Wednesday, August 07, 2019

Canadian Copyright Mass Litigation – Reasonable Reimbursement for Norwich Order Compliance

I have earlier written about the Voltage reverse class action in which Rogers was able to persuade the Supreme Court of Canada to remit to the Federal Court the question of  its reasonable costs of compliance with the Norwich order to disclose the names and addresses of alleged copyright infringers.

Another important chapter in the mass copyright litigation saga has just been written. The Federal Court, on remand from the Supreme Court of Canada based on its decision of September 14, 2018, has just provided the apparent answer to how much Voltage Pictures and presumably others will have to pay for the disclosure pursuant to a Norwich order of individual names and addresses. In this particular case, Justice Boswell concluded in Voltage v. Salna 2019 FC 1047 after considering a great deal of evidence that Rogers is entitled to compensation of $67.23 plus GST quote “for searching and disclosing the customer name and address associated with the five timestamps in the Norwich order”.

The fact that there were five timestamps involved in this particular situation presumably resulted from the fact that the IP address turned out to belong to a Mr. Robert Salma, who was a landlord whose IP address was presumably allegedly used by others. This, of course, will not be the normal situation. In the more normal situation, there will likely be a need for only two timestamp lookups

Justice Boswell concluded that each timestamp lookup entitled Rogers to reimbursement for 12 minutes of time at $35 an hour plus HST. Since there will normally be two timestamp lookups for each defendant in this mass litigation cases, that suggests reimbursement of 24÷60 X $35 which is $14 plus HST. See para. 87 of the Order and Reasons.

There are apparently approximately 55,000 potential defendants in this reverse class action, if it is allowed to proceed. More on that below. Accordingly, it would appear that if Voltage wants the names and addresses of all of these potential defendants the cost will be at least $14 times 55,000 or $770,000 plus HST, which comes to $870,100. It took some time and a failed attempt to appeal to the Supreme Court of Canada, but Voltage finally paid the sum of $75,000 into court in this reverse class action to keep it alive.

The certification motion is scheduled to be heard in Toronto on September 23 and 24th, 2019. Presumably, some very important issues will be addressed at that time. These might include the very basic question of whether a “reverse class action” can even proceed in the Federal Court in a case like this and whether there is even a cause of action against those whose only involvement is being the subscriber and paying the bill for Internet service. The Supreme Court of Canada has specifically stated that this alone does not give rise to liability. There are many other issues which will hopefully be addressed. It remains to be seen whether there will be an active intervention in the certification process.

As I wrote earlier about the SCC decision:
Here are perhaps the two most consequential paragraphs in the judgment – which put a severe chill on all the legal basis of the outstanding mass BitTorrent cases:
[35] I acknowledge that there will likely be instances in which the person who receives notice of a claimed copyright infringement will not in fact have illegally shared copyrighted content online. This might occur, for example, where one IP address, while registered to the person who receives notice of an infringement, is available for the use of a number of individuals at any given time. Even in such instances, however, accuracy is crucial. Where, for example, a parent or an employer receives notice, he or she may know or be able to determine who was using the IP address at the time of the alleged infringement and could take steps to discourage or halt continued copyright infringement. Similarly, while institutions or businesses offering Internet access to the public may not know precisely who used their IP addresses to illegally share copyrighted works online, they may be able, upon receiving notice, to take steps to secure its internet account with its ISP against online copyright infringement in the future.
 [41] It must be borne in mind that being associated with an IP address that is the subject of a notice under s. 41.26(1)(a) is not conclusive of guilt.  As I have explained, the person to whom an IP address belonged at the time of an alleged infringement may not be the same person who has shared copyrighted content online. It is also possible that an error on the part of a copyright owner would result in the incorrect identification of an IP address as having been the source of online copyright infringement. Requiring an ISP to identify by name and physical address the person to whom the pertinent IP address belonged would, therefore, not only alter the balance which Parliament struck in legislating the notice and notice regime, but do so to the detriment of the privacy interests of persons, including innocent persons, receiving notice.
(highlight and emphasis added)

Even if these comments from the SCC go beyond the narrow “ratio decidendi” (what is actually decided and what is generally rooted in the facts) to the those that are “obiter dicta”, the latter type of comments can still be authoritative if they are closely related to “ratio decidendi”.  Those who are curious about the role of SCC “obiter dicta” may want to read the SCC’s own important 2005 decision regarding this issue. See  R. v. Henry.  In this instance, these comments were arguably closely related to the “ratio” and should now be regarded as binding authority.

Meanwhile, other chapters are being written in this saga and there will be important developments in September.   More about all that later.


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