Salna v. Voltage Pictures, LLC

Salna v. Voltage Pictures, LLC
Court (s) Database
Federal Court of Appeal Decisions
Date
2021-09-08
Neutral citation
2021 FCA 176
File numbers
A-439-19
Notes
A correction was made on November 17, 2022.
A correction was made May 25, 2023
Reported Decision
Decision Content
Date: 20210908
Docket: A-439-19
Citation: 2021 FCA 176
CORAM:
NADON J.A.
RENNIE J.A.
RIVOALEN J.A.
BETWEEN:
ROBERT SALNA, JAMES ROSE and LORIDANA CERILLI, PROPOSED REPRESENTATIVE RESPONDENTS ON BEHALF OF A CLASS OF RESPONDENTS
Appellants/ Respondents on cross-appeal
and
VOLTAGE PICTURES, LLC, COBBLER NEVADA, LLC, PTG NEVADA, LLC, CLEAR SKIES NEVADA, LLC, GLACIER ENTERTAINMENT S.A.R.L. OF LUXEMBOURG, GLACIER FILMS 1, LLC, AND FATHERS & DAUGHTERS NEVADA, LLC
Respondents/ Appellants on cross-appeal
and
SAMUELSON-GLUSHKO CANADIAN INTERNET POLICY & PUBLIC INTEREST CLINIC
Intervener
Heard by online video conference hosted by the Registry on April 28, 2021.
Judgment delivered at Ottawa, Ontario, on September 8, 2021.
REASONS FOR JUDGMENT BY:
RENNIE J.A.
CONCURRED IN BY:
NADON J.A. RIVOALEN J.A.
Date: 20210908
Docket: A-439-19
Citation: 2021 FCA 176
CORAM:
NADON J.A.
RENNIE J.A.
RIVOALEN J.A.
BETWEEN:
ROBERT SALNA, JAMES ROSE and LORIDANA CERILLI, PROPOSED REPRESENTATIVE RESPONDENTS ON BEHALF OF A CLASS OF RESPONDENTS
Appellants/ Respondents on cross-appeal
and
VOLTAGE PICTURES, LLC, COBBLER NEVADA, LLC, PTG NEVADA, LLC, CLEAR SKIES NEVADA, LLC, GLACIER ENTERTAINMENT S.A.R.L. OF LUXEMBOURG, GLACIER FILMS 1, LLC, AND FATHERS & DAUGHTERS NEVADA, LLC
Respondents/ Appellants on cross-appeal
and
SAMUELSON-GLUSHKO CANADIAN INTERNET POLICY & PUBLIC INTEREST CLINIC
Intervener
REASONS FOR JUDGMENT
RENNIE J.A.
[1] This is an appeal and cross-appeal from an order of the Federal Court (2019 FC 1412, per Boswell J.). There has been a modification to the style of cause in this matter to correct a clerical error. The appellants, Robert Salna, James Rose and Loridana Cerilli, appeal the Federal Court’s award of costs in a class proceeding certification motion. The respondents Voltage Pictures LLC, Cobbler Nevada, LLC, PTG Nevada, LLC, Clear Skies Nevada, LLC, Glacier Entertainment S.A.R.L. of Luxembourg, Glacier Films 1, LLC, and Fathers & Daughters Nevada, LLC (Voltage), cross-appeal the Federal Court’s dismissal of the motion to certify.
[2] Voltage sought certification of a respondent class proceeding alleging infringement of its copyright protected work by the appellants. Known colloquially as a “reverse class action”, Voltage targeted the online copyright infringement of five of its films: The Cobbler, Pay the Ghost, Good Kill, Fathers and Daughters, and American Heist (“the Works”).
[3] The factual foundation for the allegation of copyright infringement in this case is far removed from that which was before the Supreme Court in CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13, [2004] 1 S.C.R. 339 (CCH)). There, articling students walked across the creaking and worn wooden floors of the Great Library at Osgoode Hall, placed a nickel in the single, often broken, photocopying machine and copied, page-by-page, law reports. Much has changed in the 17 years since the decision in CCH. The content and channels of artistic creation and expression have evolved in ways that were beyond contemplation in 2004. To remain relevant, the law must adapt to the evolving digital environment, the channels through which artistic endeavour is expressed and the means by which copyright may be infringed.
[4] The proposed reverse class action tests the limits of what constitutes copyright infringement. It is also an innovative development in the means by which authors attempt to protect their work in a digital environment. The novelty of the proposed class action is not, contrary to what the Federal Court held, a reason to deny an application to certify the proceeding. The proposed class proceeding may ultimately flounder, for reasons which I will identify, but the judge erred in presuming that to be the case at so early a stage. The law must be allowed to evolve.
[5] I have reached the conclusion that the cross-appeal should be allowed in part. Before elaborating on the reasons as to why I have reached this conclusion, three observations are in order.
[6] First, the Federal Court erred in the application of the test of whether a reasonable cause of action was disclosed in the certification application.
[7] Second, if the Federal Court’s reasoning prevailed, Voltage, and those similarly situated, would, in many cases, be without any remedy for violation of their copyright: a respondent class proceeding is not available and the joinder of thousands of individual actions simply not feasible.
[8] Third, I acknowledge that the proposed respondents have raised a number of substantive concerns as to whether the class proceeding is, in the end, legally and administratively viable. It was premature, however, to presume that they would materialize and be fatal to the certification application. There may be problems down the road and decertification always remains an option “if the conditions for certification are no longer satisfied with respect to the proceeding” (Federal Courts Rules, S.O.R./98-106, R. 334.19; Tiller v. Canada, 2019 FC 749, 2019 CarswellNat 2360 at para. 21).
I. Background [9] I begin with the background to the infringement allegation described in the certification application.
[10] BitTorrent is a peer-to-peer file sharing protocol that enables the decentralized and simultaneous distribution of computer files over the internet. The decentralized nature of the protocol keeps individual expenses and bandwidth usage low (Appeal Book at p. 105 (Perino Affidavit at para. 2(j))).
[11] The users of each BitTorrent software are connected to each other. Once connected, each user downloads segments of the files available in small pieces, or data packets; the file may be analogized to a completed puzzle, and the packets, the pieces of the puzzle. Once downloaded, the data file can be uploaded for the download of other BitTorrent users, known as “peers” (Voltage Amended Notice of Application at para. 17). In this way, the peers can download data packets, or pieces of the puzzle, from various sources while simultaneously uploading that content for download by others (Appeal Book at pp. 105 and 519-520 (Perino Affidavit at para. 2(h); Lethbridge Affidavit at para. 11)).
[12] Each data packet and file has its own unique and identifiable “hash” number, created using a mathematical algorithm (Voltage Amended Notice of Application at para. 18). Ultimately, an entire file can be obtained by downloading all the required packets from various peers. The peers from whom the downloader received the file and/or packets are considered “uploaders”. A particular uploader may provide to the downloader anything from only a small portion of the entire file to the entire file (Appeal Book at p. 105 (Perino Affidavit at para. 2(h))). However, it is rare for a downloader to receive an entire file from a single uploader (Appeal Book at p. 105 (Perino Affidavit at para. 2(i))). Eventually, the entire file, puzzle, or in this case, film, is assembled, piece by piece, bit by bit, for viewing.
[13] In order for files to be added and become downloadable to other peers, at least one user who has a complete copy of the entire file in question must be connected. This user, or users, “seeds” the file for the rest of the peers (Voltage Amended Notice of Application at para. 17). Once a peer downloads an entire file, they can also become a seeder of that file for other users (Appeal Book at p. 105 (Perino Affidavit at para. 2(g))).
[14] Because BitTorrent is a file sharing protocol, once files are shared in the network, they are shared by all users. As such, uploading or offering to upload specific files or data packets can be done without a user’s knowledge and can occur whenever a BitTorrent user is connected to the internet.
[15] Forensic software deployed by Voltage identified the internet protocol (IP) addresses of BitTorrent users who downloaded any of the Works. The software also collected information on the BitTorrent users offering to upload these films. This included the IP address used by the uploader, the date and time the film was made available for upload in the form of a computer file and the file’s metadata, including the name and size of the computer file containing the film and the BitTorrent hash number.
[16] An IP address allows data sent over the internet to be received by the intended recipient device. Every IP address in existence is assigned, in groups or blocks, to different Internet Service Providers (ISPs), such as Rogers, Telus or Bell. ISPs, in turn, allocate individual IP addresses to the internet-connecting devices of their customers, those contractually obligated to an ISP to pay for internet services (Internet Account Subscribers). An example of an internet-connecting device is an internet router. Although each internet-connecting device has its own IP address, that device can in turn connect to a variety of other internet using devices, such as computers, tablets, cellphones, etc. Multiple devices can thus simultaneously use an internet connection under the same IP address.
[17] Copyright owners who identify an IP address infringing their works can require ISPs to send a notice of an alleged infringement to the internet account subscriber associated with the IP address (Copyright Act, R.S.C. 1985, c. C-42, s. 41.25-41.26). This is known as “the notice and notice” regime. ISPs are required to retain records enabling the identification of these internet account holders for six months following the day on which the account holder received the notice of an alleged infringement (Copyright Act at para. 41.26(1)(b)). A copyright owner may sue an internet account holder for copyright infringement following their receipt of the notice of alleged infringement. Though perhaps obvious, in order to identify the alleged infringer and potential defendant(s), a copyright owner must apply for a Norwich order requiring the ISPs to release the name(s) of the internet account holder(s).
[18] Later in these reasons, I will return to the implications of the six-month retention period on the question of the composition of the defendant class.
[19] Voltage triggered the notice and notice procedure under the Copyright Act. It assembled the IP addresses, the times of the alleged infringement and the ISPs associated with those IP addresses. It then requested the ISPs to send notices of the alleged infringement to the internet account subscribers associated with those IP addresses.
[20] Upon reviewing the IP addresses identified by the software, Voltage determined that one, 174.112.37.227, offered to upload all five of its films at various times. Voltage obtained a Norwich order compelling Rogers Communications Inc. to disclose the identity of the subscriber with this IP address. Following an appeal to the Supreme Court of Canada (Voltage Pictures, LLC v. John Doe, 2016 FC 881, 141 C.P.R. (4th) 136 at para. 14, aff’d 2018 SCC 38 (Voltage-Norwich); Rogers Communications Inc. v. Voltage Pictures, LLC, 2018 SCC 38, [2018] 2 S.C.R. 643 (Rogers)), Rogers Communications Inc. identified Robert Salna as the internet account subscriber.
[21] Voltage filed an application in the Federal Court against the internet account subscriber connected to that IP address, Mr. Salna, alleging that its copyrights had been infringed online. Voltage alleged three different acts of infringement: (i) making a film available for download by means of the BitTorrent network offering the file for uploading, or actually uploading a film; (ii) advertising by way of the BitTorrent protocol that a film is available for download; and (iii) authorizing the infringement by failing to take reasonable steps to ensure that the first and second unlawful acts did not take place in respect of an internet account controlled by an Internet Account Subscriber.
[22] Voltage classifies persons committing either (i) or (ii) as “Direct Infringers” and persons committing (iii) as “Authorizing Infringers”. Among Direct Infringers, Voltage claimed that those who committed (i) were primary infringers (persons who infringed their copyright in the Works pursuant to subsection 27(1) of the Copyright Act), and those who committed (ii) were secondary infringers (persons who infringed their copyright in the Works pursuant to subsection 27(2) of the Copyright Act and CCH at para. 81). These categories (direct infringer, authorizing infringer, primary infringer, and secondary infringer) have been used by Voltage to describe persons who commit various acts of infringement pursuant to the Copyright Act.
[23] Voltage then brought a motion for an order to certify its application against Mr. Salna as a respondent class proceeding (a so-called “reverse class application”) under Rules 334.14(2), 334.14(3), and 334.16 of the Federal Courts Rules. It is the appeal from the dismissal of that motion that is now before this Court.
[24] Mr. Salna is the owner of a rental property who provides internet access to his tenants at his rental property. He identified his tenants as James Rose and Loridana Cerilli, and claims it was they who performed the alleged unlawful activities. Mr. Rose and Ms. Cerilli in turn denied committing the unlawful acts Voltage alleged, further stating that they were unsure if Mr. Salna’s internet connection had been compromised by other users, including family members, guests, and internet hackers.
[25] Voltage added Mr. Rose and Ms. Cerilli as proposed named representative respondents for the proposed class application. However, at the hearing of the motion, Voltage advised that the proposed class of respondents would only comprise Direct Infringers and/or Authorizing Infringers who are also internet account subscribers that had received a notice of certification from their ISP in the last six months. This amended class description excluded Mr. Rose and Ms. Cerilli as representative respondents.
II. Decision of the Federal Court [26] The Federal Court began its analysis by noting the objectives behind reverse class proceedings: (i) facilitating access to justice; (ii) conserving judicial resources and private litigation costs; (iii) preventing re-litigation of the same issues; (iv) spreading expenses and resolving common issues over many defendants or respondents; and (v) modifying harmful behaviours (Chippewas of Sarnia Band v. Canada (A.G.), 137 D.L.R. (4th) 239, [1996] OJ No. 2475 (QL) at para. 16 (Chippewas); Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46, [2001] 2 S.C.R. 534 at paras. 27 to 29 (Dutton); Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 S.C.R. 158 at paras. 15, 16 and 25 (Hollick)).
[27] The Federal Court then acknowledged that a certification motion is a procedural matter, the purpose of which is to determine how the litigation should proceed, not whether the litigation can succeed (Sauer v. Canada (Minister of Agriculture), 2008 CanLII 43774 (ON SC), 169 A.C.W.S. (3d) 27 at para. 12) and that pursuant to Rule 334.16(1) of the Federal Courts Rules, five conjunctive criteria must be met to certify a class proceeding:
(a) the pleadings disclose a reasonable cause of action;
(b) there is an identifiable class of two or more persons;
(c) the claims of the class members raise common questions of law or fact, whether or not those common questions predominate over questions affecting only individual members;
(d) a class proceeding is the preferable procedure for the just and efficient resolution of the common questions of law or fact; and
(e) there is a representative plaintiff or applicant who
(i) would fairly and adequately represent the interests of the class,
(ii) has prepared a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members as to how the proceeding is progressing,
(iii) does not have, on the common questions of law or fact, an interest that is in conflict with the interests of other class members, and
(iv) provides a summary of any agreements respecting fees and disbursements between the representative plaintiff or applicant and the solicitor of record.
[28] The moving party has the onus to show an evidentiary basis for each certification requirement (Buffalo v. Samson First Nation, 2008 FC 1308, [2009] 4 F.C.R. 3 at para. 32, aff’d 2010 FCA 165), apart from the requirement that the pleadings must disclose a reasonable cause of action. That requirement is simply based on the pleadings themselves (Hollick at para. 25).
[29] The Federal Court concluded that Voltage had not met its onus in respect of any of the five criteria.
[30] On the first criteria, that the pleadings must disclose a reasonable cause of action, the Federal Court determined that Voltage had not proven its claims at this stage in respect of either Direct Infringers (neither primary nor secondary infringement) or Authorizing Infringers.
[31] Primary infringement had not been met as Voltage had not provided a description of how direct infringers may be identified (Federal Court reasons at paras. 68 and 77). Voltage had failed to identify a direct infringer who was also an internet account subscriber in its notice of application. This failure would prevent certification of a class as there was no representative primary infringer.
[32] The Federal Court similarly determined that secondary infringement had not been proven as the expert witness evidence showed that there was no difference between uploading and downloading a file on BitTorrent, and that file sharing can happen without a user’s knowledge or consent. Instead, once a file is shared, it is shared by all. Further, “advertising a work” was not a cause of action recognized in the Copyright Act.
[33] On the final cause of action alleged by Voltage, the Federal Court determined that the claim relating to an “Authorizing Infringer” failed as it relied on an overly broad reading of Society of Composers, Authors & Music Publishers of Canada v. Canadian Assn. of Internet Providers, 2004 SCC 45, [2004] 2 S.C.R. 427 at paragraphs 127 and 128 (SOCAN) and the legal obligations placed on an internet account subscriber under the notice and notice regime in the Copyright Act.
[34] On the second conjunctive requirement for certification, that there be some evidence of an identifiable class of two or more persons, the Federal Court noted that Voltage changed its description of the class in oral argument and excluded two of its named respondents, Mr. Rose and Ms. Cerilli, from its proposed class. That left Robert Salna as the only representative respondent. As he was not a Direct Infringer, there was no representative respondent for that cause of action. Although Voltage alluded, in a footnote, to thousands of other IP addresses, this alone did not amount to “some evidence” as it was only a “bare assertion” of other members of the class (Canada v. John Doe, 2016 FCA 191, 486 N.R. 223 at para. 33 (John Doe)). Relying on the expert witness affidavits, the Federal Court concluded that the determination of responsibility for infringement associated with each IP address will be a difficult technical exercise, and thus no clear class of two or more persons had been established.
[35] On the third conjunctive criteria, Voltage had alleged that its proposed class proceeding disclosed nine common questions of fact or law:
1. Is each of Voltage’s films an original cinematographic work in which copyright subsists?
2. Does the relevant applicant own the copyright in the appropriate films?
3. Do the unlawful actions alleged by Voltage constitute copyright infringement?
4. Do the unlawful actions alleged by Voltage constitute offering a film by telecommunication contrary to the provisions of the Copyright Act?
5. Did any of the respondents consent to or authorize any of the unlawful actions alleged by Voltage?
6. Did the Internet Account Subscribers:
a) possess sufficient control over the use of their internet accounts and associated computers and internet devices such that they authorized, sanctioned, approved, or countenanced the infringements alleged by Voltage?
b) require prior notice to be found liable for authorization, and if notice is necessary, is notice by way of an agreement with an ISP sufficient to engage their liability for the acts of Direct Infringers or is specific direct notice necessary?
c) receive notice of infringement, and if they were provided with notice but ignored such notice, does that constitute authorization of copyright infringement and is willful blindness sufficient to constitute authorization of a copyright infringement?
7. Does the class have any available defences to copyright infringement, including any defence based on fair dealing?
8. What is an appropriate quantum of statutory damages available pursuant to section 38.1 of the Copyright Act?
9. Is this an appropriate case for an injunction?
[36] The Federal Court disagreed, finding that only the first two were common questions, as the outcomes of the other seven would be different depending on the factual circumstances of each respondent.
[37] On the fourth requirement, the Federal Court determined that Voltage’s litigation plan was unmanageable. The proposed class action raised more individual issues than common issues within the class and judicial resources and economy would not be saved by certifying the class. Second, the proposed class proceeding inappropriately relied on using public resources as the proposed litigation plan would require ISPs to send continuous updates on the class proceeding via the Copyright Act’s notice and notice regime. The Federal Court judge found this to run contrary to Parliament’s intention. Fourth, the proposed litigation plan specified that class members could “opt-out” of the class if they had unique issues to raise. However, if all class members opted-out, the class proceeding would evaporate.
[38] Finally, the Federal Court concluded there was no suitable representative respondent who had an interest in defending the application on behalf of a class. Although Chippewas specified that the consent or unwillingness of a proposed representative is not a barrier to certifying a class (at paras. 45-46), Voltage had not shown the proposed respondent in this case had the financial capacity and incentive to defend the application with diligence and vigour.
[39] For these four reasons, the Federal Court concluded that another strategy, the joinder of multiple individual actions, was preferable over certifying a class.
[40] Finding that the class action should not be certified, the Federal Court awarded the respondent costs. However, the Federal Court also refused to release the $75,000.00 previously posted by Voltage as security for costs in the class action as Voltage had expressed its desire to continue with the application, although not in the form of a class proceeding. Although Mr. Salna had asked for costs on a solicitor-and-client basis, the Federal Court gave the parties 20 days to negotiate costs. If no agreement could be reached in that time, either party could request an assessment of costs in accordance with the Federal Courts Rules.
[41] There are two issues on appeal:
1)Did the Federal Court make a reviewable error in refusing to certify the class action?
2) Did the Federal Court err in its decision to award costs and refusal to release the security for costs?
III. Position of the Parties A. Cross-Appeal of the Decision not to Certify [42] Voltage cross-appeals the Federal Court’s decision not to certify the class action, claiming the Federal Court made a reviewable error in each of the five criteria specified in Rule 334.16(1) of the Federal Court Rules.
[43] On the first criteria and whether the pleadings disclose a reasonable cause of action, Voltage claims the Federal Court erred in considering extraneous evidence. Whether the pleadings disclose a cause of action is to be based on the assumption that the pled facts are true (Atlantic Lottery Corp. Inc. v. Babstock, 2020 SCC 19, 447 D.L.R. (4th) 543 at para. 14; Pro-Sys Consultants Ltd. v. Microsoft Corp., 2013 SCC 57, [2013] 3 S.C.R. 477 at para. 63 (Pro-Sys)). Voltage’s statement of claim specified Mr. Salna and every other class member were primary infringers (see, e.g., paras. 6 and 24 of the Amended Notice of Application). The Court was to take these statements as true without considering any other evidence or material, and in particular, Mr. Salna’s claim that he is not a direct infringer.
[44] Voltage argues it was similarly inappropriate to consider the expert evidence on the differences between downloading and uploading on BitTorrent in concluding the elements for secondary infringement were doomed to fail. Voltage states that it pled the facts for the three criteria for secondary infringement as specified in CCH at paragraph 81. It argues:
(i) That primary infringement occurred is pled in paragraph 42 of the Amended Notice of Application and is supported by paragraphs 33-37, 6-12, 14, and 24;
42. John Doe #1 Salna and each proposed Class Member is offering to upload at least one of the Works using the BitTorrent protocol. The Voltage Parties plead that such offering to upload is, inter alia, a communication to the public via telecommunication within the meaning of the Copyright Act, and as a result violates s. 27(1). Further, the act of offering to upload and the Unlawful Acts are a result of an unauthorized reproduction of the Works, and therefore, John Doe #1 Salna and each proposed Class Member has unlawfully reproduced the Works and infringed the copyright in the Works in accordance with s. 27(1) of the Copyright Act.
(ii) That the secondary infringer knew or should have known that he or she was dealing with a product of infringement is found in paragraph 43, and supported by paragraph 24(c) of the Amended Notice of Application;
24. For the purposes of this proceeding, the following shall be referred to as the Unlawful Acts of each proposed Class member, including John Doe #1 Salna:
[…]
(c) failing to take reasonable, or any, steps to ensure that a person downloading a Work was authorized to do so by law.
[…]
43. […] John Doe #1 Salna and each proposed Class Member knew or should have known that the making of a copy of such Work would infringe the copyright in such Work if it had been made in Canada by the person who made it, […]
(iii) That the secondary infringer sold, distributed or exposed for sale the infringing good is set out in paragraph 43 and is supported by the description of the mass distribution of the films at issue by way of peer-to-peer software as set out in paragraphs 33–37 of the Amended Notice of Application;
37. Using [the forensic software] method, the Voltage Parties identified John Doe #1 Salna as being one of the many users engaging in the Unlawful Acts by illegally offering to upload the Works by engaging in the Unlawful Acts. […]
[…]
43. The act of offering to upload a Work to any person who seeks to download such a Work further:
(a) distributes such Work to such an extent as to affect prejudicially the Voltage Parties;
(b) by way of trade distributes and exposes such Work; and
(c) possesses such work for the purposes of doing the acts set out in paragraphs (a) and (b) above.
[45] Voltage also argues that the “advertising a work for download” claim constitutes copyright infringement in accordance with paragraph 27(2)(c) of the Copyright Act. The terminology “advertising a work for download” is simply a shorthand and easy to understand analogy for exposing or offering a work for download to the public, just as “advertising” is an analogy for offering for sale – a recognised infringement according to subsection 27(2). The only difference is that rather than walking into a store and making a purchase, or dropping a nickel in a photocopier, the offer is accepted with the click of a mouse.
[46] Voltage further submits the claim relating to an “authorizing infringer” has statutory foundation in subsections 3(1) and 27(1) of the Copyright Act. As each proposed class member is an internet account subscriber, each is liable for the authorization of copyright infringements happening on their IP addresses. This theory is not doomed to fail, nor does CCH close the door on this cause of action, particularly in light of comments made in SOCAN at paragraphs 124 and 127.
[47] Finally, the Federal Court erred as the issue of the reasonableness of the cause of action had already been decided and was res judicata. The Court had already considered the reasonableness of the claims in deciding to grant the Norwich order that identified Mr. Salna.
[48] On the second criteria, Voltage acknowledges that its description of its proposed class changed to avoid unnecessary individual fact-finding. However, the Federal Court erred in not acknowledging that Voltage has evidence of thousands of other IP addresses that were used on BitTorrent to infringe Voltage’s copyrights in its five films. Voltage asserts that the judge violated the established rule that a court is not, in assessing the reasonableness of a cause of action, to go behind the pleadings and into the evidence as it did and conclude that Mr. Salna is not, in fact, a direct infringer. That determination is for the merits of the application.
[49] On the third criteria, Voltage argues the judge made an error in law, pursuant to Brake v. Canada (Attorney General), 2019 FCA 274, [2020] 2 FCR 638 at paragraphs 76-78 (Brake), in focussing on whether the answer to each question would be the same for each class member. Voltage claims that pursuant to Brake, the Federal Court should have instead examined whether the resolution of these questions was necessary to the resolution of each class member’s claim. All that is necessary is that the class member claims must share a substantial common ingredient to justify certification.
[50] On the fourth criteria, Voltage submits the Federal Court erred in law in focussing on the potential number of individual issues and facts, rather than considering the test as expressed in AIC Limited v. Fischer, 2013 SCC 69, [2013] 3 S.C.R 949 (Fischer) and Wenham v. Canada (Attorney General), 2018 FCA 199, 429 D.L.R. (4th) 166 (Wenham), (Brake at para. 87). What the Federal Court ought to have considered is described in the following paragraphs from Brake:
85 The governing principles for whether a class proceeding is the preferable procedure in a given case were set out in paragraph 77 of Wenham (relying on Hollick at paras. 27-31):
(a) the preferability requirement has two concepts at its core:
(i) first, whether the class proceeding would be a fair, efficient and manageable method of advancing the claim; and
(ii) second, whether the class proceeding would be preferable to other reasonably available means of resolving the claims of class members;
(b) this determination requires an examination of the common issues in their context, taking into account the importance of the common issues in relation to the claim as a whole; and
(c) the preferability requirement can be met even where there are substantial individual issues; the common issues need not predominate over individual issues.
86 The preferability of a class proceeding must be “conducted through the lens of the three principal goals of class [proceedings], namely judicial economy, behaviour modification and access to justice”: Fischer at para. 22, cited by Wenham at para. 78.
[51] In addressing this test, Voltage argues there are numerous points in favour of a class action versus joinder. One solution to mass-copyright infringement is collective enforcement by creators (York University v. Canadian Copyright Licencing Agency (Access Copyright), 2020 FCA 77, 448 D.L.R. (4th) 456 at para. 203, rev’d, but not on this point, 2021 SCC 32), another is for a single creator to pursue a large number of infringers. What is proposed by Voltage is, in essence, the inverse of an action by a collective. Class proceedings are an efficient way to tackle mass violation of copyright as they allow for the resolution of common questions and for interveners or Court-appointed amicus curiae to make submissions on a single application, rather than thousands.
[52] Further, Voltage argues its proposed litigation plan makes no use of public resources and that there are financing options available for Mr. Salna should a class proceeding be certified. The Federal Court’s proposed approach requires each individual to bear their own litigation defence costs. Even without financing options, having multiple respondents defended by a single counsel allows for cost sharing and a more efficient use of Court resources.
[53] Finally, there is no evidence that Voltage’s proposed use of the notice and notice regime was inappropriate or that it would overwhelm ISPs. ISPs automatically send out 200,000-300,000 notices monthly (Rogers at para. 40). Voltage argues that it should be allowed to use this regime in new and novel ways, as the policy which underlies the notice and notice regime of the Copyright Act encourages the marketplace to develop non-legislative solutions to supress copyright infringement.
[54] On the last criteria, Voltage argues Mr. Salna’s disinterest in defending the application is not a bar to class certification (Chippewas at para. 45). Indeed, his affidavit stating his disinterest is premised on the false assumption that he would not have to defend an action brought against him alone, should certification fail. Should the certification application fail, Voltage intends to pursue Mr. Salna in an individual action for infringement. Mr. Salna will thus incur costs either way. But under the proposed reverse class action, the costs would be significantly distributed across the members of the class.
B. Mr. Salna’s Position on Cross-Appeal [55] On the second criteria, Mr. Salna reminds the Court that the burden is on the moving party to show some evidence of a class of two or more persons. Voltage’s expert affidavit identified only one IP address that had allegedly made the Works available for upload, that of Mr. Salna. Voltage’s earlier claim, made in a footnote, that there are thousands of infringing IP addresses was overtaken by its acknowledgment that class actions must be limited in time (citing Hollick at para. 17) and that the proposed class was restricted to infringements within the last 6 months. Without that, the footnote in the pleadings is simply a bald assertion on the existence of other class members.
[56] Mr. Salna reiterates that apart from questions (1) and (2), the remaining seven questions of fact and law were not, in fact, common. Individual fact-finding would be required to determine type of infringement, if any, each internet account subscriber was guilty of, whether they had any individual defences beyond just fair dealing and the quantum of damages that might be appropriate given the criteria in subsection 38.1(5) of the Copyright Act.
[57] Mr. Salna defends the Federal Court’s findings on the fourth criteria, that the class action would not be preferable. The Federal Court properly considered the purpose of a class action, and expressed concern over the highly individualised facts associated with each proposed respondent, the reliance on public resources, the overuse of the notice and notice regime and the possibility that every respondent may simply “opt-out” of the class action. The judge is entitled to deference in the weighing of these factors, and the respondent has failed to point to any palpable and overriding error.
[58] Finally, Mr. Salna points out that the Federal Court did consider that a respondent’s unwillingness to defend an application is not a bar to certification. However, unlike in Chippewas, here there is a limit on the award of statutory damages of $5,000.00 pursuant to paragraph 38.1(1)(b) of the Copyright Act. This is a disincentive for him and any other class member to defend the action.
C. Intervener’s Position on Cross-Appeal [59] The intervener, the Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic (CIPPIC), responded to Voltage’s arguments on the reasonableness of the cause of action and on the proper interpretation of the Copyright Act’s notice and notice regime.
[60] CIPPIC submits that the proper test is whether it is “plain and obvious”, assuming the facts pled to be true, the pleadings disclose no reasonable cause of action (John Doe at para. 23). While the pled facts are assumed to be true, an applicant must do more than simply state bald assertions of conclusions. Further, the totality of the pled facts must make out each alleged cause of action.
[61] On direct infringement, the intervener submits that Voltage’s statement of claim lacks the specificity required to make out a claim for infringement pursuant to sections 3 and 27 of the Copyright Act. Particularly, Voltage fails to specify how direct infringers will be identified from the group of internet account subscribers. Even taking Voltage’s claim that Mr. Salna is a direct infringer to be true, Voltage’s pleadings state that the internet account subscribers “should have” or “ought to have” known what their account was being used for. This does not relate to direct infringement.
[62] On secondary infringement, the intervener argues that Voltage has failed to plead facts relating to the elements for secondary infringement as set out in subsection 27(2) of the Copyright Act; in particular, Voltage has not pled any infringement occurred prior to the alleged infringement caught by the forensic software. Second, Voltage has not claimed the proposed class respondents knew they were dealing with the product of an infringement: indeed, they did not plead they notified the internet account subscribers of the alleged infringement. Finally, they have not pled any of the actions seen in the third element, such as selling or distributing for sale.
[63] On the “authorizing infringer” claim, the intervener agrees with the Federal Court that this cause of action relies too heavily on comments made in SOCAN, in which the Supreme Court of Canada opined about the possible liabilities associated with a notice and takedown regime. Actions for copyright infringement must instead be grounded in the Copyright Act, and post-SOCAN the Canadian legislature elected to adopt its notice and notice regime instead of the opined upon notice and takedown regime. Pursuant to the Copyright Act, any claim of authorization must take into account the factors and elements set out in subsection 27(2.3) and (2.4). Voltage has failed to plead facts in relation to these factors, most critically, that the internet account subscriber had any knowledge of the infringement prior to joining the application.
[64] Even if knowledge was pled, knowledge alone is insufficient to ground authorization. For that, the intervener argues something more is required, whether approval, acquiescence or encouragement; what is required is authorization of copyright infringement, not the authorization of the use of the technology (CCH at paras. 38, 42-43; Century 21 Canada Limited Partnership v. Rogers Communications Inc., 2011 BCSC 1196, 338 D.L.R. (4th) 32 at para. 342 (Century 21); Sirius Canada Inc. v. CMRRA/SODRAC Inc., 2010 FCA 348, [2012] 3 F.C.R. 717). Indeed, authorization may not be established even where a person has knowledge of the infringement and takes no steps to stop it (see, e.g., Microsoft Corporation v. Liu, 2016 FC 950, 140 C.P.R. (4th) 327).
[65] Further, the issue of the reasonableness of the pleadings is not res judicata. Prior to the certification motion, all motions before the Court that may have relied on the reasonableness of the pleadings were unopposed