Exposing Canadian Pirates Costs $11 Per IP-Address

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Voltage Pictures, the company behind the Oscar-winning Hurt Locker movie, must pay $21,557 to expose 2,000 alleged pirates. Canada's Federal Court ruled on the long running dispute between the movie studio and Internet provider Teksavvy this week, a decision that's crucial for future 'copyright trolling' efforts.

hurt-locker-lawMore than two years ago movie studio Voltage Pictures took its legal crusade against pirating BitTorrent users to Canada.

After targeting tens of thousands of people in the US, the company hoped to expose 2,000 Internet subscribers of Canadian ISP TekSavvy. The studio behind “The Hurt Locker” argued that they have a solid case under the Copyright Act.

The efforts led to objections from the Canadian Internet Policy and Public Interest Clinic (CIPPIC) who demanded safeguards so Voltage wouldn’t demand hefty fines from subscribers without oversight. The court agreed on this, but allowed the customers to be exposed.

The only matter that remained were the costs associated with identifying the alleged pirates. According to Voltage these would only be a few hundred Canadian dollars, but Teksavvy claimed more that $350,000.

This week the Federal Court ruled on the matter (pdf), settling the costs at $21,557. This includes $17,057 in technical administrative costs and $4,500 in legal fees associated with the IP-address lookups.

The total sum translates to roughly $11 per IP-address, which is a tiny fraction of the thousands of dollars in settlements Voltage usually requests.

The Court decided not to award any assessment costs, noting that both parties are intent on disparaging each other’s business practices. Taking claims from both sides into account it concluded that neither party should be rewarded for its conduct.

“TekSavvy, without justification, has greatly exaggerated its claim, while Voltage has unreasonably sought to trivialize it based on unreliable and largely irrelevant evidence,” Judge Aronovitch writes.

In the future it would be wise to agree on a fixed rate for linking IP-addresses to the personal details of subscribers before taking the matter to court, the Judge further notes.

“The best practice, in my view, would be for the rights holder to ascertain, in advance, with clarity and precision, the method of correlation used by the ISP, as well as the time and costs attendant on the execution of the work based, to begin, on a hypothetical number of IP addresses.”

The verdict opens the door for more of these cases in Canada. The question is, however, whether the costs and the restrictions still make it worthwhile.

University of Ottawa professor Michael Geist, who followed the case closely, believes this troll-type activity may not be as financially viable as Voltage has hoped.

“With the cap on liability for non-commercial infringement, the further costs of litigating against individuals, the actual value of the works, and the need to obtain court approval on demand letters, it is hard to see how this is a business model that works,” Geist notes.

Voltage, however, appears to be determined to continue its actions against the subscribers. The studio’s lawyer is happy with the verdict and says the decision “confirms the court’s commitment to facilitate anti-piracy and allow companies like Voltage to pursue pirates.”

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