The Federal Court of Appeal has made it more difficult to assert rights against defendants alleged to have made copies of the films available using BitTorrent software. BitTorrent is a protocol for distributing files on a peer-to-peer network. Voltage Holdings, LLC v. Doe #1 .
The Motion for Default Judgement
Voltage Holdings, LLC (Voltage) a movie production company, alleged that a mass group of internet subscribers used or authorized for use the BitTorrent peer-to-peer network to unlawfully make its science-fiction film, Revolt available for distribution. Voltage sought default judgment against thirty internet subscribers as well as statutory damages and costs from each. Voltage Holdings, LLC v. Doe #1 2022 FC 827
Warning notices were sent to the internet subscribers through the notice and notice regime, advising that infringing activity had been detected at the internet subscribers’ IP addresses. If a second instance of infringement occurred at the same IP address within seven days of the first notice, Voltage sent a second warning notice to the subscriber at the offending IP address. Voltage subsequently obtained Norwich orders requiring ISPs to provide it with information about the internet subscribers’ identities based on the IP addresses at which the infringement was occurring. Votlage then served the respondents, a subset of all the internet subscribers who had received two warning notices, with a statement of claim. No defences were filed.
The judge said that to establish authorization, consideration must be given to not only whether each defendant in default knew about the alleged infringing activity, but also the relationship and extent of control over the user and whether the internet subscriber had some ability to prevent the alleged infringement. Voltage had provided no evidence relating to this issue. The Judge concluded there was insufficient evidence to grant default judgement and ordered that the action proceed to trial.
The Appeal to the Federal Court of Appeal
The Appellate Court first reviewed the concept of authorization in copyright law. Subsection 3(1) of the Copyright Act grants a copyright owner the exclusive right to produce (or reproduce), perform, or publish their work. It also grants a copyright owner the sole right to “authorize any such acts.” Anyone who authorizes any of these expressions of the copyrighted work, absent a licence to do so, infringes the copyright owner’s exclusive authorization right. To “authorize” means to “sanction, approve and countenance”. Although “countenance” in this definition may appear to include some passivity within the scope of “authorization”, the Supreme Court has confirmed that the term “countenance“must be understood in its strongest dictionary meaning, namely, “give approval to; sanction, permit; favour, encourage.”
There are certain objective factors that, on their own, do not amount to authorizing infringement. An individual who provides the means or equipment to infringe another’s copyright has not necessarily authorized the infringement. Similarly, upon receiving a warning notice, an internet subscriber is not automatically assumed to have been responsible for the asserted copyright infringement; the mere association with an IP address is not conclusive of responsibility.
The law of authorizing infringement relies in part on a subjective standard. The knowledge someone might use neutral technology for infringing activity is not necessarily sufficient to establish authorization, and courts presume that an individual who authorizes an activity does so only so far as it is in accordance with the law. In some cases, however, a “sufficient degree of indifference” may allow a court to infer that the individual has authorized the infringement.
There was no question that the person using the respondents’ internet accounts to make the film available for download via BitTorrent was authorizing infringement. However, the appellant’s claim of authorizing infringement does not mirror this example. Voltage’s assertion that an authorizer can permit someone to permit reproduction went too far, particularly since the Act “exhaustively” sets out copyright interests.
Six weeks after the release of the motion Judge’s decision the Supreme Court of Canada released its ESA decision (Society of Composers, Authors, and Music Publishers of Canada v. Entertainment Software Association, 2022 SCC 30). The Court made it clear that authorization, in the context of online copyright infringement, is directed to and only possible regarding those who make the copyrighted material available for downloading. While the appellant argued there was either direct infringement or authorizing infringement the appellant’s arguments regarding authorizing infringement were, in essence, evidentiary arguments in support of its claim of direct infringement. The appellant’s theory of “third party authorization”—which involves a subscriber’s consent to sharing access to their internet account, and indifference to the purposes for which it is used—does not fit into the law of copyright as it is currently understood.
The Supreme Court said it was the act of posting the work that constitutes authorization, because the person who makes the work available “either controls or purports to control the right to communicate it”, and “invites anyone with Internet access to have the work communicated to them”. The authorizer is the individual directly engaging with the copyrighted material. This close relationship between the authorizer and the copyrighted material is emphasized and repeated throughout the Supreme Court’s reasons.
On the facts of the present case there will likely be instances in which the person who receives notice of a claimed copyright infringement will not have illegally shared copyrighted content online. An internet subscriber cannot be assumed to be the individual responsible for any infringing activity connected to their internet account.
The appellant’s evidence that an internet subscriber is often the individual using BitTorrent software to distribute files did not overcome the speculation required to conclude that the respondents, are the infringing internet users. It is well known that home internet accounts can be used by more than one person.
While there was evidence that linked the posting of the Film to a particular IP address, no other evidence before the Federal Court identified the respondents as the internet users who uploaded the Work. The appellant bore the burden of providing the Federal Court with this evidence. Although it accepted that individuals using each respondents’ IP address had infringed the appellant’s copyright by uploading the Film, the Federal Court found that it could not conclude that the respondents did it. The appeal was dismissed, and the case must procceed to trial.
Comment
This decision establishes two propositions based on the evidence available to the court. First, the appellant’s theory of “third party authorization”—which involves a subscriber’s consent to sharing access to their internet account, and indifference to the purposes for which it is used—does not fit into the law of copyright as it is currently understood. Second, there was no question, that the person using the respondents’ internet accounts to make the film available for download via BitTorrent was authorizing infringement. It will be up to the appellant to support its claim with the necessary evidence as the action proceeds.
If you have questions, please contact me at mckeown@gsnh.com.
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These comments are of a general nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.
A version of this article originally appeared in the Law360 Canada published by LexisNexis Canada Inc.
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