We’ve seen it happen in the U.S. - Are ‘copyright trolls’ coming soon?

Last week, Canada’s federal court handed down a ruling that media outlets across the country reported as having significant implications for Canadian Internet users. While the headlines have tended to focus on the threats to users’ privacy, and the possibility of U.S.-style lawsuits over alleged infringement coming to Canada, the real-world consequences may turn out to be much less dramatic, as new rules proposed by the court bode well for Canadians. This past June, we alerted our community to legal action being taken against indie ISP TekSavvy by media giant Voltage Pictures. The company claimed that approximately 2000 TekSavvy customers had allegedly violated copyright by downloading movies Voltage held the rights to.

Now, over half a year later, the court gave its long-awaited decision, ruling against TekSavvy, and forcing them to hand over their subscribers sensitive personal information to Voltage Pictures.

While media across the country focused largely on how the court’s decision would permit ISPs to disclose massive amounts of their subscribers’ personal information, this may have been a bit sensational: in actual fact, the court’s decision came with robust rules for contacting Internet users who had allegedly infringed, and disincentivizes them from threatening alleged infringers with legal action. On the latter point, while many observers have expressed concern that the federal court ruling could open Canadian Internet users up to abuse from ‘copyright trolls’ – or outdated media conglomerates who file lawsuits against alleged copyright infringers to threaten and intimidate them into quick settlements – there are two significant silver linings.

First, as copyright expert Michael Geist highlights, the court appears to be sensitive to this threat of U.S.-style copyright trolling, and has created a set of rules for how Internet subscribers can be reached by companies alleging copyright violation, including mandatory court oversight of anything sent to subscribers.

Second, given our laws and the high costs of pursuing file sharing litigation against individuals, Geist argues persuasively that, “the combination of copyright reform, the Voltage decision, likely damage awards, and litigation costs will force would-be plaintiffs to reconsider their strategies.”

While the federal court ruling appears on the face of it to be a mixed bag, it may not it be a watershed moment for opening the floodgates for ‘copyright trolls’ in Canada. As Geist goes on to point out in a piece published today, Canada’s copyright laws ensure that in cases of infringement for non-commercial purposes, the award needs to be proportionate to the infringement. As a result, the economics of suing alleged infringers do not look good, and it’s worth quoting Geist at length on this point:

Even if Voltage were successful in convincing a court to award ten times the marketplace value of a $15 movie - $150 - the economics do not make sense. Assuming Voltage manages to convince 75% of recipients to settle for the $150 demand, the campaign would generate $225,000 in revenue. Yet that must be offset by paying the TekSavvy costs before any names are released (which alone were estimated at $200,000 at the federal court hearing), covering their own costs (assume a matching $200,000 to collect the IP addresses, retain experts, and fund the litigation), and dealing with thousands of demand letter recipients (if each letter costs $30 in time and money that adds another $45,000).

So, in a scenario like the one painted above, ‘Internet trolling’ in Canada is unlikely to let the trolls break even – let alone profit. Moreover, the threats to users’ privacy mentioned above will be governed by carefully crafted rules and court oversight. While the court’s decision appears at first to be a major strike against individual Canadians, the real-world implications look much less threatening.

In the meantime, your OpenMedia team is working with people all around the world to develop fair rules for sharing and collaborating online. You can join us by using our interactive drag-and-drop tool that allows you to take a stake in your digital future at OpenMedia.org/Crowdsource.