Federal Court orders content pirates to pay millions to Bell, Rogers, Videotron

A Federal Court judge ordered three pirate TV services to pay more than $29 million in damages to major broadcasters which claimed the sellers were cutting into their business by marketing pre-loaded set-top boxes and IPTV services to customers, allowing them to bypass paid TV subscriptions and access free content. Multiple BCE Inc. and Rogers Communications Inc., along with their media subsidiaries, as well as Quebecor Inc.’s Videotron and Groupe TVA Inc. named the three set-top box sellers as additional defendants in a suit the broadcasters initially kicked off against five other sellers in 2016, alleging that through them people were able to access the broadcasters’ content, including live broadcasts, on-demand programming, and live sports coverage, without authorization. “To say that the plaintiffs, by their litigation, are playing a long game of ‘whack-a-mole’ in attempting to address the infringements and the attendant harm to their respective businesses occasioned by the pre-loaded set-top box industry is an understatement,” Justice Janet Fuhrer said in a decision released Wednesday. A company called Ottawa Tek, directed by Raheel Rafiq, was dinged with the highest damages, having been ordered by Fuhrer to pay just over $14 million in statutory damages together with Rafiq. Another company, Morcor, was directed to pay $11.36 million, and a third named INL3D was ordered to pay $3.86 million. All have been directed to pay $100,000 in punitive damages and to split the plaintiffs’ costs of $75,000 in addition to post-judgement interest of two per cent on all amounts. According to Fuhrer’s decision, the three companies were accused of advertising and selling these pro-loaded set-top boxes and IPTV services online and in stores. Fuhrer wrote that none have responded or participated in the court proceeding, leading her to grant the default judgement requested by the broadcasters. Originally, the broadcasters wanted $7.72 million from INL3D, a total of $28.16 million from Ottawa Tek and Rafiq, and $22.72 million from Morcor based on $20,000 for each work pirated, for a total of more than $58 million. Fuhrer halved the amounts in each instance, “given the plaintiffs’ intention to pursue default judgment against more defendants in this matter and in light of the plaintiffs’ admission that declines in subscriptions result only partly from content piracy.” In the process of their original May 2016 suit against the first five defendants, the broadcasters got an injunction against those first five for selling the boxes and IPTV services, which also allowed them to bring in more defendants in the future and was later upheld by the Federal Court of Appeal. Following the injunction order, the broadcasters have added in approximately 175 defendants and have gotten consent judgement against some of them, according to Fuhrer’s decision. INL3D, Ottawa Tek, and Morcor are some of those defendants which did not file statements of defence even years after being served. Fuhrer wrote that they were chosen for this particular request for default judgement “because of their prominence on the internet, their operation of brick-and-mortar locations, as well as their current or former status as incorporated commercial entities.” She noted that the broadcasters intend to use the motion “as a template or foundation for future motions for default judgement in this matter.” The decision states the broadcasters spent in excess of $1.7 billion in 2015 and $2.4 billion in 2019 producing and acquiring rights to their programming, also serving approximately 6.3 million Canadian subscribers in 2016. For its part, INL3D was said to be selling at least three models of pre-loaded set-top boxes online and in stores in a few areas of Ontario, running demonstrations for customers in stores and technical support for an unauthorized IPTV service. The decision notes that its store operations and website appear to have disappeared after being added to the suit but continues to have an active corporate status. Ottawa Tek, which was dissolved in October 2019, was accused of selling set-top boxes online and in a store in Ottawa. Though the broadcasters aren’t aware of where he is now, they claimed Rafiq responded to their investigator’s online inquiries and was the only representative of the company at the store. Meanwhile, Morcor sold multiple models of set-top boxes online and in St. Catharines, Ont., as well as unauthorized IPTV subscriptions offering access to hundreds of live channels -- similar to the other two accused -- before appearing to stop “openly offering” to sell the boxes after being added to the broadcasters’ suit, “although it continues to maintain its corporate status and operate its store,” Fuhrer wrote. Following investigators’ purchase of pre-loaded set-top boxes from each of the companies, they found an estimated 386 individual works could be accessed through INL3D, 1,408 through Ottawa Tek, and 1,136 through Morcor at the time. “The plaintiffs assert unauthorized access to and distribution of television content on the internet (i.e. ‘content piracy’) can lead to changes in consumer behaviour and, hence, significant negative financial consequences for content owners and distributors, such as the media plaintiffs and the distribution plaintiffs respectively,” Fuhrer wrote. Similar arguments have been made in the past. In May, the Federal Court of Appeal allowed Canada’s first-ever site-blocking court order to stand against an anonymously-operated (pirate IPTV) service known as GoldTV, dismissing an appeal of the order from TekSavvy Solutions Inc. Bell, Rogers, and Quebecor are also requesting a new type of site blocking order, which would require a number of third-party internet service providers — being TekSavvy, Distributel Communications Ltd., Cogeco Inc., and Bragg Communications Inc.‘s Eastlink — to block a rolling list of IP addresses in real-time, as they are identified by the broadcasters as broadcasting pirated National Hockey League games while those games are being broadcast throughout the NHL season. Such a “dynamic” block, Bell, Rogers, and Quebecor argue, is “the only effective remedy to stop such blatant and widespread infringement of their rights in Canada and the irreparable harm that is caused” by pirate NHL streaming, though this sentiment has been disputed by other groups. -- Reporting by Hannah Daley at hdaley@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca

Federal Court orders content pirates to pay millions to Bell, Rogers, Videotron

News | August 11, 2021

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Federal Court orders content pirates to pay millions to Bell, Rogers, Videotron

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