Improper Motives: Federal Court Safeguards its Process Against “Copyright Trolls”

The Federal Court granted an order compelling an internet service provider (ISP) to divulge the names and addresses of some 2000 account holders implicated in alleged copyright infringement over peer-to-peer (P2P) networks. This type of order is often associated with “copyright trolls” in other jurisdictions. However, in granting the order, Prothonotary Kevin Aalto attached conditions meant to curb potential abuses associated with the practice.


Voltage Pictures LLC is a Los Angeles-based studio engaged in the production, finance, and international sales of many popular movies, including the Academy Award-winning film “The Hurt Locker” (2008). In 2012, Voltage retained anti-piracy firm Canipre to determine if any of Voltage’s works were being shared via P2P networks in Canada, such as BitTorrent. An investigation determined that Voltage’s works were being seeded by users associated with around 2000 IP addresses.

Voltage, in response, sought a so-called Norwich Order requiring the ISP TekSavvy Solutions Inc. to provide the names and addresses of account holders associated with the internet protocol (IP) addresses in question. While TekSavvy took no position on the motion, the Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic (CIPPIC) was granted intervenor status to oppose the order, arguing that privacy considerations and the interests of justice should militate against ordering the ISP to divulge user information.

The Troll Toll – Abuse of Process and the Federal Court

“Copyright trolls” use the threat of litigation to effect quick settlements. These organizations send threatening and often misleading letters to individuals suspected of infringement, implying that liability is a foregone conclusion and demanding relatively small settlement amounts, usually low enough that retaining counsel to mount a full defence makes no economic sense. Frequently, such organizations threaten liability based on the infringement of rights related to pornographic movies – adding a layer of embarrassment to the demand and further extorting quick (and quiet) settlements from individuals.

To be clear, the plaintiff in Voltage Pictures LLC v John Doe and Jane Doe does not exhibit all of the characteristics of a typical troll. The plaintiff is engaged in a legitimate business, and does not depend on quick settlements as its primary means of generating profit. Further, Voltage produces critically acclaimed movies – not the pornographic content frequently associated with such trolls. However, the order sought by Voltage is so strongly associated with troll-like practices that, in my opinion, the spectre of the copyright troll must have heavily influenced the reasoning behind the order and the conditions under which it was granted. The Federal Court, while aware of the need to facilitate the protection of copyright, also recognizes the need to balance that interest with the prevention of the abuse of its processes.

Standards for Granting the Order – A Bona Fide Case

The specific order sought by Voltage was an equitable bill of discovery, also known in Canada as a Norwich Order after the decision of the House of Lords in Norwich Pharmacal Co. v Customs and Excise Commissioners. The order was described in BMG Canada Inc v Doe as an “ancient” form of pre-action discovery which permits a court, through its equitable jurisdiction, “to order discovery of a person against whom the applicant…has no cause of action and who is not a party to the contemplated litigation.” These orders are meant to facilitate the discovery process where some third-party has relevant information not otherwise available to a plaintiff.

The intervenor CIPPIC strongly emphasized the need to protect the privacy of users, and therefore argued that the applicant had to satisfy a higher standard of a prima facie case before the Court could justify the disclosure of users’ personal information. The Court disagreed, reviewing cases from other jurisdictions and concluding that even in the US, where a nominal prima facie standard was required, it was unclear if that standard was maintained in practice.

Slaying the Troll?

Prothonotary Aalto’s decision contains a review of case law from the US and the UK, which notes the shortcomings of judicial practice in jurisdictions where open-ended orders allowed the applicants to use the orders unfairly, by sending misleading letters to persons suspected of infringement. These letters, among other things, suggest that liability is a foregone conclusion and extort settlements from the recipients with no intention of pursuing further legal action on the part of the applicant.

In order to avoid similar abuses, this decision holds that courts should balance the privacy rights of potentially innocent users against the right of copyright holders to enforce their rights. To maintain this balance, where evidence suggests that a copyright holder is motivated by an improper purpose, the Court ought to subject the order to more stringent conditions. In some cases, where there is compelling evidence of improper motive, the Court may deny the motion entirely.

In this instance, the Court held that Voltage had met the lower bona fide standard, and allowed the order – however, it made the order subject to certain conditions meant to curb potentially abusive practices, including:

  • making the order subject to oversight by a Case Management Judge;
  • ensuring that the letter contains no inappropriate language by subjecting a draft demand letter to review by the Court;
  • requiring a statement in the letter that liability for infringement has not yet been established and recommending that recipients seek legal assistance;
  • requiring reimbursement of the reasonable costs and disbursements of TekSavvy incurred in providing the necessary information; and
  • limiting the information provided to the name and address of the IP addresses implicated in file sharing of the protected works (and not the personal phone numbers or email addresses of such individuals).

Attaching similar conditions to Norwich Orders may well render large-scale actions against individual non-commercial infringers economically unfeasible. In any case, it will be interesting to see how the enforcement tactics of rights-holders develops over the next few years, in the context of a Court cognizant both of the extent of internet piracy and the increasing importance of preserving online privacy.

David Bowden is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

  1. I think the Federal Court’s decision is a victory in terms of deterring “copyright trolls”. The carefully crafted conditions imposed on the Order, in conjunction with the statutory damages cap for end-user liability in Canada, reduce the desirability of large-scale enforcement measures targeted at allegedly infringing non-commercial actors.

    As you note, aside from the issue of copyright trolling, the decision also has interesting implications for online privacy. By recognizing the need to balance the privacy rights of users with the interests of copyright holders, the door has been opened for future courts to potentially limit the rights of copyright owners in order to protect the privacy rights of Canadians. When juxtaposed against copyright, I think it’s essential that privacy be understood as more then merely an individual interest of the end user. It is a societal value of fundamental importance to the democratic political system, supporting a myriad of other democratic ideals, including autonomy, free speech, equality, and security.

    While the right to privacy is not absolute, and should be balanced against other collective needs and values, the significance of privacy as an integral element of a liberal democracy may justify limitations on the enforcement abilities of copyright holders.

  2. Thank you, Harriette. I agree that this decision shows the extent of judicial concern regarding online privacy in Canada. While the decision did not go as far as the US case law (nominally, at least) in requiring a prima facie case before allowing an order, privacy is increasingly an important policy element which can affect litigation outcomes.

    The SCC recently affirmed that legislation which attempts to protect the control of person information enjoys “quasi-constitutional” status in Canada (in Alberta (Information and Privacy Commissioner) v United Food and Commercial Workers, Local 401 ) The Court indicated that such legislation was important for precisely the reasons you identified – privacy is fundamental for the preservation of a free and democratic society.

    I also think that the decision will leave open certain enforcement methods to rights holders which more effective safeguard privacy, in particular using the notice and notice system to contact persons involved in infringing activities without first obtaining an order that the identities of such persons be disclosed by an ISP.

  3. I am of the view that this case affirms positive steps toward balancing the interests of copyright holders with the rights of end users (in respect of the ability to access works and their interests in privacy and data protection). The notice and notice policy adopted in Canada appears to be a satisfactory way of alerting users of a potential legal issue and if the behaviours are not modified, it is up to the plaintiff (copyright owner) to seek an order in compliance with the Norwich criteria if the plaintiff wishes for ISPs to disclose personally identifiable information about customers for the purpose of pursuing litigation.

    A curious point that I am wondering is why Voltage via Canipre was targeting TekSavvy customers exclusively? Conceivably, the list of IP addresses that were tracked for allegedly downloading the copyrighted material would have included potential infringers from other ISPs, not just limited to the chunk of IP addresses specifically allotted to TekSavvy customers. Did other ISPs just offer up the information or were they not approached for personally identifiable user information? The former action does not appear proper as the BMG case, having a similar set of facts to the TekSavvy/Voltage case, did apply Norwich criteria in 2005 and so the other ISPs should have acted as TekSavvy has and waited for a court order. The principle of net neutrality posits that all data on the Internet should be treated equally, (i.e. not discriminate differentially by user), but that is what Voltage appears to have done. If a claim was not brought against alleged copyright infringers across all ISPs with respect to the work in question it may go to whether Voltage indeed brought forward a bona fide claim at all. If it is believed that TekSavvy is acting more as an enabler of infringement due to their advertised unlimited bandwidth, then why were proceedings not taken against them for intermediary liability rather than limiting the scope toward end user liability? However, I do not believe that the mere fact of providing unlimited bandwidth should unjustly label TekSavvy as acting primarily for the purpose of enabling acts of copyright infringement (Copyright Act ss 27(2.3) and (2.4)). This is likely why intermediary liability is not being pursued by Voltage.

  4. Thank you, Eliot.

    I agree with you that this decision is an important step forward in the balancing of the legitimate interests of rights holders with the reasonable expectation of privacy on the Internet.

    However, I must disagree with some of the comments you made in your second paragraph, specifically as they relate to the rights and obligations of Voltage, and the conduct of the ISPs involved (or not involved) in the current action.

    It must be remembered that TekSavvy was not the defendant in the action, nor is TekSavvy (or any other ISP) alleged to have committed any actionable wrong under the Copyright Act. Importantly, this was a Norwich Order, which is based not on the wrongdoing of a party implicated in a proceeding, but rather possession of relevant information by a non-party to a proceeding which is otherwise unavailable to a plaintiff. The alleged infringers, who have accounts with the target ISP, are the subject of any ultimate allegation of infringement made by Voltage.

    Nor does the principle of net neutrality restrict Voltage’s right to pursue an action against these individual infringers, or to seek a Norwich order requiring TekSavvy to disclose relevant information. Net neutrality is an obligation imposed upon Canadian carriers, not rights holders, under s. 36 of the Telecommunications Act, which restricts a carrier from controlling the content or influencing the meaning or purpose of telecommunications carried by it to the public. As Voltage is not a carrier, these obligations cannot be read to influence the content of the rights in the movies owned by Voltage.

    Further, there is no information about the conduct of other ISPs – such as Bell Canada or Rogers – provided in the proceedings. I agree that if these ISPs had offered up information about their account holders to Voltage in response to an inquiry by the movie studio, they may have violated relevant privacy statutes – but in the current scenario there is no indication that they have.

    Finally, I’d caution against reading down the extent of Voltage’s rights because they chose to pursue on order for disclosure against TekSavvy, rather than against other ISPs which operate in Canada. Even if the decision was strategic on the part of Voltage, it’s no answer to Voltage’s claim that account holders of services provided by other carriers may similarly have committed copyright infringement. Characterizing this order as sought in bad faith on this basis would suggest that only the wealthiest plaintiffs, capable of seeking orders for comprehensive disclosure of all alleged infringers across all Canadian carriers could qualify as having a bona fide intention to pursue litigation.

    It’s telling that TekSavvy itself took no position on the motion – the motion was instead opposed by CIPPIC, a public interest group on behalf of Canadian privacy rights. Common carriers currently like to play the role of the “dumb tube”: simple conduits through which information is passed, who carry no legal liability for the information communicated through their networks.

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