More On Mass Copyright Litigation in Canada – Part I

I have recently written about the Voltage “reverse class action” copyright infringement lawsuit wherein Voltage is trying to sue 50,000 or so people for an effective filing fee of about $0.001 per defendant, and in which Voltage has so far has been unwilling to pay $75,000 for security of costs, despite having been ordered to do so “forthwith” almost 20 months ago on February 2, 2017. The Supreme Court of Canada has refused Voltage’s application for leave to appeal regarding the security for costs issue. Thus, without the payment into court, the Voltage reverse class action lawsuit appears to be stalled with a dead battery. That ligation was launched by Kenneth (“Ken”) Clark of the prominent Toronto law firm Aird & Berlis LLP.

In my previous writing, I also indicated that there have recently been 16 other lawsuits (see below) brought by Mr. Clark on behalf of various film companies against hundreds if not thousands of individual Canadian ISP account holders.  For example, the Bodyguard Productions case, has 726 “Doe” defendants. Another, the Morgan Creek case, has 352 Doe Defendants.

I also wrote that I do not know at this time what connection, if any, Voltage has with these 16 or so mass litigation actions. However, there are at least some possible connections. There is apparently a possible connection between Voltage and Morgan Creek in action T-71-18. There is also an apparent possible connection between Voltage and Dallas Buyers Club in action T-1674-16.

According to a recent article posted August 22, 2018 by Ahmad Hathout in the WireReport – a paywalled niche news service – and my own investigation, there have been a number of settlements, including several for as much as $5,000, in which “…a good number of defendants were also represented by lawyers with copyright law practices.” 

I was asked about this for the WireReport story and was quoted as follows:

“I can’t comment on any particular settlement because I don’t know the

specific facts,” Howard Knopf, a lawyer at Macera and Jarzyna, said in an

email. “However, $5,000 is the maximum statutory damages amount that

could ever be awarded for non-commercial activity in these types of cases

even in a contested proceeding.”

He added: “Canadian courts are clear that statutory damages must somehow

correlate to actual damages, which in these en masse BitTorrent situations

are arguably less than $10 for infringement of one work by one individual.

The minimum statutory damage award for non-commercial infringement is

$100. Generally speaking, even if a settlement amount has to be paid – which

is far from clear in these situations — one would expect that it would be at the

lower end and not the upper limit.”

(highlight added)

In other words, it has become apparent that – for reasons which are far from apparent – some experienced copyright lawyers are filing consents to judgement on behalf of their clients in these lawsuits at the maximum end of $5,000, and the clients are presumably paying that plus whatever legal fees their lawyers charge in addition. I, and other knowledgeable copyright lawyers, are wondering what type of circumstances might suggest a settlement at the “max” end of statutory damages for non-commercial activity at the very beginning of the process.  I have also been advised of instances where these lawsuits have been discontinued as against particular Doe defendants without any payment whatsoever in settlement.

In any event, there has just been a potentially very important new development in mass copyright litigation in the USA which could potentially have great significance in Canada as well.

On August 27, 2018 the 9^th Circuit Court of Appeals  – one of the two most important appellate level courts in American copyright law, next only to the US Supreme Court - ruled as follows in the case of Cobbler Nevada v. Gonzales:

The district court properly dismissed Cobbler Nevada’s claims. The direct infringement claim fails because Gonzales’s status as the registered subscriber of an infringing IP address, standing alone, does not create a reasonable inference that he is also the infringer. Because multiple devices and individuals may be able to connect via an IP address, simply identifying the IP subscriber solves only part of the puzzle. A plaintiff must allege something more to create a reasonable inference that a subscriber is also an infringer. Nor can Cobbler Nevada succeed on a contributory infringement theory because, without allegations of intentional encouragement or inducement of infringement, an individual’s failure to take affirmative steps to police his internet connection is insufficient to state a claim.

The US Court’s stance on contributory infringement is consistent with the Supreme Court of Canada’s position on “authorization” in the 2004 decision in CCH Canadian v Law Society of Upper Canada, in which the SCC held that:

“…a person does not authorize infringement by authorizing the mere use of equipment that could be used to infringe copyright. Courts should presume that a person who authorizes an activity does so only so far as it is in accordance with the law” (para 38).

Cobbler is one of the top six mass BitTorrent litigation plaintiffs in the USA. This ruling, unless it is somehow overturned en banc or in the US Supreme Court (both of which possibilities I believe to be highly unlikely), may mark the beginning of the end of mass copyright litigation directed against BitTorrent users in the USA.  It is, of course, arguably of immense potential significance to the mass litigation now underway in Canada. While American precedents are not binding in Canada, they can be useful and important in the absence of specifically applicable Canadian jurisprudence. This could be just such an instance, especially since it is consistent with the current controlling decision of the Supreme Court of Canada.

As usual, I reiterate and, in this case, emphasize that this blog does not provide legal advice. Anyone involved in Canadian mass litigation should consult a lawyer – preferably someone with some copyright expertise.  Since most of my readers are lawyers, they will hopefully know what to do.

Stay tuned for more on related issues.

Meanwhile, for reference purposes, here is a list of the fifteen mass litigation cases referred to above plus the Voltage “reverse class action” case. The links will take readers to the Court’s “docket.” Thanks to Alan Macek and his invaluable IPPractice site for facilitating this compilation.

AIRD & BERLIS LLP “DOE” CASES 

2016-2018

As of August 29, 2018 (Revised August 31, 2018)

	FCT File #	Style of Cause	Type of Case	Date
1.	T-662-16	VOLTAGE PICTURES ET AL v. JOHN DOE ET AL (Salna)	Copyright Infringement [Applications] [note – $75,000 security for costs remains unpaid]	2016-04-26
2.	T-1614-16	CELL FILM HOLDINGS LLC v. DOE #1 ET AL	Copyright Infringement [Actions]	27-SEP-2016
3.	T-1674-16	DALLAS BUYERS CLUB, LLC v. DOE #1 ET AL	Copyright Infringement [Actions]	2016-10-05
4.	T-1692-16	HYBRID, LLC v. DOE #1 et.al.	Copyright Infringement [Actions]	2016-10-07
5.	T-2177-16	ME2 PRODUCTIONS, INC. v. DOE #1 ET AL	Copyright Infringement [Actions]	2016-12-19
6.	T-264-17	LHF PRODUCTION INC v. DOE #1 ET AL	Copyright Infringement [Actions]	2017-02-24
7.	T-265-17	CRIMINAL PRODUCTIONS v. DOE#1 ET AL	Copyright Infringement [Actions]	2017-02-24
8.	T-481-17	WWE STUDIOS FINANCE CORP. v. DOE #1 et.al.	Copyright Infringement [Actions]	2017-03-31
9.	T-908-17	UN4 PRODUCTIONS, INC. v. DOE #1 et.al.	Copyright Infringement [Actions]	2017-06-21
10.	T-909-17	COLOSSAL MOVIE PRODUCTIONS, LLC v. DOE #1 et.al.	Copyright Infringement [Actions]	2017-06-21
11.	T-1085-17	HEADHUNTER LLC v. DOE #1 ET AL	Copyright Infringement [Actions]	2017-07-24
12.	T-1086-17	JUSTICE EVERYWHERE PRODUCTIONS LLC v. DOE #1 ET AL	Copyright Infringement [Actions]	2017-07-24
13.	T-1087-17	VENICE PI, LLC v. DOE #1 et. al.	Patent [Sic?] Infringement	2017-07-24
14.	T-1918-17	BODYGUARD PRODUCTIONS, INC. v. DOE #1 et.al.	Copyright Infringement [Actions]	2017-12-18
15.	T-1926-17	WIND RIVER PRODUCTIONS, LLC v. DOE #1 ET. AL.	Copyright Infringement [Actions]	2017-12-18
16.	T-71-18	MORGAN CREEK PRODUCTIONS, INC. v. DOE #1 et.al.	Copyright Infringement [Actions]	2018-01-12
17.	T-513-18	POW NEVADA, LLC v. DOE #1 ET AL	Copyright Infringement [Actions]	2018-03-16

HPK

PS - August 31, 2018.
Thanks to a vigilant lawyer who pointed out that I missed one of the "Doe" cases -  namely #12 above which is the JUSTICE EVERYWHERE case. There are now 16 cases in addition to the "reverse class action".