Like many others, I’m grateful for the excellent
stream of tweets from Paul Anderson (@panderson) and others available here concerning the #Voltage hearing in Toronto on
June 25, 2013 presided over by Prothonotary Kevin Aalto. That said, even
excellent tweets such as these are nowhere close to a transcript – for which we
await in the hopefully reasonably short fullness of time, if a transcript was
taken. So, not having been at the hearing, my impressions from the tweets may
or may not be well founded.
Reading the tweets and having read most of the
record in this case, I could not help but think about the BMG case,
in which I acted as lead counsel for CIPPC in both the Federal Court and
Federal Court of Appeal back in 2004-2005. I and Richard Naiberg, one of the very able opposing counsel in
that case were asked to provide a balanced analysis, which we did and
which can be seen here and which is still useful. My comments are below are in light of BMG
and are of a general nature. Unless specifically indicated, I’m not commenting
on this particular Voltage case at this time.
The BMG
decision is presumably still the applicable law in Canada. The
main takeaway from the BMG case was quite simply this. In order to invoke the
extraordinary “equitable jurisdiction” of the Court to grant a very unusual
“Norwich order” for disclosure of the names and street addresses of those
behind the IP addresses in question, a plaintiff must come to court at the very
minimum able to satisfy two sine qua non
thresholds:
- The first is that the plaintiff must
have substantial, admissible, non-hearsay, and reliable evidence to link the alleged IP address to the
alleged infringer and to establish that it has correctly identified the IP
address in the first place.
- The second is that the Plaintiff must
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.”
The question, therefore, is whether both of these sine qua non thresholds have been met in
the present case. On the first threshold, in the BMG case, Justice Sexton of
the Federal Court of Appeal said in 2005:
[21] Much
of the crucial evidence submitted by the plaintiffs was hearsay and no grounds
are provided for accepting that hearsay evidence. In particular,
the evidence purporting to connect the
pseudonyms with the IP addresses was hearsay thus creating the risk that
innocent persons might have their privacy invaded and also be named as
defendants where it is not warranted. Without
this evidence there is no basis upon which the motion can be granted and for
this reason alone the appeal should be dismissed. (emphasis added)
The evidence in the BMG case was found to be
insufficient to warrant a disclosure order, because it failed to meet this
perfectly reasonable and not particularly demanding threshold. The door was
left open to the record industry to come back with better evidence. However,
they were apparently unable or unwilling to do so and that was thus the end of
that litigation. But the door has never been locked to such litigation in
Canada, if a plaintiff can pass the basic thresholds.
If it should turn out in the present situation
that the evidence is no better or even worse than it was in BMG (and I make no
comment on this point at this time), then that would be the end of the matter.
There would then be simply no need to address privacy concerns, the wording of
any order, supervision of settlement letters, etc. There would not even be,
strictly speaking, any need to examine the next and other threshold
requirement, which concerns the bona fide
intention to commence litigation – although Courts sometimes provide helpful obiter dicta when appropriate.
In any event, I thought it might be useful to
include some excerpts of some recent cases in the US District Courts, which are
the equivalent of Canada’s Federal Court. These decisions were indeed mentioned
by CIPPC in its memorandum and they both involve Voltage Pictures as a
plaintiff. While these decisions on not binding in Canada, and US law differs
in certain respects from that of Canada, these decisions are nonetheless
interesting and do involve Voltage Pictures.
Because IP addresses are the only identifiers of peers
within a BitTorrent system, it is difficult, if not impossible, to learn the
true identities of the peers in a swarm. To pursue litigation, plaintiffs in BitTorrent suits must
attempt to get early discovery to learn of the actual identities of the unnamed
defendants.22 The requests have been the subject of much criticism, for the
lawsuits are rarely litigated. Rather, plaintiffs seek to take advantage of the
resources of federal courts to force small, individual settlements.23
…
Courts have
been troubled by what amounts to be a new business model employed by production
companies “misusing the subpoena powers of the court, seeking the identities of
the Doe defendants solely to facilitate demand letters and coerce
settlement, rather than ultimately serve process and litigate the claims.”41
This unseemly practice is made worse by the frequent practice of joining
hundreds or thousands of defendants in a suit, saving plaintiffs tens of
thousands of dollars in filing fees. It is in this environment where courts must take
every caution to ensure that the keys to the doors of discovery are not
blithely given to parties with other intentions.
Regardless of
the dubious practices of others, Plaintiffs may have legitimate claims which
deserve litigation. Nevertheless, unnamed Defendants are improperly joined, and in order to
continue with their actions, Plaintiffs will need to pay the requisite filing
fee per suit.42 Otherwise, Plaintiff has saved over $67,500 by consolidating
its claims into four separate actions. If Plaintiffs seek to use the powers of
this Court to vindicate its rights, it must pay the requisite fees like every
other Plaintiff.
(footnotes omitted, emphasis added)
And here are some excerpts from a ruling from May, 2013 from the District
Court of Oregon, again involving Voltage Pictures:
…Thus, it is
apparent that plaintiff
seeks to place all users with the same
degree of culpability regardless of intent, degree of sharing or
profit. For instance, the grandparents whose young
grandchild used their computer to download what looks like an entertaining
Christmas movie, to his innocent mind, through their IP address,
are the same as an organization intentionally decrypting and
duplicating DVDs en masse while planting stealth viral
advertising, or more nefarious Trojan horses, into the upload stream.
By being lumped together, the Doe defendant who may
have a legitimate defense to the allegedly infringing activity
is severely prejudiced.
Indeed, while plaintiff earnestly claims to be
defending against the plague of
peer-to-peer copyright infringement and protect the hardworking men and
women who produce movies right to down to the gaffer and grip,
appears to be employing a somewhat underhanded business model of
its own to raise profits for what maybe a less than profitable,
unpopular movies. The court has a sample demand
letter plaintiffs' counsel has been sending
to the persons associated
with the IP address upon their discovery. In the letter, threats regarding severe
punitive damages are made along with the not so subtle
implication that liability is a foregone conclusion:
you have been
identified as the party responsible for the[IP] address used
to illegally copy or share our client's copyright motion
picture through ... BitTorrent. Thisletter is a
courtesy before we are required to take more formal legal action
which would involve adding you as named defendant to the lawsuit
Copyright
infringement is very serious problem forthe entertainment
industry [and our] client takes theenforcement of its
copyright seriously and will use all
legal means
available to protect its rights.
The law ... allows
the copyright owner to recover
attorney fees,
and seek damages of up to $150,000 perwork.... While
it is too late to undue the illegal filesharing you have
already done, we have prepared an
offer to enable our
client to recoup the damages incurred by
your actions and defray the costs of preventing this type
of activity in the
future ....
In exchange for a
comprehensive release of all legal claims which will
enable you to avoid becoming a named defendant in the lawsuit, our firm is authorized to accept the sum of Seven
Thousand Five Hundred Dollars ($7,500) as full settlement for its claims. This
offer will expire in
two weeks. Thereafter, if our
client chooses to settle,
the demand shall be Ten Thousand Dollars
($10,000) and this amount will continue toincrease as
litigation expenses accrue.
[I]f you do not
comply with the above request we
intend
to name you as a
defendant to the lawsuit and
proceed
against you either
individually in a severed suit if you request, or jointly
... we leave the election of how to proceed up to you, though
we note costs and fees to sever and proceed
against you individually in a separate suit are notable and
we will demand that all such costs and fees be added to
any settlement.
If forced to
proceed against you, our client reserves the right to recover
the maximum amount of damages, costs and attorney fees ... which
is $30,000 and up to $150,000 ... .In light of the
known facts of this case we have no doubt this
infringement was intentional. Exhibit B attached
to Answer and Cross Complaint (#2) in Voltage Pictures, LLC v.
Does 1-321, 3:13-cv-295-AA at pp. 1-2 (emphasis added [by the Court]).
The letter goes on
to make threats against attempts to deletefiles with
assertions that plaintiff's experts will find it anywayand the costs
associated with that will also be added to theassessment.
Accordingly, plaintiff's tactic in these
BitTorrent cases
appears to not seek to litigate
against all the Doe defendants, but to utilize the court's subpoena
powers to drastically reducelitigation costs and obtain, in
effect, $7,500 for its productwhich, in the case of Maximum
Conviction, can be obtained for $9.99 on Amazon for the Blu-Ray/DVD
combo or $3.99 for a digital rental.
The court will follow the
majority of other courts in declining to condone this
practice of en masse joinder in BitTorrent cases and orders all
Does beyond Doe one severed and dismissed from the cases. While
the ease with which movies can be copied and disseminated in the
digital age no doubt has a deleterious effect on the paying
market for such entertainment,just as a mass of plaintiffs
harmed through separate, but similar acts of one defendant must
generally seek redress individually, so should a plaintiff seek redress
individually against a mass of defendants who use similar
tactics to harm a plaintiff. Even though it makes a good deal of
sense to start these cases initially by joining all Does so that the
process of discovering them can be economized, 2 it has now become apparent that
plaintiffs' counsel seeks to abuse the process and use scare tactics and
paint all Doe users, regardless of degree of culpability in the same
light. This practice does not "comport with the principles of
fundamental fairness."
Participation in a specific
swarm is too imprecise a factor,absent additional information
relating to the alleged copyright infringement, to support joinder
under Rule 20(a). Moreover, the result is logistically
unmanageable cases involving unique defenses in addition to fundamental
unfairness. Accordingly, the courtquashes all outstanding
subpoenas and dismisses all Doe defendantsbeyond the first Doe in each
case. Plaintiff shall have 10 days tosubmit amended complaints. All
other pending motions are denied as moot.
CONCLUSION For the reasons
stated above, Doe defendants are orderedsevered and
dismissed in these cases beyond Doe #1 in each case.All outstanding
subpoenas are quashed and all other pending motionsare denied as moot.((highlight and
emphasis added, footnote omitted)
It should be noted that US procedure in these types of cases is different than
in Canada. The USA does not have the equivalent of Canada’s PIPEDA legislation
or the BMG decision. This is why things have gotten as far as they have in the
USA and thousands of lawsuits have been pursued, one of which resulted in the recent
affirmation by the First Circuit Court of Appeals of a
$675,000 damages award against
a college student for downloading thirty (30) songs. (In American law this
award is apparently non-dischargeable in bankruptcy.) While the major record
companies have curtailed their mass litigation campaign in the USA, others have
not shown such restraint. However, the American Courts have begun to rein in the
phenomenon of mass copyright litigation. The above two cases are recent and specifically
involve Voltage Pictures. As critical as the Courts are in these two cases,
there have been far more harsh recent rulings in other cases, including severe
consequences for the lawyers involved. As I recently posted:
Thus, mass litigation can sometimes get to be quite messy for all
concerned. In any event, we can only await the ruling of the Federal Court of
Canada in the Canadian version of the Voltage Pictures picture, wherein we will
get some indication of whether Canada will now see mass copyright litigation.
It would not be surprising if the Court were to rule on Voltage’s request in
the present case on fairly narrow reasons primarily concerning the evidence (or
lack thereof, if that is the case) concerning either one of the two “threshold”
issues mentioned above, since courts must rule on the evidence properly before
them and generally avoid making any legal rulings that aren’t strictly
necessary – though sometimes some helpful obiter dicta may be provided
for future guidance. Broader questions, such as whether the current Federal
Courts Act and Rules (not to mention resources) can even accommodate mass
copyright litigation, may not require an immediate decision. In any event, if
the system cannot accommodate such litigation, it may fall to Parliament, if it
so chooses, to change the system.
What will very likely be left undecided are other troubling questions,
such as the role and responsibilities of ISPs such as Teksavvy with respect to their
customers’ privacy. Teksavvy has consistently, vigorously and inexplicably taken
the position in this case that it takes no position. Apparently, Teksavvy’s
counsel did make some brief spoken submissions towards the end of the recent oral hearing. Whether
or not these submissions were effective and, if so in what respect, remains to
be seen.Based upon the Court's online docket, it does not appear that Teksavvy filed any written material for this hearing.
It should – but apparently does not – go without saying that defending ISP
customers’ privacy is hardly equivalent to promoting piracy. Some ISPs such as
Shaw and Telus (both of which took vigorous pro-privacy positions in the BMG
case) and Distributel know the difference.
Teksavvy is apparently not so savvy. Meanwhile, Teksavvy has spent a great deal
of money – presumably well over $200k - which is arguably more than would have been
required to simply deal head on with this disclosure motion – to seek
adjournments and buy time for a small law school clinic to actually take a
position. Teksavvy appears to have revenues in the order of $5 to $10 million
per month. So, even if CIPPIC succeeds this time in protecting Teksavvy’s
customers’ interests, what about the next time? And the time after that?
HPK
