Messy Mass Litigation in the USA - "staggering chutzpah involved" - Should Canadian Courts use "assessors" in some cases?

A recent dramatic development in the USA shows just how messy some mass file sharing litigation can become in that country.

According to Ars Technica, "A federal judge has fined Texas lawyer Evan Stone $10,000 for sending out subpoenas and then settlement letters to people accused of sharing a German porn film called Der Gute Onkel—all without the judge's permission."  Here's the ruling.

The Judge stated that:

To summarize the staggering chutzpah involved in this case: Stone asked the Court to authorize sending subpoenas to the ISPs. The Court said “not yet.” Stone sent the subpoenas anyway. The Court appointed the Ad Litems to argue whether Stone could send the subpoenas. Stone argued that the Court should allow him to – even though he had already done so – and eventually dismissed the case ostensibly because the Court was taking too long to make a decision.10 All the while, Stone was receiving identifying information and communicating with some Does, likely about settlement. The Court rarely has encountered a more textbook example of conduct deserving of sanctions. (emphasis added).

An interesting aspect of this ruling is that the Court appointed three attorneys ad litem (the “Ad Litems”) to represent the Does. The "chutzpadik" attorney was ordered to pay their costs in bringing the motion for sanctions.

The subpoena process is very different in the USA than in Canada, where it is mercifully much less susceptible to misuse or abuse.

However, it may be worth considering that Federal Courts Rule 52 allows a Federal Court judge to appoint a neutral "assessor" in certain types of situations to provide impartial expert advice to the Court. If no ISP or other entity is prepared to look out for the potential John and Jane Does in these types of situations, at least with respect to assessing the sufficiency of the evidence for the production order, this procedure may be worth considering.

Indeed, the late Gordon F. Henderson specifically recommended the use of "assessors" in appropriate circumstances in IP cases. Historically, they had been used mainly in admiralty cases, but there is no inherent reason why their use should be so limited.  This is discussed at page 41 of his 1991 report entitled Intellectual Property Litigation, Legislation and Education. (I was privileged to have worked very closely with him on that prescient document).


HK

Is the SAC proposed internet music "tax" a stalking horse for SOCAN?

(Above:Upper is Eric Schwartz/Bluepower.com & lower is Eric Baptise/SOCAN)

Eddie Schwartz is renewing his call for a "reasonable monthly licence fee" that would legalize the file sharing of music and "create a new business model that would be fair to consumers and creators alike". Here's his op-ed from July 30, 2010 in Straight.

He says that:

"The revenue received could be distributed to performers, songwriters, and rights-holders on a transparent, pro-rata basis by one of Canada’s respected music collectives, such as SOCAN." (emphasis added)

He is SOCAN's representative in Nashville, a fact which is also stated at the close of the Staight op-ed.

His proposal for a double negative option music "tax" (as it would inevitably be called) on internet users is itself not new. I've written about it before at some length just over a year ago here.

As I said then about the proposed monthly fee of about $5 or so:

This apparently modest fee - less than a pint of draft beer these days - would be added to their ISP bill. It would generate about $900 million a year in Canada, based upon SAC's admittedly “back of the envelope” calculations. (BTW, that’s about 4.5 times more than what SOCAN now collects - and it’s taken SOCAN and its predecessors more than 80 years to get to that level). Sure - SAC admits that $5 is just a figure for discussion purposes and they could cut back to $3 a month - a mere $600 million. Sometimes, you gotta walk before you can run.

It would likely quickly morph into a mandatory "tax", since it's hard to imagine the participation of a sufficient number of internet users and rights owners, even on a supposedly voluntary negative option basis, to enable this unprecedented scheme to begin to function. It would also be in addition to the much disliked "tax" on blank media. The current Government, to its credit, has explicitly resisted efforts to extend this blank media "tax" to iPods and other innovative devices, calling the idea "totally nonsensical". There was no ambiguity in Minister's Moore's famous tweet and Minister Clement's rapid response quoted here.

Eddie is an extremely articulate guy, a great communicator and has always seemed to choose his words carefully. He has been a Director of SOCAN and very influential in promoting the interests of pop songwriters in that organization and elsewhere. I wonder if he is now speaking for SOCAN, or at least acting as a stalking horse?

Earlier this year, SOCAN took the certainly unusual and probably unprecedented step for a Canadian collective of going outside of Canada for its next CEO. It chose Eric Baptiste from France, who has very impressive qualifications, including a 12 year career at the International Confederation of the Societies of Authors and Composers (CISAC), the World Federation of Copyright Societies with 225 member societies in 118 countries, where he had been Director General since 1999. Prior to joining CISAC, he had notable successes in the French broadcasting industry.

One can only assume that the very accomplished, upwardly mobile, and apparently still young M. Baptiste must have been offered a considerable inducement and very interesting challenge to move his career from Paris, France to suburban North York, Toronto, Ontario. On January 19, 2010, SOCAN issued a press release that included the following:

"I am delighted with the selection of Eric as my successor," says André LeBel, CEO, SOCAN. "He has all it takes to take SOCAN to the next level."
(emphasis added)

Could that “next level” be what Eddie is talking about?

HK

Industry Canada P2P Study Shows Posititve Effects on Music Biz and more...

A dynamite study just released from Industry Canada shows that P2P file sharing is good for the music business, and even more...

Here's part of the abstract:

Our review of existing econometric studies suggests that P2P file-sharing tends to decrease music purchasing. However, we find the opposite, namely that P2P filesharing tends to increase rather than decrease music purchasing.

Among Canadians who engage in P2P file-sharing, our results suggest that for every 12 P2P downloaded songs, music purchases increase by 0.44 CDs. That is, downloading the equivalent of approximately one CD increases purchasing by about half of a CD. We are unable to find evidence of any relationship between P2P filesharing and purchases of electronically-delivered music tracks (e.g., songs from iTunes). With respect to the other effects, roughly half of all P2P tracks were downloaded because individuals wanted to hear songs before buying them or because they wanted to avoid purchasing the whole bundle of songs on the associated CDs and roughly one quarter were downloaded because they were not available for purchase. Our results indicate that only the effect capturing songs downloaded because they were not available for purchase influenced music purchasing, a 1 percent increase in such downloads being associated with nearly a 4 percent increase in CD purchases.

We find evidence that purchases of other forms of entertainment such as cinema and concert tickets, and video games tend to increase with music purchases. It has been argued in the literature that the increase in the number of entertainment substitutes has led to a decline in music purchasing, but our results do not support this hypothesis. As expected, we find that reported interest in music is very strongly associated with music purchases. Finally, our results suggest that household income is not important in explaining music purchases.

(emphasis added)

The study was done by two researchers at the University of London, and can be found here.

It looks like music to our ears. I look forward to reading past the abstract...but I wanted to get this out fast...

It is entitled: The Impact of Music Downloads and P2P File-Sharing on the Purchase of Music: A Study for Industry Canada and was written by Birgitte Andersen and Marion Frenz.

PS - update - See Jack Kapica's analysis on the politics of this...

HK

No CDN lawsuits aginst individuals for file sharing?

There’s a Slyck interview from August 17, 2007 with David Basskin, spokesperson these days for the CPCC - the collector of private copying levies in Canada.

Leaving aside lots of other issues that merit comment, one answer was quite strange.

Slyck.com: Many people have argued for some time that sending lawsuits to people on P2P networks is a bad idea. Some are arguing that, instead of sending lawsuits, it's better to put a levy on ISPs to counteract what the industry considers losses over the internet. Is this something that the CPCC has considered? What are your thoughts on this idea?

David: No lawsuits have been brought in Canada against individuals with respect to unauthorized file "sharing".
...

Excuse me, but what about BMG v. Doe, in which the big record companies sued 29 John and Jane Doe Canadian defendants for file sharing? The result, as we all know, is that BMG et al failed to get disclosure of the names of the actual 29 individuals who were alleged to be illegally sharing files.

If the law suits didn’t actually proceed any further, it wasn’t for lack of effort. The record companies - backed by CRIA - lost in both the Federal Court and the Federal Court of Appeal. CRIA went through three prominent law firms to get this result. There was no lack of effort to sue individuals here.

See my comment on these cases here.

These major record companies - who tried to sue 29 individuals in Canada - happen to be major stakeholders in the private copying levy scheme, through one of the collectives that comprise the CPCC. CRIA was probably the prime mover for the levy scheme in the first place.

I should remind readers that I acted against the record companies in the BMG case and I have long acted against CPCC concerning the private copying levies.

HK