have a good balance in Canada in terms of the interplay of the Copyright Act, PIPEDA, and the Federal Court Rules. Many people, including me, put in a lot of effort in 2004 and 2005 to achieve this balance. It has apparently succeeded in discouraging to date the kind of unsavoury "troll" activity that we have seen in the USA and UK. But this balance only works if everyone plays their part.

To update, here’s an article in today’s National Post by Christine Dobby, with quotes from me and David Fewer, of CIPPIC. David is quoted as saying about Voltage’s material:

“It’s hearsay evidence. There’s very little in that affidavit that they’ve filed in support that gives us confidence that they’ve met the legal burden,” Mr. Fewer said.

If David is right, it would likely be simple, straightforward inexpensive and even easy for Teksavvy to successfully oppose this disclosure motion. This would be a win/win for Teksavvy and its customers. This would not mean that Teksavvy is getting involved in the “merits” of the case. Protecting privacy in no way amounts to endorsing piracy.

Teksavvy’s customers are indeed very “savvy”.  See the hundreds of questions and comments, many of them very perceptive and well informed, on Teksavvy’s CEO Marc Gaudrault’s statement as to why his company won’t oppose the disclosure motion. 

Generally speaking, the real issue now is under what circumstances, if any, an ISP is expected or maybe even required to take reasonable steps to safeguard its customers' privacy. If an ISP can successfully and inexpensively oppose an inadequately documented attempt to breach its customers’ privacy, then why should it be able to walk away and leave its customers on their own and just tell them they can hire their own lawyers? It’s the ISP’s duty under the PIPEDA federal privacy legislation to protect its customers’ privacy. That presumably does not mean simply telling them that their privacy is about to breached, that they are on their own and are free to get a second mortgage and hire their own lawyer.

ISPs are paid a lot for their services, and one part of their job is to live up to their PIPEDA obligations. ISPs customers pay $25, $50, $60, $80 or more a month and part of their expectation, beyond fast and reliable service, is an expectation of privacy and an expectation that their privacy will be safeguarded – especially if an ISP promotes this aspect to get and retain customers.

In the current case, at the very least and to be as polite as possible, it’s completely unrealistic to suggest that those who may be sued by Voltage should retain their own counsel at this stage. Any such person has no legal status at this point in the litigation and the legal and procedural issues they would have to deal with (such as preserving their anonymity at the peremptory state) are unmapped and much more complicated than anything Teksavvy would need to deal with. Indeed, Teksavvy’s task would apparently be quite simple if CIPPIC is substantially right as quoted today and in its earlier submissions to the Court in its letter dated December 14, 2012 here and its December 21, 2012 motion to intervene.

All that Teksavvy would need to do  – and the road map is very clear and the road well paved - is simply to demonstrate to the court, if it is the case,  that Voltage’s material is inadequate from an evidentiary standpoint and that Voltage does not sufficiently demonstrate the requirement of a bona fide intention to actually litigate.

Generally speaking, it is an interesting question as to whether any putative mass litigator can seriously intend to start 2,000 actions, which would mean 2,000 statements of claim, with a registry filing fee of $150 each, if the claims are of the nature set forth by Teksavvy in the initial statement of claim so far. It would be astonishing if the Court were to allow one plaintiff to sue hundreds or thousands of individuals at once in this type of action, since there will be different facts, different defences and different damages (if liability is proven) in each situation. And the damages would max out at $5,000 for each defendant for non-commercial activity.

In 2005, in the BMG case, the Federal Court of Appeal stated that:

It is sufficient if they show a bona fide claim, i.e. that they really do intend to bring an action for infringement of copyright based upon the information they obtain, and that there is no other improper purpose for seeking the identity of these persons. (emphasis added).

This presumably does not mean simply getting names and addresses and using the insincere threat of an action as a faux Sword of Damocles to extract substantial settlements en masse.

In this or any other similar situation to that of the BMG case, the party seeking disclosure must show that it meets the “bona fide” test and that it has sufficiently reliable non-hearsay evidence to justify the provision of thousands of names and addresses of persons whose privacy will be sacrificed and the consequences of wrongful identification can be enormous.

Is the material adequate in this case? I make no comment on that issue. That’s for the Court to decide. CIPPIC has indicated its position on this. But CIPPIC can at most be an intervener, and even if allowed to intervene, may be permitted only a limited role with no right to cross-examine. Anyway, CIPPC cannot play this role in every case.  That’s not CIPPIC's job.  It’s an ISPs job to under the PIPEDA privacy legislation to safeguard its customers' personal information.  And ISPs get well paid to do so.

To sum up, if the material does not provide adequate, non-hearsay evidence to show the reliability of the investigation and if there is not a bona fide intention of pursuing litigation, then the names and addresses should not be provided.

If Teksavvy could successfully oppose this motion and does not do so, its customers are going to have lots of questions. This could also send a signal that if an ISP as savvy as Teksavvy won’t ever oppose these types of disclosure motions in order to stand up for its customers rights under PIPEDA, then other ISPs also needn’t do so. And then, it could be open season for mass litigation and “troll” activity in Canada.

HPK

High Voltage and High Stakes: Voltage Pictures Seeks Disclosure of Customers' Names and Addresses from Teksavvy

There have been many recent reports (e.g. here, here, here, here and here) about Voltage Pictures’ second attempt at mass copyright litigation in Canada and its motion to force Teksavvy, an innovative and independent Chatham, Ontario based ISP known for its consumer friendly advocacy, to disclose the names and addresses of 2,000 of its subscribers who are currently identified only by IP address. These subscribers have allegedly infringed Voltage’s alleged copyrights in certain listed cinematographic works, such as “Balls to the Wall.”  Interestingly, the Statement of Claim does not refer to “Hurt Locker”, a Voltage picture that was the subject of a 2011 mass litigation effort, also in the Federal Court, against customers of some Quebec ISPs. That action was discontinued on March 28, 2012.

If the motion remains unopposed and is granted, the result could immediately affect 2,000 Teksavvy customers and help to pave the way for future mass litigation - or the threat thereof in order to obtain vast numbers of “settlements” - in Canada in the future.  Such litigation would be new to Canada.

I have no involvement at this time in this litigation. That said, I should disclose that I was lead counsel for CIPPIC back in 2004 and 2005 when CIPPIC actively intervened in the BMG litigation in support of the public interest and to assist the Court with respect to copyright and privacy issues.  At that time, certain major record companies were targeting only 29 alleged infringers spread amongst five large ISPs. Now we have one plaintiff (Voltage Pictures) suing 2,000 subscribers of one small Canadian ISP, namely Teksavvy.  It should be emphasized that none of those objecting to or intervening in the motion in 2004 were there in support of what is sometimes called “piracy” by the alleged downloaders and file sharers. The battle was all about privacy – and when it can or should be breached, mindful among other things of the severe consequences of ordinary citizens being dragged into complex and costly litigation, quite possibly by mistake based upon unreliable information.

Although Teksavvy has indicated that it “will not provide personal information to a 3rd party when copyright infringement is alleged unless ordered to do so by a court”, it has, however, decided in the end not to oppose the motion seeking such an order. It has decided not to cross-examine on Voltage’s affidavit material and not to file any written material. In a recent blog post entitled “Why we are not opposing motion on Monday”, Teksavvy’s CEO explains why his company has taken this position:

Everybody should know though that we have looked into all angles to determine what our position should be in this situation and after spending a significant amount of time and soliciting a considerable amount of advice from numerous respected sources, we found that we simply could not comment on the merits of the case. Our place is to ensure that we provide adequate notice and also to make known to others that these requests have occurred and that the best way to make sure to avoid being involved is to simply not engage in such activities. If somehow you end up involved and you feel its not right, the place to voice your concern is the hearing on Monday. If you intend to appear, please let us know also.

I will be there on Monday to ensure your privacy is taken seriously however we will not be making a case against the merit of what they are alleging. That's for those affected and others to do if they wish to. Our role has been to provide notice and to take every step to alert and to some degree educate people that the laws have now changed and apparently so too have the technologies used to collect evidence in these cases. If they were not enforcing these laws in the past, they are certainly doing so now, whether the laws are right or not is not for us to judge.

Interested readers should read the whole statement and the many comments that follow from Teksavvy’s often very savvy readers. Teksavvy also has a statement on its website where it states that:

We believe that our customers have a right to:

1.   Have their privacy safeguarded.

2.   Be notified that a request for their personal information has been made by a third party.

3.   Have an opportunity to defend themselves when claims are made against them.

TekSavvy will do everything in its power to protect its customers. However, we must comply with all court orders requiring us to disclose the personal information of our customers.

Despite Teksavvy’s openness concerning this issue, questions are still bound to arise why Teksavvy is not actually opposing this disclosure motion in 2012, as Shaw and Telus actively and successfully did in 2004, with Bell and Rogers taking a similar if less vigorous position. In this regard, it is interesting to compare Voltage’s material with the BMG et al material filed in 2004 that was rejected by the Federal Court and Federal Court of Appeal at that time as inadequate in a very comparable situation, as a result of which we now have clear and binding appellate case law.

Teksavvy did go to some length to specifically notify its potentially affected customers. However, it would be very surprising if any of them are willing and able to retain counsel to assume the burden of opposing a determined and experienced plaintiff and to assume the risk of an adverse costs award. In any event, the lack of time probably renders the possibility of such activity by individual Teksavvy subscribers effectively completely hypothetical. 

On Friday afternoon, December 14, just three days after Voltage’s materials were filed, CIPPIC sent a lengthy letter to the Court asking for the matter to be adjourned so that CIPPIC could intervene and providing a preview of some of the issues that may be raised, if the Court allows the adjournment.  The letter makes several allegations, the most important of which are that:

• According to CIPPIC, this is not “bona fide” litigation. In CIPPIC’s words, “this plaintiff has a track record in the United States of demanding subscriber data of internet service providers for the purposes of demanding exorbitant payments to settle under threat of litigation, with no bona fide intent to prosecute such litigation”
• According to CIPPIC, there is heavy reliance by Voltage on “hearsay” evidence. In CIPPIC’s words, “even a generous reading of the applicant’s motion materials discloses abundant reliance on hearsay evidence, including the key paragraphs in Mr. Logan’s affidavit describing the gathering of the evidence of infringement (paras. 10-11, at page 10 of the Applicant’s Motion record).”
• According to CIPPIC, “it is worth noting that the plaintiff has pleaded that the John and Jane Does have engaged in commercial infringement. We suggest that even a generous reading of the applicant’s materials fail to make our even a bona fide case of commercial infringement.”
• According to CIPPIC, the Statement of Claim also raises questions regarding jurisdiction issues in relation to non-statutory claims; and the question of joinder.

If CIPPIC is substantially right about the issues it raises in its letter of December 14, 2012, it might have been quite feasible for Teksavvy to successfully oppose the motion seeking to force it disclose its subscribers’ identity, as was done in 2004.   

The law about all of this was clearly laid out by the Federal Court of Appeal in 2005.  Here is a very balanced discussion of this presented by myself and one of my worthy opponents in that case, Richard Naiberg.  The key criteria for potential success in a disclosure motion such as this is that there must be substantial, admissible, non-hearsay, and reliable evidence in the form of affidavit material and at least a bona fide case.

The disclosure motion will be heard in the Federal Court in Toronto at 180 Queen Street West at  9:30 AM or possibly not long thereafter on Monday, December 17, 2012. The hearing will presumably be open to the public, although these court rooms typically have very limited seating for spectators.

HPK

PS - The Federal Court apparently took note of CIPPIC's letter and a request by Teksavvy to adjourn was granted until January 14, 2013. It will be interesting to see if Teksavvy now decides to actually oppose and if CIPPIC is permitted to intervene, and if so on what terms. See Michael's update.