WHICH CANADIANS ARE THE BIGGEST PIRATES?

HOW THE NEW ONLINE COPYRIGHT LAWS ARE AFFECTING CANADIANS WHO DOWNLOAD ILLEGALLY

At TekSavvy Solutions Inc.’ s office in the small southwestern Ontario town of Chatham, there’s a woman who comes to work each morning to help movie studios accuse the company’s customers of breaking the law. Every day, the employee has to process about 5,000 copyright infringement notices forwarded to TekSavvy by studios and other copyright holders that monitor the Internet for piracy.

She runs them through a software system, which the Internet service provider had to custom build, to ensure the text of the notice complies with the law and matches the IP address with the right customer. The software system only automates some of this task, so she still has to review each notice.

The whole process has become an expensive headache for a small company with 250,000 customers and about 500 employees, said Bram Abramson, TekSavvy’s chief legal and regulatory officer. The software system alone cost about $ 500,000 to set up, and the company has spent an additional $ 100,000 over the course of the past year to keep up with the notices.

“It’s a source of much frustration for us,” Abramson said. “It’s a whole system that had to be built. It’s not like you can buy that off the shelf.”

Accusing your customers of theft is also not great for business.

But under a law popularly known as notice- andnotice that went into effect in January 2015, ISPs such as TekSavvy are required to forward copyright infringement alerts to customers suspected of illegally downloading copyrighted material like movies, television shows and music.

Copyright holders, of course, have enthusiastically participated, as the thousands of notices TekSavvy has to process daily demonstrate. And proponents say the requirement to forward notices to suspected pirates is reducing online copyright theft.

In May, a coalition of small film producers called the Internet Security Task Force called on the U. S. government to follow Canada’s model, citing data from anti- piracy firm CEG TEK that shows a dramatic reduction in piracy since notice-andnotice went into effect.

CEG TEK said illegal file sharing dropped by an average of 61 per cent in January among ISPs that consistently comply with the law compared to the same month a year earlier, based on an analysis of the data using fixed variables to compensate for the constantly changing catalogue of content it monitors. The company also found a correlation between how compliant an ISP is with the requirement to send infringement notices and how much piracy went down.

“The numbers don’t lie; our data has shown time and time again, both in Canada and other territories, that CEG TEK’s model is extremely effective,” chief operating officer Kyle Reed said in an email.

Privacy and Internet freedom advocates, on the other hand, say some copyright holders are using the notices to pass on misleading information and make extortionary demands.

Less than a week after notice- and- notice went into effect, Internet law and copyright expert Michael Geist posted an infringement notice submitted by a reader of his blog that said the reader “could be liable for up to $ 150,000 per infringement” — 30 times more than the actual maximum Canadian penalty of $5,000.

Rightscorp, the firm that allegedly sent the notice, issued a statement in response saying it “has never and will not collect fees from Canadian citizens by asserting violations of U.S. law.”

Regardless of what happened in that particular instance, there are many examples of notices posted online that ask suspected pirates to pay a settlement fee of a few hundred dollars to avoid being sued.

TekSavvy, like many ISPs, has started sending a cover letter along with infringement notices in an effort to clear a few things up.

For one thing, the copyright holder sending the notice — for example, a film studio — only knows the IP address associated with the suspected piracy, not the customer’s name. To get a name, the studio would have to take TekSavvy to court, then it would have to suc- cessfully sue the customer by convincing the court he or she was the one doing the illegal downloading and not, say, a neighbour hacking into the family’s Wi- Fi network.

That’s a lot of hoops to jump through. So many that it has never actually happened.

In February 2014, a court ruled that TekSavvy must disclose the names and addresses of about 2,000 customers suspected of illegally downloading films by Voltage Pictures, which made The Hurt Locker, Dallas Buyers Club and Don Jon. But Abramson said the studio never actually followed up and asked for the contact details.

Instead, many copyright holders appear to have decided it’s easier and cheaper to use notice- and- notice to ask customers for settlements. Abramson said he thinks there should be rules about what copyright holders can put in those notices.

“We need to pass regulations clarifying that these are informational notices, not opportunities to seek the personal information of the end-users or induce them to pay a fee by scaring them,” he said. “That’s not what this regime is for.”

The online bulletin board Reddit has many examples of Canadians expressing fear and confusion after receiving a copyright infringement notice.

“What the heck do I do? Pay t he f i ne or leave it be?” a University of British Columbia student wrote last March after receiving a notice with a settlement demand of US$ 150. “I believe that ISPs require a court order before handing over your identity to people like this, but can the fact that I checked my case number on their website at all reveal my personal information/ identify me?” wrote another person posting in Reddit’s Canada section in September.

Geist, the Internet law expert, said getting suspected pirates to reveal their personal information is exactly what copyright holders are trying to do when they ask people to call or click a link in their infringement notices. He said he often hears from people who have been scared into such action and then realize they may have just given the copyright enforcement company more ammunition.

“If they’ve got an identifying name or an IP address and they’ve got someone who’s been willing to pay once, the fear is they will then use that to try to identify if there are other instances of d o wnloads,” he said. “They can continue to seek more payments.”

Geist said many copyright holders are using noticeand-notice the way it was intended, informing suspected pirates that what they’re doing is against the law and directing them to places where they can purchase or stream the material legally.

But because the law only lays out what the notices must contain, without making any rules against including misleading information, it leaves the door open for copyright holders to tr y to make back some of the money lost from piracy.

Last spring, the Ministry of Industry responded to reports of such settlement demands by clarifying that Canadians are not obligated to respond to them or pay up. A spokesman for thenminister James Moore said the ministry had spoken with CEG TEK to “better inform them what the rules are.”

Reed, the chief operating officer of CEG TEK, said his firm did have a conversation with the Ministry of Industry, but said it never suggested the company was acting improperly. He said the option to present an opportunity to settle in the infringement notices is in everyone’s best interests, since it saves the courts from being overrun with piracy lawsuits.

“For anyone in the government to state that settlement offers cannot or should not be made until an action has been filed in court is to put an onerous burden on courts and on the parties that might otherwise have resolved the claims at issue without having to resort to court action,” Reed said in an email.

Asked where the new Liberal government stands on the issue, a spokeswoman for the renamed Ministry of Innovation, Science and Economic Development said in an email that minister Navdeep Bains “will continue to meet and work with industries and stakeholders to see how Canada can improve its policies and programs, including on critical framework policies, such as copyright.”

Barry Logan, managing director at Montreal- based anti- piracy firm Canipre, which offers a similar service to CEG TEK and represents several of Canada’s leading film companies, has also had a busy year. He said Canipre collected more than one million case files in 2015, each representing a person the firm thinks could theoretically be sued for pirating its clients’ work.

While CEG TEK reported a dramatic reduction in piracy in January 2016 compared with the same month a year ago when notice- and- notice first went into effect, Canipre saw a year- over- year increase.

Canipre collected more than twice as many case files last month compared with the same month the year before, although it’s hard to draw conclusions about what that means since it also increased the number of film titles and ISPs it monitors.

There has also been a drastic increase in the popularity of legal streaming services such as Netflix, Crave, Shomi and Spotify in the past year. Logan said pirated streaming has become more popular and it’s harder for firms like his to track those services than file sharers using BitTorrent.

One t hing is certain: There’s still plenty of illegal uploading and downloading going on, and Canipre is still helping its clients send out plenty of infringement notices, both the informational type and settlement requests.

From Logan’s perspective, there’s nothing wrong with asking suspected pirates to pay up.

“I don’t believe rightsholders are shaking anybody down. They’re trying to protect their investments ... they have every right to,” he said. “They’re giving you an option to compensate them for theft.”

‘I DON’T BELIEVE RIGHTS-HOLDERS ARE SHAKING ANYBODY DOWN. THEY’RE GIVING YOU AN OPTION TO COMPENSATE THEM FOR THEFT.’ — BARRY LOGAN, CANIPRE