Canadian Copyright Law Caps Statutory Damages At $5,000 Just As File Sharing Lawsuits Make Their Unwelcome Return

from the sounds-like-these-suits-should-be-filed-in-small-claims-court dept

There’s some bad news on the copyright front in Canada, but at least it’s tempered with some, if not actually good news, reasonable news. The bad news is that file sharing lawsuits are returning to Canada, assisted by forensic software companies like Canipre, which has been collecting information on infringing users for the past several months.

A forensic software company has collected files on a million Canadians who it says have downloaded pirated content.

And the company, which works for the motion picture and recording industries, says a recent court decision forcing Internet providers to release subscriber names and details is only the first step in a bid to crack down on illegal downloads.

“The door is closing. People should think twice about downloading content they know isn’t proper,” said Barry Logan, managing director of Canipre, the Montreal-based forensic software company.

Logan said while last week’s court case involved only 50 IP addresses, his company is involved in another case that will see thousands of Canadians targeted in a sweep aimed at deterring Internet users from illegally downloading movies and other digital content.

Logan said his company has files on one million Canadians who are involved in peer-to-peer file sharing and have downloaded movies from BitTorrent sites, identifying them through Internet Protocol addresses collected over the past five months.

Moving beyond the obvious problem with identifying infringers through an IP address, it looks as if Canadian citizens are going to be on the receiving end of lawsuits brought by members of the content industry. Whether this results in a corresponding sales boost to the industries involved remains to be seen, but the tactics involved (mass lawsuits, IP addresses) seem to have been taken from the copyright trolls’ handbook. In short, there’s nothing remotely “good” about this news.

Even though the tactics are familiar and the companies involved state that they’re modeling their actions on their American counterparts, there’s one aspect that trails far “behind” the US system: statutory damages. Michael Geist reminds us of the reasonable news, which is as close to “good” as this situation gets:

While it is possible that many will receive demand letters, it is important to note that recent changes to Canadian copyright law limit liability in non-commercial cases to a maximum of $5,000 for all infringement claims. In fact, it is likely that a court would award far less – perhaps as little as $100 – if the case went to court as even the government’s FAQ on the recent copyright reform bill provided assurances that Canadians “will not face disproportionate penalties for minor infringements of copyright by distinguishing between commercial and non-commercial infringement.”

Compared to the US statutory damage laws, which allow for up to $150,000 per infringement, Canada’s limits bring personal liability down to something more in line with the “damages” of non-commercial infringement. Even commercial infringement is treated more realistically, capping out at $20,000 per infringement.

This would be the small bit of “good” news contained within the unwelcome return of file sharing lawsuits. Geist theorizes on the mass lawsuit process, lending more credence to the idea that the represented industries are heading out for a bit of trolling. Fortunately for Canadian citizens, a low cap on damages means very few of those swept up in mass filings will end up in court.

The lawsuits will likely follow a three-step process. First, rights holders will seek a court order requiring Internet providers to disclose customer name and address information. Second, should the court order the disclosure, rights holders will use the information to send settlement demand letters to subscribers. The letters will allege infringement and likely offer to settle the case for several thousand dollars. If subscribers refuse to settle – perhaps they believe the allegation is inaccurate or the settlement demands unfair – it will fall to rights holders to follow through with a lawsuit. Given recent changes to the law, there is reason to doubt those cases will be filed as the individual liability is very limited.

If you can’t keep rights holders from casting a wide net in hopes of swift settlements, the next best thing is to keep them from seeking outrageous statutory damages. With the very real possibility of showing up in court only to walk out with a $100 bill, one would suspect that settlement requests will stay at more realistic levels.

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Comments on “Canadian Copyright Law Caps Statutory Damages At $5,000 Just As File Sharing Lawsuits Make Their Unwelcome Return”

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Robert (profile) says:

Re: The US needs to import common sense from Canada

You are forgetting that Canada import’s finished products from the US that were first created at base levels in Canada.

Meaning, first we have realistic laws that don’t really need upgrading. The US uses those laws, puts them through a lobbyist assembly line, manufacturing them into a copyright clusterfuck, then “sells” them back to Canada.

Basically, the entertainment industry stole the idea from the manufacturing and natural resources sector.

Canada: Hey, we grow apples!
US: Sweet, why don’t you ship them over here, we’ll wax them with some semi-toxic chemicals, you can truck them back and increase the price above the apples we grow here in the US!
Canada: Great idea, we can screw over our farmers, price them out of the market, damage the environment, and screw price-gouge Canadian consumers, all while helping your farmers!
US: Great trading with you!

Anonymous Coward says:

Re: The US needs to import common sense from Canada

I’m sure a lobby group in the USA would claim that Canada has an unfair advantage and is trying to dump a lot of common sense on the market, so therefore a tariff should be imposed.

Much the same way they did with the software lumber fiasco. Free trade? Screw that! Agreement? Screw that too, let’s just seize money from them and give it to the our lobby group.
The NAFTA, WTO and other judicial panels all claim we’re wrong? Ignore them and try to legislate the transfer of funds before someone can do something to stop us!

out_of_the_blue says:

Proportional is fine with me!

This probably gets close to right: non-commercial infringement is still illegal but the fines aren’t obscene.

But WON’T please Mike or his pirates who want NO copyright. — Yeah, yeah, spare me the legalistic wiggles: Mike wants Megaupload and his grifting pals to be CLEAR of copyright.

G Thompson (profile) says:

Re: Re:

Actually the idea that a IP address equates to a specific individual has been tested in numerous courts and has resoundingly lost. Roadshow v iiNet for just one example – which is relevant precedent to any court in Canada due to the reciprocity between Canada and Australia.

The US court system though has not tested it, though as US companies find to their dismay, Canadian courts, like UK, New Zealand and Australia courts don’t care one iota about US wants.

Aint life great living in a commonwealth country that actually has some semblance of Democracy

Anon says:


I’m no lawyer, but I wonder about the legal implications of sitting on these IP addresses for five months+. You would think that if all of this file sharing is doing as much damage as they’ll no doubt claim in court, they would seek an injunction immediately instead of letting it go for half a year. Anyone have any insight on how that may or may not hurt their case here?

G Thompson (profile) says:

Re: Re: Damages?

Yes but being damages the other elements of the case have to be proven first. The harm element might be removed (though that’s actually simplistic – its a lot more involved than simply removing it ).

All statutory damages are is that once ALL elements of a tort have been proven upon balance, then the damages that are to give equity for the alleged harm (and harm still has to be reasonably shown – not de minimus for example) are then easily calculated due to the statutory settings. This does not mean that the court cannot set the equity below these amounts, just not above. Unless the plaitiff wants to go the route of proving (and showing evidence) that more harm has been done.

The interesting thing with these limits on Statutory damages being at $5,000 for ALL claims against any one individual (though it could also be proven that the claim could also be against a whole class – but that’s a legal scenario for another day) is that the return on investment for any troll like operation could be not only poor but could also be negative. ie: Could cost them more to take respondents to court or to even send letters. that need to be very open and with NO misleading statements (or risk a counter suit) than just to sit back, claim a loss and be silent.

This is a lose – lose for the trolls.

The Real Michael says:

Re: Re: Re: Damages?

It’s almost like an extortion tax by the content industries. They’re given leeway to spy and hoard data on internet users without their consent, cherry-pick their preferred targets, i.e. Canadian citizens, and finally spyhon money from their pockets.

It’s the ABC corporate model of the 21st Century:

A) Give people access to technology which allows them to easily copy, send and receive data.
B) The governments, doing the lobbyists’ bidding, step in and make it illegal.
C) Presto — millions of easy targets to go after.

JWW (profile) says:

A million infringers

This company says they have 1 million infringers. There are only 30 million Canadians total. They are seriously talking about suing 3% of the Canadian population!! Depending on the distribution of the infringers in some of the larger Canadian cities you could be looking at up to 5% of the population getting served notice of a $5000 lawsuit.

This will be a great way to start some riots demanding better copyright legislation.

Anonymous Coward says:

Re: A million infringers

That’s exactly the thing I looked up when I saw they had 1 million infringers identified (well, their IP addresses).

3% of the population in a couple months violating the law is certainly a sign that the law doesn’t make sense. And that is only the number identified by a single compnay. Certainly there are more people out there violating it.

Anonymous Coward says:

The bad news is that file sharing lawsuits are returning to Canada, assisted by forensic software companies like Canipre, which has been collecting information on infringing users for the past several months.

Actually it is good news as they are also collecting information that will further distinguish an actual user within an IP address. Time to pay up freeloaders.

Anonymous Coward says:

Don’t see where this makes a lot of sense. All that will happen on this is multiple charges, each at $5000. For the trolls the answer to this is either wait till you get 10 or 12 infringements or send them through the courts one at a time, each with the $5000 price tag.

What it looks to me like, is an invitation to clog up the courts with case after case of one infringement followed by another extortion attempt.

Shadow Dragon (profile) says:

Re: Re:

Especially since copyright holders have that shoot first ask questions later,But what someone shoots them back,they may get lucky if they get hit in the foot,but they may not with others. I recall lawsuit where RIAA had to pay a woman $10,000 or so for false allegations but luckily for the RIAA they avoided a RICO charge.

Anonymous Coward says:

Re: Re: Re:

That’s how I read it too. There’s something in there about (paraphrasing because my memory sucks) one being free and clear of all past infringements after settling, somehow.

Although, that may not matter if Sony, Universal, Disney, Touchstone, BMG, Geffin, Interscope etc all decide to begin lawsuits at the same time.

TheResidentSkeptic says:

You forget - they also learned Hollywood accounting

$1,000,000 in legal fees spent to collect $100 means victory. The $1,000,000 is used to “offset” the income to prove that the movie never made a profit so there are no royalties to pay out. Just more money to the lawyers so they can siphon some off to the lobbyists to pay off the lawmakers to change the law back to their version of a reasonable fee. Never ending spiral. But fun to watch.

That One Guy (profile) says:

The most important part:

Would be to make sure the canadian public at large is aware of the cap on statutory damages, because call me crazy, but I get the feeling the ones sending out shakedown letters will do everything in their power to never mention a specific amount, and will probably go with a vague ‘thousands of dollars’ or something like that.

Anonymous Coward says:

Re: The most important part:

Absolutely. The troll letter will mention up to 20,000 dollars (since in theory it might be possible for someone, somehow, to make the case for commercial infringement; even if they’d lose they can still honestly say it’s possible) as well as mention that other suits in the United States have been awarded up to 1.5 million dollars in a single trial.

These are lawyers, slimy ones, that are being funded by the masters of the spin. I would expect no less. So yeah. education. But that requires everyone who is at risk to surf sites like the eff, techdirt or torrentfreak.

Maybe the Pirate Bay can link to a copyright troll primer on their main page. Someone email W1n5t0n

Anonymous Coward says:

“A forensic software company has collected files on a million Canadians who it says have downloaded pirated content.”

And this claim is backed up by what evidence exactly? If based solely upon an IP Address accessing a torrent it’s insufficient. If based solely upon filenames it’s insufficient. If based upon known files containing copyright material, how did those files get there? Depending upon the source of these infringing copies there could be many problems for the plaintiff in a real court room. IANAL, but there seems to be more hot air than substance when it comes to press releases about copyright lawsuits. I suppose they claim the details of methods used are proprietary … tell it to the judge.

Anonymous Coward says:

considering the amount of money spent on these type of law suits, has no copyright holder even considered how much better off they would be if they treated customers as that, customers, and started giving what keeps being asked for, legitimately? i think this is and always has been more about control than anything, but if content is given in the ways asked for, it is still under the control of the copyright holder. the amount of grief caused for everyone in the situations that exist atm is absurd!

Anonymous Coward says:

There is a major problem with this since it’s very possible that many of these copyright trolling companies are releasing their content illegally themselves. These extortion lawsuits are turning into a huge business. A downloaded product should not gain 10 20 30 times the original value.

Thinking about how much it goes up when downloaded leads me to believe that many troll companies are doing it themselves for profit.

If you could turn a 10$ cd into a 600$ cd and have a new customer that would never had bought it in the first place would you do it?

Anonymous Coward says:

Re: Re:

It was like that argument why you should shoplift rather than infringe.

If you walk into a store and steal a CD,
– If successful, you get the CD with all the tracks, album art and case. You also deprived the store of a physical item and no one else can take it. Store can write off the loss. Music industry still made their money from the sale to the store.
– If caught you might (dependent on criminal history) have to pay a small fine usually 2-3 times the cost of the CD. Music industry still made no additional money.

If you download a single track,
– If successful, you get a single track of music, sometimes at a lower quality than that of a CD. The person you got the song still has their file, so you did not deprive anyone of the file. That also left the file for other people to also infringe. No financial loss to the industry, except perhaps a portion of the $0.99 in a possible sale.
– If caught, you pay thousands of dollars in fines often leading to bankruptcy. Industry makes a large amount of money.

So the ratio to the person is like saving $20 for the risk of $60 or $0.99 for the risk of $100,000. Just because it’s on “the Internet” should not cause the risk/reward ratio to go so far out of sync. There is also much more risk to public safety with a shoplifting due to the physical nature then that of infringing on the Internet.

william (profile) says:

Dear Canipre,

While you are stuck on the “old” technology of tracking IPs on torrents and the “debunked” idea of 1 IP = 1 Person, many people have already moved on to file lockers (yes they are still around after megaupload died) and good old news servers.

Please keep up the effort to waste money just like the Americans do since you have obviously learned nothing. I wish you godspeed on your pursue of wasted efforts, counter-suits and bankruptcy.


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