For the past few months, I’ve received daily emails from people who have been sent a copyright infringement notification as part of Canada’s notice-and-notice system. Most of the notifications come from CEG-TEK, a U.S.-based anti-piracy firm. Canadian Internet providers are now required by law to forward these notifications and CEG TEK has been taking advantage of a loophole in the system to include a settlement demand within the notification. Some of the recipients claim that the notification has been sent in error. Others say that they have received multiple notifications for a single download. In some cases, the recipient has clicked on the settlement demand link, while in others the person has called the company and revealed their identity. In virtually every case, they are looking for advice on what to do.
My typical response has been to point to my earlier posts on the issue that have explained Canada’s notice-and-notice system, the misuse of the system by rights holders in sending misleading information about Canadian copyright law, the government’s failure to stop the inclusion of settlement demands within the notices, and the massive expansion in the number of notices with the arrival of CEG TEK. I also point to Industry Canada’s page on the notice-and-notice system, which provides the government’s perspective on the issue. These resources can be helpful, but what most people really want to know is whether they should pay the settlement or ignore it. I don’t condone infringement but I believe that the misuse of the notice and notice system is extremely problematic. Moreover, I certainly think people that did not infringe copyright should not pay a settlement demand. I’m unable to provide specific legal advice, but I can provide more information that may assist in making a more informed decision about a system that was designed to discourage infringement, not create a loophole to facilitate settlement demands.
What does the rights holder know about the subscriber when they send the notification?
The short answer is not much. Internet providers do not disclose their subscribers’ personal information as part of the notice-and-notice process. The rights holder merely has an IP address and evidence it claims links that address to a copyright infringement. It does not know who receives the actual notice.
What steps are needed for a rights holder to sue in Canada?
As discussed in my other posts, the notices forwarded by Internet providers are an unproven allegation of infringement. For a rights holder to successfully pursue a case against an alleged individual infringer, it would first need to obtain a court order requiring the Internet provider to disclose the identity of the subscriber. Canadian courts have established privacy safeguards around potential disclosure of such information. The ISP may oppose the disclosure of the subscribers identity or argue for subscriber notification of the legal process.
If the rights holder succeeds in obtaining the subscriber’s personal information, it might then send another demand letter seeking payment in return for settling the case. Canadian courts have recently required that such letters be reviewed by the court before being sent to subscribers.
If the subscriber refuses to settle, the rights holder could pursue an infringement action in court. The rights holder would be required to prove its rights in the work, that an infringement occurred, and that the subscriber was responsible for the infringement. The rights holder would likely also need to provide some evidence of damages, given the cap on non-commercial infringement under the law discussed below. The subscriber could challenge these claims in court, potentially providing evidence that they were not involved in the unauthorized download (perhaps due to an error by the rights holder, incorrect IP address information, or an insecure wireless network) or by attempting to make the case that their actions did not violate Canadian copyright law.
What are the damages if a rights holder is successful in their lawsuit?
The legal process described above is expensive, yet the potential payoff from litigation against individuals is limited. The government established a new cap on liability for non-commercial infringement in its 2012 copyright reform package. The law now sets a maximum liability of C$5000 for all non-commercial infringements. The provision states:
Subject to this section, a copyright owner may elect, at any time before final judgment is rendered, to recover, instead of damages and profits referred to in subsection 35(1), an award of statutory damages for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally,
(b) in a sum of not less than $100 and not more than $5,000 that the court considers just, with respect to all infringements involved in the proceedings for all works or other subject-matter, if the infringements are for non-commercial purposes
The government’s intent was clearly to ensure that the maximum applied to all infringement from all rights holders. Indeed, the government’s fact sheet on the bill stated:
The Bill ensures that Canadians are not subject to unreasonable penalties by significantly reducing statutory damages for infringement for non-commercial purposes by individuals, providing the courts with the flexibility to award between $100 and $5,000 in total damages. Using the same example of five illegally downloaded songs, the individual would only be liable for a penalty of between $100 and $5,000 under the proposed changes. The Bill will ensure that courts take proportionality into account in awarding damages.
Some rights holders have recently argued that they could choose to pursue actual damages, rather than the non-commercial statutory damages. Yet the primary reason governments implemented statutory damages is that proving actual damages can be very difficult. As Howard Knopf rightly notes, to suggest that rights holder might be able to prove significant actual damages in mass copyright litigation is “extremely far fetched.”
Has anyone successfully sued a downloader for non-commercial infringement in Canada?
Not to my knowledge. The members of the Canadian Recording Industry Association ultimately abandoned the first file sharing lawsuits launched in 2004. More recently, Voltage Pictures has sought a court order for the identity of roughly 2,000 TekSavvy subscribers. After more than two years of litigation, it has obtained an order for the subscribers’ identity but that information has not been released due to an ongoing dispute over the costs its must pay before the information is made available.
Does CEG TEK regularly follow through on the demand letter with lawsuits?
According to the Cashman Law Firm, it has not sued anyone in two years in the United States. I am not aware of any lawsuits being filed in Canada.
> “with respect to all infringements involved in the proceedings for all works or other subject-matter”
Does this not mean that one or more rightsholders could initiate several separate proceedings as an end-run around the $5K cap for “all infringements”?
It’s theoretically possible based on the provision’s wording, but I don’t think this should be a major concern for a few reasons:
1. A court is likely to be highly skeptical of such a tactic, particularly if the alleged multiple infringements all pertain to the same rights holder and are within a close timeframe. A court may consider an award of statutory damages to cover all possible alleged infringements from a particular rights holder against a particular user within a reasonable timeframe.
2. Keep in mind that $5000 is the maximum, but a court is very unlikely to award the maximum damage for one infringement or a small handful of related infringements. By separating out multiple infringements, the rights holder will likely lower the quantum of damages they can expect to be awarded, if the court even allows this tactic.
3. Proceedings for copyright infringement for non-commercial use will not likely make much money, if any, for the rights holder even if they could guarantee the maximum $5,000 each time. There are significant costs associated with filing and prosecuting a claim, and most won’t be recoverable. Many such small awards simply go unpaid by the defendant, anyway, since they can be a pain to enforce, so it’s a risky proposition to begin with. If a rights holder actually takes someone to court rather than sticks a settlement demand, you can probably bet it’s to make an example out of them and scare others off illegal downloading, rather than about the actual award of damages.
I dont think it would be unreasonable for all canadians to contact this company through their email address with protests of their actions. Various links to industry canada etc could be included if people wished. I dont think there is a law against that.. let alone contacting them for information. Perhaps when they realize what it is like to use legitimate avenues for illegal activities they will begin to understand the severity of their actions.
I’m not sure what you would hope to accomplish by contacting them. Doing so would sure make them happy though, as a bunch of people would be literally identifying themselves and allowing them to threaten them more effectively.
MG Stated: “Canadian courts have established privacy safeguards around potential disclosure of such information.”
An interesting article on those “privacy safeguards”: https://torrentfreak.com/media-must-protect-dallas-buyers-clubs-innocent-victims-150412/
“Many publications did note a positive, however. In a move designed to limit Voltage’s ability to abuse the vulnerable, Justice Perram stated the following:
“Having regard to the likely identity of many account holders and their potential vulnerability to what may appear to be abusive practices I propose to impose conditions on [Voltage Pictures] that will prevent speculative invoicing,” he wrote.
This means that Voltage will be required to send a draft of the letter it intends to send to alleged downloaders for the Judge to approve. Sadly, no matter how well intentioned, this ‘safeguard’ will likely do absolutely nothing to change the outcome or business model of this notorious copyright troll.
As pointed out by Justice Perram in his ruling, the same approach was ordered in Golden Eye (International) Ltd v Telefonica UK Ltd [2012], another trolling case in the UK. Judicial oversight in that case stopped Golden Eye from citing any precise monetary claim whatsoever in their initial letter, thus removing their ‘invoicing’ value.
While great in theory, no subsequent correspondence was monitored by the court and the topic of money was raised immediately after the court turned its back. The same thing also happened in the recent case involving a company called Mircom. As required, no money was claimed in the initial letter but as soon as people wrote back, all protestations of innocence were ignored and cash demands were forthcoming alongside threats of financial ruin.”
I thought all these laws, as a policy, were intended and would lead to my ability to subscribe to Hulu, Pandora and other US services that were rejecting Canada because of “lax” copyright rules. Now we’ve got what amounts to Nigerian copyright scams legalized by all this legislative hocus pocus, and no Hulu for me.
This process disgusts me. It’s akin to legal bullying. Canadians are systematically blocked from content for which I’m sure MOST of us would be willing to pay a reasonable and nominal amount. A good example is the content difference with Netflix Canada vs Netflix US. Or access to Hulu or other services that are blocked in Canada.
Canadians should NOT have to pay these amounts unless, for some reason, they’re earning money from them. This should be up to the accusers to prove.
The real criminals are the CRTC, Canadian media companies and ISPs that work together to block us from Simpsons reruns and live events like the Superbowl and yet still profit from this control.
I don’t think ISPs are doing anything to block you unless they are also media companies like Bell or Rogers. Guys like TekSavvy would probably love it if you could easily watch Hulu and the Superbowl over their service — the more internet you use, the more money they make. They don’t really care *what* you’re using it for.
And, just to clarify, I don’t think the ISP arms of Bell or Rogers are doing anything to block you either. As for the rest, I don’t know.
@kp How long have you been astroturfing comments on blogs for Teksavvy? Teksavvy wants to become a content distributor:
http://o.canada.com/technology/techbiz/teksavvy-could-be-looking-into-launching-a-cable-service
I can’t see how what kp said could be seen as astroturfing. Or are you referring to something he/she posted somewhere/sometime else?
@Devil’s Advocate -> Pun intended 🙂
Now that’s just mean 🙁
PS TekSavvy
Above intended for Jason K, not Devil’s Advocate (stupid reply limits…) 🙂
@Jason K It all started when I was little and the teacher asked me what I wanted to be when I grew up. Without hesitation I said “I want to be an astroturfer for TekSavvy!” After five years of college and a huge student loan, I’m living the dream!!
Seriously though, what the heck are you talking about? Have I even mentioned TekSavvy in another post? also, I didn’t know they wanted to launch a cable service, but I’ll be sure to tell everyone on all the blogs how very awesome it will be! Living the dream!!! 😉
@kp I don’t think you understood the pun, and I don’t have the time to explain. Maybe read my response a few times to yourself, and maybe you’ll get it 😛
Nope I guess I’m pun impaired! 🙂
If a rights-holder initiates a mass lawsuit against a group of defendants over a single title being shared in a single torrent swarm, could they be considered co-defendants in a single case, and therefore should jointly split the maximum $5000 statutory damages if found responsible?
There was a case in the US where a judge stated that an IP address is not a person. http://www.ibtimes.co.uk/us-federal-judge-ip-address-not-enough-prove-someone-downloaded-pirated-movies-1496174
How does this impact on Copyright Infringement notices?
It doesn’t really. If you look at http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02920.html they say
“Receiving a notice does not necessarily mean that you have in fact infringed copyright…”
and
“An objective of the Notice and Notice regime is to … raise awareness in instances where Internet subscribers’ accounts are being used for [infringement] by others.”
So they already acknowledge that you may not be the guilty party, even if it is your account being used. This has no impact on the notices.
Now, whether or not it has an impact on a lawsuit that get filed… well, we’ll just have to wait for there to be a lawsuit! (i’m not aware of any in canada)
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“I don’t condone infringement.”
Wink wink.
I have received mail from them regarding the claim,,,but could i do ,,, should I pay the settlement please advice??? I also called them on their Tool free number to check the matter and give my mobile number and name ….. they said they will call me back
Please advice?
My advice would’ve been to not call them but since it is too late for that, please let us know what they say if and when they call back.
with all these new laws coming into affect and all this bounce around talk about suing the people. i find it insane that they are still trying to go after the people that merely download the content and instead of going after the real criminals that pirate the actual content and distribute it over several sites. for that matter why don’t they shut down these sites? they have already shut down a few, but if they are aware of what site the user is downloading their content from and from who, why not go for the bigger fish. doesn’t make sense to go after a few people for $5000. while their content is still being accessed on these sites.
Don’t reply to them, visit their website, or phone them, no matter how threatening their letter is. This is for the same reason you don’t feed bears and most wild animals.
Get A VPN and use it for all your web browsing, regardless of whether or not it has anything to do with downloading music or movies, etc. Web browser add-ons like Ghostery, AdBlock Plus, and Disconnect can be helpful too.
PS: I received a bunch of these letters a while back, likely due to my roommate downloading porn without a VPN. I ignored them. The due date for me to pay the extortion fee has passed, and I haven’t heard anything since.
Received a copyright infringement email yesterday and I unknowingly called CEG and gave them my name and phone number. I didn’t download what they are accusing me of but being confused and seeing the obnoxious 225$ settlement fee i was confused and i wanted answers. Im wondering if them knowing my personal information should motivate me to pay this fee?
I suggest you do some Google research on CEG. You’ll likely find cases where people have paid their settlement but continued to be harassed by them or associated entities. Remember, if they came after you, the maximum they could get is $5000, then ask yourself how much you think it would cost them to take you to court.
I’m not a lawyer. This is not legal advice.
So even someone pays the settlement they have proposed they could keep sending out new settlements asking for more money until they reach 5000$ from that particular person?
Sorry, when I say ‘come after you’ I mean take you to court, not try and squeeze ‘settlements’ out of you.
My point is that just because you pay the settlement, there is no guarantee they won’t try and take you to court anyway. There is no reason to assume that these people will act honourably.
My other point was that, if you totally ignore them and they do decide to take you to court, the most they will be able to get out of you is $5,000. Even if it costs them less than $5,000 to sue you, they don’t know if the court will award them $5,000 or $500 or $50 — so does it really make sense for them to bother?
Indeed. If you did pay a “settlement” it’s not clear to me that any amount paid would be counted toward that $5K maximum that you might be fined in some subsequent court case.
In other words, imagine you get a settlement letter for $5K (just to use round numbers for the example) and you decided to pay that settlement. (a) I don’t think there is any legal restriction on them making further claims against you[1] and (b) if you were decide to go to court over such subsequent claims, I don’t know that the $5K that you paid already would be taken into consideration[1]
[1] because you made that payment voluntarily outside of the court system
Of course IANAL so I don’t really know. Just trying to think about it in logical terms (which of course frequently does not actually work for the law 😉 ).
Like any legal trouble, you have the right to remain silent. Dont give them any more info to indentify you. The onus is on them to prove their case. Think of them as a collections agency. If they can identify you, expect to be harrassed! The extorting settlements strategy is alot cheaper than suing everyone. If they sue it will always be the owner of the ISP account. They have to get a court order, hunt you down, and serve you a summons. Not including the actual trial, this is still alot of work. As for defense, you can always claim your wifi was open, or you had a party and gave out the password. The burden of proof is to prove YOU downloaded it. Not that you were responsible for letting it happen. Just because you own a property where someone was murdered, doesnt mean you were responsible for the murder!!!