Federal Court docket, Voltage Pictures

Federal Court docket, Voltage Pictures

Podcasts

The LawBytes Podcast, Episode 10: Lowdown on Lawsuits – James Plotkin on Copyright Threats, Notices, and Lawsuits

Copyright threats and lawsuits against individuals have been around in Canada since 2004, when they were rejected by the federal court. Those threats receded for about a decade, but now they’re back. Copyright notices, litigation threats, settlement demands, and actual lawsuits have re-emerged at the very time that the music and movie industries are experiencing record music streaming revenues in Canada and massive popularity of online video services. James Plotkin, a lawyer with Caza Saikaley in Ottawa, joins the podcast this week to help sort through what the notices mean, the implications of the threats and lawsuits, and where Canadian law stands on the issue.

The podcast can be downloaded here and is embedded below. The transcript is posted at the bottom of this post or can be accessed here. Subscribe to the podcast via Apple Podcast, Google Play, Spotify or the RSS feed. Updates on the podcast on Twitter at @Lawbytespod.

Credits:

House of Commons, November 27, 2018
CBC News, Infringement Notices
CTV News, Company Collects 1 Million IP Addresses of Canadians Suspected of Illegally Downloading
CBC, As it Happens
CBC, Mainstreet NS

Transcript:

LawBytes Podcast, Episode10.mp3 | Convert audio-to-text with Sonix

Michael Geist:
This is Law Bytes, a podcast with Michael Geist

David Lametti:
What began to happen in Canada, Mr. Speaker and I saw this myself a number of times in my teaching is that American rights holders through American law firms would often allege content infringement in Canada and send out a letter saying you’ve You’ve infringed copyright. We’re going to sue you please pay x thousands of dollars by clicking on this link and we will forget this. And sadly Mr. Speaker a number of people didn’t realize that this kind of claim was actually being made against Canadian law in contravention of Canadian law and actually paid out.

Michael Geist:
Copyright threats and lawsuits against individuals have been around for awhile. The Canadian Recording Industry Association, which now calls itself Music Canada, led the charge way back in 2003 with threats to sue Napster users. Lawsuits were launched a year later but were rejected by the Federal Court citing a confluence of concerns involving evidence privacy and the state of Canadian copyright law. Those threats receded for about a decade but now they’re back. Copyright notices, litigation threats, settlement demands, and actual lawsuits have reemerged at the very time the music and movie industries are experiencing record streaming revenues and massive popularity of online services. There’s a lot of confusion and concern about what’s happening. What the notices mean,the implications of the threats and lawsuits, and where Canadian law stands on the issue. Here to help sort through what’s going on is James Plotkin, a lawyer with Casa Saikeley in Ottawa who has taken on several of these copyright cases.

Michael Geist:
Grateful to you for coming on and helping unpack a little bit what’s taking place. I feel like for this episode in particular we need the caveat this is not legal advice we’re having a conversation about our understanding of the law.

James Plotkin:
Of course I would never give legal advice into a microphone at a podcast.

Michael Geist:
Good to hear no nor should you. So why don’t we start by clarifying the difference between the threats that people are seeing often times through the notice and notice system as opposed to the lawsuits and why don’t we start with the threats and the notice and notice system.

CBC News:
Did you hear the one about the 86 year old grandmother who is facing a five thousand dollar fine for illegally downloading a zombie killing video game. It’s no Halloween joke. Ontario’s Christine McMillan recently received two emails claiming she had illegally downloaded Metro 2033. She says she’s innocent and insists her wireless connection may have been hacked. Well guilty or not, McMillan is one of tens of thousands of Canadians who received similar notices. Part of the new rules that came came in under changes to Canada’s Copyright Act.

James Plotkin:
The notice notice system came in 2012 when Canada modernized its copyright legislation and this was heralded as a quote unquote made in Canada approach to dealing with online piracy of music, films and other copyrighted content. This was in juxtaposition with the notice and takedown system that was in effect and has been in effect in the United States since about 2000 under their copyright legislation called the Digital Millennium Copyright Act. And so the way the notice and notice system works essentially is a rights holder may send a notice of purported infringement or notice of infringement to an ISP and the ISP then without actually disclosing the identity of the subscriber forwards that to the subscriber with usually an introductory text saying you know we received this from the rights holder. We have not verified its veracity but here it is. And then the content of the notice comes to the individual.

Michael Geist:
So the any piracy agency or the rights holder whoever happens to be sending these notices doesn’t know the end of the identity of the individual and the ISP isn’t disclosing it. They’re merely serving as a conduit to transfer on this message.

James Plotkin:
Correct. And that’s under the notice and notice regime and I’m sure we’ll talk a little bit more about some other mechanisms that rights holders are used to in fact get at that information. But the notice and notice is an administrative process essentially that’s supposed to act as an educational and deterrence tool to individuals who hopefully by receiving one or more of these notices will curb whatever habits that they have been doing online to the extent that those individuals subscribers themselves actually have done the infringement. That’s a totally different matter. They may not have been the individuals who infringed if anyone did at all.

Michael Geist:
Okay right. So that I think that’s important point to make. So we’re talking here about an allegation based on some entity trying to monitor activity online. This isn’t proof, it’s not determinative it’s not a judgment.

James Plotkin:
It’s not proof it’s not determinative. And again it’s meant to be a notice it’s not any proof of that leak first of all that legal rights even exist and to the extent that they do that they’ve been infringed. And to the extent that they exist existing have been infringed that they’ve been infringed by the individual who receives the notice because we have to recall that the ISP forwards this information to their subscriber. But if you have six people living in your house and 20 people visiting and using the Wi-Fi it might very well be that someone other than that subscriber did the infringement to the extent that there was one.

Michael Geist:
OK fair enough. And do the ISP have to forward on these notices?

James Plotkin:
And in fact they do. And while there are no damages or any remedies against individuals who received notices there are statutory damages under Section 41.26 of the Copyright Act that can be levied against the ISP for failing to comply with the system and in fact one of these rights holders called me to productions is currently pursuing TekSavvy a Canadian ISP attempting to get these statutory damages for alleged failures to properly forward these notices.

Michael Geist:
Ok so the internet providers themselves obviously aren’t self generating the notices they’re serving as this conduit forwarding on the notices and under the current system effectively they’ve got no real choice but to forward on those notices or the ISP itself faces the prospect of real liability.

James Plotkin:
That’s correct.

Michael Geist:
And it’s interesting. My understanding is the systems was in place well before it became formalized within the copyright act in 2012 and then took a couple of years until it actually took effect but this was used on an informal basis for for many years and seemed to have some amount of effectiveness in terms of addressing the behaviour that been talking about. So where did we go wrong in terms of what what we see taking place right now.

James Plotkin:
Well I suppose whether we went wrong depends on depends on who you ask. My one of my issues with this system from my perspective is that up until recently and and quite recently in fact the content of these notices were not regulated at all. So rights holders could essentially put in whatever they want. And I think there may be varying levels of classiness by people in their notices I think some had more of a shakedown approach where as others were actually trying to educate and deter further infringements. And this all changed. Recent about six months ago in fact when parliament part of the budget bill. I believe it was C-86 introduced an amendment to Section 41.25 of the act and added a subsection 3 which prohibited the inclusion of certain content and among that offers to settle and any request or demand from it for either payment for an alleged infringement or for personal information. So this could not be used as a way to actually get at the person’s identity or to extract a settlement from them directly.

Michael Geist:
Ok so when you say some were being used as a shakedown essentially what you’re saying is that some were putting in some sort of settlement demand or legal demands in the notification itself.

CTV News:
Frankly this sounds a little bit creepy. So now I know what it does. I think you know if there’s a million Canadians out there million Canadians being monitored who exactly is doing the monitoring and what kinds of information do they have. Ok. Well we are one company that is doing monitoring of pirated content. So we’re not monitoring people we’re monitoring the pirated content. If people go to the pirated content to download it they may become subject to our monitoring effort.

James Plotkin:
Yes. I’ve seen I’ve heard anecdotally and in one instance I’ve actually seen one of these notices from from way back and yeah the content as I said there are varying degrees of classiness. I mean I recently a client of mine showed me one from HBO and they didn’t do that. It was really more of an education approach. They didn’t threaten the lawsuit they didn’t threaten to take legal action but you know left them on the table of course in the event the infringement continued and he also said that it came remarkably quickly. So this individual had downloaded an episode of the popular show Game of Thrones and he said that shortly within five or 10 minutes after having completed the download he had received a notice from HBO or from the ISP or HBO via the ISP quite quickly in fact and so they asked why.

Michael Geist:
Within minutes of downloading it went from HBO or ever does the monitoring for them to the ISP and then forwarded along directly the subscriber.

James Plotkin:
Within minutes and so it seems HBO might have even a more advanced content surveillance system than others but that’s I’m just speculating.

Michael Geist:
Well that’s pretty amazing to hear the speed with which they were able to do that. Now for those that were so-called less classy they’re including I assume they included some kind of link ultimately to saying if you if you pay if you please click on this link or click on this link and there there would be some sort of page that would allow the person to pay a fee presumably and then settle the claim they’re doing so without knowing who the person is, without having proven the allegation, they’re just in a sense taking advantage of a subscriber who might not be aware of the fact that they don’t know any of that and simply pay out of fear for what might come next.

James Plotkin:
That’s right. And that’s well that’s what I’ve heard and I. To be fair I haven’t seen one of those with the link itself but I have heard again anecdotally stories of that nature and you know is frightening language is intended to extract settlement from people who may or very well may not have perpetrated the act of alleged infringement. And so that I think was a concern and I think it was borne of that concern that this new amendment to the law came in effect and actually started regulating the content and I know that this was criticized by certainly some people for not having happened sooner.

Michael Geist:
Sure. And I think I was one of those people.

James Plotkin:
You might have been.

Michael Geist:
I should note that I have seen some of those those notices there was a period of time where I was getting e-mails from recipients, certainly on a weekly basis. Not sure what to do. And and left left feeling rather helpless and a little bit hopeless because it can be I think for a lot of people are pretty scary thing to receive what feels like a legal demand. So the government sought to address this by by prescribing as you suggest limits on the language.

CBC As It Happens:
What happens when say HBO finds out that you have been illegally downloading the game of thrones is that they send an e-mail to your Internet provider. And as of Canadian rules that came into effect in January 2015 your provider then has to ask that e-mail on to you. And that is what has been happening at the University of Manitoba repeatedly.

Michael Geist:
Is this likely to to address the problem.

James Plotkin:
Well I suppose time will tell and I can’t claim to have any real empirical information on this although one hopes that to the extent that the notices can no longer demand settlement or give any kind of indication that liability has been proven or found or that the person who receives notice themselves are the ones who are liable if anyone should hopefully cause people at least the careful readers to maybe look at blogs like yours or other sources online to kind of you know inform themselves as to what these notices really are and I guess the most we can hope for is outside education spurred on by a less aggressive content in the notices.

Michael Geist:
Let’s hope so, in the sense if you believe this is a problem and I certainly do. I know for myself having spoken to at least a couple of ISPs there is a lingering concern that the they may still be forwarding on many of these notices and I think at least anecdotally that’s what’s taking place in part because there is while there may be rules now about what can be included, there is no standardization in terms of what’s included in the notices. Is more or less classy so to speak. And if you’re trying to forward on those notices as quickly as apparently they are sometimes literally doing it within minutes, the ability to actually dig into whether or not it includes any of the content that might be offside with the government wants to see in a notice represents a significant challenge because it doesn’t say that you can’t forward that notice it merely says you’re not required to forward it on a notification if it includes that information.

James Plotkin:
Right and I think to that point and it’s a good one. These processes obviously in the HBO case but certainly as far as I’m aware across all of the ISP certainly the big ones is is an automated electronic process. It’s not a manual one. And for those who are more interested about kind of the mechanics at least about how Rogers does this I would commend to you to look at the oral submissions and read the facta of the parties to the Voltage and Rogers case that the Supreme Court decided recently because they go into some detail. Counsel for Rogers goes into some detail on really how this is done on the ground and it’s certainly not an individual saying oh well here’s a notice and here’s what it says and they’re not really checking it for compliance in that way as far as I’m aware. And as far as the argument indicated to me when I viewed it right.

Michael Geist:
And I think that’s my understanding too the numbers are just too big. Terms of being able to look at this individually for an ISPs perspective that provides a useful segue into the other side of the story and in the sense the Rogers Voltage case sort of sits a little bit in the middle with some of the stuff because it of course had references to notice and notice and litigation as well perhaps why don’t we unpack a little bit that case and then get into the other side of what we’re seeing taking place which is the lawsuits side.

James Plotkin:
Sure. The Rogers and voltage cases actually I think useful in a couple of respects. But if I boil it to its essentials it was really about whether and to what extent an ISP can charge for the cost of complying with what’s called Norwich order and explain what that isn’t just a second. Over and above what they have to incur to affect their duties under the notice and notice regime because under the Copyright Act the there are certain obligations in the court in this case and both express and from those flowing from them implied obligations as to information retention management sending the information along as regards the notice and notice regime. And currently while the law leaves room for the Governor in Council to permit the ISP to charge for that currently there is no such prescription and so for that reason as interpreted by the courts, the ISP is are forbidden from charging any fee for compliance with the notice notice regime.

Michael Geist:
Okay, let’s just pause for a second to make sure that that everyone’s clear on that system we’ve talked about how ISP ISPs are processing large numbers of of these. The system envisions the possibility of ISP charging for this but only if the government sets a fee. And at the moment the government hasn’t set a fee. So from an ISP perspective one of the reasons presumably they have sought to automate this isn’t just volume but it’s of course the cost because at the moment all of those costs are being incurred by ISPs and ultimately arguably it’s going to be subscribers, Internet users that are going to bear some of these costs assuming that those costs get offloaded at the end of the day as part of what we pay monthly for Internet services.

James Plotkin:
Correct. Okay I agree.

Michael Geist:
All right. So they’re not charging for it. The in the case case in this case. So in the Supreme Court of Canada case talks about that interface between the notices and then Norwich order.

James Plotkin:
Okay. So Norwich order is essentially a third party discovery order that permits somebody in this case a rights holder to obtain information from a non-party that isn’t necessary to prosecute the action. And so in this case the way these lawsuits have gone and there were a number of them there’s the famous voltage pictures reverse class action. But in fact there’s 16 or 17 other these lawsuits smaller ones going in the federal court and you can talk about that later. The way that these work is the rights holder generally enters into an agreement with a third party Internet surveillance company that monitors the BitTorrent protocol to ascertain which IP addresses are in the swarm and uploading and making available the work at any given point in time and then with the IP address the rights holder can determine which ISP the person is with but does not have their identity and so in order to actually send the individual a statement of claim and serve them and get the actual legal process going against them what they do is begin the claim against John Doe’s against basically placeholder defendants obtain Norwich orders from various ISP is to disclose the subscriber information and then sue those individuals. And that’s essentially the the system that has been going in the federal court now for a couple of years.

Michael Geist:
So rights holders or at least the agents working on behalf of these rights holders actively monitoring internet traffic identify IP addresses. But in doing so don’t necessarily know who those individuals are though they will know from the IP address block which which provider the person happens to be using it. And once they’ve done that they’re then able to use this legal process to effectively require the Internet provider to disclose the identity of the subscriber so that they can proceed with their legal action.

James Plotkin:
Exactly and now looping back into Rogers and Voltage that case was about what again as I said whether and to what extent the ISP can charge for the cost of complying with the Norwich order for any activities that are not expressly or impliedly already required to discharge their notice and notice obligations because as we discussed they can’t charge for that and there is the court found some overlap as a technical matter in what has to be done for one in the other. But the court found that it was not an entire overlap and therefore sent it back to the federal court to actually determine the dollars and cents issues.

Michael Geist:
Ok. So that particular case ultimately going to Supreme Court of Canada as you as you indicate leaves open the possibility that at least for the sort of that second stage where if someone is looking now to actually engage in a legal process and sue Internet users there is the possibility that the ISP will can levy some of their costs not the ones that involve the cost of complying for the notice and notice system but additional costs that might be additive that are specific to this kind of litigation.

James Plotkin:
Certainly and it could really have a big impact on where the court actually lands on how much can be charge in any given case might have an impact because there’s a big difference being five cents and five dollars and you’re talking about the cost of retrieving thousands and thousands of records. And given that the statutory damages which is likely the remedy that the rights holders seek to obtain on the assumption that they actually want to adjudicate these things on the merits for non-commercial infringement ranges between only one hundred and five thousand dollars there does become a potential cost recovery issue if the cost of obtaining the identities of the would be defendants is restrictive or prohibitively high.

Michael Geist:
And I want to continue with the litigation but pause for just one moment because that notion of increased costs to least obtain that information might have a real impact on the ability to pursue this. Is that part in your view of kind of the system as a whole which it seems like is reliant on the notion that individual internet users will not fight that the only way that you can make this work if you are bringing lots and lots of potential actions against Internet users is essentially based on keeping your costs very low either through threats like we saw with notice and notice or through litigation which settles quickly because the moment you start increasing the costs of litigation either to get the in get the identity of the subscriber or potential even further once you actually formally sued having a subscriber say well I didn’t do this or I don’t think I’m liable and I’m going to fight you suddenly now the the system of trying to extract some kind of revenue from these individuals kind of withers away because the costs become prohibitive.

James Plotkin:
Correct. And I think there are two sides to that as well. And certainly the rights holders and this argument was made by Voltage in the Supreme Court. This is for them they say in access to justice issue because these are you know individuals or corporations who want to enforce their copyright and they’re saying that based on the system as it is procedurally again that the costs of litigation coupled with the low statutory damages and the frankly inability to prove real common law damages as far as I can tell makes it you know as a practical matter untenable for them to enforce their copyrights. That’s their side of the story. And then the other side as well that perhaps the court system is being used here as a settlement mill in a way that is not necessarily commensurate with adjudication on the merits which is generally the goal of most courts when when claims are brought of course settlement is always encouraged to unburden the court system. But if you’re using the court system specifically as a settlement device rather than for an adjudication I mean query whether the courts will ultimately be happy with that. But you know it has been going on for a couple of years and so at this point I don’t know that anybody has really pressed the issue.

Michael Geist:
Fair enough. Now let’s talk about what’s been going on for the last couple of years. You mentioned there are at least a couple of different kinds of lawsuits taking place maybe you can unpack that a little.

CBC News:
People over forty five years old can remember a time when you wanted to watch a movie you had to either go to the movie theater or wait for it to play on television. There were no VCR is there was no Netflix, no computers 40 years ago. How the world has changed now people can watch movies whenever they want. And for more choice and titles some people choose to download movies using BitTorrent that are distributing material for free. That has resulted in some people getting letters from production companies saying they’re being sued in what’s called a reverse class action.

James Plotkin:
So the one that everybody knows most about is the is the Voltage pictures John Doe reverse class action so-called that is proceeding in respect of the Hurt Locker film. And this was the first one of these Voltage Pictures actions to go although what’s getting a significantly less attention and maybe a little bit more now is the 16 or so other lawsuits started by other movie studios that all appear to be linked with Voltage. I mean for instance all of these films are within the voltage catalogue number one and they’re also all represented by the same counsel. So it seems to me that while these are different plaintiffs in name these there is a common design here. And so these are not proceeding procedurally as reverse class actions or at least not yet or at least not on a formal basis because the lawsuits are commenced as simplified actions which is the simplified rules under the federal courts rules dedicated to cases where the monetary relief in question is fifty thousand dollars or less and there are a few other restrictions so I won’t bother getting into. But what they’re doing is they are once again suing hundreds in some cases well over a thousand individuals with respect to each of these films but they manage to do so by issuing a single statement of claim for fifty dollars whereas any defendant who wishes to defend on the merits because this is not a class defence must actually defend on their own and do so individually retain counsel represent themselves or whatever.

James Plotkin:
So the access to justice and cost savings do exist. But I would I would submit that they are perhaps a little one sided in favour of the plaintiff in this instance and the clients that I represent I have a close to a dozen active files in these matters none of them are in the Voltage Pictures because that’s a there’s a whole different issue there with certification. But the individuals who are getting statements of claim in the mail in these other cases are in frankly a more pressing position because they have deadlines to defend or negotiate or settle or and they often really don’t know what to do when they come to me which is what I try to help them with.

Michael Geist:
Ok. Let’s just deal with the reverse class action quickly and then move on to the kinds of cases that you’ve been dealing with. So people may be familiar with class actions where there’s a large pool of individuals who may have been harmed in a certain circumstance. Individually their claim may not be worth that much but collectively it may make economic sense to come together and thus use the class action system. What’s a reverse class action.

James Plotkin:
Well true to its name it is the opposite of the normal class action wherein the plaintiff is the class. You have a representative plaintiff and you know a class of individuals with whom that person shares common issues and points of contention with one or more defendants. In this instance, it is one plaintiff and a pool of defendants who purportedly have engaged in activities that are common in law or in fact such that they are susceptible to class wide resolution and to just unpack that for a minute. A lot of the time people think that a class action always precedes with respect to the entirety of the claim but that’s not always the case. There are certain and individual issues that are not generally susceptible to class wide determination. You know so for instance causation in a negligence claim would be one damages in any sort of torts claim and indeed in this instance probably would also have to be an individual issue because where within the statutory damages the amount should fall with respect to any individual is dependent on the facts of their case and the factors in the law that are weighed to that effect. So even though this is proceeding as a reverse class action and there might be some common determinations for example that the plaintiff owns copyright in the work that is something that it would could be a common issue and is susceptible to class wide determination because it’s the same in respect of every defendant. But the fact that this is a reverse class action does not mean that everything will necessarily be certified as a common issue and therefore proceed on a class wide basis.

Michael Geist:
And where are we right now with respect to this that this particular court quite large claim?

James Plotkin:
So we’re now approaching the certification phase. So up until now the class has not as far as I know been exhaustively defined. And there was a security for costs motion that was brought by the representative defendant Mr. Solna and he was successful in obtaining security for costs but not mistaken the amount of roughly seventy five thousand dollars and I think that was fought but ultimately that has now been paid and so now that that’s been paid the process has been unfrozen and to the best of my knowledge and to be fair I haven’t looked at the federal court proceeding queries in a little while on this but I believe they’re now at the certification stage to figure out as I was saying what will be certified, whether there will be a certified class action and if so what issues will be certified for common determination.

Michael Geist:
So there’s still several legal hoops to go through here whether or not this gets certified at all and if it does on what basis and then of course there’s the prospect of potential litigation on those issues because that still doesn’t prove that that the in this case let’s say the individual users themselves infringed copyright in violation of let’s say one if that becomes one of the issues that does get certified.

James Plotkin:
Mm hmm. And also it’s worth noting that at certification in the ordinary course in a plaintiff’s side class action there is an opportunity and a mechanism for plaintiffs to opt out of the class so that they can pursue things individually. So likewise in this case one would think that defendants at the certification phase or thereafter would have a mechanism for opting out of the class as defendants. So for instance if you know a defendant number one wants to hire their own lawyer and doesn’t want class counsel they should have an opportunity to do so. And in my view that’s a that’s an important procedural fairness and rule of law issue that ought to be respected in the reverse class action context as well.

Michael Geist:
So in other words I don’t want to be sued under this class action I should have the right to say I don’t want to be sued under this class action.

James Plotkin:
And pursue me individually that that that should be a right and again at this point it’s all kind of up in the air. I know the reverse class action has some precedent in the provincial courts. The case law is kind of few and far between there and I’m not aware of any cases certainly in the IP context where this has happened in Canada. And I believe everyone agrees it’s quite unprecedented. So we’ll have to see how it goes.

Michael Geist:
So really a novel case the the other aspect of litigation you’ve alluded to already is that there are whole series of other cases that are proceeding not in the reverse class action side but as more traditional cases although using potentially some some tactics within the Federal Court rules of the Federal Court that raise some issues perhaps we can unpack that a little bit.

James Plotkin:
Sure. And I think it’s worth noting that the statements of claim in all of these actions at least the ones that I’ve seen and I’ve seen certainly over half a dozen of them are essentially identical in boilerplate with modifications for the name of the work and other such things. But really these claims are proceeding on two different theories of liability. Theory number one: you the Internet subscriber or the person who downloaded uploaded made the work available communicated to the public by telecommunication so on and so forth and therefore you are liable for infringement for being the person who did the things that only the copyright owner can do. The second theory is what they’re basically going is an authorization of infringement theory. So they’re saying well even if you’re not the individual who who perpetrated the act yourself it’s your internet connection and you are responsible in fact the words negligence and willful blindness if I’m not mistaken or even used in the pleading to suggest that something of a duty of care is owed to I suppose rights holders that if you’re the internet subscriber you’re responsible for what happens on your connection and therefore you have infringed by authorization. And that second theory is the one that I in particular I’m interested in challenging because as I read the case law that’s quite a stretch.

Michael Geist:
Well it would be remarkable stretch. It’s essentially saying that anyone who has an Internet service is responsible for a duty of care for how it gets used not just by themselves but anyone who might gain access just to even things like open networks are essentially forbidden because how could you meet your duty of care if you didn’t know necessarily who was accessing your network.

James Plotkin:
Correct. And there is case law on authorization of copyright infringement most notably. Well there are a couple of cases but most notably the there’s the BMG case and there’s also the CCH decision from 2004 which is mainly known as the benchmark decision on fair dealing in Canadian copyright law but it also deals with the notion of authorization. And in that case there is an argument that by making available the photocopiers in the Great Library the law society was actually authorizing copyright infringement to the extent that those who use those photocopiers use them to copy more than a fair amount of the work or any book or periodical or what have you. And the court said no, authorization is I can’t recall off the top of my head the words, but instead to countenance to sanction to to to actually proactively do something. The court does say that that as far as the evidentiary burden a quote unquote sufficient degree of indifference might in some instances amount to authorization although I won’t get into the background of this they cite some UK case law that again suggests to me does not support what the plaintiffs are doing here. But more importantly the court also says there is a presumption that when one authorizes someone to use a technology the presumption is that they’re authorizing only licit legal uses. And so that presumption can of course be rebutted. But the fact that in that instance the law society made the photocopiers available was not enough to show authorization and I would suggest that likewise here the fact that the mere fact that I allow you to use my Internet connection does not mean I allow you to do illegal things on it. I mean if we take this argument to the absurd if you use my Internet connection to go on Silk Road and hire an assassin I’m now you know an accessory to a criminal act and you know that’s a different context but I think that that it would be the reductio ad absurdum of this position.

Michael Geist:
You know the implications are enormous not just in copyright but but in other ways as well and really would change the way in which arguably change the way in which many people access the Internet are able to access the Internet today. So we’ve got claims both that people are infringing and then they’re using a network that is allowing for infringement and in doing so can be seen to be liable on those grounds. Have any of these cases gone to trial or any of these issues been tested yet.

James Plotkin:
No in fact in Canada all of these issues remain untested and all of the cases I was talking about have not passed the pleading stage yet and there’s no sign that they will anytime soon on the basis of the way things have been going because in several of these matters there’s an initial wave of Norwich orders and then people are sued and served and then there’s another wave maybe six months later and another wave six months later. And so you know the pool of defendants grows and grows. But ultimately this is the rights holders way of maximizing perhaps settlement opportunities by kind of having waves of notices and statements of claims that go out and so it kind of refreshes the settlements incentive pool if I could put it that way. I will say also that in the United States the 9th Circuit Court and the courts in California heard a case that is somewhat similar and it’s the law there is not exactly the same and I won’t get into the use idiosyncrasies but the court there found that a merely being the internet subscriber was insufficient to state a claim for contributory infringement which is again not the same but roughly analogous to authorization in the Canadian context.

James Plotkin:
And so again while there might be points of distinction I think that’s helpful. And I would also note that in the Rogers case and this was arguably obiter dictum, Justice Brown who wrote for the majority acknowledged at paragraph thirty five of the decision that there may be instances in which the person who receives the notice of being the subscriber is not in his words in fact will not have illegally share the copyrighted content online. And then they say that he says this might occur for example where one I have IP address while registered to a person who receives the notice is available for use by a number of other individuals and so without necessarily coming out and saying it it seems to me that Justice Brown is leaving room for the possibility that simply being a subscriber once again is not enough to amount to authorization and I expect that that is a point that will become live should these cases ever move forward to adjudication.

Michael Geist:
So we’ve got some there’s some significant arguments that can be raised certainly on the authorization side clearly including fairly recent Supreme Court jurisprudence that raises some real doubts about that legal theory and we’ve also got some questions even on the other side of their their legal theory does that suggest that Internet users can simply ignore this on the notice and notice side, it’s just a notice they can think about their behavior but they don’t have to respond quite clearly. What about if they happen to receive one of these lawsuits.

James Plotkin:
Well I. And again without advising or not advising it would be generally unavoidable to ignore a statement of claim because it would permit the plaintiff to proceed to get a default judgment against the individual which limits or or basically ends their rights to participate in the proceeding unless the default is lifted and then damages can be ordered against them in their absence and of course an undefended proceeding the damages are likely to be higher. And you know that that’s probably not a good strategy to ignore these notices.

Michael Geist:
Fair enough. And what kind of damages are we talking about in a copyright context.

James Plotkin:
Well again to the extent that the commerce the infringement is non-commercial in nature the well let me take a step back. Under the Copyright Act there are a whole suite of remedies. And with respect to the monetary remedies the rights holder can generally elect either between receiving ordinary common law damages which is damages for lost profits and lost lost opportunity and an accounting of profits which is basically a disgorgment as we say in law of the profits that the infringer made. So that’s one option. The other option to elect is for statutory damages which alleviates the burden of the plaintiff to actually prove any causal connection with the damages and it creates a range. But the law sets out a number of factors including you know the good and bad faith of the parties the need for deterrence a few other things for the court to figure where within the statutory damages range a an award should sit in a given instance based on those facts and again for non-commercial infringement. The range is one hundred dollars to five thousand dollars for all infringements. And that’s important because this means that in principle a person can infringe copyright for a number of years and then it’s really a race to the court. And the first rights holder who seeks to sue may do so and that essentially bars any other rights holder for infringements that occurred up until that point from suing. And then the liability can be renewed after that point but and then there’s commercial infringement where the range is significantly larger it’s between five hundred and twenty thousand dollars on a per infringement basis and there’s no same first a court rule there. Now in most of these cases these would almost certainly all be non-commercial infringements. I think there are some arguments as to whether a landlord who supplies internet is make renders it a commercial infringement and I’m sure that the plaintiffs will make that argument but the case on that is not settled at all either. So certainly for the overwhelming majority of people who receive these statements have claimed their maximum liability almost certainly going to be capped at five thousand dollars. And frankly that would be a pretty high damage award for something like this.

Michael Geist:
Ok so so not something that anybody can ignore, but on the non-commercial side the range is hundred dollars at the low end five thousand dollars at the highest end but it sounds unlikely or at least would be unusual to see a judge in a single case go for five thousand dollars. But of course this hasn’t been tested yet.

James Plotkin:
Correct. It could. It could happen. But again this is not the sort of financial liability where people have to you know start selling their belongings here. That’s that’s not the issue. But but it is a real court action and it’s not something to be ignored in my view.

Michael Geist:
James thanks so much for joining me on the podcast.

James Plotkin:
My pleasure.

Michael Geist:
That’s the Law Bytes podcast for this week. If you have comments suggestions or other feedback, write to lawbytes.com. That’s L.A. W B Y TE S at P.O. Box dot com. Follow the podcast on Twitter at @lawbytespod or Michael Geist at @mgeist. You can download the latest episodes from my Web site at Michaelgeist.ca or subscribe via RSS, at Apple podcast, Google, or Spotify. The LawBytes Podcast is produced by Gerardo LeBron Laboy. Music by the Laboy brothers: Gerardo and Jose LeBron Laboy. Credit information for the clips featured in this podcast can be found in the show notes for this episode at Michaelgeist.ca. I’m Michael Geist. Thanks for listening and see you next time.

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