Day 136, Project 365 - 3.7.10 by William Brawley (CC BY 2.0) https://flic.kr/p/7JfWGQ

Day 136, Project 365 - 3.7.10 by William Brawley (CC BY 2.0) https://flic.kr/p/7JfWGQ

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Defending Privacy Doesn’t Pay: Federal Court Issues Ruling in Voltage – TekSavvy Costs

The Federal Court has issued its ruling on the costs in the Voltage – TekSavvy case, a case involving the demand for the names and address of thousands of TekSavvy subscribers by Voltage on copyright infringement grounds. Last year, the court opened the door to TekSavvy disclosing the names and addresses, but also established new safeguards against copyright trolling in Canada. The decision required Voltage to pay TekSavvy’s costs and builds in court oversight over any demand letters sent by Voltage.

The issue of costs required another hearing with very different views of the costs associated with the case. TekSavvy claimed costs of $346,480.68 (mainly legal fees and technical costs associated with complying with the order), while Voltage argued the actual costs should be $884. The court disagreed with both sides, settling on costs of $21,557.50 or roughly $11 per subscriber name and address. The decision unpacks all the cost claims, but the key finding was that costs related to the initial motion over whether there should be disclosure of subscriber information was separate from the costs of abiding by the order the court ultimately issued. The motion judge did not address costs at the time and the court now says it is too late to address them.

That approach seemingly does not reflect how the parties viewed the case given that this was an unprecedented action. With TekSavvy now bearing all of those motion costs (in addition to costs associated with informing customers), the decision sends a warning signal to ISPs that getting involved in these cases can lead to significant costs that won’t be recouped. That is a bad message for privacy. So is the likely outcome for future cases (should they arise) with subscribers left with fewer notices and information from their ISP given the costs involved and the court’s decision to not compensate for those costs.

The big question now is whether Voltage will proceed with the case. Given their expense to date, they will likely pay the costs and obtain the names. However, they must be committed to going to court over the claims, since the court made it clear that merely sending threats would be viewed as copyright trolling for future claims. Yet with the cap on liability for non-commercial infringement, the further costs of litigating against individuals, the actual value of the works, and the need to obtain court approval on demand letters, it is hard to see how this is a business model that works. Indeed, that is what the court initial noted, stating that “damages against individual subscribers even on a generous consideration of the Copyright Act damage provisions may be miniscule compared to the cost, time and effort in pursuing a claim against the subscriber.”

Further, the market has shifted in Canada with rights holders using the new notice-and-notice system to accomplish much the same thing. Their personal information is not disclosed but the demands for payment still make it through to the subscriber. That has left Canadians facing a barrage of notices and demands for settlements. It points to why the government needs to address the costs and loopholes in the notice-and-notice system, which is now being used to circumvent the courts by pressuring subscribers to pay settlement demands with ISPs bearing all the costs of forwarding notifications.

29 Comments

  1. What a crock of shit. The motion judge didn’t deal with the legal costs but the subsequent judge then says it’s too late? Why is it too late? What’s the reasoning for that?

    How is any of this fair?

  2. I’ve been subjected to a spurious demand letter. I documented my time and made notes along the way, charging them $50/hour for research and responding to their spurious claims; sending an invoice with each response. These responses included a more reasonable estimate of what they should be claiming in damages, which was a fraction of their number. After a while the amount they claimed I owed them was overshadowed by the amount I claimed they owed me, and I started threatening to take them to small claims court for payment. They went away.

    As far as I can see, everyone should respond like this. It wrecks their game.

  3. David Collier-Brown says:

    It might be (financially) worthwhile to ask a superior court to reverse the decision on the grounds Bryan pointed out, that the motions judge did not act.

    Justice was not done, and in addition can be plainly seen to be not done.

  4. Devil's Advocate says:

    It’s worth noting how Voltage went after Teksavvy users, and not those of Bell or Rogers, despite there being far more subscribers to chase.

    Telling.

    • Can you show us confirmation of your claim regarding Bell and Rogers? Or is it just your personal opinion?

    • Douglas McMillan says:

      I believe Bell and Rogers handed over the information that Voltage wanted without a warrant or court order of any kind, an action that I feel should be considered a very serious offence. TekSavvy was the ISP that stood up for its users, and based on that alone they will continue to get my business.

      • I did read that Bell and Rogers were advised by their legal departments and complied with the request.

        What a huge set back for Teksavvy though.
        $21,557.50 compared to their claim for $346,480.68.
        Mr Geist is 100% right, defending piracy doesn’t pay

        • Lord of the Files says:

          Don’t you mean defending P-R-I-V-A-C-Y doesn’t pay? It can’t be called piracy until guilt has been proven in court.

          As things are right now, Voltage is alleging some Teksavvy customers committed copyright infringement and are demanding to know their real identities, while Teksavvy has been trying to protect those identities (i.e. their privacy).

          Remember that they’re all innocent until proven guilty, something we’re nowhere near yet and probably never will be since the reason for wanting those identities is to send threatening settlement letters, not take them to court.

      • Devil's Advocate says:

        Yeah after looking it up, that is exactly what happened.

        When I didn’t see similar stories to the Teksavvy one being posted, I just figured Bell and Rogers weren’t being targeted. And, I thought they would’ve resisted, unless at least paid for their efforts, knowing their usual stances of “entitlement”. At the time Voltage came around, the notice process we have now wasn’t in place.

        Interesting to learn they just complied. I’m a Bell user and no notice has come to me for my “questionable” downloads or torrent participation.

  5. I don’t believe Bell and Rogers handed over information. I believe that this was a test case and Voltage centered out a smaller telecom to establish the precedent, avoiding a larger telecom with deeper pockets. Thankfully, CIPPIC intervened and Teksavvy showed up.

    • “I don’t believe Bell and Rogers handed over information.”
      Can you confirm that? Or is it your personal view?
      Not to be rude but I’m not really interested in hearsay.

      • First and not to be rude, here is an example of hearsay, if not double hearsay, which you state that you are not really interested in: “I did read that Bell and Rogers were advised by their legal departments and complied with the request.”

        Second, its my personal view, which is why i started the sentence with, “I don’t believe….”

        • I get most of my information from here:
          http://cas-ncr-nter03.cas-satj.gc.ca/portal/page/portal/fc_cf_en/Search
          As for Bell and Rogers, if I’m not mistaken I read it on their websites; and not on someone’s on-line personal diary.

          • I think that you are mistaken. Since you’re a follower of the Federal court, then I refer you to the BMG case where Bell and Rogers opposed the release of account holder information and also the Voltage Pictures LLC v. Jane Doe case where Bell had to be ordered to provide such information. Lastly, I refer you to the commentary of David Bowden in his online article titled, “Improper Motives: Federal Court Safeguards its Process Against ‘Copyright Trolls’” where he noted that there was no indication that Bell or Rogers had provided account holder information to Voltage. Any sources to back up what you’re saying would be appreciated.

          • Devil's Advocate says:

            Yeah, but where did you get the information that Bell and Rogers were served with the request and that they had complied?

            Even though I had thought I found confirmation of that, I now realize the source was bogus.

          • An article in today’s Financial Post, “5 Things you should know as you start your workday”, notes that Bell willing shared the identities of its customers to Voltage. It doesn’t mention a source for this statement but there you go.

  6. Trolls won one, guess they were due, wonder if TSI will appeal?

    At any rate the court isn’t going to let them gouge and the way to deal with trolls is to have your lawyer write a letter back saying “see you in court”.

    • Unfortunately lawyers don’t come free, a standard retainer is usually $1000.00 / $1500.00, and that’s just to start a file.

      • I don’t think you know a lot about what you’re talking about here or you’re a liar.

  7. CandidCanada says:

    TekSavvy’s cost claim was honest and fair – which, sadly, is being punished as though that were a mistake in itself.

    If anything, the cost estimate was low, as the IT skills required are non-trival, below-market for the skill set, and highly disruptive of their primary profit-generating activities. The costs do not reflect the level of diligence necessary in communicating with customers in this situation. Get it wrong, and you lose a lot of business (2000+ subscribers…). This ruling doesn’t even pay the lawyers.

    Justice, it would seem, is dumb as well as blind.

    • @CandidCanada said: “TekSavvy’s cost claim was honest and fair – which, sadly, is being punished as though that were a mistake in itself.”

      I’m sorry, but have you actually read the decision? Providing nothing short of facts in court is not honest and fair at all. There was barely enough factual evidence presented by TSI for the court to arrive at the $21,557.50 let alone any other amount. I suggest rather than preaching to the crowd, people read the decision. TSI could have done a way, way better job by presenting actual costs rather than “estimates”. TSI is lucky to walk away with anything.

      If you were filing for actual costs, why would you provide “estimates” and not the actual costs and receipts. The judge tore that apart, and that’s nobody’s fault here than TSI. Their case on costs was excessively weak. They could have done a much better job.

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