Canipre Admits It's Behind Voltage-TekSavvy File Sharing Lawsuits With Speculative Invoicing Scheme
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Tuesday March 12, 2013
Canipre, a Montreal-based intellectual property rights enforcement firm, has admitted
that it is behind the Voltage file sharing lawsuits involving TekSavvy
in what is described as a "speculative invoicing" scheme. Often referred to as copyright
trolling, speculative invoicing involves sending hundreds or thousands of demand
letters alleging copyright infringement and seeking thousands of dollars
in compensation. Those cases rarely - if ever - go to court as the
intent is simply to scare enough people into settling in order to
generate a profit.
Canadian Business reports
that Canipre's goal is to import the speculative invoicing strategy to
Canada and that it found a willing partner in Voltage Pictures. Canipre
collected thousands of IP addresses that are alleged to have downloaded
Voltage films and Voltage is now asking the Federal Court to order
TekSavvy to disclose the subscriber names linked to the IP addresses.
The Canipre admission is
important because it is consistent with arguments that the case
involves copyright trolling and that the Federal Court should not
support the scheme by ordering the disclosure of subscriber contact
letter to the court raised this possibility, arguing that
"such a purpose is improper and bars the applicant from
establishing a bona fide claim." CIPPIC followed up with an affidavit
that identified 22 file sharing cases involving Voltage in the
United States. Distributel raised similar arguments in its challenge
against NGN Prima Productions, which also involves Canipre.
Parties appear to be engaged in a practice to profit by engaging
in zealous copyright enforcement, a practice referred to as
"copyright trolling". It involves sending letters to customers
demanding significant financial compensation for the alleged
copyright infringement. The amount of money demanded far exceeds
any potential damages to the Plaintiff arising from the alleged
breach. The customers are threatened with legal action if they
do not comply. Following the November Motion, at least one
Distributel customer received such a letter.
invoicing practice has faced serious criticism from courts in
other countries. In the UK, the practice has led to findings
of professional misconduct for several lawyers and adverse court
rulings. For example, in the ACS case the court considered
the possibility of banning the practice, with the lawyer
from practice for two years. In the Golden
Eye case, the UK court ruled against sending thousands of
letters with set payment demands and sought to discourage
speculative invoicing schemes, stating:
I do not consider
that the Claimants are justified in sending letters of claim to
every Intended Defendant demanding the payment of £700.
What the Claimants ought to do is to proceed in the conventional
manner, that is to say, to require the Intended Defendants who
do not dispute liability to disclose such information as they
are able to provide as to the extent to which they have engaged
in P2P filesharing of the relevant Claimants' copyright works.
In my view it would be acceptable for the Claimants to indicate
that they are prepared to accept a lump sum in settlement of
their claims, including the request for disclosure, but not to
specify a figure in the initial letter. The settlement sum
should be individually negotiated with each Intended Defendant.
U.S. courts have
also raised questions about copyright trolling practices, with concerns
that the lawsuits constitute a "fraud on the courts" and some
demands for subscriber disclosures. In fact, just yesterday a U.S.
copyright trolls to appear in court to face allegations of
Canipre's admission could have a major impact on the TekSavvy and Distributel cases as it removes any lingering doubt that these lawsuits involve copyright trolling that are unlikely to proceed to trial. Alongside copyright reforms that cap statutory damages in Canada for non-commercial infringement, the Federal Court may think twice before ordering the disclosure of personal information of thousands of subscribers in support of what is now acknowledged to be a speculative invoicing scheme.
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Tuesday March 12, 2013