Canadians who illegally download movies may be risking more than previously thought

The Hurt Locker is one of the movies people are accused of downloading
FILE - In this film publicity file image released by Summit Entertainment, Jeremy Renner is shown in a scene from, "The Hurt Locker." A federal judge has dismissed a case filed by an Iraq war veteran who claimed “The Hurt Locker” was based on his experiences as a bomb disposal expert. (AP Photo/Summit Entertainment). AP Photo/Summit Entertainment

TORONTO – Canadians who illegally download movies may be risking a far bigger fine than the presumed $5,000 statutory limit.

James Zibarras, the managing partner of Brauti Thorning Zibarras LLP and the counsel for Voltage Pictures, says many Canadians have been misguided into thinking that they won’t have to pay any more than $5,000 if they’re taken to court for illegally downloading movies.

Zibarras explained that plaintiffs in piracy cases can opt for statutory damages or actual damages. The former are awarded automatically once it’s been proven in court the defendant actually did download the movie. The latter, actual damages, take into account how much money the production company may have lost due to the downloading and subsequent distribution.

“And this is the thing, the people that Voltage goes after… technically aren’t downloaders. What Voltage goes after is people that make their product available for upload,” Zibarras said.

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“So if you merely downloaded a movie and no one else had access to that movie, well, you wouldn’t be part of the group that’s being legally pursued right now.”

When downloading via Bit Torrent clients, most users will also be simultaneously uploading parts of the file to others.  

Voltage Pictures is currently involved in a lengthy court battle with Chatham, Ontario-based ISP Teksavvy to obtain the names of 1,700 IP addresses associated with people who, they say, downloaded and distributed their movies, including The Hurt Locker.

A federal court ruled on March 18, Voltage Pictures would have to pay $22,000 to get those names – far less than the nearly $350,000 that Teksavvy wanted. Teksavvy appealed that decision arguing the court didn’t take into account all the necessary costs.  Voltage Pictures is also appealing the order, arguing their legal costs should be paid.

It’s not clear how long the appeal might take – estimates are around six months – but when that’s done, Zibarras said he expects his clients will want to go ahead with getting the names and seeking damages. And Teksavvy has said they’ll comply with the court order, according to their counsel Nicholas McHaffie, a partner at Stikeman Elliot.

New regulations regarding illegal downloading went into effect on Jan. 2. They codified that ISPs had to send what’s called a “notice-and-notice” to people connected with an IP address accused of illegal downloading. That regulation also capped statutory damages at $5,000.

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READ MORE: Internet users receive illegal downloading notices, but what do they mean?

A 2014 court ruling from the Teksavvy v. Voltage Pictures case warned that copyright trolling – going after pirates as a means of making money – might not be financially viable in Canada.

“Damages against individual subscribers even on a generous consideration of the Copyright Act damage provisions may be miniscule compared to the cost, time and effort in pursuing a claim against the subscriber.”

But as Zibarras said, they can go after far more than that.

“Once you switch to actual [damages], then there’s no cap, it’s whatever we can prove,” he said.

But Howard Knopf, a copyright lawyer with Ottawa law firm Macera & Jarzyna, said trying to recoup actual damages from each of the 1,700 defendants is “extremely far-fetched.”

“If you download something and it gets shared through Bit torrent technology with 1,700 of your closest friends, it’s very unlikely that a court would say you’ve engaged in 1,700 infringements, it’s all one work,” he said.

The closest comparison Knopf could think of was a New York woman who sued the CBC after it inadvertently used images she took of the 9/11 attacks in a documentary. She sought $21,554,954.25, claiming, according to a blog post by Knopf, that she was seeking damages for each of the CBC’s affiliated stations and Broadcasting Distribution Undertakings.

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The court awarded her $19,000, rejecting her claim for nearly $22 million.

If Voltage Pictures does move ahead with its case following the court’s decision on the appeal, it would have to either send court-approved demands for money, or sue.

But Zibarras said Voltage Pictures isn’t only worried about monetary damages – something that should worry resolute pirates. It also wants to send a message.

“There are a lot of reasons to chase these defendants, first and foremost, deterrence,” Zibarras said. “[For] production companies like Voltage, it is equally important to let the public know that we will be pursuing them because of the deterrent value of that. So it’s not always a pure cost-benefit analysis, a pure dollar value in terms of what you’re going to recover at trial.”

Deterrence is part of the reason for the new notice-and-notice regulations – statistics show they work.

University of Ottawa professor Michael Geist wrote in a presentation that only five per cent of Rogers subscribers received a notice in 2011. Of those, 68 per cent of people received a single notice; 89 per cent received two notices, and 1 in 800,000 received numerous notices.

However Knopf is leery that Voltage Pictures would go ahead with expensive litigation against each of the 1,700 defendants out of principle.

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“Businesses don’t do very much out of pure principle, they do it because they think they’re going to make money,” he said.

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