Canada: Downloaders Beware! Federal Court Orders Disclosure Of Internet Subscriber IDs

Last Updated: March 14 2014
Article by Andrew Dixon

Voltage Pictures LLC v. Does, 2014 FC 161, marks a new chapter in the tenuous relationship between copyright, technology and privacy. In what is a first for Canada, the Federal Court of Canada has ordered TekSavvy, an Internet Service Provider ("ISP"), to release the names and addresses of subscribers who were alleged to have illegally downloaded movies.

Voltage is a film production company that owns the rights to a number of movies, most notably "The Hurt Locker". In support of its application, Voltage produced evidence that identified the IP addresses of alleged unauthorized downloaders. On that basis, Voltage argued that TekSavvy should release the names of approximately 2000 individuals identified by their IP address (the "subscribers") in order for Voltage to bring actions against the subscribers for breach of copyright.

There were two issues the Court had to determine. First, should the order be made? Second, if an order is made, how can the Court minimize the invasion of privacy and ensure the applicant is using the information for a proper purpose?

In order to compel a third party to disclose information, the following elements must be considered:

  1. The applicant must have a bona fide case;
  2. The non-party (TekSavvy) must have information on an issue in the proceedings;
  3. The order is the only reasonable means of obtaining the information;
  4. Fairness requires the information be provided prior to trial; and
  5. Any order made will not cause undue delay, inconvenience or expense.

The Court found that TekSavvy had the information in issue; TekSavvy would not release it without a court order; it would be unfair to have persons who infringe copyright do so with anonymity; and TekSavvy will not be unduly burdened because it could be reimbursed for its reasonable costs.

The difficult question was whether or not the claim was bona fide. For this claim to be bona fide, Voltage had to genuinely intend to bring an action for infringement against the downloaders, and there could not be an improper purpose for seeking the disclosure.

The Court held that, based on the evidence, Voltage did have a bona fide claim; and therefore Voltage's rights as a copyright holder outweighed the privacy interests of the affected subscribers. However, questions remained about whether or not Voltage would seek to enforce its rights in a bona fide manner.

The Court was presented with examples from the U.S. and the U.K. where copyright holders had attempted to extort settlements from subscribers through underhanded tactics. These companies are called "copyright trolls". Such trolls send demand letters to subscribers that contain legal jargon, misleading language and allege the subscribers have already been found guilty of infringement. The goal is to scare or embarrass the subscribers into paying a suggested settlement. There is often no basis for the settlement amount claimed by trolls; it can range from hundreds to thousands of dollars.

The Court determined that the best way to balance copyright and privacy interests, while deterring such trolls, was to restrict the scope of the order. Where there is evidence of an improper motive, the order is to be more stringent. In this case, the Court imposed a number of terms regarding how Voltage could contact subscribers.

Only the names and addresses of the subscribers were to be released and they were to remain confidential. The Court reserved the right to review a draft of any letter that Voltage proposes to send to the subscribers and to order that amendments be made, if necessary. Any such letter must make it clear that no finding of infringement has been made against the recipient. The letter must stipulate that the person receiving the letter may not be the person responsible for the infringement and the letter must give a warning regarding the advisability of the recipient obtaining legal advice. A copy of the Court order, or the decision, must also be attached to each such letter. Finally, the Court retained authority over the order to ensure it is not being abused.

Moving forward, the Voltage case is significant for copyright holders, ISPs and subscribers. Copyright holders with the appropriate evidence can now obtain an order directing that an ISP release the names of subscribers alleged to have illegally downloaded copyright protected works, such as movies. The Federal Court has made it clear, however, that in crafting their orders the Court will restrict and discourage troll-styled business practices in Canada.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Andrew Dixon
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