On February 20, 2014, the Federal Court of Canada in Voltage Pictures LLC v John Doe and Jane Doe 2014 FC 161 ordered an Internet service provider (ISP) to release the names and addresses of 2000 subscribers alleged to have illegally downloaded a copyrighted movie using peer to peer networks and the BitTorrent protocol. This marks the first Canadian decision in which the Federal Court has ordered the large scale production of customer information from a third party ISP in order to identify potential defendants in an action for illegal downloading of copyrighted material from the Internet.

This decision represents a victory for rights holders seeking to address the large scale downloading of copyrighted material from the Internet, which is widespread in Canada. The decision is also balanced in that it encourages the Court to impose strict safeguards to prevent the coercive settlement tactics that have sometimes followed such orders in jurisdictions outside of Canada.

The Federal Courts Rules provide for production of documents from, or the examination for discovery of, non-parties with leave of the Court. Within the scope of this power, it has previously been established that the Court may order innocent third parties to disclose information in their possession regarding unlawful conduct, including the identity of potential defendants. Such orders are commonly called Norwich Orders after a 1974 UK decision of the same name. Norwich Orders have become increasingly common in Canadian litigation, especially with respect to trade-mark and copyright infringement on the Internet.

Despite the availability of Norwich Orders in Canada, such orders have typically been granted in cases involving a limited number of entities, for example, an order to obtain the identity of importers of infringing goods. In contrast, previous cases involving requests for the large scale identification of individual subscribers from ISPs have not been successful. In the 2005 decision of the Federal Court of Appeal in BMG Canada Inc v Doe, 2005 FCA 193, the Court of Appeal provided a framework to consider the issues on such motions, but ultimately refused the order on the facts of that case. The Court in Voltage agreed with and summarized the BMG principles as follows:

  1. a plaintiff must have a bona fide case;
  2. a non-party must have information on an issue in the proceeding;
  3. an order of the Court is the only reasonable means of obtaining the information;
  4. that fairness requires the information be provided prior to trial; and
  5. any order made will not cause undue delay, inconvenience or expense to the third-party or others.

In Voltage, the rights holder brought a motion to force the ISP to provide identifying information for 2000 subscribers. The ISP did not oppose the motion, but the Canadian Internet Policy and Public Interest Clinic (CIPPIC) was given leave to intervene. CIPPIC filed evidence, conducted cross-examination and made extensive written submissions. The Court carefully considered the balance between personal privacy interests and the public interest in enforcing copyright and concluded that the BMG principles properly balance these competing concerns. The Court found that the BMG principles had been established and that Voltage’s rights as a copyright holder outweigh the privacy interests of the affected internet users.

The Court spent the balance of its decision discussing what limitations should be imposed to protect the privacy interests of the subscribers. The Court was particularly concerned with the issue of “copyright trolls”. In this regard, CIPPIC filed extensive evidence of the problem of copyright trolls in other jurisdictions who file multitudes of lawsuits solely to extort quick settlements through demand letters and without any true intention of pursuing litigation. The Court noted that subscribers targeted by copyright trolls may not be the party responsible for downloading the copyrighted work and that there may be defences available. Voltage was noted to have previously engaged in such activities.

The Court concluded that safeguards were required to counteract a business model that coerces innocent people into settlements, often through misleading representations. The Court identified a non-exhaustive list of 14 considerations to achieve this goal, including the following considerations which the Court implemented, among others, in its order:

  • Putting safeguards in place so that alleged infringers receiving any “demand” letter from a party obtaining an order under Rule 238 or a Norwich Order not be intimidated into making a payment without the benefit of understanding their legal rights and obligations.
  • When issuing a Norwich Order the Court may retain the authority to ensure that it is not abused by the party obtaining it and can impose terms on how its provisions are carried out.
  • Requiring the party obtaining the order to provide a copy of any proposed “demand” letter to all parties on the motion and to the Court prior to such letter being sent to the alleged infringers.
  • Any demand letter should stipulate that the person receiving the letter may not be the person who was responsible for the infringing acts.
  • The party enforcing the Norwich Order should pay the legal costs and disbursements of the innocent third-party.

The decision is consistent with the willingness of Canadian courts in recent jurisprudence to issue Norwich Orders and confirms that such orders are available to identify defendants in large scale copyright infringement cases, provided appropriate safeguards are in place to protect privacy interests and to prevent abusive behaviour.