The Federal Court of Canada has strongly rejected an attempt by Voltage Pictures, one of Canada’s most litigious copyright companies, to use a reverse class action lawsuit approach to sue potentially thousands of Canadians. The court ruled that Voltage met none of the requirements for class action certification and in the process confirmed doubts that merely pointing to an IP address is sufficient grounds for a copyright infringement claim. The Voltage strategy was launched in 2016 as it sought certification of the class, a declaration that each member of the class had infringed its copyright, an injunction stopping further infringement, damages, and costs of the legal proceedings (the issues were discussed in this Lawbytes podcast episode with James Plotkin).
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Federal Court Short-Circuits Voltage Pictures’ Canadian File Sharing Class Action Copyright Lawsuit Strategy
The Supreme Court of Canada heard arguments yesterday in the copyright case of CBC v. SODRAC. While the case was ultimately about whether CBC should be required to pay royalties for incidental copies necessary to use new broadcast technologies, at stake was something far bigger: the future of technological neutrality under Canadian copyright law.
CBC argued that technological neutrality means that it should not pay for incidental copies since it already pays for the use of music in broadcasts. The incidental copies – copies which are made to create the final broadcast version of a program (including copies from the master to a content management system or other internal copies to facilitate the broadcast) – do not generate revenue and are simply made to facilitate use of the music that is paid for through a licence. SODRAC, a Quebec-based copyright collective, countered that CBC had always paid for these copies and that the CBC argument was the reverse of technological neutrality, since it wanted to avoid payment in the digital world for copies that were being paid for with earlier, analog technologies.
The case emerged as an important one when the question of the meaning of technological neutrality took centre stage. That elicited interveners such as Music Canada, which argued for a narrow interpretation of the principle, claiming that it was just an “interpretative metaphor” (similar arguments about users’ rights being no more than a metaphor were rejected by the Supreme Court in 2012). The danger in the case from a technological neutrality perspective is that the Supreme Court could roll back its finding that technological neutrality is a foundational principle within the law. Moreover, if the court were to rule that all copies – no matter how incidental – are copies for the purposes of the Copyright Act, there would be the very real possibility of payment demands for the myriad of copies that occur through modern technologies.
Beyond Users’ Rights: Supreme Court Entrenches Technological Neutrality as a New Copyright Principle
The technological neutrality principle is discussed in several cases, but gets its most important airing in the Entertainment Software Association of Canada v. SOCAN decision. The majority of the court states:
Unfortunately, the bill also succumbs to U.S. pressure and makes fair dealing — including the new exceptions for the many ordinary activities of Canadians — illegal whenever there is a “digital lock” on a work. A digital lock will trump all other rights, forbidding all fair dealing and keeping a work locked up even after its copyright term expires. Overall, these digital lock provisions are some of the most restrictive in the world.
To achieve a fair balance between users and copyright owners, the government needs to fix the digital lock provisions before this bill passes into law. A fair way to rework this flaw is to ensure that fair dealing with works is always legal, regardless of whether there is a digital lock present.