In Voltage Pictures LLC v. John Doe, the
Federal Court ruled that TekSavvy Solutions Inc. (TekSavvy), a
non-party Internet service provider, could not recover costs
related to its decision to inform 200,000 of its customers of a
pending motion seeking TekSavvy customer information. The motion
was brought in a class action lawsuit alleging online piracy of the
movie The Hurt Locker. The Court found it was not
necessary for TekSavvy to inform its customers about the pending
motion with the result that TekSavvy could not recover the costs
related to its voluntary decision to notify.
Voltage Pictures LLC (Voltage) started a class action against
unidentified "Doe" defendants, alleging they had engaged
in illegal file sharing over the Internet in violation of its
copyright in the film The Hurt Locker. Voltage identified
at least 4,500 IP addresses that had allegedly engaged in this
conduct. Voltage asked TekSavvy to provide the names and addresses
of its customers associated with 2,411 of the IP addresses.
TekSavvy asked Voltage to obtain a court order but said it would
not oppose the motion. Voltage then brought a motion for a
Norwich order, asking the court to compel TekSavvy to
provide it with the names and addresses it sought. A
Norwich order allows the party seeking the order to gain
pre-litigation discovery from a non-party.
TekSavvy notified its affected customers of the pending motion.
A few days later, TekSavvy sent another notice to more than 200,000
unaffected customers, informing them of Voltage's pending
motion. These notices generated a significant volume of telephone
calls and emails, as well as a hacker attack on TekSavvy's
website. To deal with these consequences, TekSavvy paid a company
to upgrade its customer-facing systems and to increase its security
On the motion, Prothonotary K.R. Aalto ordered TekSavvy to
provide the names and addresses associated with the IP addresses
that Voltage had requested. Voltage was also ordered to pay
TekSavvy "[a]ll reasonable legal costs, administrative costs
and disbursements incurred by TekSavvy in abiding by this
Order." TekSavvy provided the requested names and addresses
and sent Voltage a bill for more than C$300,000 for, among other
things, all costs for responding to customers after the two notices
it sent and for upgrading its customer-facing systems and defences
against hacking. Voltage argued it should not have to pay these
NO REIMBURSEMENT FOR COSTS RELATED TO UNNECESSARY NOTICES
The Court sided with Voltage. The Court found that, in the right
circumstances, a party complying with a Norwich order
might be able to claim consequential costs arising from compliance.
Still, it found that nothing in the jurisprudence on such orders
required that an innocent party be fully compensated for any and
all costs incurred in connection with such an order. The Court
noted that the Federal Courts Rules did not require TekSavvy to
notify its affected clients and that TekSavvy had not provided any
reasonable explanation for notifying more than 200,000 unaffected
The Court went on to note that piracy of copyrighted material on
the Internet is a serious issue and that the Court's general
policy should be to support measures that reasonably deter such
illegal conduct. Courts should not allow an Internet service
provider to unduly interfere with a copyright holder's efforts
to pursue customers, unless a good reason exists to support such
The Court concluded that TekSavvy should only be allowed to
recover the costs that were reasonably incurred in complying with
the Norwich order, and excluded all costs that resulted
from TekSavvy voluntarily giving notice of the motion for customer
information to more than 200,000 of its customers. The Court
awarded TekSavvy a total of C$33,380 in costs, which included legal
fees related to the motion and all reasonable costs related to
complying with the court order.
ONLY REASONABLE COMPLIANCE COSTS WILL BE COVERED
Internet service providers who are forced to provide customer
information pursuant to a Norwich order should be careful
to take only those steps required by the order. Courts will
generally not allow companies to claim reimbursement for voluntary
steps taken in response to a Norwich order.
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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