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COPYRIGHT - Direct infringement - Indirect infringement - Authorizing or enabling infringement

Monday, October 04, 2021 @ 8:56 AM  

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Appeal by Salna and others from an award of costs in a class proceeding certification motion. Cross-appeal by Voltage and others from dismissal of the certification motion. Voltage sought certification of a respondent class proceeding alleging online copyright infringement by the appellants using BitTorrent peer-to-peer file sharing software in respect of five films. Voltage obtained the IP addresses associated with the alleged infringement and obtained an order requiring the Internet Service Provider (ISP) to disclose the identity of Salna’s internet account. Voltage filed an application alleging three different acts of infringement, including making its films available for download, offering the film for download, or uploading the film. Voltage further alleged infringement arising from use of BitTorrent to advertise the film’s availability for download, and failure to take reasonable steps to prevent the unlawful infringement. Voltage sought to certify its application as a respondent class action. The Federal Court refused on the basis that Voltage did not meet any of the criteria for certification. Voltage cross-appealed. The appeal by Salna and others challenged the Federal Court’s costs award and its refusal to release security for costs posted by Voltage.

HELD: Appeal and cross-appeal allowed in part. The Federal Court erred in the application of the test of each of the certification criteria. Assuming the facts pled as true, Voltage’s pleadings sufficiently disclosed a reasonable cause of action based on direct and authorizing infringement, but not secondary infringement’s knowledge requirement. In finding no reasonable cause of action, the Federal Court impermissibly assessed the strength of the evidence and drew conclusions on the merits. The evidence was sufficient to show a class of two or more persons based on the IP addresses identified. It was an error to conclude that ISPs would be overburdened and refuse to send infringement notices. The Federal Court failed to analyze whether certification, despite challenges posed by individual fact assessments, could advance the goals of judicial economy, behaviour modification and access to justice. In addition, it was an error of law to merge concerns with the litigation plan into the preferable procedure test. It was thus premature for the Federal Court to hold that the substantive concerns of the class proceeding’s legal and administrative viability were fatal to certification. The criteria were remitted in part to the Federal Court for reconsideration. The court’s error in refusing to release security for costs was of no import given the outcome of the cross-appeal.

Salna v. Voltage Pictures, LLC, [2021] F.C.J. No. 943, Federal Court of Appeal, M. Nadon, D.J. Rennie and M. Rivoalen JJ.A., September 8, 2021. Digest No. TLD-October42021002