Ruling ups cost to sue online movie pirates

TORONTO • A new ruling from the Supreme Court of Canada will make it more expensive for content rights holders to sue Canadians accused of distributing pirated movies.

That could dam a torrent of lawsuits threatening thousands of individuals with $5,000 fines for sharing a single movie.

The Supreme Court of Canada sided with internet service providers in a legal battle between Rogers Communications Inc. and Voltage Pictures LLC over who should foot the bill to track down the people accused of illegally sharing movies on peer-to-peer networks like BitTorrent.

In a decision released Friday, the top court found that internet service providers are entitled to recover costs of finding and disclosing personal information.

“This is an important win for our customers and millions of internet subscribers facing open season on their personal information,” Rogers’ senior vice president of regulatory affairs David Watt said in a statement.

But the drama isn’t over. The Supreme Court ordered a lower court to set a reasonable cost — which, once determined, could make it prohibitively expensive or a bargain for movie rights holders to sue people suspected of illegal file sharing.

The legal battle stems from an attempt by Voltage, the movie production studio behind films including Dallas Buyers Club and The Hurt Locker, to launch a reverse class action lawsuit against 55,000 individuals at once.

When Voltage suspects illegal activity on an IP address, it notifies the internet service provider, who must then pass the notice to the account holder associated with the IP address.

Such notices typically warn users to stop infringing or risk facing legal action.

Rogers alone sends three million notices annually using an automated process, according to court filings.

Copyright law requires internet providers to participate in and absorb costs related to the “notice-andnotice” regime.

But Rogers appealed a Federal Court decision that found it had to pay to find an alleged infringer’s name and identity — information Voltage required to move forward with its lawsuit. Internet providers must hand over these details if rights holders such as Voltage produce court orders called Norwich orders.

But Rogers said the information is not easy to find because IP addresses are dynamic.

It argued it should be able to recoup its costs for a process that it says takes 20 to 30 minutes per instance and costs about $100 per hour.

Voltage fought the fees, which could be substantial: Identifying 55,000 subscribers at $50 apiece would cost the company $2.75 million.

The Supreme Court sided with Rogers, but it questioned how much it actually costs to fulfil the Norwich order.

It noted Rogers might already have some of the information from fulfilling its duties under the notice-andnotice regime.

Depending on the final cost, the decision could create a cost barrier for movie rights holders seeking to sue a large number of people,

IF THEY’RE READY TO PUT THEIR MONEY WHERE THEIR MOUTH IS.

given the relatively low individual damages, said James Plotkin, a copyright lawyer at CazaSaikaley LLP who has represented clients sued for infringement.

“It all depends on if they’re ready to put their money where their mouth is, frankly,” Plotkin said.

Howard Knopf, copyright lawyer at Ottawa firm Macera & Jarzyna LLC, said the decision could reduce the number of lawsuits by making it more expensive.

“It’s definitely a setback for this kind of mass litigation in Canada, and a much needed one,” Knopf said.

He noted the court stressed the importance of accurately identifying the accused infringer, who isn’t necessarily the account holder.

Tamir Israel, lawyer at the Canadian Internet Policy and Public Interest Clinic, said the bulk of the cost could still fall on internet providers if the Federal Court demands high levels of accuracy during the notice-and-notice process.

Voltage declined to comment.