While the internet has created ample opportunities for IP rights holders to exploit their intellectual property rights online, it also poses significant challenges relating to the protection of those same IP rights from would-be infringers. The internet’s global reach combined with the sophistication and anonymity of most online users has created an environment where it is becoming increasingly difficult to hold individual infringers accountable.

In recent years, the Canadian Government has taken steps to discourage online copyright infringement. For example, in early 2015, the “Notice and Notice” provisions of the Copyright Modernization Act came into force. Under this system, a copyright owner who suspects that an Internet user using a particular IP address has infringed their copyright can send a notice of alleged infringement to the Internet service provider (ISP) that owns the IP address. The ISP must then forward a notice to the subscriber who was using the IP address detailing the allegation. This regime sought to strike a balance between protecting copyright online (by strengthening the ability of copyright owners to control the use of their online works) and the privacy rights of online users (by keeping users’ identity from copyright owners).

While the “Notice and Notice” regime does provide a mechanism where rights owners can, via a court order, have an ISP release an Internet users’ subscriber information as part of a copyright infringement lawsuit, statutory damages for non-commercial infringement in Canada are limited to a maximum of $5,000. This restriction on the maximum amount recoverable in an infringement action often makes it economically unfeasible to pursue individual claims. Recently, IP rights holders have been exploring alternative strategies to defend their online interests.

We recently reported on a novel strategy used by Voltage Pictures LLC (Voltage) to enforce its IP rights without the need to pursue costly individual actions. On April 26, 2016, Voltage filed an application in the Canadian Federal Court seeking certification of a reverse class action (RCA) (i.e. one plaintiff versus multiple defendants). The RCA would name as the defendants an unknown number of Internet subscribers who were alleged to have infringed Voltage’s copyright.

As the identity of the subscribers were initially unknown to Voltage, the company brought a motion for an order compelling Rogers Communications Inc., the users’ ISP, to disclose any and all contact and personal information of a Rogers customer associated with an identified IP address, presumably so they could have this subscriber appointed as the representative defendant. The court granted the order in part, but followed previous jurisprudence by exercising caution in ordering disclosure of a subscriber’s information so as to invade the subscriber’s privacy rights in the most minimal way. The court limited the disclosure to the name and address of the subscriber and did not include the email address, telephone number, or other personal information requested by Voltage. Additionally, Justice Boswell ordered that Voltage must keep the information confidential and not disclose it to other parties or the general public.

Although the latest decision rendered in Voltage’s novel reverse class action strategy may have advanced the cause of IP owners to some degree, there are still many questions remaining as to whether this is a viable strategy to enforce IP rights. The courts have yet to consider:

  1. How the interests of all of the possible defendants will be fairly represented;
  2. How the court will address issues that are not common between the defendants;
  3. How the class will be defined; and
  4. What would happen if the defendants simply opt-out of the class action after being identified as possible class members?

Over the last several years, Canadian courts have been forced to address the tenuous balance between the privacy rights of online users and the protection of intellectual property rights. As companies begin to explore alternative approaches to enforcing their intellectual property rights, it appears as though the ability of online infringers to remain anonymous may no longer be absolute.