Column

FCA Would Allow Reverse Class Action Suit for Copyright Infringement

Owners of copyright in movies struggle with large numbers of infringements in which unauthorized copies of their works are uploaded to peer to peer file sharing services such as BitTorrent.[1]

The Federal Court of Appeal has noted that a solution to mass-copyright infringement is for a single creator to pursue a large number of infringers.[2]

Despite the limitations of the Copyright Act for individual non-commercial infringements[3] and the limitations under current copyright law on authorization, the Federal Court of Appeal was prepared to allow a reverse class-action to proceed in which a plaintiff claims numerous parties conducted both direct and indirect copyright infringement by authorizing infringements made by others by uploading infringing copies of work to a peer to peer system.[4] The certification decision was remitted to the Federal Court for assessment.

The Federal Court of Appeal would also have the Federal Court consider if a plaintiff could use the “notice and notice” scheme[5] to permit it to be used to allow the plaintiff to communicate with the class of allegedly infringing users via notices to the applicable ISPs.

In the case before the Court the Court was satisfied that the plaintiff has put forward evidence of direct copyright infringement. The plaintiff advanced a novel argument on authorizing infringement that a user who posts or advertises the posting of an unauthorized copy of a digital file on a peer to peer file sharing service authorized infringements made by others who use that service to download copies of that file.

That position is not consistent with current cases law in Canada on authorizing copyright infringement.

The cases are clear that knowledge alone is insufficient as a basis to claim authorization of infringement.[6] To claim authorization of infringement more than the mere authorization of the use of the technology is required.[7] Authorization may not be established even where a person has knowledge of the infringement and takes no steps to stop it.[8]

Basing its decision on the view that the courts should be willing to allow the common law to develop the Federal Court was prepared to allow a novel cause of action to proceed even where there were many likely issues with such an action including whether the proposed representative defendant was not interested in defending the claim[9], that there may be some factual issues unique for each defendant[10], or utilizes the “notice and notice” system for a novel purpose of communicating with alleged infringers[11].

The Federal Court of Appeal noted that the primary question to be answered is whether the class proceeding would be a fair, efficient, and manageable method of advancing the claim.[12] It found that the action met this requirement.

The Federal Court of Appeal noted that

The proposed reverse class action tests the limits of what constitutes copyright infringement. It is also an innovative development in the means by which authors attempt to protect their work in a digital environment. The novelty of the proposed class action is not … a reason to deny an application to certify the proceeding. The proposed class proceeding may ultimately flounder … but the judge erred in presuming that to be the case at so early a stage. The law must be allowed to evolve.[13]

It will be interesting to see many areas in which law may develop if this novel reverse class action proceeding is ultimately allowed to proceed.

_______________

[1] BitTorrent is a peer-to-peer file sharing protocol that enables the decentralized and simultaneous distribution of computer files over the internet.

[2] See Salna v. Voltage Pictures, LLC, 2021 FCA 176 at para 51.

[3] See s. 38.1(a), (CA) that provides a copy of $5,000 for all such infringements.

[4] The Federal Court of Appeal found that a novel argument should be allowed to advance citing “[…] the Court must be generous and err on the side of permitting a novel but arguable claim to proceed […]” Assn. of Chartered Certified Accountants v. Canadian Institute of Chartered Accountants, 2011 FC 1516, 2011 CarswellNat 5412 at para. 9; Merck & Co. at para. 24). Allowing novel but arguable claims to proceed is the “[o]nly […] way can we be sure that the common law […] will continue to evolve to meet the legal challenges that arise in our modern […] society” Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, 74 D.L.R. (4th) 321 at 990-991. See Salna v. Voltage Pictures, LLC, 2021 FCA 176 at para 83.

[5] See s. 41.26, (CA).

[6] See Salna v. Voltage Pictures, LLC, 2021 FCA 176 at para 64.

[7] See CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13, [2004] 1 S.C.R. 339 at paras. 38, 42-43; Century 21 Canada Limited Partnership v. Rogers Communications Inc., 2011 BCSC 1196, 338 D.L.R. (4th) 32 at para. 342 (Century 21); Sirius Canada Inc. v. CMRRA/SODRAC Inc., 2010 FCA 348, [2012] 3 F.C.R. 717; Salna v. Voltage Pictures, LLC, 2021 FCA 176 at para 64.

[8] See, for example, Microsoft Corporation v. Liu, 2016 FC 950, 140 C.P.R. (4th) 327.

[9] See Salna v. Voltage Pictures, LLC, 2021 FCA 176 at para 124.

[10] The Federal Court of Appeal noted that that is necessary is that the class member claims must share a substantial common ingredient to justify certification. See Salna v. Voltage Pictures, LLC, 2021 FCA 176 at para 102.

[11] See Salna v. Voltage Pictures, LLC, 2021 FCA 176 at para 53.

[12] See Salna v. Voltage Pictures, LLC, 2021 FCA 176 at para 102.

[13] See Salna v. Voltage Pictures, LLC, 2021 FCA 176 at para 4.

Start the discussion!

Leave a Reply

(Your email address will not be published or distributed)