We have received many inquiries over the last few weeks from people who have been served a Statement of Claim summoning them before the Federal Court of Canada, more precisely, as a defendant in a simplified action for alleged copyright infringement of cinematographic work through the peer-to-peer file transfer protocol called BitTorrent® (”BitTorrent”) (together: a “Statement of Claim”).
The contents of a Statement of Claim might seem intimidating for many as it contains technical and legal allegations drawn up in English only. This publication aims to provide general information regarding (i) how you were personally identified by the plaintiff; (ii) the nature of the allegations in a Statement of Claim and iii) the steps that generally need to be taken after a Statement of Claim is served.
How did the plaintiff identify you personally?
To answer this question, it is necessary to understand how BitTorrent works, and more generally, the peer-to-peer data transfer protocols. Generally speaking, BitTorrent applies to a digital platform that allows to share computer files between internet users. This sharing is made possible when a user first uploads a complete computer file to the platform. The uploaded file then becomes accessible to all platform users who can download it, in whole or in part, on their own equipment. As soon as a user begins to download the file in question, this user then makes the downloaded material (or part of it) accessible to other users.
Together, all users sharing the same file are called a “swarm”. Usually, the number of users in a swarm is inversely proportional to the time needed to complete the download of the file in question; therein lies the main appeal of BitTorrent and other peer-to-peer data transfer protocols. Additionally, each user in a swarm can consult the IP address (”Internet Protocol”) of other users in this same swarm. Consequently, it is possible that the plaintiff who served you a Statement of Claim obtained your IP address after the list of users in a swarm, created to share a file that gives access to content protected by copyright, was monitored.
Now, you may wonder how this plaintiff could come to identify you personally based on your IP address. In order to do this, the plaintiff may have addressed the Federal Court of Canada to obtain a “Norwich”1 order, i.e., an order requiring that an Internet Service Provider communicate the name and home address of each of its subscribers associated to one or the other IP addresses obtained by the monitoring activities hereabove mentioned2. In fact, copy of this order is probably joined to the pile of document attached to the Statement of Claim you were served.
Rest assured, however, “Norwich” orders issued in such a context by the Federal Court of Canada are subject to strict confidentiality rules.
What is the nature of the allegations found in a Statement of Claim?
The plaintiff’s main purpose in a Statement of Claim, in theory, is to obtain an order from the Federal Court of Canada under which the defendants are obligated to indemnify the plaintiff for the prejudice allegedly suffered by the supposed infringement of their copyrights which arise from the unauthorized sharing of a cinematic work through BitTorrent.
More specifically, the plaintiff accuses the defendants of infringement of their copyrights in said cinematographic work by communicating the work to the public by telecommunication3, i.e., by giving other BitTorrent users the opportunity to download and upload it in turn. Alternatively, the plaintiff claims that the defendants authorized4 the communication of the work in question to the public by telecommunication by making their Internet connection available to a third party who used it to download, and upload, said work using BitTorrent.
On a practical standpoint, the plaintiff aims for an out of court settlement with as many defendants possible. The plaintiff’s is mainly motivated by the fact that they are uncertain that they will be able to satisfy their burden of proof, i.e., convince the court, on a balance of probabilities, that each defendant i) has communicated the work protected by copyright to the public by telecommunication using BitTorrent, or ii) authorized the communication of this work to the public by making their internet connection available to a third party who used it to download and upload said work using BitTorrent5. This uncertainty also applies to defendants who failed to respond to a Statement of Claim by filing their statement of defence with the Registry of the Federal Court of Canada in a timely manner6.
Moreover, even if the plaintiff managed to convince the court that their copyrights were infringed by a defendant, it is up to the plaintiff to demonstrate the extent of the damages suffered from this infringement. If these damages are non-existent or cannot be adequately quantified, it is highly likely that the plaintiff will opt for the recovery of damages pre-established by the Copyright Act, which vary from $100 to $5,000 per defendant in the case of infringement committed for non-commercial purposes7. The determination of the exact amount for damages against a defendant is left to the discretion of the court, which considers all the relevant circumstances of the case, including:
«38.1(5) […]
(a) the good faith or bad faith of the defendant;
(b) the conduct of the parties before and during the proceedings;
(c) the need to deter other infringements of the copyright in question; [and] (d) in the case of infringements for non-commercial purposes, the need for an award to be proportionate to the infringements, in consideration of the hardship the award may cause to the defendant, whether the infringement was for private purposes or not, and the impact of the infringements on the plaintiff. »8
The plaintiff’s strategy is based on the idea of involving as many people as possible in an inherently complex and intimidating legal proceeding, regardless of the value of the evidence held against each defendant. This strategy, which is very widespread and severely criticized9 in the United States, has appeared in Canada where legal proceedings based on this strategy are increasing every year. Although it is justifiable for the owner of copyrights in a work to protect the assets of their intellectual property portfolio, we consider it regrettable that the mechanisms provided for in the Copyright Act are used for more mercantile than substantive purposes.
What steps generally need to be taken after a Statement of Claim is served?
A defendant has 30 days after the day on which the Statement of Claim is served to serve and file their statement of defence10. Any defendant who fails to complete these steps in the time set out is at the risk of being ruled against by the Federal Court of Canada by default proceedings.11
After serving and filing a statement of defence, a defendant usually receives additional documents pertaining to the alleged copyright infringement as well as a written settlement offer made pursuant to Rule 420 of the Federal Courts Rules12. The preferred approach then becomes dependent on subjective elements that vary according to each defendant. Some prefer to settle in order to avoid the stress and inconvenience inherent to being involved in a legal process, while others adamantly refuse to pay any sum in connection with the allegations made in the Statement of Claim they were served.
In any case, we strongly recommend that you contact a lawyer specializing in intellectual property to benefit from professional assistance in the steps you will take regarding a Statement of Claim. Your lawyer can help identify the weaknesses in the plaintiff’s case and, if necessary, negotiate an appropriate out-of-court settlement.
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If you have any questions regarding the content of this article, please contact the undersigned at the following email address: adam.ansari@cainlamarre.ca.
Nothing in this article may be construed as legal advice.
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[1] “Norwich“ orders are named in reference to the plaintiff’s commercial name in a decision rendered by the House of Lords in the U.K.: Norwich Pharmacal Co. & Others v. Customs and Excise Commissioners, [1974] AC 133 (R‑U, HL).
[2] Rogers Communications Inc. v. Voltage Pictures, LLC, 2018 SCC 38, par. 18-19.
[3] Copyright Act (R.S.C., 1985, c. C-42), par. 3(1)f), s. 2.4(1.1) and par. 27(1).
[4] Id., par. 3(1) and 27(1).
[5] Voltage Holdings, LLC v. Doe#1, 2022 FC 827, par. 35 (direct infringement) and 62-63 (indirect infringement).
[6] Id., par. 1. In this case, the Federal Court of Canada was seized of a motion seeking a default judgment against defendants.
[7] Copyright Act, prec., note 3, par. 38.1(1)b).
[8] Id., par. 38.1(5).
[9] See Matthew SAG & Jake HASKELL, “Defense Against the Dark Arts of Copyright Trolling”, dans Iowa Law Review, vol. 103:571, 2018.
[10] Federal Courts Rules, SOR/98-106, s.204(1)a).
[11] Id., s. 210(1).
[12] Id., s. 420(1). This is a formal offer filed in the court record which allows the plaintiff to obtain costs (legal fees) up to the date when the Statement of Claim was served, and double the costs incurred after, to the extent that both (i) the final judgment obtained, if any, is as favorable or more favorable than the offer made and (ii) such an offer was declined by the defendant in question.
