Canadians agreed to pay at least $200K to settle copyright suits in 2018

More than a dozen movie studios have sued Canadians in recent months in a flurry of cases that has so far yielded over $200,000 in settlement agreements from individuals, court documents show. The cases relate to alleged infringement of several movies, including “The Hitman’s Bodyguard,” “London Has Fallen,” “All Eyez on Me,” “Boyka: Undisputed IV,” “Colossal,” and “Mechanic: Resurrection.” The latter two drew settlements of $66,000 and $81,250 from alleged infringers, respectively, according to a count by The Wire Report. The agreements date back to last December, but the vast majority occurred this year. The movies have come out within the last two years. This publication viewed a number of Federal Court documents involving at least 15 movies. All of those studios list Ken Clark, a partner at law firm Aird and Berlis, as counsel. While settlements are normally confidential, these ones were filed with the court as consent judgments -- legally-binding terms that the parties agreed to in a settlement, which is signed off by a judge, who otherwise makes no findings in this case. They are, therefore, public. All told, court records show nearly 50 defendants agreeing to settle for the maximum amount of $5,000 for non-commercial infringement. That is “almost certainly far more than those people would have paid even if they admitted liability in court,” James Plotkin, a lawyer for Ottawa-based law firm CazaSaikaley, said in an email about the maximum amount. Plotkin is representing two individuals accused of copyright infringement. The remaining cases saw at least two defendants agree to pay $1,000, one for $1,250, one for $2,000, and two others for $3,000. For perspective, the court documents note that the movies in question can range in price from $12 to $25, depending on how they are obtained. This is the first time The Wire Report has been able to quantify some aspect of this long-running saga. The legal cases date back at least as far as 2011, when the studio behind “The Hurt Locker” film, Voltage Pictures LLC, filed for court orders successfully compelling internet service providers to fork over the personal information of individuals behind IP addresses they alleged were linked to copyright infringing activity. University of Ottawa professor David Fewer said at the time that the strategy isn’t to bring the alleged infringers to trial, but to extract settlements -- a method he called “illegitimate.” WWE Studios Finance Corp., a subsidiary of Voltage, recently managed to get a court-ordered disclosure of TekSavvy Solutions Inc. subscriber information, which the ISP appealed. The deluge of consent judgments follows a May 2017 ruling by the Federal Court of Appeal barring ISPs from collecting costs associated with disclosure requests. The issue originated when Rogers Communications Inc. said it would need to charge $100 per hour to retrieve the information Voltage was asking for. A year prior, a lower court ordered claimants to pay up for that information, which Voltage and other movie studios argued before the court would be a “multi-million dollar barrier” for their legal proceedings because of the “tens of thousands” of suspected infringers, according to court documents. A standard consent judgment Rogers is currently in front of the Supreme Court of Canada appealing that Federal Court decision. Experts The Wire Report spoke to recently could not say with confidence whether there’s any causal relationship between the May 2017 decision and the rise of these consent judgments in the last few months. If there is a relationship, it could amplify the stakes of that Supreme Court deliberation, which will ultimately determine whether an ISP can charge for that information. Each of the aforementioned movies is tied to individual movie studios which allege subscribers of Canadian telecoms have illegally downloaded and inadvertently or purposefully uploaded their films. One such case involved a North Bay, Ont. couple who settled to pay the maximum after they claimed in their statement of defence that they did not know a copy of The Hitman’s Bodyguard would be shared when they downloaded the movie from the file sharing program BitTorrent. When an individual downloads a file on BitTorrent, the file is automatically “seeded” for other users to download it, creating a situation where the downloader also becomes an uploader of the file. The couple said they received the first notice from Bodyguard Productions, delivered through their ISP, telling them that they must stop that activity. When they received a second notice, they said they deleted the movie, not knowing it was uploading on the file sharing program. They said in their claim that they learned their lesson and would be more careful in the future. They even offered $500 to settle the issue, a pittance compared to what they settled for. Canada’s notice-and-notice regime, which came into force in 2015, requires ISPs to automatically forward notices of alleged infringement when they receive them from rightsholders. Innovation, Science and Economic Development (ISED) recently pledged to eliminate settlement demands in notice letters as part of its intellectual property strategy, addressing a complaint that notice letters were not regulated. Clark confirmed in an email that he has sent over 300,000 notices of “confirmed copyright infringements” to ISPs for forwarding to subscribers. But some defendants -- most of which are referred to as “Does” with an identifying number to keep them anonymous -- denied having received notices. Some said they only found out after being served with a claim that the notices went to their spam folders. Other common defences included the accused not being the one who downloaded the file, the possibility that they were hacked, and illiteracy with respect to computers and BitTorrent. At least two claimed having a Netflix Inc. account gave them no reason to download movies illegally, while another said she didn’t watch English movies. One self-represented defendant threatened to sue the company for $5,000 for having to go through the ordeal. A good portion of the defendants elected to forgo legal representation and defend themselves. “I appeal to the plaintiff/claimant to leave me alone in peace NOW and FOREVER as I am just a simple, hard-working individual,” one self-represented accused, who is named, said in her defence. But while some face just hefty sums, others must stare down a situation that could potentially harm their careers -- among the named, for instance, are a medical doctor and a medical student. Names of defendants in these cases can be made public because they file a defence. “It is of the utmost importance to the Defendant to be in compliance with all applicable laws and to maintain his impeccable reputation and standing in the public and medical communities,” counsel for the Toronto-area doctor said in the statement. Some defence statements were filed as early as this month, suggesting cases are still to be settled or even tried in court (the doctor requested a trial be held in Toronto). There have, so far, been no hearings on these kinds of matters before the court. What’s more, a good number of defendants were also represented by lawyers with copyright law practises, but a significant proportion settled for the maximum amount of $5,000. The Wire Report reached out to some of the lawyers involved in the cases, but some of those who responded said they can’t comment on matters they are involved in. Why these individuals settle for the maximum, especially those who have lawyers represent them, is not clear. Some defendants hired lawyers who don’t practice in this area of the law, electing to select personal injury and even employment and real estate lawyers, according to their respective law firm websites. “I can’t comment on any particular settlement because I don’t know the specific facts,” Howard Knopf, a lawyer at Macera and Jarzyna, said in an email. “However, $5,000 is the maximum statutory damages amount that could ever be awarded for non-commercial activity in these types of cases even in a contested proceeding.” He added: “Canadian courts are clear that statutory damages must somehow correlate to actual damages, which in these en masse BitTorrent situations are arguably less than $10 for infringement of one work by one individual. The minimum statutory damage award for non-commercial infringement is $100. Generally speaking, even if a settlement amount has to be paid – which is far from clear in these situations -- one would expect that it would be at the lower end and not the upper limit.” A standard letter in these matters includes a stipulation that the plaintiff will not seek monetary relief over $50,000, which may scare self-represented individuals not versed in the damage ceilings Canada’s copyright laws impose. Ariel Katz, a professor at the University of Toronto’s faculty of law, said in a phone interview that a combination of potentially heavy legal costs to pursue a defence against the lawsuits -- a relatively new area of the law -- as well as an immunity built into copyright law protecting defendants who pay statutory damages from other claimants, may push the defendant to settle for the $5,000. A paragraph following the consent judgment orders explaining immunity from similar suits. /Photo by Ahmad Hathout But in still other cases, a number of lawsuits have been discontinued. That can mean the parties either settled on terms privately or the plaintiff just stopped pursuing, and got nothing, from the defendants. Plotkin said he got one of his client’s cases effectively dropped without having to pay anything. His client was served with a claim from the studio HeadHunters LLC for the movie “A Family Man” and the withdrawal letter came from Clark this month, he said. Plotkin wrote in the letter to Clark that his client said she didn’t recall downloading the movie, didn’t get the two notices and the claim letter did not name her, so she couldn’t adequately assess the situation. “As we speak, there are thousands of statements of claim in the hands and mailboxes of regular people who might have downloaded a movie (or not) using BitTorrent,” Plotkin said in an email. “Any internet subscriber can receive a claim like this. It might have been someone else in their home, anyone who knows their WiFi password or, if their network is not protected, anyone within WiFi range,” he added. The Wire Report counted at least 50 total “discontinuances” in the files it viewed. Those had a mix of represented and self-represented cases. Still outstanding are a bulk of cases that are still to be determined after the defendants filed defences. How much these studios actually pocketed from settlements is also difficult to quantify because agreements can be private and confidential. Some people prefer to settle privately rather than go through a potentially expensive and protracted legal battle. Plotkin added that people who want to stay out of the public eye would also want to settle privately. When reached for comment, Clark said he isn’t authorized to speak on matters related to the suits. Clark, however, confirmed in an email that he represents “a number of unaffiliated studios who do not interact with each other” when asked whether or not all these movie studios are affiliated with Voltage. Voltage’s president and chief operating officer Jonathan Deckter refused to comment when asked if his company is affiliated with the aforementioned studios. But some of the listed studios still have ties to each other. Trevor Short and Avi Lerner are founders of production house Millennium Media, which produced The Hitman’s Bodyguard, Boyka: Undisputed, Mechanic: Resurrection, Criminal, and London Has Fallen. A search of the database of registered companies in the state of Nevada lists Short and Lerner as either president, treasurer, secretary or director of Bodyguard Productions Inc., ME2 Productions Inc., UN4 Productions Inc. (Boyka: Undisputed), LHF Production Inc. (London Has Fallen), and Criminal Productions. They are also executive producers of the films. Furthermore, Morgan Creek Productions Inc. worked with Voltage Pictures LLC on All Eyez On Me. Meanwhile, Voltage is listed on the internet movie database as a non-U.S. distributor of “Sniper: Special Ops,” a film produced by another company filing claims against Canadian ISP subscribers, Hybrid LLC. Over the border, these kinds of lawsuits aren’t uncommon. In fact, legal actions for alleged infringement of these movies have been going on for years in the United States. Statutory damages in copyright infringement cases can be as high as $150,000 in that country. To grab these IP addresses, the companies employ tracking technology from Germany-based MaverickEye UG, which claims to detect copyright infringing activity. Voltage used Montreal-based Canipre in the past to nail IP addresses tied to alleged infringement. That said, the notices will keep coming, Clark said. “This hasn’t slowed down any in the year and a half, or so, that we have been sending them,” he said, referencing the over 300,000 notices he has sent so far. He added the notice-and-notice system has only been a deterrent in a “tiny handful of cases.” “It’s clearly not effective at stopping online piracy of films.” — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Canadians agreed to pay at least $200K to settle copyright suits in 2018

News | August 22, 2018

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