The Federal Court recently released its decision in Bell Media Inc v Macciacchera (Smoothstreams.tv), 2022 FC 1139, in which the court stressed the importance of compliance with Interim Orders and indicated that the Plaintiffs’ case has strong merits going forward.
The Defendants were involved in the operation of SSTV Services, which provides subscribers with unauthorized access to movies and tv shows for which the copyright is owned or licensed by the Plaintiffs. The Plaintiffs’ works can be accessed legitimately through various authorized subscriptions/platforms, over-the-air signals broadcast by the plaintiffs themselves, or through the purchasing of their works as physical media. Despite this, SSTV Services provided unauthorized access to the Plaintiffs’ works, which the Plaintiffs argued undermined their ability to control the commercial exploitation of their own works, interfered with their relationships with authorized distributors and Canadian users at large, and resulted in losses in revenue. As such, the Plaintiffs commenced an action for the infringement of the copyright in their works that are available on the Defendants’ unauthorized services.
Early in the legal process, the Plaintiffs requested an interim injunction. The Interim Order provided the following conditions:
- It prohibited the defendants from being involved in the operation of SSTV Services or any other subscription services of a similarly unauthorized nature.
- It prohibited the Defendants from removing assets out of the court’s jurisdiction and required them to authorize their financial institutions to disclose information pertaining to those assets.
- It required the Defendants to transfer the infrastructure of SSTV Services to an independent supervising solicitor and shut down the infrastructure altogether.
- It required the search, seizure, and preservation of evidence and financial information related to SSTV Services and the Defendants’ assets.
The first issue before the court was whether an Order charging a number of the Defendants with contempt should be issued. One of the Defendants refused to provide information required by the Interim Order and, due to the fact that he is the sole director of several of the corporations listed as other Defendants, his lack of cooperation caused these corporations to also be considered for contempt alongside him. The court determined that a case of contempt was made out by the Plaintiffs based on their reports that the Defendant refused to answer questions about unauthorized streams that remained online and refused to provide pertinent financial details or the passwords required to access his computer.
The second issue before the court was whether the Defendants should be ordered to identify the third parties involved in the operation of SSTV Services. It was observed that an unknown third party interacted with the SSTV Services infrastructure after the Interim Order had been put in place. The Plaintiffs have asked for the identify of this third party to be revealed in order for them to be added as a party to this action. The court agreed that an explicit order as requested by the plaintiffs should be granted because the Interim Order not only prohibited the Defendants and anyone working with them from disposing of their assets in any way, but also required them to disclose any other persons or entities related to them or SSTV Services in order to assist the persons enforcing the Order.
In conclusion, the court ultimately ordered that the Defendants charged with contempt must appear for a hearing. Additionally, the court ordered that the Defendant who refused to comply with the Order identify the third party or parties involved in the operation of SSTV Services. In doing so, the court emphasized the importance of compliance with Interim Orders. The court also made it explicitly clear in no unclear terms that despite the early stage of the matter, they believe that the Plaintiffs have already established an extremely strong case of copyright infringement against the Defendants.