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Reverse class action for video sharing dismissed

November 21, 2019

Federal Court refuses to certify Voltage “reverse class action” on numerous grounds

The Federal Court of Canada appears to have brought the Voltage “reverse class action” for copyright infringement to an end (subject to appeal). On November 12, 2019 in Voltage Pictures et al. v Salna et al. the Federal Court of Canada dismissed the application for certification brought by a group of production companies (“Voltage”) that sought to sue, in a single class proceeding, hundreds of Canadians accused of unlawfully downloading and uploading movies for which the plaintiffs own the exclusive rights.

In a certification motion, the plaintiffs have the burden of satisfying the test set out in the Federal Courts Rules, which require:

Conditions

334.16 (1) Subject to subsection (3), a judge shall, by order, certify a proceeding as a class proceeding if

(a) the pleadings disclose a reasonable cause of action;

(b) there is an identifiable class of two or more persons;

(c) the claims of the class members raise common questions of law or fact, whether or not those common questions predominate over questions affecting only individual members;

(d) a class proceeding is the preferable procedure for the just and efficient resolution of the common questions of law or fact; and

(e) there is a representative plaintiff or applicant who

(i) would fairly and adequately represent the interests of the class,

(ii) has prepared a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members as to how the proceeding is progressing,

(iii) does not have, on the common questions of law or fact, an interest that is in conflict with the interests of other class members, and

(iv) provides a summary of any agreements respecting fees and disbursements between the representative plaintiff or applicant and the solicitor of record.

Voltage argued that its amended statement of claim met the test. It is important to note that the decision is based on the pleadings, assuming the allegations to be true.

Justice Boswell determined that the Voltage pleadings did not disclose a reasonable cause of action for either primary or secondary infringement. Primary infringement refers to making a film available for upload by BitTorrent or advertising through BitTorrent that a film was available for download. Secondary infringement or authorizing infringement refers to failing to take steps, as a controller of an internet account, to prevent the two acts of primary infringement, or authorizing either of them. With respect to a primary infringement, Voltage did not identify any person who it alleged to be a primary infringer. Voltage did name an alleged secondary infringer who had an IP address that was associated with making five films available on the BitTorrent network at various times.

The Canadian Internet and Public Interest Clinic (“CIPPIC”) argued that Voltage’s own affiant admitted during cross-examination that an IP address cannot be associated with a particular individual in copyright infringement matters. The operator of the account identified by Voltage had two tenants who were also identified; however, it is unclear who (or if any of them) were the ones to allegedly infringe the plaintiffs’ copyright. Because of this, no Direct Infringer could be identified by Voltage, and it is therefore plain and obvious that its claim of primary infringement cannot succeed. From Paragraph 77: “Without an identifiable respondent the action could not appropriately go forward as a class proceeding…”.

For secondary infringement or authorizing infringement, the court similarly found that the Voltage claim as pled was doomed to fail. With BitTorrent, there is no difference between downloading and uploading files as they take place simultaneously. When files are shared on BitTorrent, they are shared by all users and not necessarily with the users’ knowledge.

The Court determined that Voltage failed to provide sufficient evidence about the actual existence of a class of two or more persons:

“The nexus between an IP address and the person responsible for copyright infringement is highly technical and difficult to assess without a consideration of the merits of individual liability issues” (para 106).

Voltage also failed to demonstrate to the court’s satisfaction that there was some basis in fact that the claims of the class members raise common questions of law or fact. The final nail in the coffin for Voltage was that its litigation plan was unmanageable for having to deal with individual issues, for relying on public resources for a private end and because it largely relies on the notice-and-notice regime of the Copyright Act to facilitate a large-scale class proceeding that could affect thousands of Canadians.

The motion was dismissed with costs.

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