Court Orders TekSavvy to Give up Customer Names but Stifles Profitability of Copyright Trolling

An independent internet service provider will have to give up the names and address of 2,000 customers who are alleged to have illegally downloaded movies.

In a decision issued on Thursday, Canada’s Federal Court ruled that TekSavvy will have to release the information on the customers, to Voltage Pictures but the court set down new rules that appear intended to discourage similar suits in the future.

Voltage Pictures, maker of the film The Hurt Locker, among others, filed the lawsuit in late 2012, demanding the names of the TekSavvy cusomters all of whom are in Ontario, who it claims were involved in sharing films through BitTorrent. The IP addresses were gathered by Canipre, a copyright enforcement company primarily known for its own violations of copyright law.

Voltage, which has pursued similar actions in the United States, has been accused of being a “copyright troll,” and that’s an accusation the court appears to have taken very seriously.

The court’s ruling begins with a quote from American lawsuit: “the rise of so-called ‘copyright trolls’ – plaintiffs who file multitudes of lawsuits solely to extort quick settlements – requires courts to ensure that the litigation process and their scarce resources are not being abused.”

In his ruling, Justice Kevin R. Aalto cited several cases from both the U.S. and the United Kingdom – including one where a Maine court “strongly criticized Voltage for it ‘underhanded business model’” and noted that some of those decisions had been abused “to coerce innocent people into settlements.”

As a result Aalto set out a strict set of rules to “ensure that Voltage does not act inappropriately in the enforcement of its rights to the detriment of innocent internet users.”

While TekSavvy will be required to release the names and addresses of the customers associated with the IP addresses in question, it will not have to release any other contact information. Additionally, Voltage will have to pay TekSavvy any “reasonable” legal or administrative costs it incurs in the process of releasing that information – before the names are given up.

Voltage will also be required to send a copy of the court’s ruling along with “any correspondence” it has with the TekSavvy subscribers, additionally that correspondence will be required to “clearly state in bold type that no court” has ruled the subscriber has infringed on Voltage’s copyrights and that the subscriber is not “liable in any way for payment of damages.”

The wording of those letters will also have to be approved by a judge before they can be sent out.

The court also set limits on what Voltage can do with the information it gets from TekSavvy. The company is only allowed to use it to further claims related to this specific suit. It is also forbidden form releasing any of the information to third parties and from sharing it publicly or with the media.

With damages for non-commercial copyright violations in Canada capped at $5,000, privacy advocates say they’re pleased with the decision
“The safeguards are significant, since they ensure the active involvement of the courts in the sending of demand letters and likely eliminate unwarranted scare tactics about potential liability,” Michael Geist, a law professor at the University of Ottawa and the Canada Research Chair in Internet and E-commerce Law, wrote on his blog. “Moreover, given the cap on liability and the increased legal costs the court involvement will create (not to mention paying legal fees for the ISP), it calls into question whether copyright trolling litigation is economically viable in Canada.”

Geist is also the founder of the Canadian Internet Policy and Public Interest Clinic, a legal clinic at the U of O which had intervenor status in the case on behalf of the unknown defendants.

This isn’t the first time Voltage has filed a lawsuit like this in Canada. In 2011 it obtained customer names from ISPs Cogeco, Videotron, and Bell. While it sent over a dozen letters threatening lawsuits if it wasn’t paid $1,500, that case was abandoned in March 2012.