Notices of Infringement Are Low Voltage Evidence. FCA Affirms Denial of Default Judgment Against Internet Account Holders

In Voltage Holdings, LLC v. Doe #1, the Federal Court of Appeal has clarified what is required to prove copyright infringement in the context of file sharing.  This is an important decision that affects the rights of internet account holders who are named in lawsuits because other people have been using their account to download movies using BitTorrent file sharing software.

Unauthorized downloading of copyright protected movies using file sharing software is an infringing activity.  It has the effect of making the movies available to other members of the public by telecommunication.  In this way, file sharing engages the exclusive rights of a copyright owner under s.3(1)(f) and s.2.4(1.1) of the Copyright Act.  [SOCAN v. ESA, 2022 SCC 30]

At issue in the Court of Appeal was whether the trial judge should have granted default judgment for copyright infringement against internet account holders.  There was evidence that the accounts had been used to download a copyright protected movie using file sharing software.  But, Voltage, the copyright owner, had no direct evidence that the account holders were the ones that downloaded the movie.  On the motion for default judgment, Voltage had argued that an adverse inference should be drawn against the defendant account holders.  They had been sent multiple notices of infringement before being sued.  They had not defended the case, despite receiving the claim and a reminder.  Therefore, Voltage argued, no further evidence was required to obtain default judgment for copyright infringement against them.  Voltage asked the trial judge to find that the defendants had either downloaded the movie themselves or that they had authorized the infringing downloads by failing to control the use of their account.  Either way, Voltage argued, default judgment should issue.  The trial judge refused.  The copyright owner appealed.

The Court of Appeal said that the internet subscribers cannot be assumed to have downloaded a movie just because there is evidence that their account was used to download a movie.  In many cases, it was someone else.  Such an assumption would make an internet subscriber strictly liable for infringing activity on their account.  But the person receiving a notice of copyright infringement on their account is entitled to a presumption of innocence.  This presumption was the effect of the Supreme Court’s ruling in Rogers Communications Inc. v. Voltage Pictures, LLC, 2018 SCC 38.  [See para. 61-64] To get default judgment, the copyright owner is obliged to provide sufficient evidence to support the claim of infringement on balance of probabilities.  The FCA held that the receipt of multiple notices of infringement and a failure to respond to a claim was not enough.  [See para. 74-78]

Similarly, an internet subscriber is not liable for authorizing infringement merely because they controlled (or failed to control) the internet account that was used to download a movie.  In accordance with the Supreme Court’s ruling in SOCAN v. ESA, 2022 SCC 30, authorization of infringement in the context of file sharing of movies is directed to those who make the copyright material available for download.  That is the activity that engages a protected copyright interest under s.3(1) of the Copyright Act.  Allowing others to use an internet account (which the Court referred to as “third party authorization”) even if the account holder is indifferent to how the account is being used, is not enough to establish liability for “authorizing infringement”.  The account holder must also be shown to have had control over the person who downloaded the movie not just control of the account.  [See para. 82-85]

In the result, the trial judge’s decision not to grant default judgment was upheld.  To obtain judgment the copyright owner will have to obtain additional evidence of infringement by the defendant account holders.  This decision is an important development in the law of online infringement and will be of significant interest to internet account holders who are named in lawsuits alleging copyright infringement based on the use of their account to download movies or other copyright works.