Voltage Holdings has lost its appeal against a 2022 Canada Federal Court decision that denied default judgment against a number of unnamed internet subscribers. Voltage claimed that the internet users, who all received two prior infringement notices, shared the movie 'Revolt' on BitTorrent or authorized someone else with access to their internet connection to do so.
Voltage Holdings is one of many mostly American movie companies that have attempted to turn piracy into profit over the last 15 years. A 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 so-called ‘notice-and-notice’ regime so Voltage identified the ISPs related to the IP addresses and warning notices were sent to the relevant subscribers. Second notices were sent after Maverickeye found the same IP addresses sharing the same work 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 later obtained a so-called Norwich order which compelled the ISPs to disclose the names and addresses of the subscribers.
Voltage labeled a subset of those subscribers “the worst of the worst” and since they failed to respond, the company requested default judgment at Canada’s Federal Court.
Justice Angela Furlanetto agreed the defendants were in default but since Voltage only presented IP address-based evidence, questions remained over who had actually shared the movie.
The Judge said that there wasn’t enough evidence to show a direct link to the subscriber or draw an adverse inference. Voltage argued that if the subscriber wasn’t the infringer, the fact that they had already received warnings under Canada’s ‘notice-and-notice’ regime, among other things, meant that they should be held liable for ‘authorizing’ infringement carried out by others.
In June 2022, Justice Furlanetto declined default judgment but also refused to dismiss the case. Voltage was given more time to present evidence to support direct infringement or authorization but the company took its case to the Federal Court of Appeal instead.
Basis for Voltage’s Appeal
In its 36-page memorandum filed in November 2022, Voltage outlined two legal theories; either the billpayers pirated the movie themselves (direct infringement), or they authorized someone else’s direct infringement by allowing them to continue pirating Voltage’s movie, despite receiving warning notices from their ISPs.
Arguments were heard on March 28, 2023, and three appeal court judges (Justices Donald J. Rennie, David W. Stratas, Wyman W. Webb) handed down their judgment last week.
The judgment says that the appeal engages two issues: the jurisprudence on what constitutes direct infringement and authorizing infringement, and the burden of proof and circumstances under which an adverse inference can be drawn.
“These issues are closely interrelated. The jurisprudence with respect to the law of copyright determines the minimum evidentiary requirements to establish the asserted types of infringement; in other words, the jurisprudence constrains the extent to which an adverse inference may be drawn in the context of online copyright infringement,” the judgment reads.
Judgment Guided By Supreme Court Ruling in 2022
According to Voltage, once it had presented all “technologically available” evidence to the Court, a “tactical burden of proof” shifted to the internet subscribers. This effectively meant they had to show they were not the infringers. In respect of its authorization claims, Voltage said that Justice Furlanetto was wrong to insist on more evidence; the fact that the subscribers received notices yet failed to control their internet connections was sufficient.
The judgment deals with the authorization claims first, guided by a Supreme Court decision handed down in 2022 in Society of Composers, Authors and Music Publishers of Canada v. Entertainment Software Association.
“The Supreme Court endorsed the Copyright Board’s determination that ‘it is the act of posting [the work] that constitutes authorization’ because the person who makes the work available ‘either controls or purports to control the right to communicate it’ and ‘invites anyone with Internet access to have the work communicated to them. The authorizer is the individual directly engaging with the copyrighted material,” the judgment clarifies.
As a result, the Court of Appeal says that whoever used the subscribers’ internet connections to make Voltage’s movie available for download, authorized the infringement. The Supreme Court found that an authorizer permits reproduction but Voltage claims that an authorizer is someone who permits someone to permit reproduction.
The difference in opinion would prove fatal.
Collisions in Copyright Law
Justice Rennie says the Voltage appeal fails to show “any reversible error” in the Federal Court’s decision. Furthermore, Voltage’s arguments on authorization are “inconsistent” with the Supreme Court’s 2022 decision. Voltage’s claims of direct infringement also run into trouble.
“Although it accepted that individuals using each respondents’ IP address had infringed the appellant’s copyright by uploading the Work, the Federal Court found that it could not conclude at this time that the respondents were themselves those particular individuals. I agree,” Justice Rennie writes.
On the question of a subscriber’s failure to defend, the Judge agrees that can lead 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 should be drawn at the same stage.
“If the fact that a defendant was in default automatically allowed for adverse inferences at the second stage of the test for motions for default judgment, plaintiffs on ex parte motions for default judgment would need to present no evidence to the court in order to be successful. Some evidence is required,” Justice Rennie continues.
Indeed, the Federal Court held that “something more is needed than the bare assertion that a subscriber is, by default, the user responsible for infringement.” Voltage failed to provide sufficient evidence, the Court of Appeal notes, so no adverse inference could be drawn.
Court of Appeal Tightens the Noose
Voltage’s reliance on infringement warnings to show subscribers’ failure to exercise control – over internet connections and connected devices – fails.
As clarified in the Supreme Court decision, authorization depends on the alleged authorizer’s control over the person who committed the resulting infringement; it does not depend on the alleged authorizer’s control over the supply of their technology.
Furthermore, to establish an infringing activity, there must be evidence to show what the activity does to the work in question.
“Posting a work online and inviting others to view it engages the author’s authorization right; however, sharing internet access after receiving notices of alleged infringement does nothing to the work in question, and does not therefore engage any copyright interest granted to the author exclusively,” the Court of Appeal notes.
Conclusion: Voltage’s Appeal is Dismissed
From the judgment: “In the factual matrix of this case and at this relatively early stage of this case, the defendants’ lack of participation in litigation does not offset the plaintiff’s lack of evidence.
“The Federal Court was not obligated to draw an adverse inference at this stage of the litigation merely because the respondents had, by their silence, not put forward sufficient evidence to rebut the appellant’s allegations,” Justice Rennie concludes.
For these reasons, Justices Rennie, Stratas, and Webb, dismissed the appeal.
The full judgment is available here (pdf)
The fact that they arrived at this by purely legal logic is surprising to me. They never even touched on the fact that IP is not ID. Not all but some ISPs assign IP dynamically, many persons can hold an IP over a relatively short period of time. They sent this letters to the ISPs and considered some imaginary person served a notice. Then they wanted the judge to fail against, imaginary people who they didn't know who they were. I don't even know what kind of precedent or case they wanted to make here. Are they going to send the routers to jail?
Yeah, the ISPs will have logs of who was assigned what IP and what kind of data was pushed through that IP at any given time, so as others have said, dynamic, static, doesn't matter (let's shelve IP spoofing and other www shenanigans aside for now). The technology is there to identify the line that made the alleged theft. But there is nothing tying it to you. Other than it's your line. Which is wild because you can't by proxy arrest someone. It's arresting and convicting the owner of a warehouse because it was filled with cocaine, on no more evidence. Ludicrous. Due process. Discovery. Motive. And a clear connection between the warehouse and the coke needs to be made. Was it deliberate or was the owner unaware of the group using makeshift pipes to smuggle drugs in. That shit matters. A lot.
What Voltage is arguing is that the connection aline should suffice. It's your line so a) you did it, or b) someone you know did it because you gave them access to your network and are thus responsible. None of which holds water because if I lend you my car and you run someone over, that's not my burden. Yeah, the cops are going to ask a litany of questions but so long as your friend didn't literally say "hey can I borrow your car to kill some people?", no jury will convict you. Nor hold you responsible. I'm not about to police what people do on my internet and if one of my friends did download an illegal copy of a movie, your gripe is with them, not me. I mean what if I made my line public? I have that right and there are no laws saying I have to block half the internet if I do! And hell take me if that makes me responsible for said people! At best, if my line is found to generate copious amounts of illegal traffic, send me a C&D first.
The issue is them rushing past due process and quite frankly, the law. You need more than an IP homie.
That's their whole argument though.
Send the subscriber a few notices to say that their service is being used for copyright infringement and if the subscriber doesn't do anything to secure their service then hold them liable.
The ISP would know who had what IP while the infringement happened though. Dynamic changes nothing.
Except they get it wrong all the time. People who have never pirated a single thing still receive ISP notices all the time.
How could they get it wrong?
Either that person is lying, or their network is open and that’s the argument that was being made. By being negligent and leaving it open, you have now let people use your network to commit a crime.
You’re an accessory by definition for other criminal situations for doing similar.
That's not how anything works. If you leave a knife unattended on a counter and a murderer picks it up and kills someone you are not an accessory to murder. Even if it was indeed your knife.
Change the knife to gun and that’s an entirely different scenario, you can be an accessory for being negligent with your firearm.
Drive your buddy around for a favor, he robs a store without you knowing and you drive him home. You’re now an accessory to theft.
Have your roommate steal your knife and the cops tell you to lock them all up, don’t do it, and guess what, you can be accessory for being negligent.
Sorry, but that is actually how the world works, nice bubble you seem to live in.
That's decidedly not how the world works. There are no laws mandating kitchen knives to be locked. And there are no laws mandating to lock down network connections. At all instances a judge would have to determine whether you were aware that a crime was being committed and willfully or by criminal negligence facilitated its occurrence.
What do you think a court order is…? Of course theres no law that specifies that, but if you’ve been told to do something, and don’t. That makes you negligent and can be an accessory.
I like how you don’t even address the other ones since they prove my point.
And nope, you don’t have to be aware, that’s the unfortunate part of it being “accessory”. You’re thinking of accomplice. Laws obviously vary place to place, but the generics are the same.
Edit, and actually yes it is actually illegal to leave a knife out as well! linky
From your own sources:
Section 84 of the Canadian Criminal Code
Or in other words, legal context matters, and this only applies in Canada, and only to knives who are intended to act as and be used as weapons. Not to kitchen knives. Idiots like you need to start using your head to actually think and not try to construct this stupid gotcha attempts.
Also, the entire section 86 is about firearms and the prohibited weapons is just there so prosecutors and judges can make ad-hoc decisions. So, as the law has proven: no, leaving a kitchen knife on a counter top or using WiFi without passwords do not make you accessory to crimes.
US has very similar laws, but the OC article is Canadian, so let’s keep it that way.
And of course it doesn’t apply to kitchen knives I never once said it did… unless a court order has been applied like I explained already…
You seem to be missing the part about a court order making the situation illegal, and until you comprehend this specific detail this discussion can’t continue.
It’s not illegal to do plenty of stuff, but once served with a legal document, those previously well legal things can become illegal. That’s the argument that Voltage was making with their first notice.
If you can’t address this specific concern, don’t deflect or move the goalposts, only address that specific point.
Copyright claimants do not have the ability or authority to issue court orders...
Court's have not mandated a requirement to secure one's internet connection nor monitor/prevent illicit activity occurring via a connection you pay for.
A copyright claimant sending you a notice of infringement also provides no obligation to investigate beyond your own activities, if even that.
Providing an open internet connection is not a crime. And, based on OPs article, the Supreme* Court has now explicitly ruled that the owner/subscriber of an internet connection cannot be held liable for the activity that passes through it, absent further evidence to show they were directly involved in that activity. (at least in reference to copyright infringement)
/e *spelling
What do you think a court order is ….
Well, it’s not the police telling me to lock up my knives, or my isp telling me to lock down my wifi.
As far as i know, there is no law and there was no court order obliging the internet subscriber to lock down their wifi. Which would not do much for a household member plugging a cable into the router’s lan port anyway.
A court order can have you lock up your knives, and that’s the parallel voltage is making.
Of course there was no law or court order, those are parallels they are using for their arguments, and it’s based on real life situations.
It’s now up to the courts to decide and I don’t want it to favor Voltage myself here.
Yet everyone seems to the think I’m defending them….
Not to mention that many ISPs also use CGNAT, so one public IP can relate to a number of different people at once.
For CG-NAT, it wouldn't even be possible for the ISP to identify the account that committed the alleged infringement without logging traffic, right?
If you know the ports the infringement is happening on they can usually determine who in the CG-NAT was using it.
If the have sufficient logging then yes
My last ISP decided your address every 24 hours unless you had an active internet connection (currently up/downloading).
Given I used to run servers for friends on different games, it was super annoying.
Honestly i think I'd prefer that now. Last year I got a notice about Capcom complaining of piracy. My wife and I are the only ones who even use our internet, it's a hidden network and our nearest neighbor is 1/4 mile down the road on one side, and about 2 miles on the other. I haven't played a Capcom game since my sister and I used to play RE5 when it first came out. So tell me, Capcom. If you're so insistent it was me, and I know it wasn't, who was it then? By their logic, I'm already guilty because I pay for the service.
DDNS ftw! Still, what a pain in the ass...
Id say they did argue that is IP not being ID, as the gist if the argument is that "yes the IP shows the subscriber, and yes the subscribers IP did violate copyright, but you have not proven whether it was the subscriber or someone else that shared the movie." They even go further in saying that the "subscriber is not liable for other peoples actions just because it's their connection."
They never mentioned that the IP they found sharing the pirated movie might as well no longer belong to the current subscriber and that proving the link between the subscriber and the IP would've been a major privacy issue. As a subscriber you don't own the connection, much less the IP address. I guess they just never got to a point where that had to be argued.
Every piracy lawsuit deals with that question. They simply subpoena the ISP, asking who was given that IP address at the given time. The ISPs keep track of that and they will give you up in the face of a subpoena.
It's why people always make such a big deal about using a VPN that doesn't log. The idea is that if your VPN provider doesn't keep track of your activities, it can only respond to a subpoena with a "Sorry, we don't keep track" letter instead of selling you out.
In Canada, ISPs are prohibited from providing that information short of a court order and, based on this article, courts have now refused to provide that order as there isn't sufficient evidence to say the subscriber is for sure the copyright infringer.
Me paying for an internet connection doesn't make me responsible for all the traffic that passes through it. At least according to Canada's supreme court.
I'm just saying that the 'IP addresses change' argument is something courts have been dealing with for decades at this point. It's a useless argument since ISPs keep track of who was assigned which IP at which time.
Assuming Canadian court systems work more or less like those in the US, it makes sense. Courts of appeal aren't there to rule on matters of fact. That was already done by the initial trial court (or should have been, at least). The appeals court, in this case, was looking at the legal question of whether or not it was reasonable for the lower court to deny default judgement against the people who never showed up to court.
These are mostly old people who have no idea how anything works.
I mean this is true but here in 2023 grey-beards are the only people who do know how anything works. There's plenty of old people who have no idea how things work but there's also old people who built the internet.
The venn diagram of people who built the Internet and people who enforce legislation don't overlap much...
And even more trustworthy are the Grey Muzzles upon whom the internet is stacked
Furries run the world