A large-scale copyright infringement lawsuit currently under way in Toronto – reminiscent of similar multimillion-dollar suits south of the border – may have a hard time succeeding under new Canadian copyright law. But that doesn't mean it won't achieve at least one other objective: scaring off future illegal downloaders.
Voltage Pictures, the U.S. movie studio best known for the 2008 hit The Hurt Locker, is trying to convince a Federal Court judge to force Canadian Internet service provider Teksavvy to hand over the identities of more than 1,000 users. The users are tied to a number of IP addresses that the studio alleges were the source of illegal downloading of the company's intellectual property on the popular Bit-torrent file-sharing platform.
If successful, it would be the largest such effort of its kind in Canada. In the last high-profile case, a record company tried to obtain the identities of just a few dozen alleged downloaders, but failed.
Voltage and Teksavvy did not respond to requests for comment on Monday.
In Canada, a Montreal-based company called Canipre acted on behalf of Voltage to collect the IP addresses that the studio is now trying to tie to users. Barry Logan, Canipre's managing director, would not comment on the lawsuit directly, but said his company's research shows Canada to be among the top five countries for illegal file-sharing.
"Canada continues to demonstrate itself as a significant source and share point of digitized content," he said. "[Piracy] activities cause a serious financial disadvantage to the entire Canadian film industry ecosystem."
Large-scale intellectual property lawsuits are a relative rarity in Canada. In U.S. courts, however, the practice is far more widespread.
In the United States, many such cases never go to court. Instead, the owner of the intellectual property often files a letter to the alleged downloader asking for a settlement in exchange for dropping the lawsuit. The proposed settlement amount is usually less than the cost of hiring a lawyer and engaging in a drawn-out legal battle. As such, many people who receive such letters will pay the settlement amount rather than fight the case.
The maximum fine amount in the U.S. for illegally downloaded content is $150,000 (U.S.). However, that amount is per infringement, which means that hypothetical fines could quickly become astronomical. In a 2011 case between a record industry group and the company responsible for the file-sharing software LimeWire, the plaintiffs estimated there had been thousands, or even millions, of illegal downloads using the software, and that the resulting maximum statutory damages, hypothetically, could reach $75-trillion. A judge rejected the estimates, calling them "absurd."
In Canada, however, the fine structure is very different. In the cases of non-commercial infringement, the new copyright reform bill, passed last year, limits maximum damages to $5,000 (Canadian). Because the maximum amount is for all claims, and not per infringement, the Canadian law severely limits the potential for the kind of massive fines that can be theoretically imposed in a U.S. courtroom. As such, even if Voltage Pictures succeeds in obtaining the identities of those users it accuses of illegally downloading its content, the company would either have to settle for far less money than it could claim south of the border, demand an out-of-court settlement amount from the users that's higher than the maximum amount it could get in a court judgment, or try to prove some of those users engaged in commercial-level infringement, for which statutory damages are far higher.
Still, for the companies filing such lawsuits, the benefits are sometimes not financial. Stories of multimillion-dollar fines levied against everyday Internet users who downloaded a few songs or movies illegally can often serve as a deterrent to future downloaders.