TekSavvy’s Appeal to Get $346,480.68 for Taking the Position to Take “No Position” - "Nice Work If You Can Get It"?

Here’s an update to my April 3, 2015 posting on TekSavvy's claim to entitlement to full indemnity costs, including legal fees, for a total of $346,480.68 for "for the costs it says it incurred as a result of Voltage’s motion" for disclosure and, which included $178,820.98 for legal costs, essentially for taking the position that it took no position in Voltage’s attempt to get the personal information on 2,000 or so of Teksavvy’s customers in order to pursue them for alleged copyright infringement.

It will be recalled that the March 17, 2015 decision by now retired Prothonotary Roza Aronovitch of the Federal Court regarding TekSavvy’s costs motion  resulted in TekSavvy getting only $21,557.50 – about 6% of what it asked for overall. And of that, only $4,500 was for legal costs, which were sought in the amount of $178,820.98.  That’s 2.5% of what was asked for in legal costs.

Both Voltage and TekSavvy have appealed Prothonotary Aronovitch's ruling. Here’s the docket. The appeal will be heard by Justice Peter Annis of the Federal Court on Monday, November 9, 2015 on the seventh floor at 90 Sparks Street, corner of Metcalfe in Ottawa.

Both sides have filed voluminous material. Teksavvy has filed a 248 page “compendium” with excerpts from 19 cases. Teksavvy has also gone to great length in its very unusual attempt to file, as “new evidence”, the transcripts from the hearings before Prothonotaries Aalto and Aronovitch.

Although CIPPIC is no longer actively involved on the file, the appeal material was eventually posted here by CIPPIC  late last week and this will be helpful to the public discussion generally and to law students in particular.  It will be recalled that CIPPIC stepped in earlier as an intervener, after Teksavvy took the position that it took no position, and sought adjournments so that CIPPIC could enter the fray. CIPPIC’s role was never entirely clear. It explicitly disclaimed any role in acting for Teksavvy or for the John or Jane Does. It did conduct some cross- examination and referred to the “hearsay” issue – the giant elephant in the room – in its written material in the disclosure motion but did not do so explicitly even once in its oral submissions before Prothonotary Aalto as confirmed by the transcript Teksavvy is trying to file. This may somewhat explain why Prothonotary Aalto’s decision does not once mention the word “hearsay”.

According to the transcript of the substantive hearing before Prothonotary Aalto, CIPPIC was apparently more concerned with broad “public policy” issues than with the more practical question of whether, in light of the BMG decision, there was arguably insufficient substantial, admissible, non-hearsay, and reliable evidence to justify denial of the disclosure motion and thereby stopping the case from even moving forward.

If only Teksavvy or CIPPIC had dealt with the evidence issue head on, this case arguably might never have gotten off the ground. For whatever reason, neither of them did so. While outcomes based upon evidentiary or procedural issues are not as dramatic or satisfying as policy based victories, there is a school of thought that one should take one’s victories wherever one can find them. In this case, if a ruling based upon insufficiency of adequate evidence could have been obtained, it might well have solved, at least for practical purposes and perhaps for a long time to come, a very big public policy problem – namely whether Canadian courts will have to deal with lawsuits such as we have seen in the USA and UK that could involve use of the courts for the alleged purpose of “speculative invoicing”, sometimes called “trolling”, of thousands of individuals who will have no practical recourse to defend their privacy and who, in very many cases, may very well be legally innocent of any infringement.

In contrast to Teksavvy’s “no position” position (it did not even file any material at the disclosure hearing before Prothonotary Aalto), many may wonder why Teksavvy has devoted such extraordinary efforts to recover almost $180,000 in legal costs from Voltage - essentially for “taking no position” and asking for adjournments so that CIPPIC, a law school clinic could intervene. And now, including Monday’s appeal, there will be two lengthy costs related proceedings with an attempt to introduce new evidence, cross-examinations, and volumes of paper – all about legal costs and TekSavvy’s alleged other internal costs. If Teksavvy had only instead devoted perhaps just a fraction of these efforts and resources to attempting to knock Voltage’s case out of the park on the basis of inadequate evidence, and had this succeeded,  as it seemed arguably very possible at the time,  and as CIPPIC and others did  in the  2004 BMG case (I was outside counsel for CIPPIC at the time and Shaw and Telus vigorously fought for their customers), Teksavvy might well have recovered substantial costs and its subscribers, whose privacy may now get compromised, would be much happier. But for reasons which remain, in my view, unexplained in any satisfactory way, this was not to be the case.

One thing that should be clear and was clear to CIPPIC, Shaw and Telus, at least in 2004, is that defending privacy – including challenging the sufficiency of the copyright owners’ evidence - does not in any way condone piracy. It is the job of ISPs to defend their customers’ privacy – not the job of a law school clinic where the path is well worn and the ISP, for whatever reason, just won’t do its job. Voltage and TekSavvy made much of their cooperation in notifying the 2,000 or so customers of what was about to befall them – without giving Voltage their identities in that notification effort. But it was absurd to expect any of them to appear – even anonymously - on the disclosure motion to fight for their privacy. Most of them would have expected their ISP to do that, as Shaw and Telus did so well in 2004.  (At that time, Rogers and Bell basically just observed and Videotron was on the side of the record companies).

Nobody stood up here explicitly for Teksavvy’s customers.  The clear position of the Federal Court of Appeal on the need for a copyright claimant to provide timely, reliable and adequate non-hearsay evidence, upholding Justice von Finckenstein’s decision below in this respect, has been eroded because it was neglected by Teksavvy, which took no position, and arguably not fully pursued by CIPPIC, which did not mention it at the hearing.  Whatever one may think of Voltage, its agenda and its goals are at least very clear in this case. The same cannot be said of Teksavvy, or perhaps even of CIPPIC, which was placed in an awkward position and which had limited resources. It’s not at all clear that Justice Mandamin’s early expression in this case of how it was “important to get it right” and that a “motion without representations from different points of view does not help”  has been fully met in this instance. Here is Justice Mandamin's Order of January 31, 2013.

If this case goes further and Voltage eventually gets the names and addresses of its 2,000 or so potential defendants (or, at least, recipients of demand letters), just who is going to stand up for the customers’ interests in terms of wording of the letter and supervision by the Court, which Prothonotary Aalto clearly recognized as important issues in his decision? This should not fall to a subsidized law clinic because a presumably prosperous ISP with $5-$10 million a month in estimated cash flow chooses, for whatever reasons, to “take no position”.

So, even though this case was started on November 14, 2012 – almost exactly three years ago – at this point we have far more questions than answers. 

HPK