U.S. companies have discovered there is money to be made, at least potentially, in suing Canadians for alleged copyright infringement. Now this practice may become more common and more contentious as the issue of reverse class action lawsuits are being debated in our courts.
In a recent article on the issue, lawyers at McInnes Cooper in Halifax noted that Hollywood production studios are suing hundreds of people every day in Canada, accusing them of illegally sharing and downloading their copyrighted content from the Internet. There is legal ground for the claims. The federal Copyright Act gives owners exclusive rights over the reproduction of their work. Unauthorized reproduction constitutes copyright infringement. That includes downloading movies, for example, from the Internet.
David Fewer, University of Ottawa
“Plainly there is some bad faith in at least some of the actions,” he added. “Some lawyers have been subsequently disbarred.”
The disdain with which the issue is viewed is evident in the term used to describe lawyers and firms, primarily in the U.S., who target Canadians and other individuals: copyright troll. While there may be a legal, if not an ethical, case for the claims, for clients that point may be moot. “The emergence of lawsuits, including reverse class actions, are a significant issue,” said Michael Geist, a law professor at the University of Ottawa. “Many recipients are frightened by these claims, even in instances where they believe the claim may be in error.”
Both fear and practicality may persuade many Canadians who receive a statement of claim to settle. It is important for lawyers to lay out the options and determine the client’s objectives, said Fewer. “Some are offended and want to fight. Some can’t sleep and just want this to end.”
Either way, cost is an issue. The offence, real or otherwise, calls for statutory damages, which usually range from $100 to $1,000. “The bigger risk is the legal cost of defending such an issue,” said Fewer. “Copyright trolls are monetizing fear and uncertainty in the justice system.”
Michael Geist, University of Ottawa
As a first step, it is important to determine whether the plaintiff is registered for business in Canada. If not, ask for security for costs, said Fewer. “If you show you are a bother, this reduces the risk of litigation. Any cost to them eats away at profit.”
A second option is negotiation, he noted. Is there any merit to the claim? If, as usual, profit is driving the claim, the plaintiff may be willing to take less money for less bother.
There is power, and more profit, in numbers. Many American companies, including movie studios, are now launching reverse class action lawsuits, which effectively bring together hundreds or even thousands of claims in one suit.
Because it is not known in advance who the defendants may be, companies head to court to compel Internet service providers to reveal the name of account holders associated with the alleged copyright infringement. A statement of claim is then sent to the individuals in question.
At present, Voltage Pictures, makers of The Hurt Locker, winner of six Academy Awards, is looking for legal permission to sue 55,000 Canadians through a reverse class action. That request will not be as profitable perhaps as originally anticipated. Last year, the Supreme Court of Canada in Rogers Communications Inc v. Voltage Pictures LLC 2018 SCC 38 ruled that Rogers is entitled to be reimbursed for the reasonable costs associated with disclosing the names of its account holders.
Next up: certification of the reverse class action. Fewer believes it is “extremely unlikely” the action will be certified in Canada. However, he noted, if this happens, “we will see more of these cases.”