Sweeping the Internet seas of pirates
Brisk business for companies tasked with rooting out infringement
At TekSavvy Solutions Inc.'s office in Chatham, Ont., there's a woman who comes to work each morning to help movie studios accuse the company's customers of crime. 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-and-notice 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 antipiracy firm CEG TEK that shows a dramatic reduction in piracy since notice-and-notice 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 with 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 noticeand-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 successfully 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 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-andnotice 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.”
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 downloads,” he said. “They can continue to seek more payments.”
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 then-minister James Moore said the ministry had spoken with CEG TEK to “better inform them what the rules are.”