In 2012, the Copyright Modernization Act was enacted to make a number of significant changes to Canada’s existing copyright regime. One of the primary goals of this new legislation was to ensure that Canada did not open the floodgates to “copyright trolls” (copyright plaintiffs who file lawsuits simply to extort quick settlements) and devolve into the shocking state of copyright litigation south of the border. The federal government hopes to balance the rights of copyright holders with the privacy rights of the alleged copyright infringers. The Act now has a statutory limit of $5,000 on damages for all non-commercial copyright infringement. The Act also implemented a new “notice-and-notice” system. This system requires that copyright holders send notices to Internet Service Providers (ISPs), who in turn must send the notices of alleged copyright infringement to their subscribers. Its implementation means that Internet Service Providers have now been thrust into the middle ground between copyright holders and alleged infringers.
Being the “middle-men”, it remained to be seen how ISPs would approach their role and what effect that would have on Canada’s copyright regime. The answer to that question can be gleaned from the conduct of TekSavvy, an ISP which is involved in an action at the Federal Court of Canada. Briefly, the facts are: Voltage, a copyright holder, identified around 2,000 alleged copyright infringers by tracking their IP addresses. Voltage sought to have the alleged infringer’s ISP, TekSavvy, reveal these subscribers’ contact information. TekSavvy requested that Voltage obtain a court order to do so. In the Federal Court’s decision of Voltage Pictures LLC v. John Doe, 2014 FC 161, Voltage was successful under Rule 238 of the Federal Court Rules and obtained what is known as a Norwich order. This order compelled TekSavvy to comply with Voltage’s request and provide the contact information of their subscribers.
The Federal Court held that order should be granted based on its finding that Voltage had proved that it had a bona fide claim against the defendant copyright infringers. Voltage also proved that the information being sought from the non-party, TekSavvy, was relevant to the issues in the action. The Federal Court also listed other requirements satisfied by Voltage: that a court order was the only reasonable means of retrieving the information; that fairness required that information be provided; and that the order would not cause undue delay, inconvenience, or expense to the non-party. In regards the expense to the non-party, the court directed Voltage to pay TekSavvy’s costs for complying with the Order. In response, TekSavvy sent Voltage a bill for roughly $350,000 in costs for complying. The matter went back to the court for adjudication. The Federal Court rejected both Voltage’s and TekSavvy’s costs outline and instead ordered Voltage to pay roughly $22,000 in costs to TekSavvy (2015 FC 339). Although this amount seems low compared to TekSavvy’s costs, it is significantly higher from Voltage’s valuation of the costs at $884. It is important to note that Voltage warned that any amount that substantially deviated from its $884 would have a “chilling effect” on such litigation.
The Federal Court clearly recognizes that ISPs have a significant role to play in the arena of copyright infringement litigation, even if only providing relevant information. However, TekSavvy’s litigation strategy will certainly make copyright holders rethink their eagerness to bring copyright claims to court, especially if they seek to rely on an ISP to help them do so. TekSavvy’s litigation strategy will hopefully discourage “copyright trolls” and compound the effect of the new Copyright Modernization Act.