Guest Post: Copyright Troll-[ing] Canadian Courts? Canada’s First Reverse Class Action Copyright Case
This Kat was very intrigued to hear about Canada's first reverse class action copyright case brought by film production companies against a class of a unidentified and potentially unlimited number of Canadians for copyright infringement. She is delighted that Kristianne C. Anor and Sanjit Rajayer are able to provide this detailed explanation and analysis of the case:
Kristianne C. Anor and Sanjit Rajayer are third year law students at the University of Ottawa and are interning at the Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic, who is intervening in this case.
Kristianne C. Anor and Sanjit Rajayer are third year law students at the University of Ottawa and are interning at the Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic, who is intervening in this case.
Yesterday and today (24 September 2019), the Federal Court of Canada began hearing arguments for and against certification of Canada’s first reverse class proceeding in a file-sharing copyright infringement case. The plaintiffs, Voltage, LLC, Cobbler Nevada, LLC, PTG Nevada, LLC, Clear Skies Nevada, LLC, Glacier Entertainment S.A.R.L. of Luxembourg, Glacier Films 1, LLC, and Father & Daughters Nevada, LLC (collectively, “Voltage”), are suing a proposed defendant class of a potentially unlimited number of Canadians for copyright infringement. The defendant class members are not only unlimited in number; they are unidentifiable—so the representative defendant and intervener claim. The representative defendant is Robert Salna, an owner of an apartment complex who offers WiFi to his tenants. The intervener is the Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic (“CIPPIC”), a non-profit legal clinic at the University of Ottawa. Because the defendants are potentially unlimited in number and unidentifiable, Salna and CIPPIC claim, the class proceedings should not be certified.
A number of public interest concerns are at stake. If the reverse class proceeding is certified, it would burden internet subscribers, including free public WiFi providers, with onerous obligations to closely restrict, monitor, and control the access and use of their internet connection. Access to the internet, a basic right in many jurisdictions, would be severely jeopardized. From a copyright policy perspective, the unprecedented enforcement mechanism Voltage seeks to set up would be so rights-invasive, that it may be a proverbial cure worse than the disease. It would encourage the monetization of copyright claims and speculative settlements, which Canada has traditionally guarded against. From an access to justice perspective, the proceedings could deny fair and effective representation to thousands of internet subscribers. Below, we break down the legal issues in the case, and the challenges it poses.
Voltage’s Copyright Infringement Claim
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| High voltage encounter! Image: Jennifer C |
Voltage is a group of movie production companies that claim copyright in the movies “The Cobbler”, “Pay the Ghost”, “Good Kill, “Fathers and Daughters”, and “American Heist.” Voltage claims that a number of unidentified internet subscribers infringed its copyright in these movies by either: (1) offering the movies for download through BitTorrent software, (2) offering to rent, sell, or distribute the movies, or (3) authorizing others to infringe voltage’s copyright by providing internet access through their internet subscription. These claims are framed under sections 27(1), 27(2), and 27(2.3) of Canada’s Copyright Act respectively. The first two claims are against defendants Voltage calls “Direct Infringers”; the third against “Authorizing Infringers”. Voltage is seeking to have its claim against “all Direct Infringers and Authorizing Infringers residing in Canada” adjudicated in a single proceeding by certifying the “Direct Infringers” and “Authorizing Infringers” as a single class represented by Salna.
Voltage’s claim shows that the only way it identifies the potential defendants is by their IP address. It claims to have identified Salna as an internet subscriber whose IP address was associated with file-sharing activity involving its movies through the BitTorrent protocol. Voltage does not specify whether it has identified any other such persons.
Background: International Copyright Troll Litigation
While some may know Voltage by their films, courts and lawyers refer to them and similar plaintiffs as “copyright trolls”. A copyright troll is a party that aggressively enforces its copyright through litigation in an effort to monetize assertions of infringement. There has been significant case law in the U.S., U.K., Australia, Denmark, and Singapore surrounding copyright trolls generally and Voltage specifically. All of the copyright troll litigation share the same modus operandi: plaintiff owns a copyright to a film; plaintiff sues numerous John Does identified in a single action for using BitTorrent to copy the movie, all identified using the forensic software companies “Guardaley” or “MaverickEye”; plaintiff subpoenas the Internet Service Providers to obtain the identities of these Does; if successful, plaintiff will send out demand letters to the Does; and, finally, Does will send a settlement to the plaintiff. Where the Does do not respond, the trolls obtain default judgments. Very rarely do these cases reach the merits. Never has an international jurisdiction certified a class of respondents. It appears that Voltage has been on a world tour of trolling Courts for copyright infringement, with stints in the UK, Australia, Singapore, and the US. Canada seems to have been its next stop. And Voltage has attempted an ambitious campaign here.
Potential Hurdles to Voltage’s Proposed Reverse Class Proceeding
To merit certification of reverse class proceedings under section 334.16 of Canada’s Federal Courts Rules, Voltage must demonstrate that its claim satisfies five criteria: (1) the pleadings must disclose a reasonable cause of action; (b)there must be an identifiable class of two or more persons; (c) the claims of the class members must raise common questions of law or fact; (d) a class proceeding must be the preferable procedure for the just and efficient resolution of the common questions of law or fact; and (e) there must be a representative defendant who would fairly and adequately represent the interests of the class.
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| How far can you stretch [your copyright] ? Image: Ravenblack7575 |
While there are several potential hurdles to Voltage’s proposed reverse class proceeding, perhaps the biggest issues it will likely face are that: 1) Voltage’s class definition does not include a range of time for alleged infringement; 2) Voltage lumps “Direct” and “Authorizing” infringers in the same class; and 3) Voltage’s list of unidentified IP addresses is not synonymous with a list of putative defendant class members. Salna and CIPPIC have raised these issues before the Federal Court.
First, without specifying a time range for the infringement to have occurred (i.e. between June 2013 to December 2013), Voltage’s proposed defendant class can continue to grow with no end in sight, potentially reaching an unlimited number of proposed defendants. A growing class of potential defendants has never been certified in Canada, and the Supreme Court of Canada has refused to certify such classes. Second, lumping both “Direct” and “Authorizing” infringers together necessarily assigns the same degree of culpability for infringement. Salna maintains he did not offer the works for upload and does not know who did. How could he be held to the same degree of liability for copyright infringement as actual infringers, when all he did was offer WiFi to the tenants in his building? Third, while a public-facing IP address is unique, it is not necessarily tied to any one device or individual. For example, all computers using a coffee shop’s free internet may share an IP address. Likewise, all members of a household, like roommates, or guests thereof using household internet, will share an IP address. Similarly, all tenants using an apartment building’s WiFi will share the same address. This poses challenges for the identifiability of potential class members as well as the manageability of the proceedings.
A reverse class action is not the appropriate procedure for a BitTorrent file-sharing case
A reverse class proceeding is a proceeding in which one or more named plaintiffs claim against a class of defendants represented by one or more members of the class. In theory, such proceedings distribute the cost of litigation among members of the defendant class, affording individual defendants a robust defence. By collectivizing small claims, reverse class proceedings ostensibly incentivize defendants to modify their behaviour, which might otherwise go unchecked.
However, these benefits would likely be lost in Voltage’s proposed reverse class proceedings.
Voltage’s proceedings are unlikely to save court resources for two reasons. First, because Voltage’s reverse class proceedings targets internet subscribers, who may not be the alleged infringers, the proceedings may be entirely fruitless. Any internet subscribers who receive a notice of the proposed class can simply opt out of the proceedings, as they are entitled to do under Canadian law. Second, Voltage’s claim against each internet subscriber is heavily based on determinations of fact, such as the subscriber’s extent of control over individual internet users, the scope of authorization of the internet user’s activity, the subscriber’s knowledge of the infringing activity, and the subscriber’s actions to stop the infringing activity. Salna’s unique circumstances exemplify this complexity. As an internet subscriber providing Wifi services to tenants, there are an innumerable and myriad factual scenarios in which an individual user could have his subscription. Some, including malicious users and legitimate VPN users, may be unknown to Salna himself. Section 27(2.4) of Canada’s Copyright Act provides a non-exhaustive list of fact-based criteria that courts must weigh to determine whether the provision of a service amounts to authorizing copyright infringement. Applying these criteria to each defendant would require a separate trial, and repetitive fact-finding inquiries, in each case. Since such a proceeding would be unmanageable and would lose the main benefit of class proceedings: judicial economy.
As CIPPIC and Salna argue in their written submissions, it is unlikely that the costs of the proceeding would be distributed among the defendants because there is no incentive for any of the defendants to share the costs. Salna and his two tenants, the representative defendants, are the only parties who will be involved in the defence until the end of the litigation. Whatever the outcome of the litigation, the other defendants are unlikely, even if they find out about the litigation, to want to pay for it. Voltage has not proposed any mechanism by which the representative defendants’ costs may be distributed as is typically the practice in class proceedings in Canada.
Voltage seeks to set up a small-claims style litigation system that will “award” the alleged copyright infringers with a “speeding ticket.” Not only is this unlikely to act as a deterred to online copyright infringement, the Canadian Parliament had already rejected such a system in favour of a less rights-invasive “Notice-and-Notice regime.” In 2012, Canada formalized the Notice-and-Notice system in its Copyright Act, effectively rejecting New Zealand’s approach of setting up a Tribunal to award “speeding tickets” to online copyright infringers.
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| Stop right there! Image: jypsygen |
In Canada, reverse class actions have been used very rarely. In the three reported reverse class actions, courts have certified defendant classes which consisted of a limited number of identified persons. The plaintiffs had a claim against each defendant. The determination of the plaintiff’s claim depended on factual and legal issues that were common to all defendants. There would have been no need for separate trials. Voltage’s proposed class proceeding does not appear to have any of these features.
Conclusion
Certifying this reverse class action would open the doors to a world of unfair, unmanageable, inefficient, and abusive reverse class proceedings. The US, UK, Australia, and Singapore have all refused reverse class certification. Similarly, the Federal Court of Canada ought to deny class certification and stop Voltage trolling Canadian Courts.
Guest Post: Copyright Troll-[ing] Canadian Courts? Canada’s First Reverse Class Action Copyright Case
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Reviewed by 0x000216
on
Tuesday, September 24, 2019
Rating: 5
Reviewed by 0x000216
on
Tuesday, September 24, 2019
Rating: 5
