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).
One of the problems with the reverse class action approach was the limited incentive for lawsuit targets to defend themselves. That left the prospect of Voltage Pictures running largely unopposed with none of the key legal arguments against its plan raised in court. The problem was solved in this case by the intervention of CIPPIC, the Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic (I was a founder of CIPPIC but had no involvement in this case). The court’s decision makes it clear that CIPPIC played a key role, raising many legal and evidence concerns. That represents an enormous contribution, but also highlights why the Voltage Pictures’ proposed approach is inappropriate from a justice perspective.
As CIPPIC notes in its tweet stream on the case, the core issue came down to whether Voltage met the five part test for class action certification. The court ruled that it failed to meet all five. There are several notable findings in the decision with implications for future copyright file sharing cases. First, the court concludes that Voltage did not demonstrate a reasonable cause of action. The court examined three possibilities: direct infringement, indirect infringement, and offering the work for download. On the issue of direct infringement, it found:
While Voltage alleges that its forensic software identified a direct infringement in Voltage’s films, Voltage has failed to identify a Direct Infringer in its amended notice of application. Without an identifiable respondent, the action could not appropriately go forward as a class proceeding.
On indirect infringement:
According to Voltage, an Authorizing Infringer has a legal obligation to monitor the Internet activity of those using their Internet connection after receipt of a notice of alleged infringement under the “notice-and-notice” regime under the Copyright Act. Voltage’s argument concerning Authorizing Infringers unjustifiably relies upon an overly broad reading of Justice Binnie’s observations in SOCAN.
On offering a work for download:
Voltage’s claim that the respondents have offered a film for download cannot succeed in view of Professor Lethbridge’s evidence [expert witness in the case] that there is no differentiation between downloading and uploading files to BitTorrent, and Internet users do not consciously decide or act so as to offer a file for download or advertise that it available for download.
The implications of these findings are very significant for all file sharing cases, as they point the weakness of arguments that Internet users face liability of they do not monitor the usage of their subscription and that merely using BitTorrent means offering work for download for the purposes of secondary copyright infringement.
Second, the court also rejected claims that Voltage’s collection of thousands of IP addresses that are alleged to have infringed copyright represented a class for the purposes of a class action, significantly derailing the possibility of using class actions in these cases:
Voltage’s allegations (unsubstantiated in evidence) of being in possession of thousands of IP addresses that have allegedly infringed copyright in its films are, in my view, insufficient to constitute some basis in fact as to the existence of a class of two or more persons.
Crucial to this finding is the Supreme Court of Canada’s reminder in the Rogers case involving Voltage that “the person to whom an IP address belonged at the time of the alleged infringement may not be the same person who shared copyrighted content online.” In other words, an IP address alone isn’t enough from an evidence perspective.
Third, the court rejects a class proceeding as a preferable approach. It notes that resolution would require individual fact-finding not well suited to a class. It also notes that there is no guarantee that intervenors such as CIPPIC will participate to ensure that there is legal representation for those targeted by infringement claims. And it concludes that the system would unfairly burden ISPs by targeting thousands of Canadians, terming it an attempt to “appropriate the notice-and-notice regime as a litigation support service.”
The complete rejection is a huge win for Internet users and appropriate balance in copyright with implications that extend beyond this case to other file sharing lawsuits in Canada. The Voltage lawsuits may continue, but the court has thrown considerable doubt over the legal soundness of its claims.