Canada: Online Copyright Infringement Lawsuit Of Movie Production Company Fails For Being A Story Without A "Who"

On September 27, 2023, the Federal Court of Appeal dismissed an appeal by the movie production company, Voltage Holdings, LLC (Voltage), which sought to place liability on internet subscribers whose IP addresses had been linked to copyright infringement activities. ¹ The Court was not persuaded that the internet account holders identified through their IP addresses (the Respondents) were necessarily the direct infringers or the authorizers of the infringement of Voltage's film (the Work). Ultimately, the Court's decision turned on evidentiary issues in light of the statutory requirements for establishing the claim. ²

Facts and Procedural History

Voltage had become aware that the Work was being made available online via BitTorrent software without its consent. Upon detecting this, Voltage determined the IP addresses of the internet account holders that were uploading and copying the Work. Voltage sent warning notices to these internet users through the notice and notice regime under the Copyright Act.

Having obtained a court order to help identify the internet subscribers' identities, ³ Voltage served a statement of claim on some of the internet subscribers but none of them filed a statement of defence. Subsequently, Voltage filed a motion for default judgement claiming that the Respondents directly infringed its copyright and that they further authorized the infringement of its copyright. The motions judge dismissed the motion on the basis that Voltage did not adduce sufficient evidence to prove, on a balance of probabilities, that the Respondents committed either infringement. The Court of Appeal agreed.

On appeal, the Court of Appeal had to determine whether the Respondents directly infringed Voltage's copyright in the Work and whether the Respondents authorized the infringement of Voltage's copyright.

Did the Respondents directly infringe Voltage's copyright?

With respect to its claim that the Respondents directly infringed its copyright of the Work, Voltage argued that the Respondents uploaded the Work online, thereby making it available for others to download. Such an action would infringe Voltage's exclusive right to reproduction of the Work under subsection 3(1) of the Copyright Act. To support this claim, Voltage relied on the evidence that it had obtained through Norwich orders, linking the IP addresses where the infringing activity occurred to the Respondents' internet accounts. Voltage stated that it adduced all evidence that was "technologically possible" to obtain, and any evidentiary gaps should be filled by adverse inferences against the Respondents. Voltage argued that the Respondents' failure to respond to the notices of infringement and the statement of claim required that such adverse inferences be drawn.

The Court of Appeal acknowledged that internet users that upload copyrighted work online for the access of others are, in fact, infringing on the exclusive reproduction right of the copyright owner. However, Voltage's evidence failed to show that the Respondents, themselves, were the direct infringers of its copyright. The Court of Appeal found the evidence linking the IP addresses under which the infringing activity occurred to the internet subscribers—not the specific internet users that uploaded and copied the Work—was insufficient to hold those individuals liable.

The Court of Appeal also refused to draw adverse inferences against the Respondents and referenced the statement of the Supreme Court of Canada in Rogers Communications Inc v Voltage Pictures, LLC, ⁴ that " ^a n Internet subscriber...cannot be assumed to be the individual responsible for any infringing activity connected to their internet account." ⁵ Voltage itself had noted in its written submissions that "it is well known that home internet accounts can be used by more than one person." ⁶

Did the Respondents authorize the infringement of Voltage's copyright?

Voltage's claim that the Respondents authorized the infringement of its copyright in the Work also failed due to insufficient evidence.

Central to the Court of Appeal 's analysis was the meaning of the word "authorization" ⁷ in the context of copyright law as set out by the Supreme Court of Canada in Society of Composers, Authors and Music Publishers of Canada v Entertainment Software Association. ⁸ The Court of Appeal noted that "authorization, in the context of online copyright infringement, is directed to and only possible in respect of those who make the copyrighted material available for downloading." ⁹ Thus, the authorizers of the copyright infringement would be the specific internet users that uploaded the Work online and allowed others to further reproduce it, not necessarily the internet account holder.

Takeaway

This case shows that, in the context of online copyright infringement, copyright owners must do more than merely demonstrate a link between the IP addresses used in infringing activities and the identity of the internet account holder. Without more, courts will not assume that the internet account holder is the individual responsible for the infringing activity connected to their internet account.

Footnotes

1 Voltage Holdings, LLC v Doe #1, 2023 COURT OF APPEAL 194 Voltage v Doe .
2 Copyright Act, RSC 1985, c C-42, s 3(1).
3 Voltage previously obtained a Norwich order, which is a remedy that seeks to compel third party intermediaries such as Internet service providers (ISPs) to disclose the identity of their customers to allow copyright owners to sue them for infringement.
4 Rogers Communications Inc v Voltage Pictures, LLC, 2018 SCC 38 .
5 Voltage v Doe at para 61.
6 Voltage v Doe at para 71.
7 Voltage v Doe at paras 27-30.
8 Society of Composers, Authors and Music Publishers of Canada v Entertainment Software Association, 2022 SCC 30.
9 Voltage v Doe at para 30.

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