Hurt Locker lawsuits raise stakes for C-11 reforms, experts say

Voltage Pictures LLC’s Canadian Hurt Locker lawsuits appear to be part of a strategy to ramp up the Internet piracy fight and bring attention to the government’s copyright reform bill, copyright advocates say. Anthony Hémond, an expert in telecommunications, broadcasting, and privacy issues at Quebec consumer group Union des consommateurs, said the Voltage cases are an attempt to lobby and pressure the government on copyright reform as its Bill C-11 is discussed in Parliament. Voltage Pictures is effectively saying that “we need to have more tools to fight piracy on the Internet,” Hémond said. In August, the Federal Court ordered Internet service providers (ISPs) Bell Canada, Cogeco Cable Inc. and Quebecor Media Inc. subsidiary Vidéotron Ltée. to give the studio names and addresses associated with 30 IP addresses in Quebec. Those addresses were allegedly involved in unauthorized peer-to-peer (P2P) sharing of Voltage’s Oscar-winning film The Hurt Locker, and the studio is now seeking $1,500 in settlements from the users of those IP addresses. La Presse reported last week that, in mid-November, lawyers at Goudreau Gage et Dubuc in Montreal, acting on behalf of Voltage, sent letters to the users of the IP addresses, demanding $1,500 each in settlements or be taken to court. Michael Geist, the Canada research chair of Internet and e-commerce law at the University of Ottawa, said the Hurt Locker case highlights the fact that the government's proposed reform doesn’t go far enough to distinguish between commercial and non-commercial copyright infringement. “In many ways, even with the cap that the government is proposing in Bill C-11, people are still going to see these types of lawsuits,” he said. “We need to remove statutory damages for non-commercial infringement altogether and move to an actual damages system,” Geist said. Jay Kerr-Wilson, a partner with Fasken Martineau in Ottawa, noted that Canadian copyright law currently allows a plaintiff to claim up to $20,000 in statutory damages. But the Copyright Act could see a new category of “non-commercial” statutory damages imposed with a range of $100 to $5,000 under Bill C-11. Kerr-Wilson noted that reducing the cap from $20,000 to $5,000 would be a significant change. “But $5,000 is still an awful lot of money and may still make the lawsuits profitable,” he said. Geist said Canada and the United States are among a minority of jurisdictions that recognize statutory damages in copyright cases. He said this explains why Voltage has not pursued similar lawsuits in many European countries. “Canada is actually one of the few countries that effectively promotes these kinds of lawsuits by allowing the plaintiff to demand significant damages far beyond the actual harm through this statutory system,” he said. Independent technology analyst Carmi Levy said he is inclined to agree that the suits are intended to influence Bill C-11, which is being debated at second reading in the House of Commons. “It isn’t so much about Voltage Pictures recouping its investment in the film or recouping lost revenue,” Levy said in an interview. “I think it’s about raising awareness and helping the industry understand the difference between commercial copyright violation and non-commercial copyright violation.” There’s a need for legislation that addresses both commercial and non-commercial infringements, he said. Levy noted there’s a difference between downloading content from the Internet to share among friends and downloading content to use as the basis for a revenue-generating business. “That’s significantly more damaging to a copyright holder than a birthday party viewing ever could be,” he said. He added that limiting damages to actual harm would put the onus on the plaintiff to validate damages as the basis for arriving at a fair settlement. But Kerr-Wilson said the statutory damage category relieves the rights holder from having to prove what the actual damages are. “They can just go after their $5,000 or $20,000,” he said. He said this can make damages arising from small personal infringement activities disproportionate to the actual harm caused. “Fifteen hundred dollars here in Canada or $3,000 in the United States is just so far beyond the damages for someone who has downloaded a $15 movie,” Geist added, referring to the settlements Voltage has sought. “They are using the law as a real threat.” Critics have suggested that the company is trying to use settlements as a business model in the U.S., where it launched nearly 25,000 lawsuits against people who downloaded the film. “They are trying to do the same here in Canada,” Hémond said. “They want people to pay for the film.” Kerr-Wilson said that although Voltage may be trying to draw attention to the copyright bill, it seems to be proving that the current law works. Under the current laws, he said, Voltage has managed to collect IP addresses, order ISPs to disclose names associated with those addresses, and send out settlement letters. Levy noted that Voltage hasn’t had much success in drawing revenues from Hurt Locker suits in the U.S. and he expects the Canadian outcome to be similar. Such cases can clog up the court system, he said, and the courts and industry are hoping for a legislative answer to the volume of cases. “Otherwise we’re going to be faced with years and possibly decades of these cases that benefit no one except for the lawyers,” he said. Many of Voltage's cases in the U.S. were dismissed because the IP addresses were found to be outside of the judge’s jurisdiction, Hémond said. Levy said the ISPs too easily gave into the court order for IP addresses, but Kerr-Wilson said that they had little choice. Hémond said individuals who receive one of Voltage’s $1,500 settlement letters should contact a lawyer. “It’s very difficult to prove efficiently that you have downloaded the movie,” he said. He noted that an IP address provides the identity of a machine or an account, but not a person. Hémond said an unsecured WiFi network could also allow another user to access the network and download the film. “There is some agreement that you can contest what Voltage Pictures wants.” dgrenier@thewirereport.ca

Hurt Locker lawsuits raise stakes for C-11 reforms, experts say

Broadcast | December 2, 2011

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us