Voltaje Holdings is one of many film companies, mostly American, that have tried to turn piracy into profits over the past 15 years. The lawsuit the company filed in Canada is broadly the same as others filed elsewhere, but the same cannot be said about the outcome.
Background
In 2017, piracy monitoring company Maverickeye collected IP addresses of BitTorrent users sharing the Voltage-owned sci-fi movie 'Revolt.' Canada operates a regime called "notice and notice", whereby Voltage identified the ISPs related to the IP addresses and warning notices were sent to the relevant subscribers. The second notices were sent after Maverickeye found the same IP addresses sharing the same job a week or more later.
In March 2018, Voltage filed a statement of claim against 110 'Doe' defendants, identified only by their IP addresses. Voltage subsequently obtained the so-called Norwich order forcing ISPs to reveal the names and addresses of subscribers.
Voltage called a subset of those subscribers "the worst of the worst," and when they did not respond, the company sought a default judgment in the Federal Court of Canada.
Judge Angela Furlanetto agreed that the defendants were in default, but since Voltage only presented evidence based on IP addresses, questions remained about who had actually shared the film.
The judge said there was insufficient evidence to show a direct link to the subscriber or draw an adverse inference. Voltage argued that if the subscriber was not the infringer, the fact that it had already received warnings under Canada's "notice and notice" regime, among other things, meant that it should be held responsible for "authorizing" the infringement carried out. By others.
In June 2022, Judge Furlanetto default judgment rejected but also refused to dismiss the case. Voltaje was given more time to present evidence supporting direct infringement or authorization, but the company took its case to the Federal Court of Appeals.
Grounds for Voltage Appeal
In its 36 page memorandum. Filed in November 2022, Voltage outlined two legal theories; Either the payers pirated the movie themselves (direct infringement), or they authorized someone else's direct infringement by allowing them to continue pirating the Voltage movie, despite receiving warning notices from their ISPs.
Arguments were heard on March 28, 2023, and three appeals court judges (Judges Donald J. Rennie, David W. Stratas, Wyman W. Webb) handed down their ruling last week.
The ruling says the appeal addresses two issues: the jurisprudence on what constitutes direct infringement and authorization of infringement, and the burden of proof and the circumstances under which an adverse inference can be drawn.
โThese issues are closely interrelated. The jurisprudence regarding copyright determines the minimum evidentiary requirements to establish the types of alleged infringement; โIn other words, case law limits the extent to which an adverse inference can be drawn in the context of online copyright infringement,โ the ruling reads.
Sentence guided by Supreme Court ruling in 2022
According to Voltaje, once it presented all the โtechnologically availableโ evidence to the Court, the โtactical burden of proofโ shifted to Internet subscribers. This effectively meant that they had to prove that they were not the offender. Regarding his authorization claims, Voltaje said Judge Furlanetto was wrong to insist on more evidence; The fact that subscribers received notices but could not control their Internet connections was enough.
The ruling first addresses the claims for authorization, guided by a Supreme Court decision delivered in 2022 in Society of Composers, Authors and Music Publishers of Canada v. Entertainment Software Association.
โThe Supreme Court upheld the Copyright Board's determination that 'it is the act of publishing [the work] that constitutes authorization" because the person who makes the work available "controls or intends to control the right to communicate it" and "invites any person with Internet access to communicate the work to him or her." The authorizer is the person who directly interacts with material protected by copyright,โ the ruling clarifies.
As a result, the Court of Appeal says that whoever used subscribers' Internet connections to make the Voltage movie available for download authorized the infringement. The Supreme Court determined that an authorizer allows reproduction, but Voltaje claims that an authorizer is someone who allows someone to allow reproduction.
The difference of opinion would prove fatal.
Collisions in copyright law
Judge Rennie says Voltaje's appeal does not demonstrate โany reversible errorโ in the Federal Court's decision. Additionally, Voltaje's arguments about authorization are โinconsistentโ with the Supreme Court's 2022 decision. Voltage's direct infringement allegations also have problems.
โWhile accepting that the persons using each respondent's IP address had infringed the appellant's copyright by uploading the Work, the Federal Court concluded that it could not conclude at this time that the respondents were themselves those individuals.
individuals. I agree,โ Judge Rennie writes.
On the issue of the subscriber's lack of defense, the judge agrees that it can give rise to an adverse inference. However, just because a defendant is found to be in default at an early stage, it does not necessarily follow that an adverse inference must be drawn at the same stage.
โIf the fact that a defendant was in default automatically permitted adverse inferences in the second stage of proof for default judgment motions, plaintiffs in ex parte default judgment motions would not need to present any evidence to the court to have success. . Some evidence is required,โ Judge Rennie continues.
Indeed, the Federal Court held that โmore is needed than the mere assertion that a subscriber is, by default, the user responsible for the infringement.โ The Court of Appeal notes that, as the Court of Appeal notes, Voltage did not provide sufficient evidence, so no adverse inference could be drawn.
The Court of Appeal tightens the noose
Voltage's reliance on violation warnings to show that subscribers exercise no control (over Internet connections and connected devices) fails.
As made clear in the Supreme Court decision, authorization depends on the alleged authorizer's control over the person who committed the resulting violation; it does not depend on the control of the alleged authorizer over the provision of his technology.
Additionally, to establish infringing activity, there must be evidence to demonstrate what the activity does. to the work in question.
โPosting a work online and inviting others to view it compromises the author's right to authorization; However, sharing Internet access after receiving notices of alleged infringement does not help matters. to the work in question and, therefore, does not compromise any copyright granted exclusively to the author,โ notes the Court of Appeal.
Conclusion: Voltage's appeal is dismissed
From the ruling: โIn the factual matrix of this case and at this relatively early stage of this case, the defendants' lack of participation in the litigation does not compensate for the plaintiff's lack of evidence.
"The Federal Court was not required to draw an adverse inference at this stage of the litigation simply because the respondents, by their silence, had not presented sufficient evidence to refute the appellant's allegations," Judge Rennie concludes.
For these reasons, Judges Rennie, Stratas and Webb dismissed the appeal.
The full ruling is available here (pdf)
